CTX Qwest Corp. 7.00% Notes Due 2052

Centex Reports Record First Quarter Results Revenues Rise 27%; Earnings Per Diluted Share From Continuing Operations Grow 30% DALLAS, July 26 /PRNewswire-FirstCall/ -- Centex Corporation (NYSE:CTX) today announced the highest revenues, operating earnings and earnings per diluted share for any first quarter in its history. Highlights of the quarter ended June 30, 2004 (compared to last year's first quarter): -- Revenues rose 27% to $2.8 billion. -- Earnings per diluted share from continuing operations grew 30% to $1.35. -- Domestic home closings increased 16%; sales (orders) rose 7%. -- Domestic Home Building operating margin was 11.8%, up 140 basis points. -- Domestic Home Building backlog rose 21% to 17,062 units. Through its subsidiaries, Centex ranks as one of America's leading companies in the Home Building, Financial Services, Construction Services and Home Services industries. "As planned, the strong first quarter results have given us a great start toward achieving another year of record revenues and earnings for our shareholders in fiscal 2005," commented Tim Eller, Centex Corporation Chairman and CEO. "We are encouraged by the direction of the economy as it appears we are entering a period of job growth and rising consumer confidence. This type of economic environment historically has been a positive for housing's fundamentals and our businesses." "We are excited about the opportunity to further demonstrate the strength of the Centex operating model as we move into an improving economic environment. Centex has never been in a stronger financial position," said Lel Echols, Executive Vice President and CFO. "Given the strength of this year's first quarter, and our impressive backlog for the home building operations, we are raising our earnings guidance for fiscal 2005 to $6.75 to $7.25 per diluted share." HOME BUILDING Domestic Operating earnings from Centex Homes were $223.6 million for the first quarter this year, 43% higher than $156.6 million for the first quarter a year ago. Fiscal 2005's first quarter revenues from Centex Homes were $1.9 billion, 26% higher than $1.5 billion for the same quarter last year. The 43% increase in operating earnings was achieved on a 16% increase in closings to 7,383 homes in this year's first quarter, as well as an improvement in operating margins to 11.8% from 10.4% a year ago. The margin increase was due primarily to a higher per-unit average sales price and continuing process improvements. New home orders for this year's first quarter were 9,031 homes, 7% above last year's level. The backlog of homes sold but not delivered at June 30, 2004 was 17,062 units, 21% higher than the backlog at the same time a year ago. The dollar value of backlog increased 44% to $5.0 billion versus the same quarter last year. "We are very pleased with our 7% sales (orders) growth this quarter, as average neighborhoods grew by only 2%. Additionally, our average sales price was strong, up 9%, reflecting pricing power in many markets and our aggressive pricing strategies. For example, in many neighborhoods, we have reduced the number of homes in each release and increased prices on a real-time basis to reflect our strong market position and increases in some raw materials costs," noted Andy Hannigan, Chairman and CEO of Centex Homes. "As we continue through fiscal 2005, we will accelerate our neighborhood growth and continue to drive market share gains in our existing markets." International London, England-based Fairclough Homes, the international operation of Centex Homes, closed 314 homes during the first quarter of fiscal 2005 versus 313 units for the same quarter last year. Operating earnings for the quarter were $6.9 million, a 44% increase over last year's first quarter operating earnings of $4.8 million. Operating profit margin increased 160 basis points to 7.0% in the quarter. FINANCIAL SERVICES Operating earnings from Financial Services for the first quarter this year were $57.6 million, 12% lower than $65.6 million for the same quarter last year. Fiscal 2005's first quarter Financial Services revenues of $274.3 million were 3% above $266.9 million for the same quarter a year ago. CTX Mortgage Company Operating earnings from CTX Mortgage Company, LLC and related companies, including Title and Insurance operations, totaled $32.0 million for the first quarter of fiscal 2005, 38% lower than $51.4 million for fiscal 2004's first quarter. Retail originations were down 38% in the quarter versus the same period a year ago. Operating profit per loan decreased 12% to $1,670 in the quarter. "Our emphasis on adjusting overhead costs to origination levels underscores our strategy of sustaining profitability in a rising rate environment. Our profit per loan was very healthy in the face of 38% less retail originations," commented John Matthews, Chairman and CEO of CTX Mortgage. Centex Home Equity Company Centex Home Equity Company, LLC (CHEC) reported operating earnings of $25.5 million for the first quarter of fiscal 2005, an 80% improvement over $14.2 million in last year's first quarter. Originations for the first quarter of fiscal 2005 increased 28% to a record 11,520 loans. CHEC's owned loan servicing portfolio has reached $6.9 billion, growing by over 35% versus the first quarter last year. "It was another great quarter at Centex Home Equity and we are looking forward to another record year in fiscal 2005," said Tony Barone, President and CEO of Centex Home Equity Company. "Our earnings as a percentage of our owned portfolio improved by 36 basis points to 1.52% this quarter versus last year's first quarter. Additionally, our 90-plus day delinquency remained low, coming in at 2.1%, down 50 basis points versus last year at this time." CONSTRUCTION SERVICES Construction Services reported operating earnings of $4.5 million for the first quarter of fiscal 2005, versus operating earnings of $4.6 million for the same quarter last year. Revenues from Construction Services were $434.2 million for the quarter this year, 16% higher than revenues of $375.8 million for the year-ago quarter. New contracts for the quarter totaled $338 million, 30% higher than $261 million for the same quarter a year ago. The backlog of uncompleted construction contracts at June 30, 2004 was $1.65 billion, 17% more than $1.41 billion at June 30, 2003. "We continue to execute our strategy of focusing on regional strengths and expertise in specific customer segments," said Robert C. Van Cleave, Chairman, President and CEO of Centex Construction Services. "Our $1.65 billion backlog is 17% ahead of last year's first quarter and increases in profitability will follow as we proceed through this fiscal year." OUTLOOK Given the strength of the first quarter, the positive economic outlook and the record backlog of homes sold but not delivered, Centex is raising its earnings per diluted share guidance for fiscal 2005 to $6.75 to $7.25 per diluted share and expects fiscal 2005 to be the company's ninth consecutive record year. Centex's senior management will conduct a conference call to discuss the first quarter of fiscal 2005 financial results, at 10:00 a.m. Eastern Time (9:00 a.m. Central Time) on Tuesday, July 27. The conference call, accompanied by a slide presentation, will be webcast simultaneously on the Centex Web site at http://www.centex.com/ . A replay of the call, as well as the presentation, will be archived on that site. Forward-Looking Statements. This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the context of the statement and generally arise when Centex is discussing its beliefs, estimates or expectations. These statements are not historical facts or guarantees of future performance but instead represent only Centex's belief at the time the statements were made regarding future events, which are subject to significant risks, uncertainties and other factors, many of which are outside of Centex's control. Actual results and outcomes may differ materially from what is expressed or forecast in such forward-looking statements. With respect to forward-looking statements relating to the business, operations, assets, liabilities, financial condition or results of operations of Centex, the risks and uncertainties to which these statements are subject include the following: general economic conditions and interest rates; the cyclical and seasonal nature of our businesses; adverse weather conditions; changes in property taxes and energy costs; changes in federal income tax laws and federal mortgage financing programs; governmental regulations; changes in governmental and public policy; changes in economic conditions specific to any one or more of our markets and businesses; competition; availability of land and raw materials; and unexpected operational difficulties. For example, increases in interest rates or decreases in demand for housing on a national or regional basis or increases in the cost or reductions in the supply of suitable land for development, or lumber or other building materials or labor, could affect the revenues or operating earnings of our homebuilding operations. Similarly, increases in interest rates could adversely affect demand for some of the mortgage loans offered by our mortgage finance operations. Finally, changes in national and regional economic conditions and levels of infrastructure and construction spending could adversely affect the results of operations of our construction services operations. These and other risks and uncertainties are described in greater detail in Centex's most recent Annual Report on Form 10-K for the fiscal year ended March 31, 2004 (including under the captions "Forward- Looking Statements" and "Management's Discussion and Analysis of Financial Condition and Results of Operations"), which is on file with the SEC and may be obtained free of charge through the website maintained by the SEC at http://www.sec.gov/ . All forward-looking statements made in this press release are made as of the date hereof, and the risk that actual results will differ materially from expectations expressed in this press release will increase with the passage of time. Centex undertakes no duty to update any forward-looking statement to reflect future events or changes in Centex's expectations. NOTE ATTACHMENTS: (1) Revenues and Earnings by Lines of Business (2) Condensed Consolidated Balance Sheets (3) Condensed Consolidated Cash Flows (4) Supplemental Domestic Home Building Data (5) Domestic Housing Activity by Geographic Area (6) Domestic Housing Activity Dollar Values by Geographic Area (7) Supplemental International Home Building Data (8) Supplemental Financial Services Data Attachment 1 Centex Corporation and Subsidiaries Revenues and Earnings by Lines of Business (dollars in thousands, except per share data) Quarter Ended June 30, (unaudited) 2004 2003 (C) Change Revenues Home Building (A) $1,998,114 $1,504,493 33% Financial Services 274,321 266,860 3% Construction Services 434,217 375,755 16% Other 59,421 25,521 133% Total $2,766,073 $2,172,629 27% Operating Earnings Home Building (A) $231,120 $161,407 43% Financial Services 57,574 65,599 (12%) Construction Services 4,466 4,559 (2%) Other 7,342 (1,693) 534% Total Operating Earnings 300,502 229,872 31% Corporate General Expenses (19,585) (19,103) Interest Expense (5,025) (15,470) Earnings from Continuing Operations Before Income Taxes 275,892 195,299 41% Income Taxes (98,659) (62,081) Earnings from Continuing Operations 177,233 133,218 33% Earnings from Discontinued Operations, net (B) --- 9,572 Net Earnings $177,233 $142,790 24% Earnings Per Share - Basic Earnings per Share - Continuing Operations $1.43 $1.09 31% Earnings per Share - Discontinued Operations --- 0.08 Earnings Per Share - Basic $1.43 $1.17 22% Earnings Per Share - Diluted Earnings per Share - Continuing Operations $1.35 $1.04 30% Earnings per Share - Discontinued Operations --- 0.08 Earnings Per Share - Diluted $1.35 $1.12 21% Average Shares Outstanding: Basic 123,573,221 122,490,530 1% Diluted 130,926,818 127,865,692 2% (A) 3333 Holding Corporation and Centex Development Company, L.P. were consolidated into Centex Corporation on February 29, 2004. As a result, beginning March 1, 2004, International Home Building is fully consolidated as a component of Home Building. Centex's equity in the earnings of International Home Building prior to March 1, 2004 have been reclassified from Investment Real Estate to Home Building. See Attachment 7 for additional International Home Building information. (B) Includes the operations spun-off in the CXP and Cavco transactions and other discontinued manufactured housing operations. (C) Certain prior year items have been reclassified to conform to current period classifications. Attachment 2 Centex Corporation and Subsidiaries Condensed Consolidated Balance Sheets (Dollars in millions) (unaudited) Centex Corporation Centex Financial and Subsidiaries Corporation* Services June 30, March 31, June 30, March 31, June 30, March 31, 2004 2004 2004 2004 2004 2004 Assets Cash - Unrestricted $182 $193 $155 $175 $27 $18 Restricted 330 296 34 36 296 260 Receivables - Residential Mortgage Loans Held for Investment 6,921 6,498 --- --- 6,921 6,498 Residential Mortgage Loans Held for Sale 1,846 1,820 --- --- 1,846 1,820 Other Receivables 680 669 495 491 185 178 Inventories - Homebuilding 5,664 5,105 5,664 5,105 --- --- Land Held Under Option Agreements not Owned 449 362 449 362 --- --- Other 54 94 46 85 8 9 Investments 186 140 737 672 --- --- Property and Equipment, net 166 156 119 115 47 41 Goodwill 249 255 237 238 12 17 Deferred Charges and Other Assets 459 481 218 239 241 242 $17,186 $16,069 $8,154 $7,518 $9,583 $9,083 Liabilities and Stockholders' Equity Accounts Payable and Accrued Liabilities $1,870 $1,963 $1,661 $1,715 $193 $264 Debt Non-Financial Services 2,808 2,418 2,808 2,418 --- --- Financial Services 8,821 8,302 --- --- 8,821 8,302 Minority Stockholders' Interest 421 336 419 335 2 1 Stockholders' Equity 3,266 3,050 3,266 3,050 567 516 $17,186 $16,069 $8,154 $7,518 $9,583 $9,083 * In the supplemental data presented above, "Centex Corporation" represents the consolidation of all subsidiaries other than those included in Financial Services. Transactions between Centex Corporation and Financial Services have been eliminated from the Centex Corporation and Subsidiaries balance sheets. ** We believe that separate disclosure of the consolidating information is useful because: the Financial Services subsidiaries operate in a distinctly different financial environment that generally requires significantly less equity to support their higher debt levels compared to the operations of our other subsidiaries; the Financial Services subsidiaries have structured their financing programs substantially on a stand-alone basis; and we have limited obligations with respect to the indebtedness of our Financial Services subsidiaries. Management uses this information in its financial and strategic planning. Attachment 3 Centex Corporation and Subsidiaries Condensed Consolidated Cash Flows (Dollars in millions) (unaudited) Centex Corporation and Centex Financial Subsidiaries Corporation* Services For the For the For the Quarter Quarter Quarter Ended Ended Ended June 30, June 30, June 30, 2004 2003 2004 2003 2004 2003 Cash Flows - Operating Activities Net Earnings $177 $143 $177 $143 $36 $41 Adjustments - Depreciation and Amortization 24 30 20 25 4 5 Other Noncash Adjustments 12 13 (41) (42) 17 14 Increase in Loans Held for Sale (26) (44) --- --- (26) (44) (Increase) Decrease in Inventories (528) (292) (529) (290) 1 (2) Other Operating Activities (95) (135) (23) (106) (90) (20) (436) (285) (396) (270) (58) (6) Cash Flows - Investing Activities Increase in Loans Held for Investment (450) (479) --- --- (450) (479) Other Investing Activities (40) (73) (20) (78) (2) (4) (490) (552) (20) (78) (452) (483) Cash Flows - Financing Activities Increase (Decrease) in Short-Term Debt, net 220 77 --- (25) 220 102 Issuance of Long-Term Debt, net 690 386 391 3 299 383 Other Financing Activities 4 17 4 17 --- --- 914 480 395 (5) 519 485 Effect of Exchange Rate on Cash 1 --- 1 --- --- --- Net (Decrease) Increase in Cash and Cash Equivalents (11) (357) (20) (353) 9 (4) Cash and Cash Equivalents at Beginning of Period 193 456 175 441 18 15 Cash and Cash Equivalents at End of Period $182 $99 $155 $88 $27 $11 * In the supplemental data presented above, "Centex Corporation" represents the consolidation of all subsidiaries other than those included in Financial Services. Transactions between Centex Corporation and Financial Services have been eliminated from the Centex Corporation and Subsidiaries cash flows. ** We believe that separate disclosure of the consolidating information is useful because: the Financial Services subsidiaries operate in a distinctly different financial environment that generally requires significantly less equity to support their higher debt levels compared to the operations of our other subsidiaries; the Financial Services subsidiaries have structured their financing programs substantially on a stand-alone basis; and we have limited obligations with respect to the indebtedness of our Financial Services subsidiaries. Management uses this information in its financial and strategic planning. Attachment 4 Centex Corporation and Subsidiaries Supplemental Home Building Data - Domestic Operations (unaudited) (dollars in millions, except per unit data) Quarter Ended June 30, 2004 2003 HOME BUILDING - DOMESTIC Revenues - Housing $1,872.3 100.0% $1,477.4 100.0% Cost of Sales - Housing (1,361.8) (72.7%) (1,102.6) (74.6%) Gross Margin - Housing 510.5 27.3% 374.8 25.4% Revenues - Land Sales & Other 26.8 27.1 Cost of Sales - Land Sales & Other (35.1) (24.8) Gross Margin - Land Sales & Other (8.3) 2.3 Total Gross Margin 502.2 26.4% 377.1 25.1% Selling, General & Administrative (286.4) (15.1%) (221.7) (14.7%) Other Income 7.8 0.5% 1.2 ---% Operating Earnings $223.6 11.8% $156.6 10.4% Units Closed 7,383 6,349 Average Unit Sales Price $253,592 $232,699 % Change 9.0% 8.8% Operating Earnings per Unit $30,284 $24,667 % Change 22.8% 22.9% Average Neighborhoods 570 558 % Change 2.2% 15.8% LOT POSITION - DOMESTIC As of June 30, 2004 2003 Change Lot Owned and Controlled: Lots Owned 82,853 64,757 27.9% Lots Controlled 129,315 84,454 53.1% Total 212,168 149,211 42.2% Attachment 5 Centex Corporation and Subsidiaries Supplemental Home Building Data - Domestic Operations Housing Activity (Units) by Geographic Area Closings Quarter Ended June 30, 2004 2003 Change Mid-Atlantic 1,303 1,114 17% Southeast 1,309 1,126 16% Midwest 1,524 1,224 25% Southwest 1,988 1,731 15% West Coast 1,259 1,154 9% 7,383 6,349 16% Sales (Orders) Backlog As of June 30, 2004 2003 Change Mid-Atlantic 2,974 2,482 20% Southeast 4,324 3,269 32% Midwest 3,442 3,321 4% Southwest 3,216 2,792 15% West Coast 3,106 2,247 38% 17,062 14,111 21% Sales (Orders) Quarter Ended June 30, 2004 2003 Change Mid-Atlantic 1,476 1,448 2% Southeast 1,926 1,682 15% Midwest 1,574 1,625 (3%) Southwest 2,335 2,265 3% West Coast 1,720 1,390 24% 9,031 8,410 7% Attachment 6 Centex Corporation and Subsidiaries Supplemental Home Building Data - Domestic Operations Housing Activity (Values) by Geographic Area Housing Revenues - Closings (dollars in millions) Quarter Ended June 30, 2004 2003 Change Mid-Atlantic $373.0 $294.7 27% Southeast 317.2 243.1 30% Midwest 320.9 255.8 25% Southwest 314.2 259.5 21% West Coast 547.0 424.3 29% $1,872.3 $1,477.4 27% Sales (Orders) Backlog Value (dollars in millions) As of June 30, 2004 2003 Change Mid-Atlantic $990.7 $709.4 40% Southeast 1,193.5 811.9 47% Midwest 691.3 658.7 5% Southwest 535.6 438.4 22% West Coast 1,592.5 852.8 87% $5,003.6 $3,471.2 44% Attachment 7 Centex Corporation and Subsidiaries Supplemental Home Building Data - International Operations (unaudited) (dollars in millions, except per unit data) Quarter Ended June 30, 2004 2003 HOME BUILDING - INTERNATIONAL Revenues - Housing $94.7 100.0% $88.7 100.0% Cost of Sales - Housing (72.0) (76.0%) (71.1) (80.2%) Gross Margin - Housing 22.7 24.0% 17.6 19.8% Revenues - Land Sales & Other 4.3 --- Cost of Sales - Land Sales & Other (4.1) --- Gross Margin - Land Sales & Other 0.2 --- Total Gross Margin 22.9 23.1% 17.6 19.8% Selling, General & Administrative (15.4) (15.5%) (12.3) (13.8%) Operating Earnings 7.5 7.6% 5.3 6.0% Interest (0.6) (0.6%) (0.5) (0.6%) Earnings Before Income Taxes $6.9 7.0% $4.8 5.4% Units Closed 314 313 Unit Sales 382 363 Plots Owned and Controlled 5,423 4,591 Average Unit Sales Price $301,666 $283,534 % Change 6.4% 25.1% Operating Earnings per Unit $23,984 $17,083 % Change 40.4% N.M. Attachment 8 Centex Corporation and Subsidiaries Supplemental Financial Services Data CTX Mortgage Company Quarter Ended June 30, 2004 2003 Change Originations Builder 5,019 4,435 13% Retail 14,154 22,792 (38%) Total 19,173 27,227 (30%) Applications Builder 6,146 6,064 1% Retail 10,867 25,255 (57%) Total 17,013 31,319 (46%) Loan Volume (in billions) $3.50 $4.55 (23%) Average Loan Size $182,600 $167,300 9% Operating Profit per Loan $1,670 $1,889 (12%) Centex Home Equity Quarter Ended June 30, 2004 2003 Change Originations 11,520 8,995 28% Applications 97,965 80,637 21% Loan Volume (in billions) $1.44 $0.88 64% Average Loan Size $125,100 $97,600 28% Earnings As a % of Average "Owned" Portfolio 1.52% 1.16% Servicing Portfolio: As of June 30, 2004 2003 Change Number of Loans: Portfolio Accounting Method 78,331 65,456 Serviced for Others 13,253 12,801 Total 91,584 78,257 17% Servicing Portfolio (in billions): Portfolio Accounting Method $6.92 $5.11 Serviced for Others 0.94 0.75 Total $7.86 $5.86 34% CPLBF http://www.newscom.com/cgi-bin/prnh/20020403/CTXELLER DATASOURCE: Centex Corporation CONTACT: Leldon E. Echols, Executive Vice President and Chief Financial Officer, or Matthew G. Moyer, Vice President-Investor Relations, both of Centex Corporation, +1-214-981-5000 Web site: http://www.sec.gov/ Web site: http://www.centex.com/

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