10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended March 31, 2004

Commission File No. 1-6776

CENTEX CORPORATION

(Exact name of registrant as specified in its charter)
Nevada
(State of incorporation)
75-0778259
(I.R.S. Employer Identification No.)
2728 N. Harwood, Dallas, Texas 75201
(Address of principal executive office, including zip code)
(214) 981-5000
(Registrant’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:

	Name of each
	exchange on which
Title of each class	registered
Common Stock ($.25 par value)	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [  ].

     Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]

     Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes [X] No [  ].

     On September 30, 2003 (the last business day of the registrant’s most recently completed second fiscal quarter), the aggregate market value of the Centex Corporation common stock held by non-affiliates of the registrant was $4.80 billion based upon the last sale price reported for such date on the New York Stock Exchange. Solely for purposes of determining this amount, Centex Corporation will treat as an affiliate (i) any director or executive officer of Centex Corporation or (ii) any person who beneficially owns more than 10% of the outstanding common stock of Centex Corporation as reflected in a Schedule 13D filed with the Securities and Exchange Commission, unless such person indicates in such filing that it holds such shares solely for investment and not with a view to exercising control over the business or affairs of Centex Corporation. As of May 15, 2004, 123,356,741 shares of the registrant’s $.25 par value common stock were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the following documents are incorporated by reference in Part III of this Report:

(a) Proxy statement for the annual meeting of stockholders of Centex Corporation to be held on July 15, 2004.

TABLE OF CONTENTS

FORM 10-K

		Page
PART I
Item 1.	Business		3
Item 2.	Properties		15
Item 3.	Legal Proceedings		16
Item 4.	Submission of Matters to a Vote of Security Holders		16
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		18
Item 6.	Selected Financial Data		19
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		20
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk		50
Item 8.	Financial Statements and Supplementary Data		53
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		97
Item 9A.	Controls and Procedures		97
PART III
Item 10.	Directors and Executive Officers of the Registrant		97
Item 11.	Executive Compensation		98
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		98
Item 13.	Certain Relationships and Related Transactions		98
Item 14.	Principal Accountant Fees and Services		98
PART IV
Item 15.	Exhibits, Financial Statement Schedules and Reports on Form 8-K		98
SIGNATURES			104
INDEX TO EXHIBITS
Restated Articles of Incorporation
Specimen Centex Common Stock Certificate
Amended and Restated 1987 Stock Option Plan
8th Amended/Restated 1998 Employee Stock Plan
Amended/Restated 2001 Stock Plan
Stock Option Agreement for 2001 Stock Plan
Restricted Stock Agreement for 2001 Stock Plan
Amended/Restated Long-Term Incentive Plan
Award Agreement LTIP
Amended/Restated 2003 Equity Incentive Plan
Stock Option Agmt for 2003 Equity Incentive
Stock Unit Agmt for 2003 Equity Incentive Plan
Amended/Restated Executive Deferred Compensation
Salary Continuation
Consulting Agreement - David W. Quinn
Termination Agreement - David W. Quinn
List of Subsidiaries
Consent of Independent Auditors
Powers of Attorney
Certification of CEO Pursuant to Rule 13a-14(a)
Certification of CFO Pursuant to Rule 13a-14(a)
Certification of CEO - 18 U.S.C. Section 1350
Certification of CFO - 18 U.S.C. Section 1350

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PART I

ITEM 1.  BUSINESS

General Development of Business

     Centex Corporation is a Nevada corporation. Our common stock, par value $.25 per share, began trading publicly in 1969. Our common stock is traded on the New York Stock Exchange, or the NYSE. As of May 15, 2004, 123,356,741 shares of our common stock were outstanding. Any reference herein to we, us or our includes Centex Corporation and its subsidiary companies.

     Since our founding in 1950 as a Dallas, Texas-based residential construction company, we have evolved into a multi-industry company. As of March 31, 2004, our subsidiary companies operated in four principal business segments: Home Building, Financial Services, Construction Services and Investment Real Estate. We provide a brief overview of each segment below, with a more detailed discussion of each segment later in this section.

     Our domestic homebuilding operations currently involve the purchase and development of land or lots and the construction and sale of single-family homes, townhomes and low-rise condominiums. We have participated in the conventional homebuilding business since 1950. Home Building internally tracks its performance compared to the last reported twelve months of revenues for its competitors. Based on Home Building’s comparisons, we believe that it ranked as the nation’s fourth largest homebuilder at March 31, 2004. Our international homebuilding operations currently involve the purchase and development of land or lots and the construction and sale of a range of products from small single-family units to executive houses and apartments throughout the United Kingdom.

     Our Financial Services operations are primarily engaged in the residential mortgage banking business, as well as other financial services that are in large part related to the residential mortgage market. These operations include mortgage origination, servicing and other related services for purchasers of homes sold by our Home Building operations, other homebuilders and other real estate professionals, sub-prime home equity lending and the sale of title insurance and various other insurance coverages. We have been in the mortgage lending business since 1973.

     Our Construction Services operations involve the construction of buildings and facilities for both private and government interests, including educational institutions, hospitals, military housing, correctional institutions, airport facilities, office buildings, hotels and resorts and sports facilities. We entered the Construction Services business in 1966 by acquiring a Dallas-based contractor that had been in business since 1936. We also acquired significant construction companies in 1978, 1982, 1987 and 1990.

     Our Investment Real Estate operations involve the development and sale of land, primarily for industrial, office, multi-family, retail, residential and mixed-use projects. We have determined that no significant capital will be allocated to Investment Real Estate for new business development. Beginning April 1, 2004, the Investment Real Estate financial results will be included in our Other business segment.

     In June 2003, we spun off to our stockholders substantially all of our manufactured housing operations, which had previously been included in our Other business segment. We now report the historical financial results of manufactured housing operations as a discontinued operation.

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     Prior to January 2004, we were also engaged in the construction products business through our majority equity interest in Centex Construction Products, Inc. (now known as Eagle Materials Inc.), which we refer to as Construction Products. On January 30, 2004, we spun off to our stockholders our entire equity interest in Construction Products. We now report the historical financial results of Construction Products as a discontinued operation.

     Prior to February 2004, the common stock of 3333 Holding Corporation, which we refer to as Holding, and warrants to purchase limited partnership interests in Centex Development Company, L.P., which we refer to as the Partnership, were traded in tandem with our common stock. We held an ownership interest in the Partnership, which we reported on the equity method of accounting as a part of our Investment Real Estate business segment. Neither Holding nor the Partnership were consolidated in our financial statements. The operations of the Partnership included homebuilding operations in the United Kingdom. In February 2004, we acquired Holding and the Partnership through merger transactions, and the tandem trading arrangement was terminated. As a result of the merger, the international homebuilding operations of the Partnership are now included in our Home Building business segment, and the Partnership’s domestic real estate operations are included in the Investment Real Estate segment for periods prior to April 1, 2004 and will be included in our Other business segment beginning April 1, 2004.

Financial Information about Industry Segments

     Note (K), “Business Segments,” of the Notes to Consolidated Financial Statements on pages 82-85 of this Report contains additional information about our business segments and specific information on revenues received from external customers located in the United States and the United Kingdom for fiscal 2004, 2003 and 2002.

Narrative Description of Business

HOME BUILDING

Domestic

     Our conventional homebuilding subsidiary, Centex Homes, purchases and develops land or lots and constructs and sells single-family homes, townhomes and low-rise condominiums domestically. Centex Homes is the only company to rank among the nation’s top 10 homebuilders for each of the past 35 years according to Professional Builder magazine. Centex Homes sells to both first-time and move-up buyers, as well as active adult and second home buyers. In fiscal 2004, 81% of the homes we sold were single-family detached homes, and the remainder were townhomes and low-rise condominiums.

Markets

     Centex Homes follows a strategy of reducing exposure to local market volatility by diversifying operations across geographically and economically diverse markets. As of March 31, 2004, Centex Homes was building in 92 market areas, including Washington, D.C., and in 26 states. Each market is listed below by geographic areas.

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Region	States	Markets	States and Markets (continued)
Mid-Atlantic	Maryland	Baltimore	Pennsylvania	Pittsburgh
	New Jersey	Atlantic/Cape May	South Carolina	Charleston/North Charleston
		Middlesex/Hunterdon/Sommerset		Hilton Head
		Monmouth/Ocean		Myrtle Beach
		Trenton	Virginia	Norfolk/Virginia Beach/Newport
	North Carolina	Charlotte/Gastonia/Rock Hill		Richmond/Petersburg
		Greensboro/Winston Salem/High		Washington, D.C.
		Point
		Raleigh/Durham/Chapel Hill
		Wilmington
Southeast	Florida	Daytona Beach	Georgia	Atlanta
		Ft. Lauderdale	South Carolina	Columbia
		Ft. Myers/Cape Coral		Greenville/Spartanburg/Anderson
		Ft. Walton Beach	Tennessee	Nashville
		Jacksonville
		Lakeland/Winter Haven
		Naples
		Orlando
		Punta Gorda
		Sarasota/Bradenton
		Tampa/St. Petersburg/Clearwater
		West Palm Beach/Boca Raton
Midwest	Colorado	Boulder/Longmont	Missouri	St. Louis
		Denver	Ohio	Akron
		Eagle		Canton/Massillon
		Fort Collins/Loveland		Cincinnati
		Greeley		Cleveland/Lorain/Elyria
	Indiana	Indianapolis		Columbus
		Fort Wayne		Dayton/Springfield
	Illinois	Chicago		Mansfield
	Kentucky	Louisville		Steubenville/Weirton
	Michigan	Ann Arbor		Toledo
		Detroit		Youngstown/Warren
		Grand Rapids/Muskegon/Holland	Utah	Salt Lake City
		Kalamazoo/Battle Creek
	Minnesota	Minneapolis/St. Paul
		Rochester
Southwest	Arizona	Phoenix/Mesa	Texas	Austin/San Marcos
	Nevada	Las Vegas		Brazoria
	New Mexico	Albuquerque		Dallas
		Santa Fe		Ft. Worth/Arlington
				Galveston/Texas City
				Houston
				Killeen/Temple
				San Antonio
West Coast	California	Bakersfield	Hawaii	Hawaii
		Fresno	Nevada	Las Vegas
		Kings County		Reno
		Los Angeles/Long Beach	Oregon	Eugene
		Oakland		Portland/Vancouver
		Orange County	Washington	Seattle/Bellevue/Everett
		Riverside/San Bernardino		Tacoma
		Sacramento
		San Diego
		San Francisco
		San Jose
		San Luis Obispo
		Visalia/Tulare/Porterville
		Yolo

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     In fiscal 2004, Centex Homes closed 30,358 homes, including first-time, move-up and, in some markets, custom homes, ranging in price from approximately $59,000 to $1.5 million. The average sales price in fiscal 2004 was $242,465.

     Our practice has been to acquire land, build homes on the land and sell the homes within 24 to 36 months from the date of land acquisition. Generally, this involves acquiring land that is properly zoned and is either ready for development or, to some degree, already developed. We control a substantial amount of our land, including lots and land to be developed into lots, through option agreements that we can exercise over specified time periods or, in certain cases, as the land or lots are needed. At March 31, 2004, Centex Homes owned approximately 77,000 lots and had options to purchase approximately 115,000 lots. In addition, Centex Homes enters into joint ventures with other builders and developers for land acquisition, development and other activities. For additional discussion of our participation in joint ventures and lot option agreements, see Notes (H), “Commitments and Contingencies,” and (I), “Land Held Under Option Agreements Not Owned and Other Land Deposits” of the Notes to Consolidated Financial Statements on pages 79-81 of this Report.

     Our growth strategy for Centex Homes has been focused primarily on organic growth opportunities through land acquisition and development in existing business units and markets. To a lesser extent, we have also grown the business through the acquisition of other homebuilding companies. Since April 1998, we have acquired homebuilding operations of the following companies:

Company	Date Acquired	Description
Wayne Homes	April 1998	Single-family homes in the “on-your-lot” market segment.
Teal Homes	May 1998	Single-family homes for the first-time and move-up buyer in the Richmond, Virginia area.
Calton Homes	December 1998	Single-family homes for the first-time and move-up buyer in New Jersey.
Real Homes	September 1999	Single-family homes for the first-time and move-up buyer in the Las Vegas, Nevada area.
Selective Group	March 2001	Single-family homes for the first-time and move-up buyer in the Detroit, Michigan area.
CityHomes	March 2001	Urban townhomes and condominiums in the Dallas, Texas area.
Jones Company	January 2003	Single-family homes for the first-time and move-up buyer in the St. Louis, Missouri and Indianapolis, Indiana areas.

     In addition, in July 1999, we acquired land and other operating assets for the construction of single-family homes, townhomes and duplexes from Sundance Homes, a suburban Chicago homebuilder. Sundance Homes retained its name and continues to operate in other markets in which we do not compete.

     Centex Homes sells its homes under a variety of brand names including several of the acquired company names listed above. Fox & Jacobs, one of our brand names, primarily markets to first-time buyers. Centex Homes primarily markets its homes to first-time and move-up buyers. Wayne Homes markets primarily to rural lot owners for construction of a home on their lot. Centex Destination Properties markets to second home/resort home buyers.

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     The table below summarizes by geographic area Centex Homes’ domestic home closings, sales (orders) backlog and sales (orders) for the five most recent fiscal years.

Closings (in units):

	For the Years Ended March 31,
	2004		2003		2002		2001		2000
Mid-Atlantic		5,201		4,501		3,877		3,395		3,058
Southeast		5,568		4,851		4,440		4,137		4,142
Midwest		5,801		4,695		3,688		3,296		3,089
Southwest		8,708		8,157		6,910		5,661		4,923
West Coast		5,080		4,223		4,045		4,170		3,692
		30,358		26,427		22,960		20,659		18,904
Average Sales Price (in 000’s)	$	242	$	220	$	214	$	206	$	192

Sales (Orders) Backlog, at the end of the period (in units):

	For the Years Ended March 31,
	2004		2003		2002		2001		2000
Mid-Atlantic		2,801		2,148		1,503		1,365		1,210
Southeast		3,707		2,713		2,315		1,936		1,891
Midwest		3,392		2,920		2,093		2,037		1,628
Southwest		2,869		2,258		2,361		2,546		1,861
West Coast		2,645		2,011		1,099		1,381		989
		15,414		12,050		9,371		9,265		7,579

     We define backlog units as units that have been sold, as evidenced by a signed contract, but not closed. Substantially all of the orders in sales backlog as of March 31, 2004 are expected to close during fiscal year 2005.

Sales (Orders) (in units):

	For the Years Ended March 31,
	2004		2003		2002		2001		2000
Mid-Atlantic		5,854		5,146		3,936		3,550		3,207
Southeast		6,562		5,249		4,819		4,182		4,202
Midwest		6,273		5,087		3,744		3,572		3,207
Southwest		9,319		8,054		6,725		6,325		5,031
West Coast		5,714		5,132		3,763		4,562		3,760
		33,722		28,668		22,987		22,191		19,407

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Competition and Other Factors

     The conventional homebuilding industry is essentially a “local” business and is highly competitive. The top 10 builders in calendar year 2003 accounted for approximately 15.1% of the total for-sale attached and detached housing permits in the United States. We compete in each of Centex Homes’ market areas with numerous other homebuilders, including national, regional and local builders. Centex Homes’ top six competitors based on revenues for their most recent fiscal year-end are as follows: Beazer Homes USA, Inc., D. R. Horton, Inc., KB Homes, Lennar Corporation, Pulte Homes, Inc. and The Ryland Group, Inc. Centex Homes’ operations accounted for an estimated 2.1% of the total for-sale attached and detached housing permits in the United States for the twelve months ended March 31, 2004. The main competitive factors affecting Centex Homes’ operations are location, price, availability of mortgage financing for customers, construction costs, design and quality of homes, customer service, marketing expertise, availability of land, price of land and reputation. We believe that Centex Homes competes effectively by building a high quality home, maintaining geographic diversity, being responsive to the specific demands of each market and managing the operations at a local level.

     The results of operations of our Home Building segment may be adversely affected by increases in interest rates. Any significant increase in mortgage interest rates above currently prevailing low levels could affect the ability or willingness of prospective home buyers to finance home purchases. Although we expect that we would be able to make adjustments in our operations to mitigate the effects of any increase in interest rates, there can be no assurances that these efforts would be successful.

     The homebuilding industry is affected by changes in national and local economic conditions, job growth, long-term and short-term interest rates, consumer confidence, governmental policies, zoning restrictions and, to a lesser extent, changes in property taxes, energy costs, federal income tax laws, federal mortgage financing programs and various demographic factors. The political and economic environments affect both the demand for housing constructed and the subsequent cost of financing. Unexpected climatic conditions, such as unusually heavy or prolonged rain or snow, may affect operations in certain areas.

     The homebuilding industry is subject to extensive regulations. Centex Homes and its subcontractors must comply with various federal, state and local laws and regulations, including worker health and safety, zoning, building standards, erosion and storm water pollution control, advertising, consumer credit rules and regulations and the extensive and changing federal, state and local laws, regulations and ordinances governing the protection of the environment, including the protection of endangered species. Centex Homes is also subject to other rules and regulations in connection with its manufacturing and sales activities, including requirements as to incorporated building materials and building designs. All of these regulatory requirements are applicable to all homebuilding companies, and, to date, compliance with these requirements has not had a material impact on Centex Homes. We believe that Centex Homes is in material compliance with these requirements.

     We purchase materials, services and land from numerous sources (primarily local vendors), and believe that we can deal effectively with the challenges we may experience relating to the supply or availability of materials, services and land.

International

     In February 2004, we acquired through merger transactions Holding and its subsidiary and the Partnership and its subsidiaries. Our international homebuilding operations currently involve the purchase and development of land or lots and the construction and sale of a range of products from small single-family units to executive houses and apartments throughout the United Kingdom. International homebuilding currently has 47 developments located throughout England. For the period from February 29, 2004, the date of the merger

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transactions, through March 31, 2004, our international homebuilding operations delivered 236 units, with prices ranging from $95,000 to $795,000. The average sales price was approximately $327,326. As of March 31, 2004, our international homebuilding operations had 388 units in sales backlog. We define backlog units as units that have been sold, as evidenced by a signed contract, but not closed. Substantially all of the orders in sales backlog as of March 31, 2004 are expected to close during fiscal 2005. Home Building’s international operations currently account for less than 1% of the new homes market in the United Kingdom.

FINANCIAL SERVICES

     Our Financial Services operations are primarily engaged in the residential mortgage lending business, as well as other financial services that are in large part related to the residential mortgage market. These operations include mortgage origination, servicing and other related services for purchasers of homes sold by our Home Building operations, other homebuilders and other real estate professionals, sub-prime home equity lending and the sale of title insurance and various other insurance coverages.

Conforming Mortgage Lending

     We established CTX Mortgage Company, LLC and its related companies to provide mortgage financing for homes built by Centex Homes. By opening CTX Mortgage Company, LLC offices in Centex Homes’ housing markets, we have been able to provide mortgage financing for an average of 69% of Centex Homes’ sales, other than cash sales, over the past five years and 74% in fiscal 2004. In 1985, we expanded CTX Mortgage Company, LLC’s operations to include the origination of mortgage loans that are not associated with the sale of homes built by Centex Homes. We refer to mortgage financing for homes built by Centex Homes as Builder loans and to mortgage financing for homes built by others as Retail loans.

     At March 31, 2004, CTX Mortgage Company, LLC originated loans through its loan officers in 240 offices located in 36 states. The offices vary in size depending on loan volume.

     The following table shows the unit breakdown of Builder and Retail loans for CTX Mortgage Company, LLC and its related companies for the five years ended March 31, 2004:

	For the Years Ended March 31,
	2004			2003			2002			2001			2000
Loan Types:
Builder		20,865			18,127			15,435			12,506			10,958
Retail		67,481			66,807			64,949			48,244			48,301
		88,346			84,934			80,384			60,750			59,259
Origination Volume (in billions)	$	15.12		$	13.99		$	12.45		$	8.88		$	8.11
Percent of Centex Homes’ Non-Cash Closings Financed		74	%		73	%		72	%		64	%		61	%

     We provide mortgage origination and other mortgage-related services for the Federal Housing Administration, or FHA, the Department of Veterans’ Affairs, or VA, and conventional loans on homes that Centex Homes or others build and sell, as well as resale homes and refinancing of existing mortgages. Our loans are generally first-lien mortgages secured by one- to four-family residences. A majority of the loans qualify for inclusion in programs sponsored by the Government National Mortgage Association, or GNMA, the Federal National Mortgage Association, or FNMA, or the Federal Home Loan Mortgage Corporation, or FHLMC. These loans are known in the industry as “conforming” loans. The remainder of the loans are either pre-approved and individually underwritten by CTX Mortgage Company, LLC or private investors who

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subsequently purchase the loans, or are funded by private investors who pay a broker fee to CTX Mortgage Company, LLC for broker services rendered. CTX Mortgage Company, LLC’s principal sources of income consist of gains on sales of mortgage loans, inclusive of all servicing rights, and, to a lesser extent, net interest income and other fees. Generally, we sell our right to service the mortgage loans and retain no other residual interests.

     We also participate in joint-venture agreements with third-party homebuilders and other real estate professionals to provide mortgage originations for their customers. These joint venture companies are fully consolidated in CTX Mortgage Company, LLC’s financial statements. At March 31, 2004, CTX Mortgage Company, LLC had 21 of these agreements, operating in 21 offices located in 9 states.

     In 1999, CTX Mortgage Company, LLC entered into a mortgage loan purchase agreement with Harwood Street Funding I, LLC, or HSF-I, that we refer to as the HSF-I Purchase Agreement. HSF-I is a variable interest entity for which we are the primary beneficiary and, as of July 1, 2003, is consolidated with our Financial Services segment. HSF-I purchases mortgage loans, at closing, from CTX Mortgage Company, LLC with the proceeds from the issuance of senior debt and subordinated certificates. Since 1999, CTX Mortgage Company, LLC has sold substantially all of the conforming and Jumbo “A” mortgage loans that it originates to HSF-I in accordance with the HSF-I Purchase Agreement. When HSF-I acquires these loans, it typically holds them for a period of 45 to 60 days and then resells them into the secondary market. In accordance with the HSF-I Purchase Agreement, CTX Mortgage Company, LLC acts as servicer of the loans owned by HSF-I and arranges for the sale of the mortgage loans into the secondary market.

Sub-Prime Home Equity Lending

     We formed the predecessor of Centex Home Equity Company, LLC, or Home Equity, in fiscal 1995. Home Equity’s business involves the origination of primarily nonconforming home equity mortgage loans. The sub-prime lending market is comprised of borrowers whose financing needs are not being met by traditional mortgage lenders for a variety of reasons, including credit histories that may limit a borrower’s access to credit or a borrower’s need for specialized loan products such as cash-out refinance and jumbo loans. Since its inception, Home Equity has focused on lending to individuals who have substantial equity in their homes but whose financing needs are not being met by traditional mortgage lenders. Home Equity’s mortgage loans to these borrowers are made primarily for such purposes as debt consolidation, refinancing, home improvement or educational expenses. Substantially all of Home Equity’s mortgage loans are secured by first mortgage liens on one- to four-family residences and have amortization schedules ranging from 5 to 30 years.

     At March 31, 2004, Home Equity had 166 offices and was doing business in 47 states. Home Equity originates home equity loans through five major origination sources:

• its retail branches;

• a broker referral network;

• referrals from its conforming mortgage affiliate, CTX Mortgage Company, LLC;

• a correspondent mortgage banker network; and

• Home Equity’s direct sales unit that sources lending opportunities from a variety of channels including through the Internet.

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     The following table summarizes Home Equity’s origination statistics for the five-year period ended March 31, 2004:

	For the Years Ended March 31,
	2004		2003		2002		2001		2000
Loans		36,659		29,448		26,955		26,418		20,568
Origination Volume (in billions)	$	3.92	$	2.51	$	2.09	$	1.72	$	1.32

     We began servicing loans through Home Equity in fiscal 1997, and we generally service all loans included in the Home Equity portfolio. Servicing fees for sub-prime loans are significantly higher than for conforming loans, primarily due to the higher costs associated with more frequent contact with customers. Servicing encompasses, among other activities, the following processes: billing, collection of payments, investor reporting, customer help, recovery of delinquent payments and instituting foreclosure and liquidation of the underlying collateral. As of March 31, 2004, Home Equity was servicing a sub-prime loan portfolio of 87,073 loans with a total loan value of approximately $7.14 billion.

     From October 1997 through March 2000, a majority of Home Equity’s loans originated were included in securitizations that utilized a structure that resulted in the loans being accounted for as sales. Under this structure, Home Equity retained a residual interest in, as well as the servicing rights to, the securitized loans. We call this retained residual interest the mortgage securitization residual interest, or MSRI. As a result of the sales accounting treatment, our balance sheet does not reflect the mortgage loans receivable and offsetting debt resulting from these securitizations. The estimated gain on the sale of these loans was included in earnings during the period in which the securitization transaction closed. As of March 31, 2004, Home Equity had a remaining MSRI of $87.8 million, which includes $86.5 million remaining on loans securitized from October 1997 to March 2000 accounted for as gain on sale and $1.3 million related to loans sold in fiscal year 2004 to a government sponsored enterprise that we continue to service.

     We changed the structure of securitizations beginning April 1, 2000. Subsequent to March 31, 2000, securitizations have been accounted for as borrowings; interest has been recorded over the life of the loans using the interest, or actuarial, method; the mortgage loans receivable and the securitization debt have remained on Home Equity’s balance sheet and the related interest margin has been reflected in our income statement. Under both structures, recourse on the securitized debt is limited to the payments received on the underlying mortgage collateral with no recourse to Home Equity or Centex Corporation. As is common in these structures, Home Equity remains liable for customary loan representations. The change in structure of the securitizations does not affect the cash flow and profit recognized over the life of the mortgages. However, the change did affect the timing of profit recognition. Interest margin, rather than gain on sale of loans, is now Home Equity’s primary source of operating income. From April 1, 2000 to March 31, 2004, Home Equity completed fifteen securitizations totaling approximately $8.84 billion in loans under this structure.

Other Financial Services Operations

     We offer title agent, title underwriting, closing, appraisal and other settlement services in 26 states under the Commerce Title name, including Commerce Title Company, Commerce Title Agency and Commerce Title Insurance Company. Through Westwood Insurance, a multi-line property and casualty insurance agency, we market homeowners and auto insurance to homebuilding and mortgage customers and customers of approximately nine other homebuilders in 50 states. Westwood Insurance also provides coverage for some commercial customers.

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     Our Technologies Group, headquartered in Edmond, Oklahoma, provides mortgage quality control services and provides the mortgage industry with regulations and guidelines in an electronic format.

Competition and Other Factors

     The financial services industry in the United States is highly competitive. CTX Mortgage Company, LLC competes with commercial banks, other mortgage lending companies and other financial institutions to supply mortgage financing at attractive rates to purchasers of Centex homes, as well as to the general public. Home Equity competes with commercial banks, other sub-prime lenders and other financial institutions to supply sub-prime financing at attractive rates. Our title and insurance operations compete with other providers of title and insurance products to sell their products to purchasers of our homes, as well as to the general public. Many of these competitors have greater resources than we do.

     The results of operations of our Financial Services segment may be adversely affected by increases in interest rates. Any significant increase in mortgage interest rates above currently prevailing low levels could affect the ability or willingness of prospective home buyers to finance home purchases and/or curtail mortgage refinance activity. Although we expect that we would be able to make adjustments in our operations to mitigate the effects of any increase in interest rates, there can be no assurances that these efforts would be successful.

     The Financial Services operations are subject to extensive state and federal regulations, as well as rules and regulations of, and examinations by, FNMA, FHLMC, FHA, VA, Department of Housing and Urban Development, or HUD, GNMA and state regulatory authorities with respect to originating, processing, underwriting, making, selling, securitizing and servicing loans and providing title and other insurance products. In addition, there are other federal and state statutes and regulations affecting such activities. These rules and regulations, among other things, impose licensing obligations on our Financial Services operations, specify standards for origination procedures, establish eligibility criteria for mortgage loans, provide for inspection and appraisals of properties, regulate payment features and, in some cases, fix maximum interest rates, fees, loan amounts and premiums for title and other insurance. Certain of our Financial Services operations are required to maintain specified net worth levels and submit annual audited financial statements to HUD, VA, FNMA, FHLMC, GNMA and some state regulators.

     As an approved FHA mortgagee, CTX Mortgage Company, LLC is subject to examination by the Federal Housing Commissioner at all times to ensure compliance with FHA regulations, policies and procedures. Our title and insurance operations are subject to examination by state authorities. Mortgage origination and servicing activities are subject to the Equal Credit Opportunity Act, the Fair Housing Act, the Fair Credit Reporting Act, the Federal Truth-In-Lending Act, the Real Estate Settlement Procedures Act, the Riegle Community Development and Regulatory Improvement Act, the Home Ownership and Equity Protection Act and regulations promulgated under such statutes, as well as other federal and state consumer credit laws. The Real Estate Settlement Procedures Act also applies to our insurance operations. These statutes prohibit discrimination and unlawful kickbacks and referral fees and require the disclosure of certain information to borrowers concerning credit and settlement costs. Many of these regulatory requirements seek to protect the interest of consumers, while others protect the owners or insurers of mortgage loans. Failure to comply with these requirements can lead to loss of approved status, demands for indemnification or loan repurchases from investors, class action lawsuits by borrowers, administrative enforcement actions and, in some cases, rescission or voiding of the loan by the consumer.

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CONSTRUCTION SERVICES

     Construction Services provides a range of commercial contracting services, including construction management, general contracting, design-build and preconstruction services. As a general contractor or construction manager, Construction Services provides management personnel for the construction of facilities. Occasionally, Construction Services may perform some of the actual construction work on a project but will generally hire subcontractors to perform the majority of the work. For the fiscal year ended March 31, 2004, over 90% of contracted projects range in size from $10 million to $350 million.

     Historically, Construction Services has conducted its operations through its distinct, largely autonomous operating companies. Construction Services’ principal operating companies are Centex Construction Company, Inc., Centex Rodgers, Inc. and Centex-Rooney Construction Co., Inc. These operating companies serve various geographic locations and project niches. In fiscal 2004, Construction Services decided to exit the industrial construction market. Construction Services is currently transitioning to one common organizational structure with one brand, standardized operating policies and procedures and an emphasis on certain geographic markets and project niches in which it has expertise. As of March 31, 2004, Construction Services’ primary offices are located in the metropolitan areas of Dallas, Nashville, Ft. Lauderdale, Charlotte and Washington D.C.

     Construction contracts are primarily procured under one of two methods: negotiated (qualifications-based selection) or competitive bid (price-based selection). At March 31, 2004, approximately 88% of backlog was procured under the negotiated method. The backlog at March 31, 2004 was $1.75 billion compared to $1.52 billion at March 31, 2003. Approximately $1.22 billion of the backlog at March 31, 2004 is projected to be constructed and the related revenues recognized during fiscal year 2005. We define backlog as the uncompleted portion of all signed contracts.

     The following table summarizes the backlog as of March 31, 2004 by industry segment:

Industry Segment	% of Backlog
Education		19	%
Healthcare		19	%
Military Housing		19	%
Corrections		13	%
Government		8	%
Transportation		8	%
Corporate Office Buildings		5	%
Hospitality		3	%
Other		6	%
Total		100	%

Competition and Other Factors

     The construction industry is very competitive, and Construction Services competes with numerous local, regional and national contractors depending upon the nature of the project. Top-tier construction firms distinguish themselves from regional and local firms based on their project resumes, reputation and financial strength. Construction Services focuses on maintaining a competitive advantage over other top-tier construction firms by utilizing disciplined decision making for market selection, project selection, risk assessment and pricing; providing excellence in customer service and recruiting top-quality, experienced industry personnel.

     Although national demand for commercial construction is relatively stable, individual markets do experience moderate cyclicality and can be sensitive to overall spending trends in the economy, changes in

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federal, state and local appropriations for construction projects, financing and capital availability for commercial real estate and competitive pressures on the availability and pricing of construction projects.

     Construction Services’ operations are affected by federal, state and local laws and regulations relating to worker health and safety, as well as environmental laws. With respect to health and safety matters, we believe that Construction Services has taken appropriate precautions to protect employees and others from workplace hazards. Current environmental laws may require Construction Services’ operating subsidiaries to work in concert with project owners to acquire the necessary permits or other authorizations for certain activities, including the construction of projects located in or near wetland areas. Construction Services’ operations are also affected by environmental laws regulating the use and disposal of hazardous materials encountered during demolition operations. We believe that Construction Services’ current procedures and practices are consistent with industry standards and that compliance with the health and safety laws and environmental laws does not constitute a material burden or expense.

     Construction Services’ operations obtain materials and services from numerous sources. Our construction companies believe they can deal effectively with challenges they may experience relating to the supply or availability of materials and services.

INVESTMENT REAL ESTATE

     Investment Real Estate’s operations involve the development and sale of land, primarily for industrial, office, multi-family, retail, residential and mixed-use projects. Investment Real Estate historically conducted its operations directly and through our investment in the Partnership, which was accounted for under the equity method of accounting. The Partnership’s operations include domestic real estate operations and an international homebuilding business located in the United Kingdom. In February 2004, we acquired through merger transactions Holding and its subsidiary and the Partnership and its subsidiaries. Subsequent to the merger, we have consolidated the financial results of the Partnership; as a result, we have realigned our reporting for the Partnership, whereby the Partnership’s international homebuilding operations are included in our Home Building business segment. The Partnership’s domestic operations are reported in the Investment Real Estate business segment for periods through March 31, 2004. We have determined that no significant capital will be allocated to Investment Real Estate for new business development. Beginning April 1, 2004, the Investment Real Estate financial results will be included in our Other business segment.

     As of March 31, 2004, Investment Real Estate owned land located in Texas zoned for office, retail and residential uses. At March 31, 2004, Investment Real Estate also owned approximately 291,000 square feet of office buildings located in Texas, 222,000 square feet of office and industrial projects under development in California and Texas, and 381 apartment units under development in Florida.

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EMPLOYEES

     The following table presents a breakdown of our employees as of March 31, 2004:

Business Segment	Employees
Home Building		7,636
Financial Services		5,938
Construction Services		1,474
Investment Real Estate		8
Other		1,476
Total		16,532

     The 1,476 Other employees include 1,322 employees of our home services operations, which provides home pest control services and 154 corporate employees. The 154 corporate employees are employed by Centex Corporation; all others are employees of our various subsidiaries.

AVAILABLE INFORMATION

     Anyone seeking information about our business operations and financial performance can receive copies of the 2004 Annual Report to Stockholders, Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, all amendments to those reports and other documents filed with the Securities and Exchange Commission in Washington, D.C., without charge, by contacting our Corporate Communications office at (214) 981-6503; by writing to Centex Corporation, Investor Relations, P.O. Box 199000, Dallas, Texas 75219 or via email at ir@centex.com. In addition, all filings with the Securities and Exchange Commission, news releases and quarterly earnings announcements, including live audio and replays of recent quarterly earnings webcasts, can be accessed free of charge on our web site (www.centex.com). We make our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act available on our web site as soon as reasonably practicable after we electronically file the material with, or furnish it to, the Securities and Exchange Commission. To retrieve any of this information, go to www.centex.com, select “Investor Relations” and select “SEC Filings.” The reference to our web site is merely intended to suggest where additional information may be obtained by investors, and the materials and other information presented on our web site are not incorporated in and should not otherwise be considered part of this Report.

ITEM 2.  PROPERTIES

     The following properties are used in the operation of our business:

     Centex Homes owns property in Dallas, Texas. This property consists of office and warehouse buildings situated on approximately 18 acres. Centex Homes also owns smaller parcels of land in rural areas of Ohio, Indiana, Pennsylvania, Florida, North Carolina, Minnesota and Washington. Situated on this land are sales offices for its Wayne Homes “on-your-lot” market segment. Home Building owns a building in Tamworth, Staffordshire, England used by its international operations.

     Financial Services owns property in Edmond, Oklahoma. This property consists of two office buildings situated on approximately 12 acres of a 20-acre parcel of land. The remaining eight acres of the parcel are being held for future development or possible sale.

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     Investment Real Estate owns property in Dallas, Texas. This property consists of two office buildings and approximately seven acres of land. Home Equity is using one office building, and approximately 74% of the other office building is leased to Centex and its various subsidiaries.

     See “Item 1. Business” on pages 3-15 of this Report for additional information relating to the Company’s properties including land owned or controlled by our Home Building segment and land and buildings owned by our Investment Real Estate segment.

ITEM 3.  LEGAL PROCEEDINGS

     In the normal course of our business, we and/or our subsidiaries are named as defendants in suits filed in various state and federal courts. We believe that none of the litigation matters in which we, or any of our subsidiaries, are involved would have a material adverse effect on our consolidated financial condition or operations.

     In January 2003, Centex received a request for information from the United States Environmental Protection Agency (“EPA”) pursuant to Section 308 of the Clean Water Act seeking information about storm water discharge practices at projects that Centex subsidiaries had completed or were building. Subsequently, the EPA limited its request to Centex Homes and 30 communities. Centex Homes has provided the requested information and the EPA has asserted that some of these and certain other communities have violated regulatory requirements applicable to storm water discharges, and that injunctive relief and civil penalties may be warranted. Centex Homes has defenses to the allegations made by the EPA and is exploring methods of settling this matter.

     While the amount of civil penalties, if any, and the cost of injunctive relief, if any, are undetermined, the Company is confident that such amounts will not be material to its consolidated financial condition or operations.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     On February 25, 2004, we held a special meeting of stockholders. At the special meeting, the following matters were approved by stockholders:

(1) Stockholders approved the proposal to amend the Restated Articles of Incorporation to increase Centex’s authorized common stock from 100 million shares to 300 million shares as set forth in Item 1 of the Centex Corporation Proxy Statement dated January 26, 2004. Voting results, which are stock split adjusted, are summarized as follows:

Number of Shares
For	Against		Abstained		Broker Non-Votes
103,751,674		2,755,916		568,840		—

(2) Stockholders approved the proposal to terminate the nominee agreement relating to the tandem trading of Holding’s and the Partnership’s equity interests with Centex common stock, as set forth in Item 2 of the Centex Corporation Proxy Statement dated January 26, 2004. Voting results, which are stock split adjusted, are summarized as follows:

Number of Shares
For	Against		Abstained		Broker Non-Votes
92,025,216		1,161,598		629,792		—

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EXECUTIVE OFFICERS OF CENTEX (See Item 10 of Part III of this Report)

     The following is an alphabetical listing of our executive officers as of May 28, 2004, as such term is defined under the rules and regulations of the Securities and Exchange Commission. Officers are generally elected by the Board of Directors at its meeting immediately following our annual stockholders’ meeting, with each officer serving until a successor has been elected and qualified. There is no family relationship between any of these officers.

Name	Age		Positions with Centex or Business Experience
Leldon E. Echols		48	Executive Vice President and Chief Financial Officer of Centex Corporation since June 2000; Partner and employee at Arthur Andersen LLP from December 1978 to May 2000
Timothy R. Eller		55	Chairman of the Board, Chief Executive Officer, President and Chief Operating Officer of Centex Corporation (Chairman of the Board and Chief Executive Officer since April 2004; President and Chief Operating Officer since April 2002); Executive Vice President of Centex Corporation from August 1998 to April 2002; Chairman of the Board of Centex Real Estate Corporation from April 1998 to April 2003; Chief Executive Officer of Centex Real Estate Corporation from July 1991 to April 2002; President and Chief Operating Officer of Centex Real Estate Corporation from January 1990 to April 1998
Mark D. Kemp		42	Vice President and Controller of Centex Corporation since December 2002; Partner and employee at Arthur Andersen LLP from December 1983 to August 2002
Raymond G. Smerge		60	Executive Vice President, Chief Legal Officer, General Counsel and Secretary of Centex Corporation (Executive Vice President since July 1997; Chief Legal Officer since September 1985; General Counsel and Secretary since April 1993; Vice President from September 1985 to July 1997)
Robert S. Stewart		50	Senior Vice President of Centex Corporation since May 2000; Employee at the Weyerhaeuser Company from March 1977 to May 2000, during which time he held a range of key management positions, including positions in strategic planning.
Jonathan R. Wheeler		52	Senior Vice President of Centex Corporation since May 2004; Senior Vice President of Centex Real Estate Corporation from October 1997 to May 2004

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PART II

ITEM 5.  MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

	Stock Prices and Dividends
	Year Ended March 31, 2004						Year Ended March 31, 2003
	Price						Price
	High		Low		Dividends		High		Low		Dividends
Quarter
First	$	43.75	$	26.78	$	.02	$	29.45	$	24.45	$	.02
Second	$	41.48	$	35.55	$	.02	$	29.60	$	21.27	$	.02
Third	$	56.54	$	38.55	$	.02	$	26.34	$	19.16	$	.02
Fourth	$	58.40	$	46.27	$	.04	$	28.79	$	24.15	$	.02

The principal market for our common stock is the New York Stock Exchange (ticker symbol CTX). The approximate number of record holders of our common stock at May 15, 2004 was 3,056.

On March 12, 2004, we completed a two-for-one stock split in the form of a 100 percent stock dividend to our stockholders of record as of February 29, 2004. All prior period stock prices and dividends per share have been restated to give retroactive application to the stock split.

Dividend amounts represent cash dividends per share paid by us quarterly on our common stock. Effectively, the stock split mentioned above doubled Centex’s dividend. We currently expect that comparable cash dividends will continue to be paid throughout fiscal year 2005.

The remaining information called for by this item relating to securities authorized for issuance under equity compensation plans is reported in Note (M), “Capital Stock and Employee Benefit Plans,” of the Notes to Consolidated Financial Statements on pages 87-91 of this Report.

     The following table details our common stock repurchases for the three months ended March 31, 2004:

	Issuer Purchases of Equity Securities
					Total Number of		Maximum Number of
					Shares Purchased as		Shares that May Yet
	Total Number of		Average Price Paid		Part of Publicly		Be Purchased Under
	Shares Purchased		Per Share		Announced Plan		the Plan
Period
January 1-31	No shares repurchased					4,349,600		1,672,800
February 1-29		396,000	$	50.70		4,745,600		3,604,000
March 1-31		880,000	$	55.17		5,625,600		2,724,000

On February 17, 2004, the Board of Directors increased our share repurchase authorization of common stock to 4,000,000 shares adjusted for the stock split discussed above. The total number of shares purchased in the above table represents shares of common stock repurchased pursuant to Board of Directors authorizations including the February 17, 2004 authorization and all prior authorizations. Purchases are made from time-to-time in the open market. The share repurchase authorization has no stated expiration date, and the Board of Directors has authorized all shares repurchased.

     On May 29, 2003, Laurence E. Hirsch, an executive officer of Centex Corporation, converted a convertible debenture in the principal amount of $2.1 million into 400,000 shares of Centex Corporation common stock. Centex Corporation sold the debenture to Mr. Hirsch in May 1985. The 400,000 shares of common stock issued by Centex Corporation to Mr. Hirsch were not registered under the Securities Act of 1933 in reliance on the exemption from registration provided by Section 3(a)(9) thereof, which exempts any security exchanged by the issuer with its existing security holders exclusively where no commission or other remuneration is paid or given directly or indirectly for soliciting the exchange.

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ITEM 6.  SELECTED FINANCIAL DATA

Summary of Selected Financial Data (Unaudited) ⁽¹⁾
(Dollars in thousands, except per share data)

	For the Years Ended March 31,
	2004			2003			2002			2001			2000
Revenues	$	10,363,391		$	8,428,705		$	7,123,794		$	6,138,577		$	5,353,312
Earnings from Continuing Operations (2)	$	777,131		$	526,812		$	358,402		$	265,194		$	192,021
Net Earnings	$	827,686		$	555,919		$	382,226		$	281,977		$	257,132
Stockholders’ Equity	$	3,050,225		$	2,657,846		$	2,116,773		$	1,714,064		$	1,419,349
Net Earnings as a Percentage of Beginning Stockholders’ Equity		31.1	%		26.3	%		22.3	%		19.9	%		21.5	%
Total Assets	$	16,068,568		$	11,610,536		$	8,985,455		$	6,649,043		$	4,038,740
Deferred Income Tax Assets	$	157,678		$	172,240		$	166,346		$	126,570		$	106,489
Total Long-term Debt, Consolidated	$	8,615,864		$	6,181,543		$	4,776,199		$	2,758,118		$	746,535
Debt (with Financial Services reflected on the equity method) (3)	$	2,418,190		$	2,024,953		$	1,605,797		$	1,182,250		$	874,180
Financial Services’ Debt		8,302,190			4,998,819			3,485,027			2,054,898			415,327
Total Debt, Consolidated	$	10,720,380		$	7,023,772		$	5,090,824		$	3,237,148		$	1,289,507
Capitalization (with Financial Services reflected on the equity method) (3) (4)	$	5,802,931		$	4,683,755		$	3,724,827		$	2,901,394		$	2,350,728
Financial Services Capitalization (4)		8,820,005			5,380,226			3,797,355			2,323,155			620,080
Consolidation Eliminations		(516,280	)		(379,671	)		(310,353	)		(266,124	)		(202,931	)
Total Capitalization, Consolidated	$	14,106,656		$	9,684,310		$	7,211,829		$	4,958,425		$	2,767,877
Debt as a Percentage of Capitalization (4)
With Financial Services reflected on the equity method (3)		41.7	%		43.2	%		43.1	%		40.7	%		37.2	%
Consolidated		76.0	%		72.5	%		70.6	%		65.3	%		46.6	%
Per Common Share (5)
Earnings from Continuing Operations (2)
Per Share — Basic	$	6.30		$	4.33		$	2.96		$	2.25		$	1.62
Earnings from Continuing Operations (2)
Per Share — Diluted	$	6.01		$	4.18		$	2.87		$	2.18		$	1.58
Net Earnings Per Share — Basic	$	6.71		$	4.57		$	3.16		$	2.39		$	2.17
Net Earnings Per Share — Diluted	$	6.40		$	4.41		$	3.06		$	2.32		$	2.11
Cash Dividends	$	.10		$	.08		$	.08		$	.08		$	.08
Book Value Based on Shares Outstanding at Year End	$	24.87		$	21.84		$	17.30		$	14.30		$	12.07
Average Shares Outstanding
Basic		123,382,068			121,564,084			121,121,576			118,190,806			118,616,316
Diluted		129,392,821			126,116,312			125,058,294			121,321,770			121,857,960
Stock Prices
High	$	58.40		$	29.60		$	31.55		$	23.10		$	21.44
Low	$	26.78		$	19.16		$	14.02		$	10.32		$	8.75

(1)	The selected financial data presented in this table for the periods covered by the financial statements included in this Report and all prior periods have been adjusted to reflect our Construction Products operations (spun off in January 2004) and our manufactured housing operations (spun off in June 2003) as discontinued operations.
(2)	Earnings from Continuing Operations are Before Cumulative Effect of a Change in Accounting Principle. For more detailed discussion of the change in accounting principle, see Note (F), “Indebtedness” of the Notes to Consolidated Financial Statements on pages 74-78 of this Report.
(3)	Represents a supplemental presentation that reflects the Financial Services segment as if accounted for under the equity method. 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. We also use this presentation to allow investors to compare us to homebuilders that do not have financial services operations.
(4)	Capitalization is composed of Debt, Negative Goodwill, Minority Interest and Stockholders’ Equity. Minority interest in fiscal 2004 includes $332.7 million of minority interests recorded in connection with the consolidation of certain entities with which Home Building has lot option agreements. Negative Goodwill arose in conjunction with the combination of Centex Real Estate Corporation with Vista Properties, Inc. in the fiscal year ended March 31, 1997. Fiscal years 2001 and 2000 include the accretion of negative goodwill to earnings as a reduction of costs and expenses. During fiscal 2001, negative goodwill was fully accreted.
(5)	On March 12, 2004, we completed a two-for-one stock split in the form of a 100 percent stock dividend to our stockholders of record as of February 29, 2004. All prior period stock prices, dividends and earnings per share have been restated to give retroactive application to the stock split.

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ITEM 7.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Executive Summary

     The following summarizes our results for the three-year period ended March 31, 2004:

Revenues

04 03 02 Total 10,363 8,429 7,124 Home Building 7,600 5,923 4,972 Financial Services 1,048 855 700 Construction Services 1,596 1,518 1,296 Other 119 133 156

Earnings (Loss) from Continuing Operations Before Income Tax
and Cumulative Effect of a Change in Accounting Principle

04 03 02 Total 1,149 747 580 Home Building 1,005 652 499 Financial Services 230 162 115 Construction Services 17 31 36 Other (103) (98) (70)

     Other consists of the financial results of Investment Real Estate, home services operations, corporate general and administrative expense and interest expense.

     Fiscal year 2004 represents our eighth consecutive year of growth in revenues and earnings from continuing operations. As outlined in the charts above, in 2004 revenues increased 23% to $10.36 billion and

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earnings from continuing operations increased 54% to $1.15 billion. The increase in revenues and operating earnings is primarily the result of the operating results of our Home Building segment, complemented by improved operating results of our Financial Services segment. The growth in operating earnings from these segments was offset, to a much lesser extent, by a decline in operating earnings of our Construction Services segment. In addition to the execution of our organic growth strategy in our primary business segments (Home Building, Financial Services and Construction Services), in fiscal year 2004, we also (i) distributed $0.46 per share, split adjusted, in value to our stockholders through the spin-off of substantially all of our manufactured housing operations, (ii) distributed $5.29 per share, split adjusted, in value to our stockholders through the spin-off of our Construction Products segment, (iii) repurchased 3,426,200 shares of common stock and (iv) completed a two-for-one stock split, without changing the per share dividend, effectively doubling our cash dividend to stockholders beginning in the fourth quarter.

     Home Building’s organic growth strategy is driven primarily by growth in neighborhoods open for sale, increases in closings per neighborhood, increases in average selling prices, and continued improvements in operating margins. Over the last two fiscal years, Home Building’s domestic operations have increased average neighborhood count from 474 to 558 and closings per average neighborhood from 48.4 to 54.4. Over that same period of time, operating margins have also improved from 9.8% to 12.8%.

     The overall demand for housing in the United States remains favorable, and is driven by population growth, demographics, immigration, household formations and increasing home ownership rates. Short-term growth drivers such as mortgage rates, consumer confidence and employment levels can also impact housing demand. The highly fragmented homebuilding industry in the United States is in the early stages of a consolidation phase. In 1995, based upon single-family permits issued in the United States, the 10 largest homebuilders represented approximately 7.2% of the housing market. As of 2003, the 10 largest homebuilders were producing approximately 15.1% of the nation’s new housing stock. We believe industry consolidation will continue to be an important growth factor over the next decade or more as large homebuilders realize the benefits of size, such as capital strength, more efficient operations and technological advantages.

     Currently, we have homebuilding operations in 45 of the 50 largest housing markets in the United States. We have largely completed our geographic diversification plan and are now focused primarily on further penetration in our existing markets.

     Financial Services’ operating results over the last two years have been favorably impacted by increases in loan originations reflective of a favorable mortgage interest rate environment and improvements in interest spread. The favorable rate environment also created substantial refinance activity. Thirty-year conventional mortgage fixed interest rates were 5.45%, 5.75% and 7.01% as of March 31, 2004, 2003 and 2002 respectively. In addition to the increases in loan originations, the Financial Services operations have also improved their operating leverage, which has had a positive effect on their operating earnings. Our Financial Services segment will continue to focus on serving the customers of our Home Building segment and increasing the percentage of conforming mortgage loans provided to them. For the year ended March 31, 2004, our conforming mortgage business financed approximately 74% of our Home Building non-cash unit closings. In addition, the Financial Services growth model includes plans to increase the number of loan officers originating Retail loans and improve their productivity. Our conforming mortgage lending business is a fee-based business with low capital requirements. Our Financial Services segment also includes our sub-prime home equity lending operations, which is a portfolio-based model that produces more predictable earnings. Our sub-prime home equity loans are obtained through our organically grown origination channels using centrally controlled product, pricing and underwriting.

     The results of operations of certain of our segments, including our Home Building and Financial Services operations, may be adversely affected by increases in interest rates. Any significant increase in mortgage interest rates above currently prevailing low levels could affect the ability or willingness of

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prospective home buyers to finance home purchases and/or curtail mortgage refinance activity. Although we expect that we would be able to make adjustments in our operations to mitigate the effects of any increase in interest rates, there can be no assurances that these efforts would be successful.

     Our Construction Services segment operating earnings have decreased over the last two years as a result of challenges in the overall commercial construction industry. Industry conditions have created increased pricing pressure on construction companies, which in turn has reduced our Construction Services operating margins. However, revenues have increased over the last two years due to our focus on increasing market share. The commercial construction environment remains challenged but is showing signs of improvement as evidenced by the increase in backlog. At March 31, 2004, the backlog was $1.75 billion, an increase of 14.9% over the prior year. Strategically, we will continue to focus on our core geographic and selected industry segments to achieve growth in revenues and operating earnings.

     In fiscal year 2004, we consummated several transactions the most significant of which were the spin-offs to our stockholders of substantially all of our manufactured housing operations on June 30, 2003 and our entire ownership interest in Construction Products, a former majority owned subsidiary, on January 30, 2004. Since the dates of the spin-offs, the assets and liabilities of manufactured housing and Construction Products are no longer included in our consolidated balance sheet, their revenues and earnings are no longer included in our consolidated results of continuing operations, and we no longer operate in the Construction Products business segment. Manufactured housing and Construction Products are reported as discontinued operations in our consolidated financial statements contained in this Report.

FISCAL YEAR 2004 COMPARED TO FISCAL YEAR 2003

HOME BUILDING

     The following summarizes the results of our Home Building operations for the two-year period ended March 31, 2004 (dollars in millions except per unit data and lot information):

	For the Years Ended March 31,
	2004						2003
				% Change						% Change
Revenues — Housing	$	7,438.0			27.8	%	$	5,818.8			18.9	%
Revenues — Land Sales and Other		161.5			55.4	%		103.9			34.2	%
Cost of Sales — Housing		(5,460.8	)		25.2	%		(4,362.7	)		17.8	%
Cost of Sales — Land Sales and Other		(146.4	)		60.4	%		(91.3	)		40.7	%
Selling, General and Administrative Expenses		(1,042.3	)		22.7	%		(849.2	)		16.4	%
Earnings from Unconsolidated Entities		55.3			71.7	%		32.2			29.3	%
Operating Earnings	$	1,005.3			54.3	%	$	651.7			30.6	%
Operating Earnings as a Percentage of Revenues		13.2	%	NM				11.0	%	NM

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     Home Building’s results are derived from its domestic and international operations as described below.

Domestic

     Home Building’s domestic operations involve the purchase and development of land or lots and the construction and sale of detached and attached single-family homes. The following summarizes the results of our Home Building domestic operations for the two-year period ended March 31, 2004:

	For the Years Ended March 31,
	2004					2003
			% Change					% Change
Units Closed		30,358		14.9	%		26,427		15.1	%
Average Unit Sales Price	$	242,465		10.1	%	$	220,183		3.0	%
Operating Earnings Per Unit	$	31,816		33.2	%	$	23,889		12.7	%
Backlog Units		15,414		27.9	%		12,050		28.6	%
Average Operating Neighborhoods		558		7.5	%		519		9.5	%
Closings Per Average Neighborhood		54.4		6.9	%		50.9		5.2	%
Lots Owned		77,475		29.5	%		59,844		37.5	%
Lots Controlled		115,366		62.7	%		70,926		39.6	%
Total Lots Owned and Controlled		192,841		47.5	%		130,770		38.6	%

     Home Building’s financial performance is reflective of changes in the following performance indicators:

• Growth in average neighborhoods

• Growth in closings per average neighborhood

• Increases in average unit sales price

• Operating margin improvement

     The following summarizes changes in performance indicators for the year ended March 31, 2004 as compared to the prior year.

     We define a neighborhood as an individual active selling location targeted to a specific buyer segment. The 7.5% growth in neighborhoods achieved in fiscal 2004 was down slightly from the prior year’s growth of 9.5%. During the year, we added 316 new neighborhoods and closed out of 308 neighborhoods. Our record fourth quarter sales resulted in some existing neighborhoods being “closed out” (i.e., all remaining units sold) earlier than anticipated. In addition, to maximize our pricing opportunities, we delayed the opening of other neighborhoods.

     The increase in closings per average neighborhood in fiscal 2004 was the result of higher sales rates due to our continued focus on market research, activity-based sales management and Internet marketing. Sales orders for the year were strong across all of our operating regions and totaled 33,722 units, an increase of 18% versus the prior year. Home closing volume also increased 15%, to 30,358 homes.

     Strong residential housing market conditions, combined with our geographic, product and segment diversification strategies, continued to drive higher average selling prices. For fiscal 2004, average selling prices were up 10% to $242,465. Average selling prices, excluding California, were up 9% to $210,724 and California’s average selling price was up 13% to $445,462.

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     Operating margins for our domestic homebuilding operations improved to 12.8% for the fiscal year from 10.7% in the prior year. Increased unit volume, average selling price increases and continued focus on lowering direct construction and selling, general and administrative costs resulted in margin improvement throughout the Home Building segment. National and regional purchasing programs and local cost reduction and efficiency efforts have helped offset increasing raw material costs experienced throughout the year. We purchase materials, services and land from numerous sources (primarily local vendors), and believe that we can deal effectively with the challenges we may experience relating to the supply or availability of materials, services and land.

     The above factors contributed to the improvement in our operating earnings, which is reflective of our continued focus on our “Quality Growth” strategy, consisting of growing revenue and earnings while expanding margins.

     During the year, we continued to increase our land position to facilitate our short and longer term growth initiatives. Based on our current closing projections, our land position that is currently owned or controlled under option agreements at March 31, 2004 would produce approximately 100% of our projected closings for fiscal year 2005, 80% of our projected closings for fiscal year 2006, and 55% of our projected closings for fiscal year 2007.

International

     In February 2004, we acquired through merger transactions the Partnership, an investment previously accounted for on the equity method of accounting. Subsequent to the merger, international homebuilding operations of the Partnership have been consolidated with the Home Building segment. Prior period earnings related to the international homebuilding operations of the Partnership, previously reflected in our Investment Real Estate segment, have been reclassified to the Home Building segment to conform to the presentation subsequent to the merger. Our international homebuilding operations involve the purchase and development of land or lots and the construction and sale of a range of products from small single-family units to executive houses and apartments throughout the United Kingdom. Included in Home Building’s operating results were revenues and operating earnings of $80.5 million and $14.1 million, respectively, for the one-month period subsequent to the merger transactions. Earnings from unconsolidated entities related to the international homebuilding operations of the Partnership were $25.3 million for the period from April 1, 2003 through February 29, 2004, the date of the merger, and $20.4 million for the fiscal year ended March 31, 2003.

FINANCIAL SERVICES

     The Financial Services segment is primarily engaged in the residential mortgage lending business, as well as other financial services that are in large part related to the residential mortgage market. Its operations include mortgage origination, servicing and other related services for purchasers of homes sold by our Home Building operations and other homebuilders, sub-prime home equity lending and the sale of title insurance and various other insurance coverages.

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     The following summarizes the results of our Financial Services operations for the two-year period ended March 31, 2004 (dollars in millions):

	For the Years Ended March 31,
	2004						2003
				% Change						% Change
Revenues	$	1,047.9			22.6	%	$	855.0			22.2	%
Cost of Sales		(223.8	)		21.3	%		(184.5	)		16.0	%
Selling, General and Administrative Expenses		(593.8	)		16.7	%		(508.7	)		19.4	%
Operating Earnings	$	230.3			42.3	%	$	161.8			41.1	%
Interest Margin	$	302.0			75.2	%	$	172.4			60.1	%
Origination Volume	$	19,036.7			15.4	%	$	16,497.4			13.5	%
Number of Loans Originated		125,005			9.3	%		114,382			6.6	%
Number of Loan Applications		430,439			27.3	%		338,136			35.8	%

     Financial Services’ results are primarily derived from conforming mortgage lending and sub-prime home equity lending operations as described below.

Conforming Mortgage Lending

     The following summarizes the results of our Conforming Mortgage Lending operations for the two-year period ended March 31, 2004 (dollars in millions):

	For the Years Ended March 31,
	2004						2003
				% Change						% Change
Revenues	$	521.1			14.8	%	$	453.9			14.3	%
Cost of Sales		(21.9	)		212.9	%		(7.0	)		(50.7	%)
Selling, General and Administrative Expenses		(333.4	)		0.4	%		(332.2	)		13.2	%
Operating Earnings	$	165.8			44.6	%	$	114.7			28.0	%
Interest Margin	$	47.4			457.6	%	$	8.5			32.8	%
Average Interest Earning Assets	$	1,332.4			570.9	%	$	198.6			(18.5	%)
Average Yield		5.99	%	NM				7.18	%	NM
Average Interest Bearing Liabilities	$	1,246.2			841.2	%	$	132.4			(37.3	%)
Average Rate Paid		1.59	%	NM				4.08	%	NM

     The revenues and operating earnings of CTX Mortgage Company, LLC and its related companies are derived primarily from the sale of mortgage loans, inclusive of all servicing rights and, to a lesser extent, interest income and other fees. Net origination fees, mortgage servicing rights, and other revenues derived from the origination of mortgage loans are deferred and recognized when the related loan is sold to a third-party purchaser. Interest revenues on residential mortgage loans receivable are recognized using the interest (actuarial) method. Other revenues, including fees for title insurance and other services performed in connection with mortgage lending activities, are recognized as earned.

25

     Our business strategy of selling conforming loans reduces our capital investment and related risks, provides substantial liquidity and is an efficient process given the size and maturity of the conforming mortgage loan secondary capital markets. CTX Mortgage Company, LLC originates mortgage loans, holds them for a short period and sells them to HSF-I and investors. HSF-I is a variable interest entity for which we are the primary beneficiary and, as of July 1, 2003, is consolidated with our Financial Services segment. As a result of the consolidation of HSF-I, we recorded a cumulative effect of a change in accounting principle of $13.3 million, net of tax, in the quarter ended September 30, 2003. This cumulative effect of a change in accounting principle primarily represented the deferral of service release premium income, offset to a lesser extent by the deferral of certain loan origination costs, which was recognized as loans were sold into the secondary market. The consolidation of HSF-I resulted in an increase in our residential mortgage loans held for sale with a corresponding increase in our debt of approximately $1.32 billion at March 31, 2004. In addition, interest income and interest expense of HSF-I subsequent to June 30, 2003 are reflected in our financial statements. As a result of the consolidation, interest expense reflected as cost of sales in the table above increased approximately $15 million. HSF-I purchases mortgage loans, at closing, from CTX Mortgage Company, LLC with the proceeds from the issuance of securitized medium term notes, secured liquidity notes and subordinated certificates that are extendable for up to five years. CTX Mortgage Company, LLC and its related companies sold $16.25 billion of mortgage loans to investors during the year ended March 31, 2004. CTX Mortgage Company, LLC sold $10.55 billion of mortgage loans to HSF-I and other investors during the year ended March 31, 2003. CTX Mortgage Company, LLC and its related companies recognized gains on the sale of mortgage loans of $240.4 million and $254.5 million for the years ended March 31, 2004 and 2003, respectively.

     In the normal course of its activities, CTX Mortgage Company, LLC carries inventories of loans pending sale to third-party investors and earns an interest margin, that we define as the difference between interest revenue on mortgage loans held for sale or investment and interest expense on debt used to fund the mortgage loans. CTX Mortgage Company, LLC uses HSF-I and short-term mortgage warehouse facilities to finance these inventories of loans. The significant increase in interest margin is due to the consolidation of HSF-I interest income and expense in our financial statements subsequent to June 30, 2003.

     The increase in revenues for the year ended March 31, 2004 is the result of an increase in the volume of loans originated and sold to the secondary market, and to a lesser extent, higher revenues from Title and Insurance operations. The following table provides a comparative analysis of mortgage loan originations and applications for the two-year period ended March 31, 2004:

	For the Years Ended March 31,
	2004					2003
			% Change					% Change
Origination Volume	$	15,116.0		8.0	%	$	13,991.2		12.4	%
Number of Loans Originated
Builder		20,865		15.1	%		18,127		17.4	%
Retail		67,481		1.0	%		66,807		2.9	%
		88,346		4.0	%		84,934		5.7	%
Number of Loan Applications
Builder		24,031		19.5	%		20,103		23.0	%
Retail		65,514		(6.3	%)		69,883		16.1	%
		89,545		(0.5	%)		89,986		17.6	%
Average Loan Size	$	171,100		3.9	%	$	164,700		6.4	%
Profit Per Loan	$	1,839		34.3	%	$	1,369		20.4	%

     The increase in loan originations is primarily reflective of an increase related to loans originated for Centex Homes’ buyers. CTX Mortgage Company, LLC originated 74% of the non-cash closings of Centex

26

Homes’ buyers, an increase of 1% from the prior year. Per-loan profit increased due to increased operational leverage as a result of the increase in the volume of originations, as well as an increase in Title and Insurance earnings.

     CTX Mortgage Company, LLC’s operations are influenced by borrowers’ perceptions of and reactions to interest rates. Refinancing activity accounted for 39% and 42% of originations in 2004 and 2003, respectively. Any significant increase in mortgage interest rates above currently prevailing low levels could affect the ability or willingness of prospective home buyers to finance home purchases and/or curtail mortgage refinance activity. Although there can be no assurance that these efforts will be successful, we will seek to mitigate the effects of any increase in mortgage interest rates by adding loan officers, improving their productivity and reducing costs.

Sub-Prime Home Equity Lending

     The following summarizes the results of our Sub-Prime Home Equity Lending operations for the two-year period ended March 31, 2004 (dollars in millions):

	For the Years Ended March 31,
	2004						2003
				% Change						% Change
Revenues	$	526.8			31.3	%	$	401.1			32.6	%
Cost of Sales		(201.9	)		13.7	%		(177.5	)		22.5	%
Selling, General and Administrative Expenses:
Operating Expenses		(180.9	)		27.8	%		(141.6	)		22.9	%
Loan Loss Provision		(79.5	)		127.8	%		(34.9	)		100.6	%
Operating Earnings	$	64.5			36.9	%	$	47.1			87.6	%
Interest Margin	$	254.6			55.3	%	$	163.9			61.8	%
Average Interest Earning Assets	$	5,592.2			43.6	%	$	3,895.5			48.4	%
Average Yield		8.16	%	NM				8.76	%	NM
Average Interest Bearing Liabilities	$	5,822.6			43.8	%	$	4,049.2			52.6	%
Average Rate Paid		3.47	%	NM				4.38	%	NM

     The revenues of Centex Home Equity Company, LLC, or Home Equity, are derived primarily from interest income on mortgage loans held for investment. Home Equity’s operating earnings are derived primarily from the net interest margin on mortgage loans held for investment. The majority of Home Equity’s loan originations are securitized and accounted for as borrowings; interest is recorded over the life of the loans using the interest, or actuarial method; the mortgage loans receivable and the securitization debt remain on Home Equity’s balance sheet and the related interest margin is reflected in our income statement. We commonly refer to these securitized mortgage loans as portfolio accounting method loans. This structure of securitizations has been utilized since April 1, 2000. Previous loans originated were included in securitizations that utilized a structure that caused them to be accounted for as sales. Under this structure, Home Equity retained a residual interest in, as well as the servicing rights to, the securitized loans. We call this retained residual interest the mortgage securitization residual interest, or MSRI. Our balance sheet does not reflect the mortgage loans receivable and offsetting debt resulting from these securitizations, which were accounted for as sales. The estimated gain on the sale of these loans was included in earnings during the period in which the securitization transaction closed. Under both structures, recourse on the securitized debt is limited to the payments received on the underlying mortgage collateral with no recourse to Home Equity or Centex Corporation. As is common in these structures, Home Equity remains liable for customary loan representations. The change in structure of

27

the securitizations has no effect on the ultimate cash flow and profit recognized over the life of the mortgages. However, the change in accounting for securitizations did affect the timing of profit recognition. Interest margin, which is recognized over the life of the loan, is now Home Equity’s primary source of operating income as compared to gain on sale of loans, which previously was recognized upon securitization. Home equity loans are securitized to provide a low cost method for funding our mortgage operations and to reduce our interest rate exposure on fixed rate loans. In addition to Home Equity’s mortgage loans held for investment, in fiscal year 2004, Home Equity sold 2% of its mortgage loans originated to a government sponsored enterprise, which were accounted for as sales.

     The revenues of Home Equity increased for the year ended March 31, 2004 as a result of continued growth in our portfolio of residential mortgage loans held for investment. Interest margin, which we define as the difference between interest revenue on mortgage loans held for sale or investment and interest expense on debt used to fund the mortgage loans, increased primarily as a result of an increase in the portfolio of mortgage loans held for investment and a decrease in interest rates on debt used to fund mortgage loans.

     Average interest earning assets and liabilities increased primarily due to an increase in the volume of loan originations and an increase in average loan size (see table below). The fact that the average rate paid on interest bearing liabilities decreased significantly more than the decrease of the yield earned on interest earning assets, coupled with the increase in originations resulted in the increase in net interest margin.

     The following summarizes Home Equity’s portfolio of mortgage loans, based on the securitization structure, as of March 31, 2004 and 2003:

	For the Years Ended March 31,
	2004					2003
			% Change					% Change
Servicing Portfolio:
Number of Loans
Portfolio Accounting Method		76,215		24.8	%		61,073		35.1	%
Other		10,858		(18.5	%)		13,329		(24.4	%)
Total		87,073		17.0	%		74,402		18.4	%
Dollars in billions
Portfolio Accounting Method	$	6.50		40.1	%	$	4.64		42.8	%
Other		0.64		(23.8	%)		0.84		(25.0	%)
Total	$	7.14		30.3	%	$	5.48		25.4	%

     The following table provides a comparative analysis of mortgage loan originations and applications for the two-year period ended March 31, 2004:

	For the Years Ended March 31,
	2004					2003
			% Change					% Change
Origination Volume	$	3,920.7		56.4	%	$	2,506.2		19.8	%
Number of Loans Originated		36,659		24.5	%		29,448		9.2	%
Number of Loan Applications		340,894		37.4	%		248,150		43.9	%
Average Loan Size	$	106,900		25.6	%	$	85,100		9.7	%

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     The increase in origination volume was due to an increase in the average loan size and an increase in the overall sales force, which resulted in an increase in the number of loan applications received.

     The increase in Home Equity’s operating earnings is primarily the result of the increase in interest margin, as noted above. Interest income will be positively affected as the portfolio of mortgage loans held for investment increases and matures. The increase in interest margin was partially offset by an increase in servicing and production costs, mostly attributable to loan volume and loan servicing growth, and an increase in the provision for losses on residential mortgage loans held for investment.

     Home Equity’s selling, general and administrative expenses increased as a result of Home Equity’s growth. Home Equity’s increase in loan production volume, the expansion of its branch offices and the increase in the number of its employees are directly related to a corresponding increase in salaries and related costs, rent expense, group insurance costs and advertising expenditures. The remainder of the increase was due to an increase in the provision for loan losses.

     The increase in the provision for losses in fiscal 2004 occurred primarily because the amount of the residential mortgage loans held for investment increased and the residential mortgage loan portfolio continued to mature. As the age and size of the residential mortgage loan portfolio continues to mature and grow, we expect the provision for losses, the loans charged off and the allowance ratios to continue to increase. For a more detailed discussion of our accounting policy and methodology for establishing the provision for losses, see “Critical Accounting Estimates — Valuation of Residential Mortgage Loans Held for Investment” on page 46 of this Report. Changes in the allowance for losses is included in Note (C), “Allowance for Losses on Residential Mortgage Loans Held for Investment,” of the Notes to Consolidated Financial Statements on page 72 of this Report.

     The primary risks in Home Equity’s operations are consistent with those of the financial services industry and include credit risk associated with its loans, liquidity risk related to funding its loans and interest rate risk prior to securitization of the loans. In addition, it is also subject to prepayment risks (principal reductions in excess of contractually scheduled reductions) associated with loans securitized prior to April 2000. See Note (A), “Significant Accounting Policies,” of the Notes to Consolidated Financial Statements on pages 62-71 of this Report.

CONSTRUCTION SERVICES

     The following summarizes Construction Services’ results for the two-year period ended March 31, 2004 (dollars in millions):

	For the Years Ended March 31,
	2004					2003
			% Change					% Change
Revenues	$	1,596.3		5.2	%	$	1,517.9		17.1	%
Operating Earnings	$	16.4		(46.6	%)	$	30.7		(15.2	%)
New Contracts Executed	$	1,823		112.7	%	$	857		(41.1	%)
Backlog of Uncompleted Contracts	$	1,746		14.9	%	$	1,520		(30.3	%)

     Operating earnings for Construction Services decreased as a result of depressed market conditions and the resulting pricing pressure. In addition, in fiscal 2004, Construction Services recorded a project loss of $4.5 million related to the construction of a distribution facility and incurred approximately $2.7 million of costs associated with its decision to exit the pharmaceutical and industrial construction markets. The increases in new contracts executed and backlog of uncompleted contracts were the result of our strategy to increase market

29

share by focusing on key geographic markets and certain industry markets. Construction Services defines backlog as the uncompleted portion of all signed contracts.

     Construction Services has also been awarded work that is pending execution of a signed contract. At March 31, 2004 and 2003, such work, which is not included in backlog, was approximately $2.03 billion and $1.94 billion, respectively. There is no assurance that this awarded work will result in future revenues.

INVESTMENT REAL ESTATE

     The following summarizes Investment Real Estate’s results for the two-year period ended March 31, 2004 (dollars in millions):

	For the Years Ended March 31,
	2004					2003
			% Change					% Change
Revenues	$	37.9		13.8	%	$	33.3		(37.6	%)
Earnings from Unconsolidated Entities	$	14.5		9.8	%	$	13.2		97.0	%
Operating Earnings	$	44.8		31.8	%	$	34.0		(5.0	%)

     The changes in revenues and operating earnings were primarily related to the timing of property sales. Property sales contributed operating earnings of $30.8 million for the year ended March 31, 2004 and $18.3 million for the same period last year. The timing of sales is uncertain and can vary significantly from period to period. It is not currently anticipated that any significant capital will be allocated to Investment Real Estate for new business development. Effective April 1, 2004, Investment Real Estate will be included in the Other segment.

OTHER

     Our Other segment includes our home services operations, corporate general and administrative expense and interest expense. In June 2003, we spun off substantially all of our investment in manufactured housing operations, which had previously been included in the Other segment. As a result of the spin-off, manufactured housing operations are reflected as a discontinued operation and not included in the segment information below.

     Other consisted of the following (dollars in millions):

	For the Years Ended March 31,
	2004						2003
				% Change						% Change
Operating Loss from home services	$	(2.3	)		(76.0	%)	$	(9.6	)		(340.0	%)
Corporate General and Administrative Expenses		(105.5	)		75.0	%		(60.3	)		20.1	%
Interest Expense		(39.9	)		(33.8	%)		(60.3	)		2.9	%
Other		—			(100.0	%)		(0.6	)		—	%
Operating Loss	$	(147.7	)		12.9	%	$	(130.8	)		24.1	%

     The decrease in our home services division’s operating loss in fiscal 2004 is primarily due to an $8.0 million provision recorded in the fourth quarter of fiscal 2003 to reduce the carrying value of its remaining home security monitoring assets to estimated fair value. Our home services operations sold substantially all of its remaining security monitoring assets in fiscal 2004. The sale of these operations did not have a material effect on home services’ operating loss in fiscal 2004.

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     Corporate general and administrative expenses represent corporate employee compensation and other corporate costs such as investor communications, insurance, rent and professional services. The increase in corporate general and administrative expenses is primarily related to compensation increases reflective of additional personnel to support the growth in our operations and higher performance-related compensation levels due to the expensing of stock options and increases in our earnings and returns. In addition, in fiscal 2004, we recorded an incremental $16 million in employee compensation related to acceleration of certain executive compensation costs for the March 31, 2004 retirement of an executive officer.

     Total interest costs, including interest expensed and relieved to Home Building’s costs and expenses and excluding interest to Financial Services, for the years ended March 31, 2004 and 2003, were $129.0 million and $109.8 million, respectively. The increase in total interest costs is primarily related to an increase in average debt outstanding for the fiscal year 2004, as compared to the prior year. This increase is offset by slightly lower borrowing costs in the fiscal year 2004, as compared to the prior year. For additional discussion of interest costs, see Note (A), “Significant Accounting Policies” of the Notes to Consolidated Financial Statements on pages 62-71 of this Report.

     Our effective tax rate related to continuing operations increased to 32% from 30% in the prior year primarily due to the decrease in the utilization of net operating loss carryforwards during fiscal 2004 compared to fiscal 2003. We expect that the effective tax rate will increase in fiscal 2005 to approximately 35%. The expected increase in the effective tax rate is primarily due to the reduction of net operating loss carryforwards available to offset future taxable income.

DISCONTINUED OPERATIONS

     In June 2003, we spun off to our stockholders substantially all of our manufactured housing operations, and in January 2004, we spun off to our stockholders our entire equity interest in Construction Products. As a result of the spin-offs, the earnings from these operations have been reclassified to discontinued operations in the Statements of Consolidated Earnings. All prior period information related to these discontinued operations has been reclassified to be consistent with the March 31, 2004 presentation.

     For the years ended March 31, 2004 and 2003, discontinued operations had revenues of $461.9 million and $643.2 million and operating earnings of $49.9 million and $47.5 million, respectively. In connection with the tax-free distribution of our interests in Construction Products, we recognized, as a component of discontinued operations, a tax benefit of $33.5 million. The tax benefit is a result of the reversal of a deferred tax liability for the difference between the financial carrying amount of our investment in Construction Products and the respective tax basis, which was no longer required given the tax-free nature of the distribution. In connection with the spin-offs, we recorded a dividend to stockholders of $420.3 million representing our net investments in manufactured housing operations and Construction Products on the respective spin-off dates.

31

FISCAL YEAR 2003 COMPARED TO FISCAL YEAR 2002

HOME BUILDING

     The following summarizes the results of our Home Building operations for the two-year period ended March 31, 2003 (dollars in millions except per unit data and lot information):

	For the Years Ended March 31,
	2003						2002
				% Change						% Change
Revenues — Housing	$	5,818.8			18.9	%	$	4,894.8			15.1	%
Revenues — Land Sales and Other		103.9			34.2	%		77.4			(24.3	%)
Cost of Sales — Housing		(4,362.7	)		17.8	%		(3,703.9	)		12.5	%
Cost of Sales — Land Sales and Other		(91.3	)		40.7	%		(64.9	)		12.3	%
Selling, General and Administrative Expenses		(849.2	)		16.4	%		(729.4	)		18.6	%
Earnings from Unconsolidated Entities		32.2			29.3	%		24.9			8,400.0	%
Operating Earnings	$	651.7			30.6	%	$	498.9			27.8	%
Operating Earnings as a Percentage of Revenues		11.0	%	NM				10.0	%	NM

Domestic

     The following summarizes the results of our Home Building domestic operations for the two-year period ended March 31, 2003:

	For the Years Ended March 31,
	2003					2002
			% Change					% Change
Units Closed		26,427		15.1	%		22,960		11.1	%
Average Unit Sales Price	$	220,183		3.0	%	$	213,738		3.8	%
Operating Earnings Per Unit	$	23,889		12.7	%	$	21,193		12.2	%
Backlog Units		12,050		28.6	%		9,371		1.1	%
Average Operating Neighborhoods		519		9.5	%		474		3.7	%
Closings Per Average Neighborhood		50.9		5.2	%		48.4		7.1	%
Lots Owned		59,844		37.5	%		43,513		16.6	%
Lots Controlled		70,926		39.6	%		50,819		17.8	%
Total Lots Owned and Controlled		130,770		38.6	%		94,332		17.2	%

     Revenues increased for the year ended March 31, 2003 primarily due to an increase in units closed and higher unit sales prices. The increase in units closed was the result of a higher number of operating neighborhoods in fiscal 2003 versus fiscal 2002. The increase in the unit sales price was largely driven by higher selling prices in the Washington, D.C., New Jersey and California markets.

     Cost of sales was 75.2% of revenues for the year ended March 31, 2003 compared to 75.8% of revenues for the same period in the prior year. The decrease in cost of sales as a percentage of revenue is a result of higher per unit sales price and ongoing cost reduction efforts. The increase in selling, general and

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administrative expenses was due to incremental costs associated with closing more homes and higher personnel costs to support Home Building’s growth in neighborhoods.

     As a result of the increase in revenues, decrease in cost of sales as a percentage of revenues, and the continued leverage of the selling, general and administrative expenses discussed above, operating earnings for the year ended March 31, 2003 were 10.7% of revenues compared to operating earnings of 9.8% of revenues for the same period last year.

     Units in backlog increased due to an increase in neighborhoods and an increase in sales versus the prior year.

     Included in Home Building’s financial results is equity in earnings of the Partnership’s international operations of $20.4 million and $12.3 million for the years ended March 31, 2003 and 2002, which was reclassified from the Investment Real Estate segment to conform to the fiscal year 2004 presentation.

FINANCIAL SERVICES

     The following summarizes the results of our Financial Services operations for the two-year period ended March 31, 2003 (dollars in millions):

	For the Years Ended March 31,
	2003						2002
				% Change						% Change
Revenues	$	855.0			22.2	%	$	699.8			50.9	%
Cost of Sales		(184.5	)		16.0	%		(159.1	)		71.8	%
Selling, General and Administrative Expenses		(508.7	)		19.4	%		(426.0	)		21.3	%
Operating Earnings	$	161.8			41.1	%	$	114.7			482.2	%
Interest Margin	$	172.4			60.1	%	$	107.7			245.2	%
Origination Volume	$	16,497.4			13.5	%	$	14,537.9			37.2	%
Number of Loans Originated		114,382			6.6	%		107,339			23.1	%
Number of Loan Applications		338,136			35.8	%		249,030			13.5	%

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Conforming Mortgage Lending

     The following summarizes the results of our Conforming Mortgage Lending operations for the two-year period ended March 31, 2003 (dollars in millions):

	For the Years Ended March 31,
	2003						2002
				% Change						% Change
Revenues	$	453.9			14.3	%	$	397.2			30.8	%
Cost of Sales		(7.0	)		(50.7	%)		(14.2	)		(21.5	%)
Selling, General and Administrative Expenses		(332.2	)		13.2	%		(293.4	)		16.6	%
Operating Earnings	$	114.7			28.0	%	$	89.6			163.5	%
Interest Margin	$	8.5			32.8	%	$	6.4			700.0	%
Average Interest Earning Assets	$	198.6			(18.5	%)	$	243.7			11.1	%
Average Yield		7.18	%	NM				7.86	%	NM
Average Interest Bearing Liabilities	$	132.4			(37.3	%)	$	211.0			9.2	%
Average Rate Paid		4.08	%	NM				5.57	%	NM

     Our business strategy of selling conforming loans reduces our capital investment and related risks, provides substantial liquidity and is an efficient process given the size and maturity of the conforming mortgage loan secondary capital markets. CTX Mortgage Company, LLC originates mortgage loans, holds them for a short period and sells them to HSF-I and investors. HSF-I was an unaffiliated entity that was not consolidated with Financial Services or Centex Corporation and subsidiaries at March 31, 2003. HSF-I purchases mortgage loans, at closing, from CTX Mortgage Company, LLC with the proceeds from the issuance of securitized medium term notes, secured liquidity notes and subordinated certificates that are extendable for up to five years. The debt, interest income and interest expense of HSF-I were not reflected in the financial statements of Financial Services or Centex Corporation and subsidiaries at March 31, 2003. CTX Mortgage Company, LLC sold $10.55 billion and $10.20 billion of mortgage loans to HSF-I and repurchased $6.9 million and $1.1 million of delinquent or foreclosed mortgage loans from HSF-I during the years ended March 31, 2003 and 2002, respectively. CTX Mortgage Company, LLC recognized gains on the sale of mortgage loans of $254.5 million and $188.9 million for the years ended March 31, 2003 and 2002, respectively.

     The increase in revenues for the year ended March 31, 2003 is primarily related to an increase in CTX Mortgage Company, LLC originations as well as higher revenue from Title and Insurance operations. The increase in originations and Title and Insurance revenues was due, in large part, to an increase in mortgage loans originated for Centex Homes’ buyers and an increase in refinancing business.

     In the normal course of its activities, CTX Mortgage Company, LLC carries inventories of loans pending sale to third-party investors and earns an interest margin, that we define as the difference between interest revenue on mortgage loans held for sale or investment and interest expense on debt used to fund the mortgage loans. CTX Mortgage Company, LLC uses short-term mortgage warehouse facilities to finance these inventories of loans. The fact that the average rate paid on interest bearing liabilities decreased significantly more than the yield earned on interest earning assets decreased and the increase in originations noted above led to an increase in net interest margin.

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     The following table provides a comparative analysis of mortgage loan originations and applications for the two-year period ended March 31, 2003:

	For the Years Ended March 31,
	2003					2002
			% Change					% Change
Origination Volume ($ in millions)	$	13,991.2		12.4	%	$	12,445.5		40.1	%
Number of Loans Originated
Builder		18,127		17.4	%		15,435		23.4	%
Retail		66,807		2.9	%		64,949		34.6	%
		84,934		5.7	%		80,384		32.3	%
Number of Loan Applications
Builder		20,103		23.0	%		16,344		4.8	%
Retail		69,883		16.1	%		60,188		9.3	%
		89,986		17.6	%		76,532		8.3	%
Average Loan Size	$	164,700		6.4	%	$	154,800		5.9	%
Profit Per Loan	$	1,369		20.4	%	$	1,137		103.0	%

     Per-loan profit increased due to increased operational leverage as a result of the increase in the volume of originations, as well as an increase in Title and Insurance revenues and an improvement in the spread between the weighted-average coupon rate of loans originated by CTX Mortgage Company, LLC and its cost of funds.

Sub-Prime Home Equity Lending

     The following summarizes the results of our Sub-Prime Home Equity Lending operations for the two-year period ended March 31, 2003 (dollars in millions):

	For the Years Ended March 31,
	2003						2002
				% Change						% Change
Revenues	$	401.1			32.6	%	$	302.6			89.2	%
Cost of Sales		(177.5	)		22.5	%		(144.9	)		94.5	%
Selling, General and Administrative Expenses:
Operating Expenses		(141.6	)		22.9	%		(115.2	)		21.0	%
Loan Loss Provision		(34.9	)		100.6	%		(17.4	)		286.7	%
Operating Earnings	$	47.1			87.6	%	$	25.1			275.5	%
Interest Margin	$	163.9			61.8	%	$	101.3			233.2	%
Average Interest Earning Assets	$	3,895.5			48.4	%	$	2,625.1			152.7	%
Average Yield		8.76	%	NM				9.38	%	NM
Average Interest Bearing Liabilities	$	4,049.2			52.6	%	$	2,653.9			164.8	%
Average Rate Paid		4.38	%	NM				5.46	%	NM

     The revenues and operating earnings of Centex Home Equity Company, LLC, or Home Equity, are derived primarily from interest margin on mortgage loans held for investment. The majority of Home Equity’s loan originations are securitized and accounted for as borrowings; interest is recorded over the life of the loans

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using the interest, or actuarial method; the mortgage loans receivable and the securitization debt remain on Home Equity’s balance sheet and the related interest margin is reflected in our income statement. We commonly refer to these securitized mortgage loans as portfolio accounting method loans. This structure of securitizations has been utilized since April 1, 2000. Previous loans originated were included in securitizations that utilized a structure that caused them to be accounted for as sales. Under this structure, Home Equity retained a residual interest in, as well as the servicing rights to, the securitized loans. We call this retained residual interest the mortgage securitization residual interest, or MSRI. As a result, our balance sheet does not reflect the mortgage loans receivable and offsetting debt resulting from these securitizations. The estimated gain on the sale of these loans was included in earnings during the period in which the securitization transaction closed. Under both structures, recourse on the securitized debt is limited to the payments received on the underlying mortgage collateral with no recourse to Home Equity or Centex Corporation. As is common in these structures, Home Equity remains liable for customary loan representations. The change in structure of the securitizations has no effect on the ultimate cash flow and profit recognized over the life of the mortgages. However, the change in accounting for securitizations did affect the timing of profit recognition. Interest margin, which is recognized over the life of the loan, is now Home Equity’s primary source of operating income as compared to gain on sale of loans, which previously was recognized upon securitization. Home equity loans are securitized to provide a low cost method for funding our mortgage operations and to reduce our interest rate exposure on fixed rate loans.

     The revenues of Home Equity, increased in fiscal 2003 as a result of continued growth in our portfolio of residential mortgage loans held for investment. Interest margin, which we define as the difference between interest revenue on mortgage loans held for sale or investment and interest expense on debt used to fund the mortgage loans, increased primarily as a result of an increase in the portfolio of mortgage loans held for investment and a decrease in interest rates on debt used to fund mortgage loans.

     Average interest earning assets and liabilities increased primarily due to an increase in the volume of loan originations and an increase in average loan size (see table below). The fact that the average rate paid on interest bearing liabilities decreased significantly more than the yield earned on interest earning assets decreased and the increase in originations noted below resulted in the increase in net interest margin.

     The following summarizes Home Equity’s portfolio of mortgage loans, based on the securitization structure, as of March 31, 2003 and 2002:

	For the Years Ended March 31,
	2003					2002
			% Change					% Change
Servicing Portfolio:
Number of Loans
Portfolio Accounting Method		61,073		35.1	%		45,211		70.5	%
Other		13,329		(24.4	%)		17,622		(24.0	%)
Total		74,402		18.4	%		62,833		26.4	%
Dollars in billions
Portfolio Accounting Method	$	4.64		41.5	%	$	3.28		85.3	%
Other		0.84		(22.9	%)		1.09		(27.3	%)
Total	$	5.48		25.4	%	$	4.37		33.6	%

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     The following table provides a comparative analysis of mortgage loan originations and applications for the two-year period ended March 31, 2003:

	For the Years Ended March 31,
	2003					2002
			% Change					% Change
Origination Volume	$	2,506.2		19.8	%	$	2,092.4		21.8	%
Number of Loans Originated		29,448		9.2	%		26,955		2.0	%
Number of Loan Applications		248,150		43.9	%		172,498		16.0	%
Average Loan Size	$	85,100		9.7	%	$	77,600		19.4	%

     The increase in origination volume was due to an increase in average loan size. The slight increase in the number of originations relative to the larger increase in total applications is reflective of Home Equity’s continued adherence to its credit underwriting guidelines.

     The increase in Home Equity’s operating earnings is primarily the result of the increase in interest margin, as noted above. Interest income will be positively affected as the portfolio of mortgage loans held for investment increases and matures. The increase in interest margin was partially offset by an increase in servicing and production costs, mostly attributable to loan volume and loan servicing growth, and an increase in the provision for losses on residential mortgage loans held for investment.

     Home Equity’s selling, general and administrative expenses increased as a result of Home Equity’s growth. Home Equity’s increase in loan production volume, the expansion of its branch offices and the increase in the number of its employees are directly related to a corresponding increase in salaries and related costs, rent expense, group insurance costs and advertising expenditures. The remainder of the increase was due to an increase in the provision for loan losses.

     The increase in the provision for losses occurred primarily because the amount of the residential mortgage loans held for investment increased and the residential mortgage loan portfolio continued to mature. As the age and size of the residential mortgage loan portfolio continues to mature and grow, we expect the provision for losses, the loans charged off and the allowance ratios to continue to increase. For a more detailed discussion of our accounting policy and methodology for establishing the provision for losses, see “Critical Accounting Estimates — Valuation of Residential Mortgage Loans Held for Investment” on page 46 of this Report. Changes in the allowance for losses is illustrated in Note (C), “Allowance for Losses on Residential Mortgage Loans Held for Investment,” of the Notes to Consolidated Financial Statements on page 72 of this Report.

     The primary risks in Home Equity’s operations are consistent with those of the financial services industry and include credit risk associated with its loans, liquidity risk related to funding its loans and interest rate risk prior to securitization of the loans. In addition, as Home Equity services its loans, it is also subject to customer prepayment risks, which would curtail Home Equity’s servicing and interest income related to the respective prepaid loan.

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CONSTRUCTION SERVICES

     The following summarizes Construction Services’ results for the two-year period ended March 31, 2003 (dollars in millions):

	For the Years Ended March 31,
	2003					2002
			% Change					% Change
Revenues	$	1,517.9		17.1	%	$	1,296.0		0.4	%
Operating Earnings	$	30.7		(15.2	%)	$	36.2		17.2	%
New Contracts Executed	$	857		(41.1	%)	$	1,455		(24.6	%)
Backlog of Uncompleted Contracts	$	1,520		(30.3	%)	$	2,180		7.8	%

     The increase in revenues was primarily the result of a shift in the stage of completion of certain longer-term construction contracts. Additionally, in fiscal 2003, we had a greater volume of shorter-term construction contracts as compared to the prior year. Operating earnings for the group decreased primarily as a result of a decrease in project margins reflective of the current construction environment. In addition, in fiscal 2003, Construction Services recorded a project profit write-down of $2.1 million related to a single project and a $2.4 million write-down of a long-lived asset. The decreases in new contracts executed and backlog of uncompleted contracts were the result of reduced activity in the commercial construction industry and delays in the execution of contracts for awarded projects. Future operating margins and earnings are likely to be impacted by this reduced activity and our lower backlog.

INVESTMENT REAL ESTATE

     The following summarizes Investment Real Estate’s results for the two-year period ended March 31, 2003 (dollars in millions):

	For the Years Ended March 31,
	2003					2002
			% Change					% Change
Revenues	$	33.3		(37.6	%)	$	53.4		90.0	%
Earnings from Unconsolidated Entities	$	13.2		97.0	%	$	6.7		36.7	%
Operating Earnings	$	34.0		(5.0	%)	$	35.8		(29.7	%)

     The changes in revenues and operating earnings were primarily related to the timing of property sales. Property sales contributed operating earnings of $18.3 million for the year ended March 31, 2003 and $35.8 million for the same period last year. The timing of sales is uncertain and can vary significantly from period to period.

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OTHER

     Our Other segment includes corporate general and administrative expense and interest expense. Also included in our Other segment are our home services operations, which are not material for purposes of segment reporting.

	For the Years Ended March 31,
	2003						2002
				% Change						% Change
Operating (Loss) Earnings from home services	$	(9.6	)		(340.0	%)	$	4.0			(11.1	%)
Corporate General and Administrative Expenses		(60.3	)		20.1	%		(50.2	)		36.0	%
Interest Expense		(60.3	)		2.9	%		(58.6	)		8.3	%
Other		(0.6	)		—	%		(0.6	)		20.0	%
Operating Loss	$	(130.8	)		24.1	%	$	(105.4	)		21.1	%

     The decrease in our home services division’s operating earnings in fiscal 2003 is primarily due to higher general and administrative expenses, including higher marketing costs, and an $8.0 million provision in the fourth quarter to reduce the carrying value of its remaining home security assets to estimated fair value. Our home services operations sold its chemical lawn care business in the second quarter. The sale of this business did not have a material effect on home services’ operating earnings.

     Corporate general and administrative expense represents compensation and other costs not identifiable with a specific segment. The increase in corporate general and administrative expense is primarily related to an increase in personnel and higher compensation resulting from continued improvements in our performance.

     Our effective tax rate decreased to 30% for the year ended March 31, 2003 from 38% for the year ended March 31, 2002. The decrease in the effective tax rate is primarily the result of the utilization of net operating loss carryforwards during fiscal 2003.

DISCONTINUED OPERATIONS

     In June 2003, we spun off to our stockholders substantially all of our manufactured housing operations, and in January 2004, we spun off to our stockholders our entire equity interest in Construction Products. As a result of the spin-offs, the earnings of these operations have been reclassified to discontinued operations in the Statements of Consolidated Earnings. All prior period information related to these discontinued operations has been reclassified to be consistent with the March 31, 2004 presentation. For the years ended March 31, 2003 and 2002, discontinued operations had revenues of $643.2 million and $593.0 million and operating earnings of $47.5 million and $38.5 million, respectively.

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FINANCIAL CONDITION AND LIQUIDITY

     The consolidating net cash used in or provided by the operating, investing and financing activities for the years March 31, 2004, 2003 and 2002 is summarized below (dollars in thousands). See “Statements of Consolidated Cash Flows with Consolidating Details” on pages 58-59 of this Report for the detail supporting this summary.

	For the Years Ended March 31,
	2004			2003			2002
Net Cash (Used in) Provided by
Centex*
Operating Activities	$	(332,931	)	$	(54,859	)	$	28,997
Investing Activities		(33,361	)		31,127			(227,946	)
Financing Activities		99,381			281,645			342,001
Effect of Exchange Rate on Cash		692			—			—
		(266,219	)		257,913			143,052
Financial Services
Operating Activities		1,090,135			(39,443	)		185,525
Investing Activities		(1,931,321	)		(1,412,615	)		(1,506,841	)
Financing Activities		844,373			1,440,015			1,336,676
		3,187			(12,043	)		15,360
Centex Corporation and Subsidiaries
Operating Activities		689,515			(3,579	)		57,909
Investing Activities		(1,896,493	)		(1,545,988	)		(1,604,094	)
Financing Activities		943,254			1,795,437			1,704,597
Effect of Exchange Rate on Cash		692			—			—
Net Increase (Decrease) in Cash	$	(263,032	)	$	245,870		$	158,412

* “Centex” represents a supplemental presentation that reflects the Financial Services segment as if accounted for under the equity method. 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 Centex has limited obligations with respect to the indebtedness of our Financial Services subsidiaries. Management uses this information in its financial and strategic planning. We also use this presentation to allow investors to compare us to homebuilders that do not have financial services operations.

     We generally fund our Centex operating and other short-term liquidity needs through cash provided by operations, borrowings from commercial paper and other short-term credit arrangements and the issuance of medium-term notes and other debt securities. Centex’s operating cash is derived primarily through home and land sales from our Home Building segment and general contracting fees obtained through our Construction Services segment. During fiscal 2004, cash was primarily used in Centex’s operating activities to finance increases in Home Building inventories relating to the increased level of sales and resulting units under construction during the year, and for the acquisition of land held for development. The funds provided by Centex’s financing activities were primarily from debt issued to fund the increased homebuilding activity.

     We generally fund our Financial Services’ operating and other short-term liquidity needs through securitizations, committed credit facilities, proceeds from the sale of mortgage loans to investors and cash flows from operations. Financial Services’ operating cash is derived primarily through sales of mortgage loans, interest income on mortgage loans held for investment and origination and servicing fees. Effective June 30, 2003, Financial Services consolidated $2.48 billion of HSF-I’s residential mortgage loans held for sale. The initial consolidation of HSF-I was not reflected in the Statements of Consolidated Cash Flows, as it was a non-

40

cash transaction. As these mortgage loans have been sold in the secondary market, an inflow of cash from operating activities has occurred. During fiscal 2004, cash was primarily used in Financial Services’ investing activities to finance increases in residential mortgage loans held for investment. For additional discussion on the consolidation of HSF-I in June 2003, see Note (F), “Indebtedness,” of the Notes to Consolidated Financial Statements on pages 74-78 of this Report. The funds provided by Financial Services’ financing activities were primarily from new debt used to fund the increased residential mortgage loan activity.

     Our future cash requirements are illustrated in the following table of contractual obligations as of March 31, 2004 (in thousands):

	Payments Due by Period
	Less Than						More Than
	1 Year		1 - 3 Years		3 - 5 Years		5 Years		Total
Centex
Long-term Debt(1)	$	34,916	$	790,819	$	377,840	$	1,372,545	$	2,576,120
Capital Leases		409		660		305		151		1,525
Operating Leases		33,728		59,667		47,815		40,480		181,690
Purchase Obligations		22,322		—		—		—		22,322
		91,375		851,146		425,960		1,413,176		2,781,657
Financial Services(2)
Long-term Debt		2,043,473		3,282,993		1,041,559		47,140		6,415,165
Operating Leases		23,181		31,158		16,031		27,921		98,291
		2,066,654		3,314,151		1,057,590		75,061		6,513,456
	$	2,158,029	$	4,165,297	$	1,483,550	$	1,488,237	$	9,295,113

(1)	The amount of debt subject to a variable interest rate is $32.5 million, of which $23.3 million was based on the U.S. Libor rate of 1.09% at March 31, 2004 and $9.2 million was based on the U.K. Libor rate of 4.375% at March 31, 2004.
(2)	The amount of debt subject to a variable interest rate is $3.41 billion. The basis of the rate is U.S. Libor which was 1.09% at March 31, 2004.

     As outlined above, our primary contractual obligations are payments under long-term debt agreements and lease payments under operating leases. Purchase obligations primarily represent specific performance agreements of our Home Building segment that in essence may require us to purchase the land contingent upon the land seller meeting certain obligations, joint funding obligations and open purchase orders. Financial Services long-term debt associated with Home Equity includes Asset-Backed Certificates related to securitized residential mortgage loans structured as collateralized borrowings. The principal and interest on these certificates are paid from the liquidation of the underlying residential mortgage loans, which serve as collateral for the debt. Accordingly, the timing of the principal payments on these certificates is dependent upon the payments received on the underlying residential mortgage loans. The contractual obligations of this component of long-term debt are based on contractual maturities adjusted for projected prepayments.

     Our contractual obligations will be funded in the ordinary course of business through our operating cash flows and through our credit facilities. Centex Corporation currently has an investment-grade credit rating from each of the principal credit rating agencies. Our ability to finance our activities on favorable terms is dependent to a significant extent on whether we are able to maintain our investment-grade credit ratings. We attempt to manage our debt levels in order to maintain investment-grade ratings. If, however, our debt ratings were downgraded, we would not have access to the commercial paper markets and might need to draw on our existing committed backup facility, which exceeds our commercial paper program size.

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     Our existing credit facilities and available capacity as of March 31, 2004 are summarized below (dollars in thousands):

	Existing Credit			Available
	Facilities			Capacity
Centex
Centex Corporation
Multi-Bank Revolving Credit Facility	$	800,000		$	800,000	(1)
Multi-Bank Revolving Letter of Credit Facility		250,000			80,351	(2)
		1,050,000	(3)		880,351
International homebuilding
Multi-Bank Revolving Credit Facility		182,620			82,179
Unsecured Credit Facility		36,524			36,524
		219,144			118,703	(4)
Financial Services
Unsecured Credit Facilities		125,000			125,000	(5)
Secured Credit Facilities		425,000			73,075	(6)
Harwood Street Funding I, LLC Facility		3,000,000			1,675,413
Harwood Street Funding II, LLC Facility		2,500,000			1,839,452
		6,050,000			3,712,940
	$	7,319,144		$	4,711,994	(7)

(1)	This is a committed, multi-bank revolving credit facility, maturing in August 2006, which serves as backup for commercial paper borrowings. As of March 31, 2004, there were no borrowings under this backup facility, and our $700 million commercial paper program had no amounts outstanding. We have not borrowed under this revolving credit facility since its inception.
(2)	This is a committed, multi-bank revolving letter of credit facility, maturing in August 2004. Letters of credit under this facility may expire no later than August 2005.
(3)	In conjunction with the issuance of surety bonds in support of our Construction Services activity, Centex Corporation will provide letters of credit of up to $100 million if Centex Corporation’s public debt ratings fall below investment grade. In support of this ratings trigger, we maintain a minimum of $100 million in unused committed credit at all times.
(4)	The international homebuilding operations maintain a secured, committed, multi-bank revolving £100 million credit facility. This facility is not guaranteed by nor is there recourse to Centex Corporation. The international homebuilding operations also maintain an uncommitted, unsecured £20 million credit facility guaranteed by Centex Corporation.
(5)	Centex Corporation, CTX Mortgage Company, LLC and its related companies and Home Equity, on a joint and several basis, share in a $125 million uncommitted, unsecured credit facility.
(6)	CTX Mortgage Company, LLC and its related companies and Home Equity share in a $250 million committed secured credit facility to finance mortgage inventory. CTX Mortgage Company, LLC and its related companies also maintain $165 million of committed secured mortgage warehouse facilities to finance mortgages. In April 2004, these facilities, which totaled $165 million, increased to $210 million. Home Equity also maintains a $10 million committed secured mortgage warehouse facility to finance mortgages.
(7)	The amount of available capacity consists of $4.55 billion of committed capacity and $162 million of uncommitted capacity as of March 31, 2004. Although we believe that the uncommitted capacity is currently available, there can be no assurance that the lenders under these facilities would elect to make advances if and when requested to do so.

     CTX Mortgage Company, LLC finances its inventory of mortgage loans held for sale principally through sales of conforming and Jumbo “A” loans to HSF-I. HSF-I acquires mortgage loans from CTX Mortgage Company, LLC, holds them for a period of 45 to 60 days and then resells them into the secondary market. HSF-I obtains the funds needed to purchase eligible mortgage loans from CTX Mortgage Company, LLC by issuing (1) short-term secured liquidity notes that are currently rated A1+ by Standard & Poor’s, or S&P, and P-1 by Moody’s Investors Service, or Moody’s, (2) medium-term debt that is currently rated A1+ by

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S&P and P-1 by Moody’s and (3) subordinated certificates maturing in September 2004, November 2005 and June 2006, extendable for up to five years, that are currently rated BBB by S&P and Baa2 by Moody’s. The purpose of this arrangement is to allow CTX Mortgage Company, LLC to reduce the cost of financing the mortgage loans originated by it and to improve its liquidity. Because HSF-I is a consolidated entity, the debt, interest income and interest expense of HSF-I are reflected in the financial statements of Financial Services.

     Home Equity finances its inventory of mortgage loans held for investment principally through HSF-II, a wholly-owned, consolidated entity, under a revolving sales agreement that expires upon final payment of the senior and subordinated debt issued by HSF-II. This arrangement, where HSF-II has committed to finance all eligible loans, gives Home Equity daily access to HSF-II’s capacity of $2.50 billion. HSF-II obtains funds through the sale of subordinated notes that are rated BBB by S&P, Baa2 by Moody’s, and BBB by Fitch, and short-term secured liquidity notes that are rated A1+ by S&P, P-1 by Moody’s and F1+ by Fitch. Because HSF-II is a consolidated entity, the debt, interest income and interest expense of HSF-II are reflected in the financial statements of Financial Services.

     Under our debt covenants, we are required to maintain certain leverage and interest coverage ratios and a minimum tangible net worth. At March 31, 2004, we were in compliance with all of these covenants.

     As of March 31, 2004, our short-term debt was $2.10 billion, all of which was applicable to Financial Services. Excluding Financial Services, our short-term borrowings are generally financed at prevailing market interest rates from our commercial paper programs and from uncommitted bank facilities.

     During fiscal 2004, we issued senior notes in the aggregate principal amount of $300 million with an interest rate of 5.125%, maturing in fiscal year 2014. On May 5, 2004, we issued $350 million aggregate principal amount of senior notes with an interest rate of 5.70%, maturing in fiscal year 2015.

     Our outstanding debt (in thousands) as of March 31, 2004 was as follows (due dates are presented in fiscal years)⁽¹⁾:

Centex
Senior Debt:
Medium-term Note Programs, weighted-average 4.67%, due through 2007	$	258,000
Long-term Notes, weighted-average 6.73%, due through 2014		1,808,332
Other Indebtedness, weighted-average 3.13%, due through 2010		152,152
Subordinated Debt:
Subordinated Debentures, 8.75%, due in 2007		99,763
Subordinated Debentures, 7.38%, due in 2006		99,943
		2,418,190
Financial Services
Short-term Debt:
Short-term Notes Payable		601,718
Harwood Street Funding I and II, LLC Secured Liquidity Notes		1,502,798
Home Equity Asset-Backed Certificates, weighted-average 3.52%, due through 2034		5,964,924
Harwood Street Funding I, LLC Variable Rate Subordinated Extendable Certificates, weighted-average 3.06%, due through 2007		139,000
Harwood Street Funding II, LLC Variable Rate Subordinated Notes, weighted-average 3.24%, due through 2009		93,750
		8,302,190
Total	$	10,720,380

(1) Certain of the borrowings described in the table above vary on a seasonal basis and depend on the working capital needs of our operations.

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CERTAIN OFF-BALANCE SHEET OBLIGATIONS

     The following is a summary of certain off-balance sheet arrangements and other obligations and their possible effects on our liquidity and capital resources.

Joint Ventures

     We conduct a portion of our land acquisition, development and other activities through our participation in joint ventures in which we hold less than a majority interest. These land related activities typically require substantial capital, and partnering with other developers allows Centex Homes to share the risks and rewards of ownership while providing for efficient asset utilization. Our investment in these non-consolidated joint ventures, accounted for using the equity method, was $140.1 million and $102.3 million at March 31, 2004 and 2003, respectively. These joint ventures had total outstanding secured debt of approximately $207.7 million and $232.5 million at March 31, 2004 and 2003, respectively. Our liability with respect to this debt, based on our ownership percentage of the related joint ventures, is limited to approximately $53.0 million and $41.9 million at March 31, 2004 and 2003, respectively. Under the structure of this debt, we become liable up to these amounts only to the extent that the construction debt exceeds a certain percentage of the value of the project. At March 31, 2004 and 2003, we were not liable for any of this debt. For a discussion of the impact of new accounting pronouncements on our accounting for transactions with non-consolidated joint ventures, see “Recent Accounting Pronouncements” on pages 47-48 of this Report.

CRITICAL ACCOUNTING ESTIMATES

     Some of our critical accounting policies require the use of judgment in their application or require estimates of inherently uncertain matters. Our accounting policies are in compliance with generally accepted accounting principles; however, a change in the facts and circumstances of the underlying transactions could significantly change the application of the accounting policies and the resulting financial statement impact. Listed below are those policies that we believe are critical and require the use of complex judgment in their application.

Impairment of Long-Lived Assets

     Housing projects and land held for development and sale are stated at the lower of cost (including direct construction costs, capitalized interest and real estate taxes) or fair value less cost to sell. Property and equipment is carried at cost less accumulated depreciation. We assess these assets for recoverability in accordance with the provisions of Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” or SFAS No. 144. SFAS No. 144 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets is measured by comparing the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. These evaluations for impairment are significantly impacted by estimates of revenues, costs and expenses and other factors. If these assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. No significant impairments of long-lived assets were recorded in fiscal 2004, 2003 or 2002.

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Goodwill

     Goodwill represents the excess of purchase price over net assets of businesses acquired. See Note (E), “Goodwill,” of the Notes to Consolidated Financial Statements on pages 73-74 of this Report for a summary of the changes in goodwill by segment. We adopted the provisions of Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets,” or SFAS No. 142, effective April 1, 2001. Upon the adoption of SFAS No. 142, goodwill is no longer subject to amortization. Rather, goodwill will be subject to at least an annual assessment for impairment, at the reporting unit level, by applying a fair value-based test. If the carrying amount exceeds the fair value, an impairment has occurred. We continually evaluate whether events and circumstances have occurred that indicate the remaining balance of goodwill may not be recoverable. Fair value is estimated using a discounted cash flow or market valuation approach. Such evaluations for impairment are significantly impacted by estimates of future revenues, costs and expenses and other factors. If the goodwill is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the goodwill exceeds the fair value of the future cash flows. We had no impairment of goodwill in fiscal 2004, 2003 and 2002.

Land Held Under Option Agreements Not Owned

     In order to ensure the future availability of land for homebuilding, the Company enters into lot option purchase agreements with unaffiliated third parties. Under the option agreements, the Company pays a stated deposit in consideration for the right to purchase land at a future time, usually at predetermined prices. These options generally do not contain performance requirements from the Company nor obligate the Company to purchase the land.

     The Company has evaluated those entities with which we entered into lot option agreements in accordance with the provisions of Financial Accounting Standards Board (“FASB”) Interpretation No. 46, “Consolidation of Variable Interest Entities,” as revised (“FIN 46”). The provisions of FIN 46 require the Company to consolidate the financial results of a variable interest entity if the Company is the primary beneficiary of the variable interest entity. Variable interest entities are entities in which (1) equity investors do not have a controlling financial interest and/or (2) the entity is unable to finance its activities without additional subordinated financial support from other parties. The primary beneficiary of a variable interest entity is the owner or investor that absorbs a majority of the variable interest entity’s expected losses and/or receives a majority of the variable interest entity’s expected residual returns.

     The Company determines if it is the primary beneficiary of variable interest entities based upon analysis of the variability of the expected gains and losses of the variable interest entity. Expected gains and losses of the variable interest entity are highly dependent upon management’s estimates of the variability and probabilities of future land prices, the probabilities of expected cash flows and entitlement risks related to the underlying land, among other factors. Based on this evaluation, if the Company is the primary beneficiary of those entities with which we have entered into lot option agreements, the variable interest entity is consolidated. For purposes of consolidation, to the extent financial statements are available, the Company consolidates the assets and liabilities of the variable interest entity. If financial statements for the variable interest entity are not available, the Company records the remaining purchase price of land in the Consolidated Balance Sheets under the caption, land held under option agreements not owned, with a corresponding increase in minority interests. Lot option deposits related to these options are reclassified to land held under option agreements not owned.

     See Note (I), “Land Held Under Option Agreement Not Owned and Other Land Deposits,” of the Notes to Consolidated Financial Statements on page 81 of this Report for further discussion on the results of our analysis of lot option agreements.

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Valuation of Residential Mortgage Loans Held for Investment

     Home Equity originates and purchases loans in accordance with standard underwriting criteria. The underwriting standards are primarily intended to assess the creditworthiness of the mortgagee, the value of the mortgaged property and the adequacy of the property as collateral for the home equity loan.

     Home Equity establishes an allowance for losses by recording a provision for losses in the statement of consolidated earnings when it believes a loss has occurred. When Home Equity determines that a residential mortgage loan held for investment is partially or fully uncollectible, the estimated loss is charged against the allowance for losses. Recoveries on losses previously charged to the allowance are credited to the allowance at the time the recovery is collected.

     We believe that the allowance for losses is sufficient to provide for credit losses in the existing residential mortgage loans held for investment, which include real estate owned. We evaluate the allowance on an aggregate basis considering, among other things, the relationship of the allowance to residential mortgage loans held for investment and historical credit losses. The allowance reflects our judgment of the present loss exposure at the end of the reporting period. A range of expected credit losses is estimated using historical losses, static pool loss curves and delinquency modeling. These tools take into consideration historical information regarding delinquency and loss severity experience and apply that information to the portfolio at each reporting date.

     Although we consider the allowance for losses on residential mortgage loans held for investment reflected in our consolidated balance sheet to be adequate, there can be no assurance that this allowance will prove to be sufficient over time to cover ultimate losses. This allowance may prove to be insufficient due to unanticipated adverse changes in the economy or discrete events adversely affecting specific customers or industries. See Note (C), “Allowance for Losses on Residential Mortgage Loans Held for Investment,” of the Notes to Consolidated Financial Statements on page 72 of this Report for a discussion of the changes in the allowance for losses.

Mortgage Securitization Residual Interest

     Home Equity uses mortgage securitizations to finance its mortgage loan portfolio. For securitizations prior to April 2000, which Home Equity accounted for as sales, Home Equity retained a mortgage securitization residual interest, or MSRI. The MSRI represents the present value of Home Equity’s right to receive, over the life of the securitization, the excess of the weighted-average coupon on the loans securitized over the interest rates on the securities sold, a normal servicing fee, a trustee fee and an insurance fee, where applicable, net of the credit losses relating to the loans securitized. Home Equity estimates the fair value of MSRI through the application of discounted cash flow analysis. Such analysis requires the use of various assumptions, the most significant of which are anticipated prepayments (principal reductions in excess of contractually scheduled reductions), estimated future credit losses and the discount rate applied to future cash flows. See Note (A), “Significant Accounting Policies,” of the Notes to Consolidated Financial Statements on pages 62-71 of this Report for a discussion of the sensitivity of the MSRI to changes in the assumptions.

Loan Origination Reserve

     CTX Mortgage Company, LLC has established a liability for anticipated losses associated with loans originated. This liability includes losses associated with certain borrower payment defaults, credit quality issues or misrepresentation. CTX Mortgage Company, LLC estimates the losses that may be incurred for certain loan originations based on, among other factors, historical loss rates and current trends in loan originations. This liability reflects management’s judgment of the loss exposure at the end of the reporting period.

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     Although we consider the loan origination reserve reflected in our consolidated balance sheet at March 31, 2004 to be adequate, there can be no assurance that this reserve will prove to be sufficient over time to cover ultimate losses in connection with our loan originations. This reserve may prove to be insufficient due to unanticipated adverse changes in the economy or discrete events adversely affecting specific customers.

Warranty Accruals

     Home Building offers a ten-year limited warranty for most homes constructed and sold in the United States and in the United Kingdom. The United States warranties cover defects in materials or workmanship in the first year of the home and certain designated components or structural elements of the home in the second through tenth years. The United Kingdom warranties cover defects in materials or workmanship in various components of the home for the first two years and designated structural elements of the home in the third through tenth years. In California, effective January 1, 2003, Centex Homes began following the statutory provisions of Senate Bill 800, which in part provides a statutory warranty to customers and a statutory dispute resolution process. Home Building estimates the costs that may be incurred under its warranty program for which it will be responsible and records a liability at the time each home is closed. Factors that affect Home Building’s warranty liability include the number of homes closed, historical and anticipated rates of warranty claims and cost per claim. Home Building periodically assesses the adequacy of its recorded warranty liability and adjusts the amounts as necessary. Although we consider the warranty accruals reflected in our consolidated balance sheet to be adequate, there can be no assurance that this accrual will prove to be sufficient over time to cover ultimate losses.

      Effective April 1, 2004, Home Building’s United States warranties covering defects in materials or workmanship were extended to two years.

Insurance Accruals

     We have certain deductible limits under our workers’ compensation, automobile and general liability insurance policies for which reserves are actuarially determined based on claims filed and an estimate of claims incurred but not yet reported. Projection of losses concerning these liabilities is subject to a high degree of variability due to factors such as claim settlement patterns, litigation trends and legal interpretations, among others. Although we consider the insurance accruals reflected in our consolidated balance sheet to be adequate, there can be no assurance that this accrual will prove to be sufficient over time to cover ultimate losses.

RECENT ACCOUNTING PRONOUNCEMENTS

     In January 2003, the FASB issued Interpretation No. 46, “Consolidation of Variable Interest Entities,” as revised, or FIN 46, which modified the accounting for certain entities in which (1) equity investors do not have a controlling financial interest and/or (2) the entity is unable to finance its activities without additional subordinated financial support from other parties. As of March 31, 2004, all the provisions of FIN 46 apply, and we have interests in HSF-I, certain land option agreements and joint ventures that are affected by this interpretation. The nature of these entities’ operations, the amounts consolidated in our financial statements, our potential maximum exposure related to these entities and the applicability of FIN 46 to these entities are discussed as follows:

HSF-I	Note (F), “Indebtedness”
Joint Ventures	Note (H), “Commitments and Contingencies”
Land Option Agreements	Note (I), “Land Held Under Option Agreements not Owned and Other Land Deposits”

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     In April 2003, the FASB issued Statement of Financial Accounting Standards No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities,” or SFAS No. 149. The statement amends and clarifies financial accounting and reporting for derivative instruments and hedging activities under Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities,” or SFAS No. 133, by requiring that contracts with comparable characteristics be accounted for similarly, resulting in more consistent reporting of contracts as either derivatives or hybrid instruments. A portion of this statement is effective for contracts entered into or modified and for hedging relationships designated after June 30, 2003. The remainder of this statement codifies previously issued SFAS No. 133 implementation guidance, which retains its original effective dates. The implementation of SFAS No. 149 did not have a material impact on the Company’s results of operations or financial position.

     In May 2003, the FASB issued Statement of Financial Accounting Standards No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity,” or SFAS No. 150. The statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within the scope of SFAS No. 150 as a liability (or an asset in some circumstances). Certain provisions of this statement are effective for financial instruments entered into or modified after May 31, 2003. In October 2003, FASB deferred indefinitely certain provisions of this Statement pertaining to non-controlling interests in limited life entities. The implementation of the provisions of SFAS No. 150 which are effective did not have an impact on the Company’s results of operations or financial position.

     On March 9, 2004, the SEC issued Staff Accounting Bulletin No. 105, “Application of Accounting Principles to Loan Commitments,” or SAB 105. SAB 105 applies to all interest rate lock commitments (“IRLCs”) entered into after March 31, 2004. SAB 105 expresses the SEC staff’s view that the fair value of IRLCs should not consider the expected future cash flows related to the associated servicing of the future loan. CTX Mortgage Company, LLC does enter into IRLCs with certain customers; however, no servicing income is recorded upon entering into the IRLC. Accordingly, SAB 105 will not have an effect on the Company’s financial position or results of operations.

FORWARD-LOOKING STATEMENTS

     Various sections of this Report, including Business, Management’s Discussion and Analysis of Financial Condition and Results of Operations, Other Developments and Outlook sections, contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities 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 we are discussing our beliefs, estimates or expectations. These statements are not historical facts or guarantees of future performance but instead represent only our 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 the Company’s control. Actual results and outcomes may differ materially from what we express or forecast in these forward-looking statements. All forward-looking statements made in this Report are made as of the date hereof, and the risk that actual results will differ materially from expectations expressed in this Report will increase with the passage of time. We undertake no duty to update any forward-looking statement to reflect future events or changes in our expectations.

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     In addition to the specific risks and uncertainties discussed elsewhere in this Report, the following risks and uncertainties may affect our business, operations, financial condition or results of operations:

• Our Home Building operations are sensitive to changes in general economic conditions, including levels of employment, consumer confidence and income, availability of financing, interest rate levels and changes in the economic condition of the local markets in which we operate.

• Our Home Building operations depend to a significant extent upon our being able to acquire land that is suitable for residential development at acceptable prices and in locations that are desirable to us. Any increases in the cost or reductions in the supply of suitable land for development could affect the revenues or operating earnings of our Home Building operations.

• Our Home Building operations may be adversely affected by increases in interest rates. The majority of our home buyers finance their purchases of homes. In general, housing demand is likely to be adversely affected by significant increases in interest rates. If mortgage interest rates increase significantly and the ability or willingness of prospective buyers to finance home purchases is adversely affected, our operating results may be adversely affected.

• Our Home Building and Construction Services operations could be adversely affected by fluctuating lumber prices and supply, as well as shortages of other materials, including insulation, drywall, concrete, carpenters, electricians and plumbers. In addition, both our Home Building and Construction Services operations are subject to risks and uncertainties involving the cost and availability of labor and labor disputes. These factors could cause delays in construction that could have an adverse effect upon our Home Building and Construction Services operations.

• Our international homebuilding operations are affected by fluctuations in the value of the United States dollar as compared to the British pound sterling and changes in the British economy to the extent those changes affect the homebuilding market in the United Kingdom. We do not currently use any hedging instruments or other strategies to manage currency risks related to fluctuations in the value of the United States dollar or the British pound sterling.

• Our Home Building operations are also subject to other risks and uncertainties, including seasonal variations, adverse weather conditions, the general demand for housing in national and regional markets and new construction and the resale market for existing homes.

• Although national demand for commercial construction is relatively stable, individual markets do experience moderate cyclicality and can be sensitive to overall capital spending trends in the economy, changes in federal and state appropriations for construction projects, financing and capital availability for commercial real estate and competitive pressures on the availability and pricing of construction projects.

• Our Construction Services operations are also subject to other risks and uncertainties, including the timing of new awards and the funding of such awards; adverse weather conditions; cancellations of, or changes in the scope to, existing contracts; the ability to meet performance or schedule guarantees and cost overruns.

• An increase in interest rates could have an adverse affect on our Financial Services operations. The operations of CTX Mortgage Company, LLC are influenced by borrowers’ perceptions of and reactions to interest rates. Any significant increase in mortgage rates above currently prevailing levels could adversely affect the volume of loan originations due to curtailment of refinancing activity.

• Our Home Equity operations involve holding residential mortgage loans for investment and establishing an allowance for credit losses on these loans. Although the amount of this allowance reflects our judgment as

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	to our present loss exposure on these loans, there can be no assurance that it will be sufficient to cover any losses that may ultimately be incurred.
•	All of our businesses operate in very competitive environments, which are characterized by competition from a number of other homebuilders, mortgage lenders, and contractors in each of the markets in which we operate. Any increase in competition has the potential to reduce the number of homes we sell, or to compel us to accept reduced profit margins in order to maintain sales volume.
•	We are subject to various federal, state and local statutes, rules and regulations that could affect our businesses, including those concerning zoning, construction, protecting the environment and health. In addition, our businesses could be affected by changes in federal income tax policy, federal mortgage loan financing programs and other changes in regulation or policy.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     We are exposed to market risks related to fluctuations in interest rates on our direct debt obligations, mortgage loans receivable and residual interest in mortgage securitizations. The following analysis provides a framework to understand our sensitivity to hypothetical changes in interest rates as of March 31, 2004.

     We have utilized derivative instruments in conjunction with our overall strategy to manage the amount of debt outstanding that is subject to changes in interest rates. As of March 31, 2004, we had interest rate swap agreements that converted $2.18 billion of our variable-rate debt outstanding into fixed-rate debt. We recognize amounts paid or received under interest rate swap agreements as adjustments to interest expense.

     Financial Services originates, sells and securitizes conforming and nonconforming “A” mortgages, sub-prime first and second mortgages and home equity loans. Since December 1999, substantially all conforming and Jumbo “A” mortgages have been sold to HSF-I at or near the date on which the loans were funded. HSF-I has entered into a swap arrangement with a bank (the “Harwood Swap”) under which the bank has agreed to make certain payments to HSF-I, and HSF-I has agreed to make certain payments to the bank, the net effect of which is that the bank has agreed to bear certain interest rate risks, non-credit related market risks and prepayment risks related to the mortgage loans held by HSF-I. However, the Company effectively bears all interest rate risks, non-credit related market risks and prepayment risks related to the Harwood Swap because Centex has entered into a separate swap arrangement with the bank pursuant to which Centex has agreed to pay to the bank all amounts that the bank is required to pay to HSF-I pursuant to the Harwood Swap plus a monthly fee equal to a percentage of the notional amount of the Harwood Swap. Additionally, the bank is required to pay to Centex all amounts that the bank receives from HSF-I pursuant to the Harwood Swap. Financial Services executes the forward sales of CTX Mortgage Company, LLC’s loans to hedge the risk of reductions in value of mortgages sold to HSF-I or maintained under secured financing agreements. This offsets the majority of our risk as the counterparty to the swap supporting the payment requirements of HSF-I. CTX Mortgage Company, LLC, acting as manager of HSF-I, delivers mortgages held by HSF-I to third party purchasers generally within 60 days of origination. Due to the high degree of liquidity in the “A” mortgage market and the frequency of loan sales and securitizations, the use of forward sales is an effective hedge against changes in market value that result from changes in interest rates.

     Home Equity uses interest rate swaps to hedge the market risk associated with the carrying of mortgages in anticipation of issuance of securitization debt to finance sub-prime mortgages. Home Equity will generally hold mortgages in anticipation of securitization for up to 120 days. Home Equity also uses interest rate swaps, included in the $2.18 billion balance stated above that, in effect, fix the interest rate on its variable interest rate debt.

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     As of March 31, 2004, our total MSRI was $89.4 million, comprised of $87.8 million related to Home Equity and $1.6 million related to CTX Mortgage Company, LLC. Home Equity’s MSRI consists of $86.5 million remaining on loans securitized from October 1997 to March 2000 accounted for as gain on sale and $1.3 million related to loans sold in fiscal year 2004 to a government sponsored enterprise that we continue to service. CTX Mortgage Company, LLC’s MSRI resulted from an acquisition in fiscal 2002. We continually monitor the fair value of the MSRI and review the factors expected to influence the future constant prepayment rate, or CPR, discount rates and credit losses. In developing assumptions regarding expected future CPR, we consider a variety of factors, many of which are interrelated. These factors include historical performance, origination channels, characteristics of borrowers, such as credit quality and loan-to-value relationships, and market factors that influence competition. If changes in assumptions regarding future CPR, discount rates or credit losses are necessary, the MSRI fair value is adjusted accordingly.

     Our international homebuilding operations are located in the United Kingdom. As a result, our financial results could be affected by factors such as changes in the foreign currency exchange rate or weak economic conditions in our markets. Our aggregate net investment exposed to foreign currency exchange rate risk is approximately $286.9 million as of March 31, 2004.

     We utilize both short-term and long-term debt in our financing strategy. For fixed-rate debt, changes in interest rates generally affect the fair market value of the debt instrument but not our earnings or cash flows. Conversely, for variable-rate debt, changes in interest rates generally do not impact the fair market value of the debt instrument but do affect our future earnings and cash flows. We do not have an obligation to prepay any of our fixed-rate debt prior to maturity, and as a result, interest rate risk and changes in fair market value should not have a significant impact on the fixed-rate debt until we are required to refinance such debt.

     As of March 31, 2004, short-term debt was $2.10 billion, all of which was applicable to Financial Services. The majority of Financial Services’ debt is collateralized by residential mortgage loans. We borrow on a short-term basis in the commercial paper market under a $700 million commercial paper program supported by an $800 million revolving credit facility with a term expiring in fiscal year 2007 and from banks under uncommitted lines, all of which bear interest at prevailing market rates. The weighted-average interest rate on short-term borrowings outstanding at March 31, 2004 was 1.23%.

     The maturities of Centex’s long-term debt outstanding at March 31, 2004 were as follows. We define Centex as a supplemental presentation that reflects the Financial Services segment as if accounted for under the equity method.

	Maturities through March 31,
	2005			2006			2007			2008			2009			Thereafter			Total			Fair Value
(in 000’s)
Centex
Fixed Rate Debt	$	33,679		$	321,059		$	291,508		$	336,452		$	1,187		$	1,285,545		$	2,269,430		$	2,295,850
Average Interest Rate		3.67	%		8.65	%		6.52	%		4.83	%		7.67	%		6.77	%		6.67	%
Variable Rated Hedged Debt(1)	$	—		$	25,000		$	91,310		$	—		$	—		$	—		$	116,310		$	116,575
Average Interest Rate		—			6.69	%		4.98	%		—			—			—			5.34	%
Variable Rate Debt	$	—		$	—		$	9,131		$	23,319		$	—		$	—		$	32,450		$	32,635
Average Interest Rate		—			—			5.39	%		2.25	%		—			—			3.13	%

(1) These variable rate notes are fixed rate instruments as a result of a hedge using interest rate swaps.

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     The maturities of Centex’s long-term debt outstanding at March 31, 2003 were as follows:

	Maturities through March 31,
	2004			2005			2006			2007			2008			Thereafter			Total			Fair Value
(in 000’s)
Centex
Fixed Rate Debt	$	13,491		$	2,364		$	300,124		$	202,414		$	335,022		$	973,119		$	1,826,534		$	2,037,796
Average Interest Rate		7.88	%		5.07	%		8.96	%		8.01	%		4.82	%		7.26	%		7.18	%
Variable Rated Hedged Debt(1)	$	55,000		$	—		$	25,000		$	—		$	—		$	—		$	80,000		$	80,030
Average Interest Rate		5.49	%		—			7.99	%		—			—			—			6.27	%
Variable Rate Debt	$	14,000		$	30,000		$	15,000		$	88,000		$	24,319		$	2,100		$	173,419		$	176,380
Average Interest Rate		2.37	%		3.34	%		3.10	%		3.32	%		2.49	%		2.75	%		3.10	%

(1) These variable rate notes are fixed rate instruments as a result of a hedge using interest rate swaps.

     The following table sets forth the estimated maturity or repricing of our Financial Services’ obligations collateralized by securitized residential mortgage loans accounted for as borrowings outstanding at March 31, 2004.

	Maturities through March 31,
	2005			2006			2007			2008			2009			Thereafter			Total			Fair Value
(in 000’s)
Financial Services
Fixed Rate Debt	$	794,175		$	929,921		$	583,563		$	207,444		$	227,786		$	42,949		$	2,785,838		$	2,842,429
Average Interest Rate		5.05	%		5.13	%		4.62	%		4.78	%		5.97	%		6.68	%		5.07	%
Variable Rate Debt	$	1,183,806		$	922,322		$	734,304		$	384,837		$	185,308		$	1,259		$	3,411,836		$	3,419,668
Average Interest Rate		2.14	%		2.27	%		2.35	%		2.17	%		2.33	%		5.00	%		2.23	%

     The following table sets forth the estimated maturity or repricing of our Financial Services’ obligations collateralized by securitized residual mortgage loans accounted for as borrowings outstanding at March 31, 2003.

	Maturities through March 31,
	2004			2005			2006			2007			2008			Thereafter			Total			Fair Value
(in 000’s)
Financial Services
Fixed Rate Debt	$	584,776		$	452,417		$	353,367		$	459,027		$	497,246		$	71,177		$	2,418,010		$	2,501,771
Average Interest Rate		5.46	%		5.62	%		5.75	%		5.61	%		4.87	%		4.01	%		5.55	%
Variable Rate Debt	$	500,621		$	424,838		$	313,308		$	173,214		$	274,094		$	52,505		$	1,738,580		$	1,732,822
Average Interest Rate		1.99	%		2.15	%		2.37	%		2.43	%		2.62	%		2.77	%		2.17	%

     The principal and interest on this debt is paid using the cash flows from the underlying mortgage receivables, which serve as collateral for this debt. Accordingly, the timing of the principal payments on this debt is dependent on the payments received on the underlying mortgage receivables. The amounts shown within a particular period were determined in accordance with the contractual terms of the debt, except (1) fixed-rate mortgage securities reflect estimated prepayments, which were estimated based on the results of a prepayment model we utilize, and empirical data, and (2) adjustable-rate debt is included in the period in which it is first scheduled to adjust and not in the period in which it matures. We believe that these assumptions approximate actual experience and consider them reasonable. However, the interest rate sensitivity could vary substantially if different assumptions were used or actual experience differs from the historical experience on which we base the assumptions.

52

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Financial Information

Consolidated Revenues and Operating Earnings by Line of Business	54
Statements of Consolidated Earnings	55
Consolidated Balance Sheets with Consolidating Details	56
Statements of Consolidated Cash Flows with Consolidating Details	58
Statements of Consolidated Stockholders’ Equity	60
Notes to Consolidated Financial Statements	62
Report of Independent Auditors	95
Quarterly Results	96

53

Centex Corporation and Subsidiaries
Consolidated Revenues and Operating Earnings by Line of Business
(Dollars in thousands)

	For the Years Ended March 31,
	2004			2003			2002			2001			2000
Revenues
Home Building	$	7,599,519		$	5,922,724		$	4,972,172		$	4,356,446		$	3,686,878
		74	%		71	%		70	%		71	%		68	%
Financial Services		1,047,905			855,015			699,760			463,646			430,611
		10	%		10	%		10	%		8	%		8	%
Construction Services		1,596,335			1,517,851			1,296,024			1,290,382			1,205,762
		15	%		18	%		18	%		21	%		23	%
Investment Real Estate		37,869			33,298			53,461			28,103			30,061
		—			—			1	%		—			1	%
Other		81,763			99,817			102,377			—			—
		1	%		1	%		1	%		—			—
	$	10,363,391		$	8,428,705		$	7,123,794		$	6,138,577		$	5,353,312
		100	%		100	%		100	%		100	%		100	%
Business Segment Operating Earnings(1)
Home Building	$	1,005,290		$	651,719		$	498,925		$	390,301		$	326,929
		78	%		75	%		72	%		79	%		81	%
Financial Services		230,301			161,825			114,733			19,667			32,474
		18	%		18	%		17	%		4	%		8	%
Construction Services		16,413			30,718			36,225			30,886			23,471
		1	%		4	%		5	%		6	%		6	%
Investment Real Estate		44,756			33,942			35,754			50,942			26,413
		3	%		4	%		5	%		10	%		6	%
Other		(2,298	)		(10,239	)		3,358			4,009			(4,833	)
		—			(1	%)		1	%		1	%		(1	%)
		1,294,462			867,965			688,995			495,805			404,454
		100	%		100	%		100	%		100	%		100	%
Corporate General and Administrative		105,529			60,289			50,189			36,924			33,015
Interest Expense		39,869			60,326			58,576			54,069			65,139
Earnings from Continuing Operations Before Income Taxes and Cumulative Effect of a Change in Accounting Principle	$	1,149,064		$	747,350		$	580,230		$	404,812		$	306,300

Applicable segment operating expenses have been deducted from business segment operating earnings.

(1) Business Segment Operating Earnings include earnings from unconsolidated entities and exclude corporate general and administrative expense and interest expense.

54

Centex Corporation and Subsidiaries
Statements of Consolidated Earnings
(Dollars in thousands, except per share data)

	For the Years Ended March 31,
	2004			2003		2002
Revenues
Home Building	$	7,599,519		$	5,922,724	$	4,972,172
Financial Services		1,047,905			855,015		699,760
Construction Services		1,596,335			1,517,851		1,296,024
Investment Real Estate		37,869			33,298		53,461
Other		81,763			99,817		102,377
		10,363,391			8,428,705		7,123,794
Costs and Expenses
Home Building		6,649,495			5,303,183		4,498,206
Financial Services		817,604			693,190		585,027
Construction Services		1,579,922			1,487,133		1,259,799
Investment Real Estate		7,628			12,528		24,348
Other		84,061			110,056		99,019
Corporate General and Administrative		105,529			60,289		50,189
Interest Expense		39,869			60,326		58,576
		9,284,108			7,726,705		6,575,164
Earnings from Unconsolidated Entities		69,781			45,350		31,600
Earnings from Continuing Operations Before Income Taxes and Cumulative Effect of a Change in Accounting Principle		1,149,064			747,350		580,230
Income Taxes		371,933			220,538		221,828
Earnings from Continuing Operations Before Cumulative Effect of a Change in Accounting Principle		777,131			526,812		358,402
Earnings from Discontinued Operations, net of Tax Provision (Benefit) of $(13,899), $18,394 and $14,711		63,815			29,107		23,824
Earnings Before Cumulative Effect of a Change in Accounting Principle		840,946			555,919		382,226
Cumulative Effect of a Change in Accounting Principle, net of Tax Benefit of $8,303		(13,260	)		—		—
Net Earnings	$	827,686		$	555,919	$	382,226
Basic Earnings Per Share
Continuing Operations	$	6.30		$	4.33	$	2.96
Discontinued Operations		0.52			0.24		0.20
Cumulative Effect of a Change in Accounting Principle		(0.11	)		—		—
	$	6.71		$	4.57	$	3.16
Diluted Earnings Per Share
Continuing Operations	$	6.01		$	4.18	$	2.87
Discontinued Operations		0.49			0.23		0.19
Cumulative Effect of a Change in Accounting Principle		(0.10	)		—		—
	$	6.40		$	4.41	$	3.06
Average Shares Outstanding
Basic		123,382,068			121,564,084		121,121,576
Dilutive Securities:
Options		5,754,689			3,464,616		3,109,002
Other		256,064			1,087,612		827,716
Diluted		129,392,821			126,116,312		125,058,294
Cash Dividends Per Share	$	.10		$	.08	$	.08

See Notes to Consolidated Financial Statements.

55

Centex Corporation and Subsidiaries
Consolidated Balance Sheets with Consolidating Details
(Dollars in thousands)

	Centex Corporation and Subsidiaries
	March 31,
	2004			2003
Assets
Cash and Cash Equivalents	$	193,147		$	456,179
Restricted Cash		296,016			172,321
Receivables —
Residential Mortgage Loans Held for Investment, net		6,498,155			4,642,826
Residential Mortgage Loans Held for Sale		1,819,605			303,328
Construction Contracts		312,552			251,024
Trade, including Notes of $51,321 and $28,369		356,570			352,313
Inventories —
Housing Projects		4,897,036			3,306,655
Land Held for Development and Sale		208,140			106,057
Land Held Under Option Agreements Not Owned		362,405			—
Other		94,224			15,278
Investments —
Centex Development Company, L.P.		—			281,100
Joint Ventures and Other		140,118			102,277
Unconsolidated Subsidiaries		—			—
Property and Equipment, net		155,891			146,329
Other Assets —
Deferred Income Taxes		157,678			172,240
Goodwill		254,258			212,939
Mortgage Securitization Residual Interest		89,374			108,102
Deferred Charges and Other, net		233,399			227,986
Assets of Discontinued Operations		—			753,582
	$	16,068,568		$	11,610,536
Liabilities and Stockholders’ Equity
Accounts Payable	$	760,563		$	600,816
Accrued Liabilities		1,201,349			984,305
Debt —
Centex		2,418,190			2,024,953
Financial Services		8,302,190			4,998,819
Payables to Affiliates		—			—
Liabilities of Discontinued Operations		—			341,105
Commitments and Contingencies
Minority Interests		336,051			2,692
Stockholders’ Equity —
Preferred Stock, Authorized 5,000,000 Shares, None Issued		—			—
Common Stock, $.25 Par Value; Authorized 300,000,000 Shares;
Outstanding 122,660,357 and 121,672,182 Shares		32,068			30,966
Capital in Excess of Par Value		202,958			83,228
Unamortized Value of Deferred Compensation		(411	)		(2,398	)
Retained Earnings		2,990,889			2,597,078
Treasury Stock, at Cost; 5,610,772 and 2,193,688 Shares		(212,822	)		(45,037	)
Accumulated Other Comprehensive Income (Loss)		37,543			(5,991	)
Total Stockholders’ Equity		3,050,225			2,657,846
	$	16,068,568		$	11,610,536

See Notes to Consolidated Financial Statements.

56

Centex Corporation and Subsidiaries
Consolidated Balance Sheets with Consolidating Details
(Dollars in thousands)

Centex*						Financial Services
March 31,						March 31,
2004			2003			2004			2003
$	174,878		$	441,097		$	18,269		$	15,082
	36,152			8,349			259,864			163,972
	—			—			6,498,155			4,642,826
	—			—			1,819,605			303,328
	312,552			251,024			—			—
	178,829			154,009			177,741			198,304
	4,897,036			3,306,655			—			—
	208,140			106,057			—			—
	362,405			—			—			—
	85,284			6,832			8,940			8,446
	—			281,100			—			—
	140,118			102,277			—			—
	531,941			405,407			—			—
	114,524			104,233			41,367			42,096
	66,985			82,777			90,693			89,463
	237,656			195,884			16,602			17,055
	—			—			89,374			108,102
	171,534			146,346			61,865			81,640
	—			753,582			—			—
$	7,518,034		$	6,345,629		$	9,082,475		$	5,670,314
$	743,062		$	560,228		$	17,501		$	40,588
	972,041			760,541			229,308			223,764
	2,418,190			2,024,953			—			—
	—			—			8,302,190			4,998,819
	—			—			15,661			25,736
	—			341,105			—			—
	334,516			956			1,535			1,736
	—			—			—			—
	32,068			30,966			1			1
	202,958			83,228			275,521			200,467
	(411	)		(2,398	)		—			—
	2,990,889			2,597,078			256,490			198,145
	(212,822	)		(45,037	)		—			—
	37,543			(5,991	)		(15,732	)		(18,942	)
	3,050,225			2,657,846			516,280			379,671
$	7,518,034		$	6,345,629		$	9,082,475		$	5,670,314

* In the supplemental data presented above, “Centex” represents the consolidation of all subsidiaries other than those included in Financial Services as described in Note (A), “Significant Accounting Policies.” Transactions between Centex and Financial Services have been eliminated from the Centex Corporation and Subsidiaries balance sheets.

57

Centex Corporation and Subsidiaries
Statements of Consolidated Cash Flows with Consolidating Details
(Dollars in thousands)

	Centex Corporation and Subsidiaries
	For the Years Ended March 31,
	2004			2003			2002
Cash Flows — Operating Activities
Net Earnings	$	827,686		$	555,919		$	382,226
Adjustments
Cumulative Effect of a Change in Accounting Principle		13,260			—			—
Depreciation and Amortization		101,626			113,213			90,659
Provision for Losses on Residential Mortgage Loans Held for Investment		79,503			34,859			17,415
Deferred Income Tax Provision (Benefit)		17,803			23,687			(16,307	)
Equity in Earnings of Centex Development Company, L.P. and Joint Ventures		(79,987	)		(42,672	)		(29,918	)
Undistributed Earnings of Unconsolidated Subsidiaries		—			—			—
Minority Interest, net of Taxes		(8,252	)		20,201			13,818
Changes in Assets and Liabilities, Excluding Effect of Acquisitions (Increase) (Increase) Decrease in Restricted Cash		(116,398	)		(66,051	)		(44,618	)
(Increase) Decrease in Receivables		(67,808	)		(96,427	)		3,384
Decrease (Increase) in Residential Mortgage Loans Held for Sale		927,151			(61,535	)		40,197
Increase in Housing Projects and Land Held for Development and Sale Inventories		(1,203,547	)		(734,666	)		(484,157	)
Decrease (Increase) in Other Inventories		464			(2,164	)		(23,213	)
Increase (Decrease) in Accounts Payable and Accrued Liabilities		232,601			218,448			164,777
(Increase) Decrease in Other Assets, net		(37,891	)		19,867			(52,202	)
Increase (Decrease) in Payables to Affiliates		—			—			—
Other		3,304			13,742			(4,152	)
		689,515			(3,579	)		57,909
Cash Flows — Investing Activities
Payments received on Notes Receivable		13,231			6,356			36,177
Increase in Residential Mortgage Loans Held for Investment		(1,934,832	)		(1,398,235	)		(1,499,601	)
Decrease (Increase) in Investment and Advances to Centex Development Company, L.P. and Joint Ventures		79,298			52,792			(37,327	)
(Increase) Decrease in Investment and Advances to Unconsolidated Subsidiaries		—			—			—
Acquisitions, net of Cash Acquired
Home Building Operations		—			(137,733	)		—
Other		—			—			(39,411	)
Purchases of Property and Equipment, net		(53,758	)		(62,701	)		(60,380	)
Other		(432	)		(6,467	)		(3,552	)
		(1,896,493	)		(1,545,988	)		(1,604,094	)
Cash Flows — Financing Activities
(Decrease) Increase in Short-term Debt, net		(1,083,468	)		534,231			(213,308	)
Centex
Issuance of Long-term Debt		404,998			605,992			1,007,699
Repayment of Long-term Debt		(164,073	)		(298,491	)		(699,570	)
Financial Services
Issuance of Long-term Debt		5,334,407			1,999,374			2,053,238
Repayment of Long-term Debt		(3,432,323	)		(1,013,186	)		(458,704	)
Proceeds from Stock Option Exercises		65,099			15,738			31,525
Treasury Stock Purchases, net		(167,785	)		(38,478	)		(6,559	)
Dividends Paid		(13,601	)		(9,743	)		(9,724	)
		943,254			1,795,437			1,704,597
Effect of Exchange Rate on Cash		692			—			—
Net (Decrease) Increase in Cash and Cash Equivalents		(263,032	)		245,870			158,412
Cash and Cash Equivalents at Beginning of Year		456,179			210,309			51,897
Cash and Cash Equivalents at End of Year	$	193,147		$	456,179		$	210,309

See Notes to Consolidated Financial Statements.

58

Centex Corporation and Subsidiaries
Statements of Consolidated Cash Flows with Consolidating Details
(Dollars in thousands)

Centex*									Financial Services
For Years Ended March 31,									For Years Ended March 31,
2004			2003			2002			2004			2003			2002
$	827,686		$	555,919		$	382,226		$	132,845		$	152,970		$	80,512
	—			—			—			13,260			—			—
	84,275			96,214			74,816			17,351			16,999			15,843
	—			—			—			79,503			34,859			17,415
	8,076			23,687			(16,307	)		9,727			(2,430	)		(41,293	)
	(79,987	)		(42,672	)		(29,918	)		—			—			—
	(58,345	)		(77,970	)		(52,512	)		—			—			—
	(8,051	)		20,201			13,818			(201	)		—			—
	(27,803	)		(3,589	)		682			(88,595	)		(62,462	)		(45,300	)
	(54,366	)		(44,726	)		31,458			(13,442	)		(51,701	)		(28,074	)
	—			—			—			927,151			(61,535	)		40,197
	(1,203,547	)		(734,666	)		(484,157	)		—			—			—
	958			2,842			(2,797	)		(494	)		(5,006	)		(20,416	)
	229,234			116,989			124,543			(12,022	)		91,584			30,968
	(54,365	)		18,931			(8,861	)		16,474			3,397			139
	—			—			—			8,578			(155,879	)		135,692
	3,304			13,981			(3,994	)		—			(239	)		(158	)
	(332,931	)		(54,859	)		28,997			1,090,135			(39,443	)		185,525
	12,897			5,261			36,024			334			1,095			153
	—			—			—			(1,934,832	)		(1,398,235	)		(1,499,601	)
	79,298			52,761			(37,327	)		—			—			—
	(68,189	)		164,531			(130,693	)		—			—			—
	—			(137,733	)		—			—			—			—
	—			—			(38,904	)		—			—			(507	)
	(38,935	)		(47,226	)		(53,494	)		(14,823	)		(15,475	)		(6,886	)
	(18,432	)		(6,467	)		(3,552	)		18,000			—			—
	(33,361	)		31,127			(227,946	)		(1,931,321	)		(1,412,615	)		(1,506,841	)
	(25,257	)		6,627			18,630			(1,058,211	)		527,604			(231,938	)
	404,998			605,992			1,007,699			—			—			—
	(164,073	)		(298,491	)		(699,570	)		—			—			—
	—			—			—			5,334,407			1,999,374			2,053,238
	—			—			—			(3,432,323	)		(1,013,186	)		(458,704	)
	65,099			15,738			31,525			—			—			—
	(167,785	)		(38,478	)		(6,559	)		—			—			—
	(13,601	)		(9,743	)		(9,724	)		500			(73,777	)		(25,920	)
	99,381			281,645			342,001			844,373			1,440,015			1,336,676
	692			—			—			—			—			—
	(266,219	)		257,913			143,052			3,187			(12,043	)		15,360
	441,097			183,184			40,132			15,082			27,125			11,765
$	174,878		$	441,097		$	183,184		$	18,269		$	15,082		$	27,125

* In the supplemental data presented above, “Centex” represents the consolidation of all subsidiaries other than those included in Financial Services as described in Note (A), “Significant Accounting Policies.” Transactions between Centex and Financial Services have been eliminated from the Centex Corporation and Subsidiaries statements of cash flows.

59

Centex Corporation and Subsidiaries
Statements of Consolidated Stockholders’ Equity
(in thousands)

								Unamortized
	Common Stock					Capital in Excess of		Value of Deferred
	Shares			Amount		Par Value		Compensation
Balance, March 31, 2001		119,858		$	29,964	$	10,797	$	—
Issuance and Amortization of Restricted Stock		156			38		3,114		(2,408	)
Exercise of Stock Options, Including Tax Benefit		2,772			694		43,187		—
Cash Dividends		—			—		—		—
Purchases of Common Stock for Treasury		(444	)		—		—		—
Net Earnings		—			—		—		—
Unrealized Loss on Hedging Instruments		—			—		—		—
Foreign Currency Translation Adjustments		—			—		—		—
Unrealized Gain on Investments		—			—		—		—
Comprehensive Income
Balance, March 31, 2002		122,342			30,696		57,098		(2,408	)
Issuance and Amortization of Restricted Stock		40			10		990		10
Exercise of Stock Options, Including Tax Benefit		1,040			260		19,621		—
Cash Dividends		—			—		—		—
Purchases of Common Stock for Treasury		(1,750	)		—		—		—
Other		—			—		5,519		—
Net Earnings		—			—		—		—
Unrealized Loss on Hedging Instruments		—			—		—		—
Foreign Currency Translation Adjustments		—			—		—		—
Other Comprehensive Income Items		—			—		—		—
Comprehensive Income
Balance, March 31, 2003		121,672			30,966		83,228		(2,398	)
Issuance and Amortization of Restricted Stock		128			32		2,328		1,987
Stock Compensation		—			—		26,002		—
Exercise of Stock Options, Including Tax Benefits		3,478			870		89,500		—
Cash Dividends		—			—		—		—
Spin-off of Subsidiaries		—			—		—		—
Purchases of Common Stock for Treasury		(3,418	)		—		—		—
Exercise of Convertible Debenture		800			200		1,900		—
Net Earnings		—			—		—		—
Unrealized Gain on Hedging Instruments		—			—		—		—
Foreign Currency Translation Adjustments		—			—		—		—
Other Comprehensive Income Items		—			—		—		—
Comprehensive Income
Balance, March 31, 2004		122,660		$	32,068	$	202,958	$	(411	)

See Notes to Consolidated Financial Statements.

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Centex Corporation and Subsidiaries

Statements of Consolidated Stockholders’ Equity

(in thousands)

						Accumulated
			Treasury			Other
Retained			Stock			Comprehensive
Earnings			at Cost			Income (Loss)			Total
$	1,678,400		$	—		$	(5,097	)	$	1,714,064
	—			—			—			744
	—			—			—			43,881
	(9,724	)		—			—			(9,724	)
	—			(6,559	)		—			(6,559	)
	382,226			—			—			382,226
	—			—			(11,033	)		(11,033	)
	—			—			2,622			2,622
	—			—			552			552
										374,367
	2,050,902			(6,559	)		(12,956	)		2,116,773
	—			—			—			1,010
	—			—			—			19,881
	(9,743	)		—			—			(9,743	)
	—			(38,478	)		—			(38,478	)
	—			—			—			5,519
	555,919			—			—			555,919
	—			—			(10,849	)		(10,849	)
	—			—			19,330			19,330
	—			—			(1,516	)		(1,516	)
										562,884
	2,597,078			(45,037	)		(5,991	)		2,657,846
	—			—			—			4,347
	—			—			—			26,002
	—			—			—			90,370
	(13,601	)		—			—			(13,601	)
	(420,274	)		—			—			(420,274	)
	—			(167,785	)		—			(167,785	)
	—			—			—			2,100
	827,686			—			—			827,686
	—			—			5,706			5,706
	—			—			36,864			36,864
	—			—			964			964
										871,220
$	2,990,889		$	(212,822	)	$	37,543		$	3,050,225

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Centex Corporation and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

(A) SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

     The consolidated financial statements include the accounts of Centex Corporation and subsidiaries (the “Company”) after the elimination of all significant intercompany balances and transactions.

Balance sheet and cash flows data is presented in the following categories:

• Centex Corporation and Subsidiaries. This represents the consolidation of Centex, Financial Services and all of their consolidated subsidiaries. The effects of transactions among related companies within the consolidated group have been eliminated.

• Centex. This information is presented as supplemental information and represents the consolidation of all subsidiaries other than those included in Financial Services, which are presented on an equity basis of accounting.

• Financial Services. This information is presented as supplemental information and represents Centex Financial Services and its subsidiaries.

     The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Revenue Recognition

     Revenues from Home Building projects are recognized as homes are sold and title passes. Investment Real Estate’s property sales are recognized when a buyer has made an adequate cash down payment, all significant risks and rewards of ownership have been relinquished and title has transferred to the buyer. Sales revenues related to contractually obligated improvements are deferred until such improvements have been completed.

     Net origination fees, mortgage servicing rights, and other revenues derived from the origination of mortgage loans are deferred and recognized when the related loan is sold to a third-party purchaser. Other revenues, including fees for title insurance and other services performed in connection with mortgage lending activities, are recognized as earned.

     Interest revenues on residential mortgage loans receivable are recognized as revenue using the interest (actuarial) method. Revenue accruals are suspended, except for revenue accruals related to insured mortgage loans, when the residential mortgage loan becomes contractually delinquent for 90 days or more. The accrual is resumed when the residential mortgage loan becomes less than 90 days contractually delinquent. At March 31, 2004 and 2003, residential mortgage loans, on which revenue was not being accrued, were approximately $210.5 million and $167.1 million, respectively.

     Long-term construction contract revenues are recognized on the percentage-of-completion method based on the costs incurred relative to total estimated costs. Full provision is made for any anticipated losses. In

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fiscal 2004, Construction Services recorded a project loss of $4.5 million related to the construction of a distribution facility. Billings for long-term construction contracts are rendered monthly, including the amount of retainage withheld by the customer until contract completion. As a general contractor, the Company withholds similar retainages from each subcontractor. Retainages of $103.2 million and $87.5 million included in construction contracts receivable and $101.4 million and $99.9 million included in accounts payable at March 31, 2004 and 2003, respectively, are generally receivable and payable within one year.

     Claims related to long-term construction contracts are recognized as revenue only after management has determined that the collection is probable and the amount can be reliably estimated. There are no claims included in revenues for the fiscal years ended March 31, 2004 and 2003 and $1.8 million in claims are included in revenues for the fiscal year ended March 31, 2002 (“fiscal 2004,” “fiscal 2003” and “fiscal 2002”).

     For the Company’s home services operations, revenue is recognized at the time the services are rendered.

Earnings Per Share

     Basic earnings per share are computed based on the weighted-average number of shares of common stock, par value $.25 per share (“Common Stock”), outstanding, including vested shares of restricted stock and vested deferred stock units under the long-term incentive plan. Diluted earnings per share are computed based upon the basic weighted-average number of shares plus the dilution of the stock options, unvested shares of restricted stock, unvested deferred stock units under the long-term incentive plan and a convertible debenture. Earnings per share calculations for all periods presented have been restated to give retroactive application to the March 12, 2004 two-for-one stock split effected in the form of a 100 percent stock dividend to Company stockholders of record on February 29, 2004.

     The computation of diluted earnings per share excludes anti-dilutive options to purchase 373,000 shares of Common Stock at an average price of $35.37 for the year ended March 31, 2004. The computation of diluted earnings per share excludes anti-dilutive options to purchase 1,704,000 shares of Common Stock at an average price of $25.22 for the year ended March 31, 2003. The computation of diluted earnings per share excludes anti-dilutive options to purchase 3,400 shares of Common Stock at an average price of $23.04 for the year ended March 31, 2002. Anti-dilutive options at March 31, 2004, have an expiration date of May 2010.

Cash and Cash Equivalents

     Cash equivalents represent highly liquid investments with an original maturity of three months or less.

Restricted Cash

     Restricted cash primarily represents cash in principal and interest accounts for insurance agreements and required cash balances for Harwood Street Funding I, LLC (“HSF-I”) and Harwood Street Funding II, LLC (“HSF-II”).

Residential Mortgage Loans

     Residential mortgage loans held for investment represent mortgage loans originated by Home Equity, which are securitized and recorded as secured borrowings in the financial statements using the portfolio method. These mortgage loans are stated at cost less an allowance for losses. Residential mortgage loans held for sale represent mortgage loans originated by CTX Mortgage Company, LLC, which will be sold to third parties and recorded as sales. The carrying value of loans designated as hedged is adjusted for changes in the fair value to the extent the hedge is deemed effective. Unhedged loans or loans hedged ineffectively are stated at the lower

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of cost or market. Market is determined by forward sale commitments, current investor yield requirements and current market conditions. Substantially all of the mortgage loans are delivered to third-party purchasers and/or subjected to securitization within three months after origination. These loans are subject to hedge instruments during the time they are held in inventory. Substantially all of the mortgage loans are pledged as collateral for secured financings.

     Home Equity establishes an allowance for losses by recording a provision for losses in the Statements of Consolidated Earnings when it believes a loss has occurred. When Home Equity determines that a residential mortgage loan held for investment is partially or fully uncollectible, the estimated loss is charged against the allowance for losses. Recoveries on losses previously charged to the allowance are credited to the allowance at the time the recovery is collected.

     Home Equity believes that the allowance for losses is sufficient to provide for credit losses in the existing residential mortgage loans held for investment, which include real estate owned. Home Equity evaluates the allowance on an aggregate basis considering, among other things, the relationship of the allowance to residential mortgage loans held for investment and historical credit losses. The allowance reflects Home Equity’s judgment of the present loss exposure at the end of the reporting period. A range of expected credit losses is estimated using historical losses, static pool loss curves and delinquency modeling. These tools take into consideration historical information regarding delinquency and loss severity experience and apply that information to the portfolio at each reporting date.

     CTX Mortgage Company, LLC has established a liability for anticipated losses associated with loans originated based on, among other factors, historical loss rates and current trends in loan originations. This liability includes losses associated with certain borrower payment defaults, credit quality issues or misrepresentation and reflects management’s judgment of the loss exposure at the end of the reporting period.

     Although Home Equity and CTX Mortgage Company, LLC consider the allowance for losses on residential mortgage loans held for investment and the loan origination reserve reflected in the consolidated balance sheet at March 31, 2004 to be sufficient, there can be no assurance that this allowance or reserve will prove to be sufficient over time to cover ultimate losses. This allowance and reserve may prove to be insufficient due to unanticipated adverse changes in the economy or discrete events adversely affecting specific customers or industries.

Trade Accounts and Notes Receivable

     Trade accounts receivable primarily consist of accrued interest, amounts related to securitizations, receivables for the sale of servicing rights, closed unfunded home sales receivables, insurance claims receivable and trade sales related to the Company’s Financial Services and Home Building segments and are net of an allowance for doubtful accounts. Notes receivable at March 31, 2004 are collectible primarily over five years with $20.3 million being due within one year. The weighted-average interest rate on notes receivable at March 31, 2004 was 4.4%.

Inventory, Capitalization and Segment Expenses

     Housing projects and land held for development and sale are stated at the lower of cost (including direct construction costs, capitalized interest and real estate taxes) or fair value less cost to sell. The relief of capitalized costs is included in the Home Building costs and expenses in the Statements of Consolidated Earnings when related revenues are recognized.

     General operating expenses associated with each segment of business are expensed when incurred and are included in the appropriate business segment.

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Land Held Under Option Agreements Not Owned

     In order to ensure the future availability of land for homebuilding, the Company enters into lot option purchase agreements with unaffiliated third parties. Under the option agreements, the Company pays a stated deposit in consideration for the right to purchase land at a future time, usually at predetermined prices. These options generally do not contain performance requirements from the Company nor obligate the Company to purchase the land.

     The Company has evaluated those entities with which the Company entered into lot option agreements in accordance with the provisions of Financial Accounting Standards Board (“FASB”) Interpretation No. 46, “Consolidation of Variable Interest Entities,” as revised (“FIN 46”). The provisions of FIN 46 require the Company to consolidate the financial results of a variable interest entity if the Company is the primary beneficiary of the variable interest entity. Variable interest entities are entities in which (1) equity investors do not have a controlling financial interest and/or (2) the entity are unable to finance its activities without additional subordinated financial support from other parties. The primary beneficiary of a variable interest entity is the owner or investor that absorbs a majority of the variable interest entity’s expected losses and/or receives a majority of the variable interest entity’s expected residual returns.

     The Company determines if it is the primary beneficiary of variable interest entities based upon analysis of the variability of the expected gains and losses of the variable interest entity. Expected gains and losses of the variable interest entity are highly dependent on management’s estimates of the variability and probabilities of future land prices, the probabilities of expected cash flows and the entitlement risks related to the underlying land, among other factors. Based on this evaluation, if the Company is the primary beneficiary of those entities with which the Company has entered into lot option agreements, the variable interest entity is consolidated. For purposes of consolidation, to the extent financial statements are available, the Company consolidates the assets and liabilities of the variable interest entity. If financial statements for the variable interest entity are not available, the Company records the remaining purchase price of land in the Consolidated Balance Sheets under the caption, land held under option agreements not owned, with a corresponding increase in minority interests. Lot option deposits related to these options are reclassified to land held under option agreements not owned.

Investments

     The Company is a participant in certain joint ventures with interests ranging from 20% to 67%. Investments in joint ventures in which the Company’s interest exceeds 50% have been consolidated. All remaining investments in joint ventures are carried on the equity method in the consolidated financial statements.

     Prior to March 2004, the Company maintained an investment in Centex Development Company, L.P. and subsidiaries (the “Partnership”), accounted for under the equity method of accounting. In February 2004, we acquired the Partnership through merger. Subsequent to the merger, we have consolidated the Partnership. See Note (G), “Merger of 3333 Holding Corporation and Subsidiary and Centex Development Company, L.P. and Subsidiaries,” for additional information regarding the Partnership.

     The earnings or losses of the Company’s investment in the Partnership and joint ventures are included in the appropriate business segment.

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Property and Equipment, net

     Property and equipment is carried at cost less accumulated depreciation. Depreciation is recorded using the straight-line method over the estimated useful life of the asset. Depreciable lives for Buildings and Improvements typically range from 7 to 40 years; depreciable lives for Machinery, Equipment and Other typically range from 2 to 10 years. Major renewals and improvements are capitalized and depreciated. Repairs and maintenance are expensed as incurred. Costs and accumulated depreciation applicable to assets retired or sold are eliminated from the accounts and any resulting gains or losses are recognized at such time.

Impairment of Long-Lived Assets

     The Company assesses housing projects, land held for development and sale and property and equipment for recoverability in accordance with the provisions of Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS No. 144”). SFAS No. 144 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets is measured by comparing the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. These evaluations for impairment are significantly impacted by estimates of revenues, costs and expenses and other factors. If these assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. No significant impairments of long-lived assets were recorded in fiscal 2004, 2003 or 2002.

Goodwill

     Goodwill represents the excess of purchase price over net assets of businesses acquired. The Company adopted the provisions of Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets” (“SFAS No. 142”), effective April 1, 2001. Upon the adoption of SFAS No. 142, goodwill is no longer subject to amortization. Rather, goodwill is subject to at least an annual assessment for impairment, at the reporting unit level, by applying a fair value-based test. If the carrying amount exceeds the fair value, an impairment has occurred. The Company continually evaluates whether events and circumstances have occurred that indicate the remaining balance of goodwill may not be recoverable. Fair value is estimated using a discounted cash flow or market valuation approach. Such evaluations for impairment are significantly impacted by estimates of future revenues, costs and expenses and other factors. If the goodwill is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the goodwill exceeds the fair value of the future cash flows. The Company had no impairment of goodwill in fiscal 2004, 2003 and 2002. See further discussion of goodwill at Note (E), “Goodwill.”

Mortgage Securitization Residual Interest

     Home Equity uses mortgage securitizations to finance its mortgage loan portfolio. Securitizations entered into prior to April 1, 2000 were accounted for as sales, and the resulting gains on such sales were reported in operating results during the period in which the securitizations closed. Home Equity changed the legal and economic structure of securitizations subsequent to March 31, 2000, causing securitizations after that date to be accounted for as secured borrowings. Additionally, in fiscal year 2004, Home Equity sold 2% of its mortgage loans originated to a government sponsored enterprise, which were accounted for as sales.

     For securitizations accounted for as sales, Home Equity retained a residual interest (the “Mortgage Securitization Residual Interest” or “MSRI”). The MSRI represents the present value of Home Equity’s right to receive, over the life of the securitization, the excess of the weighted-average coupon on the loans securitized over the interest rates on the securities sold, a normal servicing fee, a trustee fee and an insurance fee, where applicable, net of the credit losses relating to the loans securitized.

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     Changes in Home Equity’s MSRI were as follows:

	For the Years Ended March 31,
	2004			2003			2002
Beginning Balance	$	106,373		$	122,316		$	146,394
Cash Received		(11,256	)		(17,193	)		(32,281	)
Accretion and Other		(7,321	)		1,250			8,203
Ending Balance	$	87,796		$	106,373		$	122,316

     The Company classifies MSRI as trading securities in accordance with SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities,” and accordingly, carries MSRI at fair value on the Company’s balance sheet.

     Home Equity estimates the fair value of MSRI through the application of discounted cash flow analysis. Such analysis requires the use of various assumptions, the most significant of which are anticipated prepayments (principal reductions in excess of contractually scheduled reductions), estimated future credit losses and the discount rate applied to future cash flows. Home Equity monitors the fair value of MSRI and the reasonableness of the underlying assumptions in light of current market conditions.

     At March 31, 2004, Home Equity used the following assumptions in monitoring the fair value of the MSRI: cumulative credit losses of 4.51% to 6.11%; Constant Prepayment Rate (“CPR”) for fixed rate loans of 26.55% per annum; a CPR of 31.28% per annum for variable rate loans; and a discount rate of 15% simple interest. At March 31, 2004, the expected weighted-average life of Home Equity’s MSRI balance was 1.45 years, with individual transactions ranging from 0.85 years to 1.77 years.

     Home Equity had MSRI of $87.8 million and $106.4 million at March 31, 2004 and 2003, respectively. The outstanding principal amount of the related securitized loans was $562.6 million and $785.8 million at March 31, 2004 and 2003, respectively. Delinquencies related to MSRI were $37.1 million and $51.0 million at March 31, 2004 and 2003, respectively. Net credit losses for fiscal 2004, 2003 and 2002 were $18.0 million, $22.4 million and $17.3 million, respectively.

     At March 31, 2004, the sensitivity of the current fair value of the MSRI to an immediate 10 percent and 20 percent unfavorable change in assumptions is presented in the table below. These sensitivities are based on assumptions used to value our MSRI at March 31, 2004.

	Impact on fair value of an adverse change
Assumption	10%		20%
Credit Losses	$	1,076	$	2,500
Constant Prepayment Rate	$	1,303	$	2,610
Discount Rate	$	2,456	$	4,829

     These sensitivities are hypothetical and should not be considered to be predictive of future performance. As the figures indicate, the change in fair value based on a 10 percent variation in assumptions cannot necessarily be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. Also, in this table, the effect of a variation in a particular assumption on the fair value of the residual cash flow is calculated independently from any change in another assumption. In reality, changes in one factor may contribute to changes in another (for example, increases in market interest rates may result in

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lower prepayments), which might magnify or counteract the sensitivities. Furthermore, the estimated fair values as disclosed should not be considered indicative of future earnings on these assets.

     In addition to Home Equity’s MSRI, CTX Mortgage also had MSRI of $1.6 million and $1.7 million at March 31, 2004 and 2003, respectively. CTX Mortgage’s MSRI resulted from an acquisition in fiscal 2002.

Deferred Charges and Other

     Deferred charges and other are primarily composed of interest rate lock commitments, deposits, investments, prepaid expenses, acquisition intangibles, securitization costs and other financing costs.

Advertising Costs

     Advertising costs are expensed as incurred. Advertising costs for fiscal 2004, 2003 and 2002 were $91.4 million, $78.6 million and $78.9 million, respectively.

Foreign Currency Exchange Gains or Losses

     Home Building’s international operations, whose functional currency is not the U.S. dollar, translates its financial statements into U.S. dollars. Assets and liabilities are translated at the exchange rate in effect as of the financial statement date. Income statement accounts are translated using the average exchange rate for the period. Income statement accounts that represent significant, non-recurring transactions are translated at the rate in effect as of the date of the transaction. Gains and losses resulting from the translation are included in accumulated other comprehensive income as a separate component of stockholders’ equity.

Off-Balance Sheet Obligations

     The Company enters into various “off-balance-sheet” transactions in the normal course of business in order to facilitate homebuilding activities. Further discussion regarding these transactions can be found in Note (H), “Commitments and Contingencies.”

Insurance Accruals

     The Company has certain deductible limits under its workers’ compensation, automobile and general liability insurance policies for which reserves are actuarially determined based on claims filed and an estimate of claims incurred but not yet reported. Although we consider the insurance accruals reflected in our consolidated balance sheet to be adequate, there can be no assurance that this accrual will prove to be sufficient over time to cover ultimate losses. Projection of losses concerning these liabilities is subject to a high degree of variability due to factors such as claim settlement patterns, litigation trends and legal interpretations. Expenses associated with insurance claims up to our deductible limits were $42.7 million, $18.1 million and $21.4 million for fiscal 2004, 2003 and 2002, respectively.

Stock-Based Employee Compensation Arrangements

     On April 1, 2003, the Company adopted the fair value measurement provisions of SFAS No. 123, under which the Company recognizes compensation expense of a stock-based award to an employee on a straight-line basis over the vesting period based on the fair value of the award on the grant date. The fair value method has been applied to awards granted or modified on or after April 1, 2003 (the prospective method), whereas awards granted prior to such date continue to be accounted for in accordance with Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB No. 25”), and related interpretations.

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     On January 30, 2004, the Company modified all of its stock options and long-term incentive plan rights outstanding, in order to keep the holders in the same economic position as before the spin-off of Centex Construction Products, Inc. (“Construction Products”). The modification resulted in a reduction of the exercise price and an increase in the number of shares. This adjustment is a modification under the provisions of SFAS No. 123 and accordingly, compensation expense of $12.2 million will be expensed over the remaining vesting periods. Subsequent to January 30, 2004, the Company has no outstanding options or other stock rights accounted for under the provisions of APB No. 25.

     The following pro forma information reflects the Company’s net earnings and earnings per share as if compensation cost for all stock option plans and other equity-based compensation programs had been determined based upon the fair value at the date of grant for awards outstanding in fiscal 2004, 2003 and 2002, consistent with the provisions of SFAS No. 123.

	For the Years Ended March 31,
	2004			2003			2002
Net Income — as Reported	$	827,686		$	555,919		$	382,226
Stock-Based Employee Compensation Expense Included in Reported Net Income, net of Related Tax Effects		19,727			4,244			484
Total Stock-Based Employee Compensation Expense Determined Under Fair Value Based Method, net of Related Tax Effects		(31,580	)		(24,512	)		(24,957	)
Pro Forma Net Earnings	$	815,833		$	535,651		$	357,753
Earnings Per Share:
Basic — as Reported	$	6.71		$	4.57		$	3.16
Basic — Pro Forma	$	6.61		$	4.41		$	2.95
Diluted — as Reported	$	6.40		$	4.41		$	3.06
Diluted — Pro Forma	$	6.29		$	4.25		$	2.86

Income Taxes

     The Company accounts for income taxes on the deferral method whereby deferred tax assets and liabilities are recognized for the consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis.

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Interest Expense

     Interest expense relating to the Financial Services segment is included in Financial Services’ costs and expenses. The Company capitalizes a portion of interest incurred as a component of housing projects’ inventory cost. The relief of capitalized interest is included in Home Building’s costs and expenses as housing inventories are sold. Interest expense related to segments other than Financial Services and Home Building is included as a separate line item on the Statements of Consolidated Earnings.

	For the Years Ended March 31,
	2004			2003			2002
Total Interest Incurred	$	378,718		$	318,349		$	271,289
Less — Interest Capitalized		(114,997	)		(73,572	)		(53,568	)
Financial Services Interest Expense		(223,852	)		(184,451	)		(159,145	)
Interest Expense, net	$	39,869		$	60,326		$	58,576
Capitalized Interest Relieved to Home Building’s Costs and Expenses	$	89,144		$	49,450		$	40,851

Statements of Consolidated Cash Flows — Supplemental Disclosures

     The following table provides supplemental disclosures related to the Statements of Consolidated Cash Flows:

	For the Years Ended March 31,
	2004		2003		2002
Cash Paid for Interest	$	362,167	$	318,607	$	262,488
Net Cash Paid for Taxes	$	356,853	$	204,368	$	199,366

     Effective July 1, 2003, the Company consolidated HSF-I pursuant to the provisions of FIN 46, as discussed in Note (F), “Indebtedness.” As of July 1, 2003, HSF-I assets and liabilities which were consolidated by the Company were as follows:

Cash and Cash Equivalents	$	18,000
Residential Mortgage Loans Held for Sale		2,443,428
Other Assets		(36,100	)
Accounts Payable		20,910
Financial Services Debt		(2,459,498	)
	$	(13,260	)

     As a result of the consolidation of HSF-I, the Company recorded a cumulative effect of a change in accounting principle, net of tax, of $13,260.

     As explained in Note (I), “Land Held Under Option Agreements not Owned and Other Land Deposits” pursuant to the provisions of FIN 46, the Company consolidated $332.7 million of lot option agreements and reclassified $29.7 million of deposits related to these options, previously included in Land Held for Development and Sale.

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Recent Accounting Pronouncements

     In January 2003, the FASB issued Interpretation No. 46, “Consolidation of Variable Interest Entities,” as revised, (“FIN 46”), which modified the accounting for certain entities in which (1) equity investors do not have a controlling financial interest and/or (2) the entity is unable to finance its activities without additional subordinated financial support from other parties. As of March 31, 2004, all the provisions of FIN 46 apply, and the Company has interests in HSF-I, certain land option agreements and joint ventures that are affected by this interpretation. The nature of these entities’ operations, the Company’s potential maximum exposure related to these entities and the applicability of FIN 46 to these entities are discussed as follows:

HSF-I	Note (F), “Indebtedness”
Joint Ventures	Note (H), “Commitments and Contingencies”
Land Option Agreements	Note (I), “Land Held Under Option Agreements not Owned and Other Land Deposits”

     In April 2003, the FASB issued Statement of Financial Accounting Standards No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities,” (“SFAS No. 149”). The statement amends and clarifies financial accounting and reporting for derivative instruments and hedging activities under Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities,” or SFAS No. 133, by requiring that contracts with comparable characteristics be accounted for similarly, resulting in more consistent reporting of contracts as either derivatives or hybrid instruments. A portion of this statement is effective for contracts entered into or modified and for hedging relationships designated after June 30, 2003. The remainder of this statement codifies previously issued SFAS No. 133 implementation guidance, which retains its original effective dates. The implementation of SFAS No. 149 did not have a material impact on the Company’s results of operations or financial position.

     In May 2003, the FASB issued Statement of Financial Accounting Standards No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity,” (“SFAS No. 150”). The statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within the scope of SFAS No. 150 as a liability (or an asset in some circumstances). Certain provisions of this statement are effective for financial instruments entered into or modified after May 31, 2003. In October 2003, FASB deferred indefinitely certain provisions of this statement pertaining to non-controlling interests in limited life entities. The implementation of the provisions of SFAS No. 150 which are effective did not have an impact on the Company’s results of operations or financial position.

     On March 9, 2004, the Securities and Exchange Commission (“SEC”) issued Staff Accounting Bulletin No. 105, “Application of Accounting Principles to Loan Commitments,” (“SAB 105”). SAB 105 applies to all interest rate lock commitments (“IRLCs”) entered into after March 31, 2004. SAB 105 expresses the SEC staff’s view that the fair value of IRLCs should not consider the expected future cash flows related to the associated servicing of the future loan. CTX Mortgage Company, LLC does enter into IRLCs with certain customers; however, no servicing income is recorded upon entering into the IRLC. Accordingly, SAB 105 will not have an effect on the Company’s financial position or results of operations.

Reclassifications

     Certain prior year balances have been reclassified to conform to the fiscal 2004 presentation.

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(B) RESIDENTIAL MORTGAGE LOANS HELD FOR INVESTMENT

     Residential mortgage loans held for investment, including real estate owned, consisted of the following:

	March 31,
	2004			2003
Residential Mortgage Loans Held for Investment	$	6,554,513		$	4,671,210
Allowance for Losses on Residential Mortgage Loans Held for Investment		(56,358	)		(28,384	)
Residential Mortgage Loans Held for Investment, net of Allowance for Losses	$	6,498,155		$	4,642,826

     At March 31, 2004, contractual maturities of residential mortgage loans held for investment were as follows:

2005	$	77,999
2006		81,931
2007		86,520
2008		93,730
2009 and thereafter		6,214,333
	$	6,554,513

     It is the Company’s experience that a substantial portion of the loan portfolio generally is renewed or repaid prior to contractual maturity dates. The above maturity schedule should not be regarded as a forecast of future cash collections.

(C) ALLOWANCE FOR LOSSES ON RESIDENTIAL MORTGAGE LOANS HELD FOR INVESTMENT

     Changes in the allowance for losses on residential mortgage loans held for investment were as follows:

	For the Years Ended March 31,
	2004			2003			2002
Balance at Beginning of Period	$	28,384		$	14,106		$	2,814
Provision for Losses		79,503			34,859			17,415
Recoveries on Loans Charged Off		204			160			259
Losses Sustained		(51,733	)		(20,741	)		(6,382	)
Balance at End of Period	$	56,358		$	28,384		$	14,106
Allowance as a Percentage of Gross Loans Held for Investment		0.9	%		0.6	%		0.4	%
Allowance as a Percentage of 90+ Days
Contractual Delinquency		36.4	%		23.2	%		16.9	%
90+ Days Contractual Delinquency (based on months)
Total Dollars Delinquent	$	154,868		$	122,479		$	83,490
% Delinquent		2.4	%		2.6	%		2.6	%

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(D) PROPERTY AND EQUIPMENT

     Property and equipment cost by major category and accumulated depreciation are summarized below:

	March 31,
	2004			2003
Land, Buildings and Improvements	$	98,887		$	82,132
Machinery, Equipment and Other		218,883			211,311
		317,770			293,443
Accumulated Depreciation		(161,879	)		(147,114	)
	$	155,891		$	146,329

     The Company had depreciation expense related to property and equipment of $39.5 million, $35.9 million, and $32.9 million for fiscal 2004, 2003, and 2002, respectively.

(E) GOODWILL

     A summary of changes in goodwill by segment for the years ended March 31, 2004 and 2003 are presented below:

	Home			Financial			Construction
	Building			Services			Services		Other			Total
Balance as of March 31, 2002	$	84,151		$	16,815		$	1,007	$	87,295		$	189,268
Goodwill Acquired		38,860			240			—		1,978			41,078
Sale of Chemical Lawn Care Operations		—			—			—		(17,393	)		(17,393	)
Other		—			—			—		(14	)		(14	)
Balance as of March 31, 2003		123,011			17,055			1,007		71,866			212,939
Goodwill Consolidated or Acquired		36,425			414			—		6,674			43,513
Other		(829	)		(867	)		—		(498	)		(2,194	)
Balance as of March 31, 2004	$	158,607		$	16,602		$	1,007	$	78,042		$	254,258

     Goodwill for the Other segment at March 31, 2004 and 2003 is related to the Company’s home services operations. Included in Assets of Discontinued Operations at March 31, 2003 is $67.3 million of goodwill related to manufactured housing, $51.6 million related to the Company’s investment in Construction Products and $40.3 million of Construction Products’ goodwill.

     As explained in Note (G), “Merger of 3333 Holding Corporation and Subsidiary and Centex Development Company, L.P. and Subsidiaries,” the Company acquired through merger the Partnership, which resulted in the consolidation of $36.4 million in Home Building’s goodwill.

     The Company made several acquisitions during fiscal 2003 that resulted in an increase to goodwill. The largest fiscal 2003 acquisition was Centex Homes’ acquisition of substantially all of the St. Louis and Indianapolis home building operations of The Jones Company on January 2, 2003 for a total purchase price of $141.3 million. Operations of The Jones Company are included in our results of operations for the three months ended March 31, 2003, contributing revenues of $47.7 million and an operating loss of $0.4 million.

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     Centex pro forma financial information is not presented as the pro forma impact of the fiscal 2004 and 2003 acquisitions on the results of operations were not significant.

(F) INDEBTEDNESS

     Balances of short-term and long-term debt (debt instruments with original maturities greater than one year) and weighted-average interest rates at March 31 were (due dates are presented in fiscal years):

	March 31,
	2004					2003
			Weighted-					Weighted-
			Average					Average
			Interest					Interest
			Rate					Rate
Short-term Debt:
Financial Services
Financial Institutions	$	601,718		1.42	%	$	283,146		1.99	%
Secured Liquidity Notes:
Harwood Street Funding I, LLC		936,000		1.15	%		—		—
Harwood Street Funding II, LLC		566,798		1.15	%		559,083		1.41	%
Consolidated Short-term Debt		2,104,516					842,229
Long-term Debt:
Centex
Medium-term Note Programs, due through 2007		258,000		4.67	%		281,000		4.79	%
Long-term Notes, due through 2014		1,808,332		6.73	%		1,508,116		7.05	%
Other Indebtedness, due through 2010		152,152		3.13	%		36,249		3.54	%
Subordinated Debt:
Subordinated Debentures, due in 2007		99,763		8.75	%		99,694		8.75	%
Subordinated Debentures, due in 2006		99,943		7.38	%		99,894		7.38	%
		2,418,190					2,024,953
Financial Services
Home Equity Asset-Backed Certificates, due through 2034		5,964,924		3.52	%		4,081,590		4.52	%
Harwood Street Funding I, LLC Variable Rate Subordinated Extendable Certificates, due through 2007		139,000		3.06	%		—		—
Harwood Street Funding II, LLC Variable Rate Subordinated Notes, due through 2009		93,750		3.24	%		75,000		3.38	%
		6,197,674					4,156,590
Consolidated Long-term Debt		8,615,864					6,181,543
Total Debt	$	10,720,380				$	7,023,772

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     The weighted-average interest rates for short-term and long-term debt during the years ended March 31, 2004, 2003, and 2002 were:

	For the Years Ended March 31,
	2004			2003			2002
Short-term Debt		1.2	%		1.6	%		2.3	%
Long-term Debt:
Centex
Medium-term Note Programs(1)		5.30	%		5.31	%		6.56	%
Long-term Notes		6.87	%		7.72	%		8.48	%
Other Indebtedness		2.93	%		4.16	%		7.96	%
Subordinated Debentures		8.07	%		8.07	%		8.07	%
Financial Services
Centex Home Equity Company, LLC Long-term Debt(2)		3.51	%		4.50	%		5.49	%
CTX Mortgage Company, LLC Long-term Debt(3)		2.56	%		—			—

(1) Interest rates include the effects of an interest rate swap agreement.

(2) Consists of Centex Home Equity Company, LLC Asset-Backed Certificates and Harwood Street Funding II, LLC Variable Rate Subordinated Notes.

(3) Consists of Harwood Street Funding I, LLC Variable Rate Subordinated Extendable Certificates.

     Maturities of Centex and Financial Services long-term debt during the next five years ending March 31 are:

			Financial
	Centex		Services		Total
2005	$	33,679	$	1,977,981	$	2,011,660
2006		346,059		1,852,243		2,198,302
2007		391,949		1,317,867		1,709,816
2008		359,771		592,281		952,052
2009		1,187		413,094		414,281
Thereafter		1,285,545		44,208		1,329,753
	$	2,418,190	$	6,197,674	$	8,615,864

     Financial Services long-term debt associated with Home Equity includes Asset-Backed Certificates of $5.96 billion at March 31, 2004. These Asset-Backed Certificates relate to securitized residential mortgage loans structured as collateralized borrowings. The holders of such debt have no recourse for non-payment to Centex Home Equity Company, LLC or Centex Corporation; however, Centex Home Equity Company, LLC remains liable for customary loan representations. The principal and interest on these certificates are paid from the liquidation of the underlying residential mortgage loans, which serve as collateral for the debt. Accordingly, the timing of the principal payments on these certificates is dependent upon the payments received on the underlying residential mortgage loans. The expected maturities of this component of long-term debt are based on contractual maturities adjusted for projected prepayments.

     At March 31, 2003, included in other long-term debt, was a $2.1 million convertible subordinated debenture sold at par in 1985 to a corporate officer, which bore interest at LIBOR plus 1.5%. In connection with this transaction, the Company guaranteed the payment of a $2.1 million note payable to a bank by the

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officer. In May 2003, the convertible subordinated debenture was converted by the corporate officer into 400,000 shares of the Company’s Common Stock and the Company guarantee was terminated.

     Under the Company’s debt covenants, the Company is required to maintain certain leverage and interest coverage ratios and a minimum tangible net worth. At March 31, 2004, the Company was in compliance with all of these covenants.

Credit Facilities

     The Company’s existing credit facilities and available borrowing capacity as of March 31, 2004 are summarized below:

	Existing Credit			Available
	Facilities			Capacity
Centex
Centex Corporation
Multi-Bank Revolving Credit Facility	$	800,000		$	800,000	(1)
Multi-Bank Revolving Letter of Credit Facility		250,000			80,351	(2)
		1,050,000	(3)		880,351
International homebuilding
Multi-Bank Revolving Credit Facility		182,620			82,179
Unsecured Credit Facility		36,524			36,524
		219,144			118,703	(4)
Financial Services
Unsecured Credit Facility		125,000			125,000	(5)
Secured Credit Facilities		425,000			73,075	(6)
Harwood Street Funding I, LLC Facility		3,000,000			1,675,413
Harwood Street Funding II, LLC Facility		2,500,000			1,839,452
		6,050,000			3,712,940
	$	7,319,144		$	4,711,994	(7)

(1) This is a committed, multi-bank revolving credit facility, maturing in August 2006, which serves as backup for commercial paper borrowings. As of March 31, 2004, there were no borrowings under this backup facility, and the Company’s $700 million commercial paper program had no amounts outstanding. There have been no borrowings under this revolving credit facility since inception.

(2) This is a committed, multi-bank revolving letter of credit facility, maturing in August 2004. Letters of credit issued under this facility may expire no later than August 2005.

(3) In conjunction with the issuance of surety bonds in support of our Construction Services activity, Centex Corporation will provide letters of credit of up to $100 million if Centex Corporation’s public debt ratings fall below investment grade. In support of this ratings trigger, we maintain a minimum of $100 million in unused committed credit at all times.

(4) The international homebuilding operations maintain a secured, committed, multi-bank revolving £100 million credit facility. This facility is not guaranteed by nor is there recourse to Centex Corporation. The international homebuilding operations also maintain an uncommitted, unsecured £20 million credit facility guaranteed by Centex Corporation.

(5) Centex Corporation, CTX Mortgage Company, LLC and its related companies and Home Equity, on a joint and several basis, share in a $125 million uncommitted, unsecured credit facility.

(6) CTX Mortgage Company, LLC and its related companies and Home Equity share in a $250 million committed secured credit facility to finance mortgage inventory. CTX Mortgage Company, LLC and its related companies also maintain $165 million of committed secured mortgage warehouse facilities to finance mortgages. In April 2004, these facilities, which totaled $165 million, increased to $210 million. Home Equity also maintains a $10 million committed secured mortgage warehouse facility to finance mortgages.

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(7) The amount of available borrowing capacity includes $4.55 billion of committed capacity and $162 million of uncommitted capacity as of March 31, 2004. Although the Company believes that the uncommitted capacity is currently available, there can be no assurance that the lenders under these facilities would elect to make advances if and when requested to do so.

CTX Mortgage Company, LLC and Harwood Street Funding I, LLC

     CTX Mortgage Company, LLC finances its inventory of mortgage loans held for sale principally through sales of conforming and Jumbo “A” loans to HSF-I, pursuant to a mortgage loan purchase agreement (the “HSF-I Purchase Agreement”). Since 1999, CTX Mortgage Company, LLC has sold substantially all of the conforming and Jumbo “A” mortgage loans that it originates to HSF-I in accordance with the HSF-I Purchase Agreement. HSF-I’s commitment to purchase eligible mortgage loans continues in effect until the occurrence of certain termination events described in the HSF-I Purchase Agreement. When HSF-I acquires these loans, it typically holds them for a period of 45 to 60 days and then resells them into the secondary market. In accordance with the HSF-I Purchase Agreement, CTX Mortgage Company, LLC acts as servicer of the loans owned by HSF-I and arranges for the sale of the eligible mortgage loans into the secondary market. HSF-I obtains the funds needed to purchase eligible mortgage loans from CTX Mortgage Company, LLC by issuing (1) short-term secured liquidity notes that are currently rated A1+ by Standard & Poor’s (“S&P”) and P-1 by Moody’s Investors Service (“Moody’s”), (2) medium-term debt that is currently rated A1+ by S&P and P-1 by Moody’s and (3) subordinated certificates maturing in September 2004, November 2005 and June 2006, extendable for up to five years, that are currently rated BBB by S&P and Baa2 by Moody’s. Under the terms of the HSF-I Purchase Agreement, CTX Mortgage Company, LLC may elect to sell to HSF-I, and HSF-I is obligated to purchase from CTX Mortgage Company, LLC, mortgage loans that satisfy certain eligibility criteria and portfolio requirements. At March 31, 2004, the maximum amount of mortgage loans that HSF-I is allowed to carry in its inventory under the HSF-I Purchase Agreement is $3.00 billion. This arrangement provides CTX Mortgage Company, LLC with reduced financing cost for eligible mortgage loans it originates and improves its liquidity.

     In January 2003, the FASB issued FIN 46, which modified the accounting for certain entities in which (1) equity investors do not have a controlling financial interest and/or (2) the entity is unable to finance its activities without additional subordinated financial support from other parties. Pursuant to FIN 46, HSF-I is a variable interest entity for which the Company is the primary beneficiary. Accordingly, HSF-I was consolidated in the Company’s financial statements beginning July 1, 2003. Prior to the implementation of FIN 46, HSF-I was not consolidated in the Company’s financial statements. As a result of the consolidation of HSF-I, the Company recorded a cumulative effect of a change in accounting principle of $13.3 million, net of tax, in the quarter ended September 30, 2003. This cumulative effect of a change in accounting principle primarily represented the deferral of service release premium income, offset to a lesser extent by the deferral of certain loan origination costs, which was recognized as loans were sold into the secondary market. The consolidation of HSF-I resulted in an increase in the Company’s residential mortgage loans held for sale with a corresponding increase in the Company’s debt of approximately $1.32 billion at March 31, 2004. In addition, interest income and interest expense of HSF-I subsequent to June 30, 2003, are reflected in the Company’s financial statements. Because HSF-I is a consolidated entity as of July 1, 2003, all transactions between the Company and HSF-I subsequent to June 30, 2003 are eliminated in consolidation.

     HSF-I has entered into a swap arrangement with a bank (the “Harwood Swap”) under which the bank has agreed to make certain payments to HSF-I, and HSF-I has agreed to make certain payments to the bank, the net effect of which is that the bank has agreed to bear certain interest rate risks, non-credit related market risks and prepayment risks related to the mortgage loans held by HSF-I. The purpose of this arrangement is to provide credit enhancement to HSF-I by permitting it to hedge these risks with a counterparty having a short-term credit rating of A1+ from S&P and P-1 from Moody’s. However, the Company effectively bears all interest rate risks, non-credit related market risks and prepayment risks that are the subject of the Harwood Swap because Centex has entered into a separate swap arrangement with the bank pursuant to which Centex has

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agreed to pay to the bank all amounts that the bank is required to pay to HSF-I pursuant to the Harwood Swap plus a monthly fee equal to a percentage of the notional amount of the Harwood Swap. Additionally, the bank is required to pay to Centex all amounts that the bank receives from HSF-I pursuant to the Harwood Swap. Financial Services executes the forward sales of CTX Mortgage Company, LLC’s loans to hedge the risk of reductions in value of mortgages sold to HSF-I or maintained under secured financing agreements. This offsets the majority of the Company’s risk as the counterparty to the swap supporting the payment requirements of HSF-I. See additional discussion of interest rate risks in Note (N), “Derivatives and Hedging.” The Company is also required to reimburse the bank for certain expenses, costs and damages that it may incur.

     HSF-I’s debt does not have recourse to the Company, and the consolidation of this debt did not change the Company’s debt ratings. The Company does not guarantee the payment of any debt or subordinated extendable certificates of HSF-I and is not liable for credit losses relating to securitized residential mortgage loans sold to HSF-I. However, the Company retains certain risks related to the portfolio of mortgage loans held by HSF-I. In particular, CTX Mortgage Company, LLC makes representations and warranties to HSF-I to the effect that each mortgage loan sold to HSF-I satisfies the eligibility criteria and portfolio requirements discussed above. CTX Mortgage Company, LLC may be required to repurchase mortgage loans sold to HSF-I if such mortgage loans are determined to be ineligible loans or there occur certain other breaches of representations and warranties of CTX Mortgage Company, LLC, as seller or servicer. CTX Mortgage Company, LLC’s obligation as servicer to repurchase such loans is guaranteed by Centex Corporation. CTX Mortgage Company, LLC records a liability for its estimated losses for these obligations and such amount is included in its loan origination reserve. CTX Mortgage Company, LLC and its related companies sold $16.25 billion of mortgage loans to investors during the year ended March 31, 2004. CTX Mortgage Company, LLC sold $10.55 billion and $10.20 billion of mortgage loans to HSF-I and other investors during the years ended March 31, 2003 and 2002, respectively. CTX Mortgage Company, LLC and its related companies recognized gains on the sale of mortgage loans of $240.4 million, $254.5 million and $188.9 million for the years ended March 31, 2004, 2003 and 2002, respectively.

Centex Home Equity Company, LLC and Harwood Street Funding II, LLC

     Home Equity finances its inventory of mortgage loans held for investment principally through HSF-II, a wholly-owned, consolidated entity, under a revolving sales agreement that expires upon final payment of the senior and subordinated debt issued by HSF-II. This arrangement, where HSF-II has committed to finance all eligible loans, gives Home Equity daily access to HSF-II’s capacity of $2.50 billion. HSF-II obtains funds through the sale of subordinated notes that are currently rated BBB by S&P, Baa2 by Moody’s and BBB by Fitch Ratings (“Fitch”) and short-term secured liquidity notes that are currently rated A1+ by S&P’s, P-1 by Moody’s and F1+ by Fitch. Because HSF-II is a consolidated entity, the debt, interest income and interest expense of HSF-II are reflected in the financial statements of Financial Services. HSF-II’s debt does not have recourse to the Company and the consolidation of this debt does not change the Company’s debt ratings.

     In the event Financial Services is unable to finance its inventory of loans through HSF-I and HSF-II, it would draw on existing credit facilities currently held in addition to HSF-I and HSF-II. In addition, Financial Services would need to make other customary financing arrangements to fund its mortgage loan origination activities. Although the Company believes that Financial Services could arrange for alternative financing that is common for non-investment grade mortgage companies, there can be no assurance that such financing would be available on satisfactory terms, and any delay in obtaining such financing could adversely affect the results of operations of Financial Services.

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(G) MERGER OF 3333 HOLDING CORPORATION AND SUBSIDIARY AND CENTEX DEVELOPMENT COMPANY, L.P. AND SUBSIDIARIES

     On February 29, 2004, the Company completed the acquisition of 3333 Holding Corporation (“Holding”) and the Partnership through a series of transactions which included mergers with the Company’s subsidiaries. The transactions were approved by the Company’s stockholders and holders of beneficial interests in Holding at a special joint meeting of stockholders held on February 25, 2004. This transaction terminated the tandem trading relationship between the Company’s Common Stock and the common stock of Holding, as well as the stockholder warrants of the Partnership. For their interests in the securities of Holding and the Partnership, the Company’s stockholders of record on February 29, 2004 received an amount equal to $0.02 per share of the Company’s Common Stock totaling approximately $1.2 million, which was paid on March 10, 2004.

     The mergers resulted in the consolidation of Holding and the Partnership. As a result of the mergers, effective March 1, 2004, the Company eliminated its investment in the Partnership of $370.6 million, recorded net assets of $370.6 million including goodwill of $36.4 million, and recorded a dividend to stockholder of $1.2 million. Operations of Holding and the Partnership have been consolidated in the Company’s results of operations from March 1, 2004 through March 31, 2004. Prior to the merger, the Company accounted for its limited partnership interest in the Partnership using the equity method of accounting for investments. However, Centex pro forma financial information is not presented as the impact of this acquisition on the Company’s results of operations was not significant as the investment in the Partnership was already accounted for under the equity method of accounting.

     The Partnership was a master limited partnership formed by the Company in March 1987 to broaden the range of business activities conducted for the benefit of the Company’s stockholders to include general real estate development.

(H) COMMITMENTS AND CONTINGENCIES

     The Company conducts a portion of its land acquisition, development and other activities through its participation in joint ventures in which the Company holds less than a majority interest. These land related activities typically require substantial capital, and partnering with other developers allows Centex Homes to share the risks and rewards of ownership while providing for efficient asset utilization. The Company’s investment in these non-consolidated joint ventures was $140.1 million and $102.3 million at March 31, 2004 and 2003, respectively. These joint ventures had total outstanding secured construction debt of approximately $207.7 million and $232.5 million at March 31, 2004 and 2003, respectively. The Company’s maximum potential liability with respect to this debt, based on its ownership percentage of the related joint ventures, is approximately $53.0 million and $41.9 million at March 31, 2004 and 2003, respectively. Under the structure of this debt, the Company becomes liable up to these amounts only to the extent that the construction debt exceeds a certain percentage of the value of the project. At March 31, 2004 and 2003, the Company was not liable for any of this debt. For a discussion of the impact of FIN 46 on our accounting for transactions with non-consolidated joint ventures, see “Recent Accounting Pronouncements” on pages 47-48 of this Report.

     In the normal course of its business, the Company issues certain representations, warranties and guarantees related to its home sales, land sales, building sales, commercial construction and mortgage loan originations. The Company believes that it has established the necessary accruals for these representations, warranties and guarantees. See further discussion on our warranty liability below.

     Home Building offers a ten-year limited warranty for most homes constructed and sold in the United States and in the United Kingdom. The United States warranties cover defects in materials or workmanship in the first year of the home and certain designated components or structural elements of the home in the second

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through tenth years. The United Kingdom warranties cover defects in materials or workmanship in various components of the home for the first two years and designated structural elements of the home in the third through tenth years. In California, effective January 1, 2003, Centex Homes began following the statutory provisions of Senate Bill 800, which in part provides a statutory warranty to customers and a statutory dispute resolution process. Home Building estimates the costs that may be incurred under its warranty program for which it will be responsible and records a liability at the time each home is closed. Factors that affect Home Building’s warranty liability include the number of homes closed, historical and anticipated rates of warranty claims and cost per claim. Home Building periodically assesses the adequacy of its recorded warranty liability and adjusts the amounts as necessary.

     Effective April 1, 2004, Home Building’s United States warranties covering defects in materials or workmanship were extended to two years.

     Changes in Home Building’s contractual warranty liability at March 31 are as follows:

	March 31,
	2004			2003
Balance at Beginning of Period	$	16,125		$	15,097
Warranties Issued		29,806			20,377
Settlements Made		(25,597	)		(18,307	)
Changes in Liability of Pre-Existing Warranties, Including Expirations		(188	)		(1,042	)
Balance at End of Period	$	20,146		$	16,125

     CTX Mortgage Company, LLC has established a liability for anticipated losses associated with loans originated. Changes in CTX Mortgage Company, LLC’s mortgage loan origination reserve at March 31 are as follows:

	March 31,
	2004			2003
Balance at Beginning of Period	$	28,594		$	21,693
Provisions for Losses		1,837			8,401
Settlements		(5,386	)		(1,500	)
Balance at End of Period	$	25,045		$	28,594

     In the normal course of its business, the Company and/or its subsidiaries are named as defendants in certain suits filed in various state and federal courts. Management believes that none of the litigation matters in which the Company or any subsidiary is involved would have a material adverse effect on the consolidated financial condition or operations of the Company.

     In January 2003, Centex received a request for information from the United States Environmental Protection Agency (“EPA”) pursuant to Section 308 of the Clean Water Act seeking information about storm water discharge practices at projects that Centex subsidiaries had completed or were building. Subsequently, the EPA limited its request to Centex Homes and 30 communities. Centex Homes has provided the requested information and the EPA has asserted that some of these and certain other communities have violated regulatory requirements applicable to storm water discharges, and that injunctive relief and civil penalties may be warranted. Centex Homes has defenses to the allegations made by the EPA and is exploring methods of settling this matter.

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     While the amount of civil penalties, if any, and the cost of injunctive relief, if any, are undetermined, the Company is confident that such amounts will not be material to its consolidated financial condition or operations.

     The Company leases certain office facilities and other equipment under operating leases. Future minimum payments under the noncancelable leases are as follows: 2005 — $56.9 million; 2006 — $49.1 million; 2007 — $41.7 million; 2008 — $36.1 million; 2009 — $27.7 million and thereafter — $68.4 million.

     Rental expense for the years ended March 31, 2004, 2003 and 2002 was $52.3 million, $43.6 million and $49.7 million, respectively.

(I) LAND HELD UNDER OPTION AGREEMENTS NOT OWNED AND OTHER LAND DEPOSITS

     The Company has determined that in accordance with the provisions of FIN 46, it is the primary beneficiary of certain lot option agreements at March 31, 2004. As a result, the Company recorded $332.7 million of land as inventory under the caption land held under option agreements not owned, with a corresponding increase to minority interests. In addition, at March 31, 2004, the Company reclassified $29.7 million of deposits related to these options, previously included in land held for development and sale, to land held under option agreements not owned.

     At March 31, 2004, the Company had deposited or invested with third parties $88.7 million (excluding the $29.7 million of deposits discussed above) included in land held for development and sale related to lot option agreements. The lot option agreements related to these deposits had a total remaining purchase price of approximately $3.22 billion.

(J) COMPREHENSIVE INCOME

     Comprehensive income is summarized below:

	For the Years Ended March 31,
	2004		2003			2002
Net Earnings	$	827,686	$	555,919		$	382,226
Other Comprehensive Income (Loss), net of Tax:
Unrealized Gain (Loss) on Hedging Instruments		5,706		(10,849	)		(11,033	)
Foreign Currency Translation Adjustments		36,864		19,330			2,622
Other		964		(1,516	)		552
Comprehensive Income	$	871,220	$	562,884		$	374,367

     The foreign currency translation adjustments are primarily the result of the Partnership’s translated assets, liabilities and income statement accounts. The unrealized gain (loss) on hedging instruments represents the deferral in other comprehensive income of the unrealized gain (loss) on swap agreements designated as cash flow hedges. The accounting for interest rate swaps and other derivative financial instruments is discussed in detail in Note (N), “Derivatives and Hedging.” Other consists of the unrealized gain (loss) on investments, which represents mark to market adjustments to securities available for sale by the Company.

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     The components of accumulated other comprehensive income are as follows:

	As of March 31, 2004
	Before Tax			Tax (Expense)		Net-of-Tax
	Amount			Benefit		Amount
Unrealized Loss on Hedging Instruments	$	(23,041	)	$	6,865	$	(16,176	)
Foreign Currency Translation Adjustments		53,719			—		53,719
Accumulated Other Comprehensive Income	$	30,678		$	6,865	$	37,543

(K) BUSINESS SEGMENTS

     As of March 31, 2004, the Company operated in four principal business segments: Home Building, Financial Services, Construction Services and Investment Real Estate. These segments operate primarily in the United States, and their markets are nationwide. Revenues from any one customer are not significant to the Company. Intersegment revenues and investments in joint ventures are not material and are not shown in the following tables.

     In June 2003, the Company spun off to its stockholders substantially all of its manufactured housing operations, which had previously been included in the Other segment. In January 2004, we spun off to our stockholders our entire equity interest in Construction Products, our former construction products subsidiary, which had previously been reported as a separate business segment. All Construction Products operations, assets and liabilities are reflected as a discontinued operation and are not included in the segment information below.

Home Building

     Home Building’s operations involve the purchase and development of land or lots and the construction and sale of detached and attached single-family homes domestically and the purchase and development of land or lots and the construction and sale of a range of products from small single-family units to executive houses and apartments throughout the United Kingdom.

Financial Services

     Financial Services’ mortgage operations consist primarily of home financing, sub-prime home equity lending and the sale of title insurance and other various insurance coverages. These activities include mortgage origination, servicing and other related services for homes sold by the Company’s subsidiaries and others. Financial Services’ revenues include interest income of $525.9 million, $356.8 million and $266.9 million in fiscal 2004, 2003 and 2002, respectively. Substantially all of the Company’s interest income in each year is earned by the Financial Services segment. Financial Services’ cost of sales is comprised of interest expense related to debt issued to fund its home financing and sub-prime home equity lending activities.

Construction Services

     Construction Services’ operations involve the construction of buildings for both private and government interests including educational institutions, hospitals, military housing, correctional institutions, airport facilities, office buildings, hotels and resorts and sports facilities. As this segment generates positive cash flow, intercompany interest income (credited at the prime rate in effect) of $4.9 million, $6.2 million and $7.1 million for fiscal 2004, 2003 and 2002, respectively, is included in management’s evaluation of this segment.

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However, the intercompany interest income is eliminated in consolidation and excluded from the tables presented below.

Investment Real Estate

     Investment Real Estate’s operations involve the development and sale of land, primarily for industrial, office, multi-family, retail, residential and mixed-use projects. Investment Real Estate historically conducted its operations directly and through the Company’s investment in the Partnership, which was accounted for under the equity method of accounting. The Partnership’s operations include domestic real estate operations and an international homebuilding business located in the United Kingdom. As previously described in Note (G), “Merger of 3333 Holding Corporation and Subsidiary and Centex Development Company, L.P. and Subsidiaries,” in February 2004, the Company acquired Holding and the Partnership. Subsequent to the merger, the Company has consolidated the financial results of the Partnership; and as a result, the Company has realigned its reporting for the Partnership, whereby the Partnership’s international home building operations are included in the Home Building business segment. The Partnership’s domestic operations continue to be reported in the Investment Real Estate business segment. Prior period amounts have been reclassified to conform to the current year presentation. The Company has determined that no significant capital will be allocated to Investment Real Estate for new business development. Beginning April 1, 2004, the Investment Real Estate financial results will be included in the Other business segment.

Other

     The Company’s Other segment includes corporate general and administrative expense and interest expense. Also included in the Other segment are the Company’s home services operations, which are not material for purposes of segment reporting. In June 2003, the Company spun off substantially all of its manufactured housing operations, which had previously been included in the Other segment. All remaining manufactured housing operations and related assets are reflected as a discontinued operation and not included in the segment information below.

     The following are included in Other in the tables below (dollars in millions):

	For the Years Ended March 31,
	2004			2003			2002
Operating (Loss) Earnings from home services	$	(2.3	)	$	(9.6	)	$	4.0
Corporate General and Administrative Expense		(105.5	)		(60.3	)		(50.2	)
Interest Expense		(39.9	)		(60.3	)		(58.6	)
Other		—			(0.6	)		(0.6	)
	$	(147.7	)	$	(130.8	)	$	(105.4	)

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	For the Year Ended March 31, 2004
	(Dollars in millions)
	Home			Financial			Construction			Investment
	Building			Services			Services			Real Estate			Other			Total
Revenues	$	7,599.5		$	1,047.9		$	1,596.3		$	37.9		$	81.8		$	10,363.4
Cost of Sales		(5,607.2	)		(223.8	)		(1,519.8	)		0.7			(38.5	)		(7,388.6	)
Selling, General and Administrative Expenses		(1,042.3	)		(593.8	)		(60.1	)		(8.3	)		(191.0	)		(1,895.5	)
Earnings from Unconsolidated Entities		55.3			—			—			14.5			—			69.8
Earnings (Loss) from Continuing Operations Before Income Tax	$	1,005.3		$	230.3		$	16.4		$	44.8		$	(147.7	)	$	1,149.1
Segment Assets	$	6,189.6		$	9,082.5		$	341.5		$	98.0		$	357.0		$	16,068.6
Capital Expenditures	$	33.4		$	16.7		$	2.0		$	0.2		$	3.8		$	56.1
Depreciation and Amortization	$	24.2		$	17.4		$	1.9		$	0.3		$	29.4		$	73.2

     The Home Building segment includes revenues and total assets of $80.5 million and $556.1 million, respectively, from operations in the United Kingdom. Depreciation and Amortization for discontinued operations was $27.8 million for the fiscal year ended March 31, 2004.

	For the Year Ended March 31, 2003
	(Dollars in millions)
	Home			Financial			Construction			Investment
	Building			Services			Services			Real Estate			Other			Total
Revenues	$	5,922.7		$	855.0		$	1,517.9		$	33.3		$	99.8		$	8,428.7
Cost of Sales		(4,454.0	)		(184.5	)		(1,413.6	)		(3.0	)		(35.3	)		(6,090.4	)
Selling, General and Administrative Expenses		(849.2	)		(508.7	)		(73.6	)		(9.5	)		(195.3	)		(1,636.3	)
Earnings from Unconsolidated Entities		32.2			—			—			13.2			—			45.4
Earnings (Loss) from Continuing Operations Before Income Tax	$	651.7		$	161.8		$	30.7		$	34.0		$	(130.8	)	$	747.4
Segment Assets	$	4,000.3		$	5,670.3		$	292.8		$	293.3		$	600.2		$	10,856.9
Capital Expenditures	$	28.4		$	16.6		$	2.0		$	—		$	27.7		$	74.7
Depreciation and Amortization	$	18.7		$	17.0		$	2.5		$	0.4		$	35.8		$	74.4

     Depreciation and Amortization for discontinued operations was $38.8 million for the fiscal year ended March 31, 2003.

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	For the Year Ended March 31, 2002
	(Dollars in millions)
	Home			Financial			Construction			Investment
	Building			Services			Services			Real Estate			Other			Total
Revenues	$	4,972.2		$	699.8		$	1,296.0		$	53.4		$	102.4		$	7,123.8
Cost of Sales		(3,754.3	)		(159.1	)		(1,196.1	)		(12.1	)		(38.0	)		(5,159.6	)
Selling, General and Administrative Expenses		(743.9	)		(426.0	)		(63.7	)		(12.2	)		(169.8	)		(1,415.6	)
Earnings from Unconsolidated Entities		24.9			—			—			6.7			—			31.6
Earnings (Loss) from Continuing Operations Before Income Tax	$	498.9		$	114.7		$	36.2		$	35.8		$	(105.4	)	$	580.2
Segment Assets	$	3,030.5		$	4,148.0		$	260.2		$	299.2		$	415.2		$	8,153.1
Capital Expenditures	$	20.9		$	10.7		$	3.9		$	0.1		$	9.7		$	45.3
Depreciation and Amortization	$	16.2		$	15.8		$	2.6		$	0.4		$	17.7		$	52.7

     Depreciation and Amortization for discontinued operations was $37.9 million for the fiscal year ended March 31, 2002.

     The reconciliation of segment assets to consolidated total assets at the end of each year, in millions of dollars, is as follows:

	For the Years Ended March 31,
	2004		2003		2002
Segment Assets	$	16,068.6	$	10,856.9	$	8,153.1
Assets from Discontinued Operations		—		753.6		832.4
Total Consolidated Assets	$	16,068.6	$	11,610.5	$	8,985.5

(L) INCOME TAXES

     The provision for income taxes includes the following components:

	For the Years Ended March 31,
	2004			2003			2002
Current Provision
Federal	$	310,088		$	169,785		$	220,043
State		44,042			48,351			33,744
		354,130			218,136			253,787
Deferred Provision (Benefit)
Federal		(1,563	)		4,452			(33,426	)
State		19,366			(2,050	)		1,467
		17,803			2,402			(31,959	)
Provision for Income Taxes	$	371,933		$	220,538		$	221,828

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     The difference between income taxes computed at the federal statutory rate of 35% and the actual amounts were as follows:

	For the Years Ended March 31,
	2004			2003			2002
Earnings from Continuing Operations Before Income
Taxes and Cumulative Effect of a Change in Accounting Principle	$	1,149,064		$	747,350		$	580,230
Income Taxes at Statutory Rate	$	402,172		$	261,573		$	203,081
Increases (Decreases) in Tax Resulting from -
State Income Taxes, net		42,037			29,738			23,388
Change in Valuation Allowance		(54,353	)		(88,843	)		(8,235	)
Other		(17,923	)		18,070			3,594
Provision for Income Taxes	$	371,933		$	220,538		$	221,828
Effective Tax Rate		32	%		30	%		38	%

     The deferred income tax provision (benefit) results from the following temporary differences in the recognition of revenues and expenses for tax and financial reporting purposes:

	For the Years Ended March 31,
	2004			2003			2002
Securitization Reporting Differences	$	20,669		$	9,554		$	(25,663	)
Net Operating Loss Carryforwards		55,226			87,570			16,576
Change in Valuation Allowance		(54,353	)		(88,843	)		(8,235	)
Financial Accrual Changes and Other		(3,739	)		(5,879	)		(14,637	)
Deferred Income Tax Provision (Benefit)	$	17,803		$	2,402		$	(31,959	)

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     Components of deferred income taxes are as follows:

	March 31,
	2004			2003
Deferred Tax Assets
Deferred Compensation	$	20,848		$	10,463
Net Operating Loss Carryforwards		39,457			94,056
Uniform Capitalization for Tax Reporting		67,735			59,706
Financial Accruals		119,084			98,226
State Income Taxes		—			15,553
Securitization Reporting Differences		16,123			36,792
All Other		4,931			19,517
Total Deferred Tax Assets		268,178			334,313
Valuation Allowance for Deferred Tax Assets		(39,278	)		(93,004	)
Net Deferred Tax Assets		228,900			241,309
Deferred Tax Liabilities
Deferred Income and Expenses		—			13,428
Excess Tax Depreciation and Amortization		15,557			15,195
Interest and Real Estate Taxes Expensed as Incurred		40,637			28,323
Installment Sale Reporting		12,959			—
All Other		2,069			12,123
Total Deferred Tax Liabilities		71,222			69,069
Net Deferred Tax Assets	$	157,678		$	172,240

     At March 31, 2004, the Company had $112.8 million of net operating loss carryforwards available to reduce future federal taxable income including $1.8 million which resulted from the Company’s acquisition of 3333 Holding Corporation in February 2004. A valuation allowance of $0.7 million was established to offset the deferred tax assets of Holding. In fiscal 2004, the Company utilized approximately $157.8 million of net operating loss carryforwards. A valuation allowance had previously been established against approximately $154.8 million of the carryforwards utilized. The net operating loss carryforwards, if unused, expire in fiscal years 2008 to 2021.

     As of March 31, 2004, the Company has not provided for withholding taxes or U.S. federal income taxes on approximately $66 million of accumulated undistributed earnings of its foreign subsidiaries as they are considered by management to be permanently reinvested. Determination of the deferred income tax liability of these unremitted earnings is not practicable as such liability, if any, is dependent on circumstances existing when remittance occurs.

(M) CAPITAL STOCK AND EMPLOYEE BENEFIT PLANS

Stock Split

     On March 12, 2004, the Company completed a two-for-one stock split in the form of a 100 percent stock dividend to Company stockholders of record on February 29, 2004. All prior period stock prices, dividends and earnings per share have been restated to give retroactive application to the stock split.

Stockholder Rights Plan

     On October 2, 1996, the Board of Directors of the Company (the “Board”) adopted a new stockholder rights plan (“Plan”) to replace the original rights plan, which expired on October 1, 1996. In connection with

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the Plan, the Board authorized and declared a dividend of one right (“Right”) for each share of Common Stock of the Company to all stockholders of record at the close of business on October 15, 1996. After giving effect to the Company’s two-for-one stock splits effective March 2, 1998 and March 12, 2004, and the April 2002 amendment to the Plan increasing the exercise price, each Right entitles its holder to purchase one one-hundredths of a share of a new series of preferred stock designated Junior Participating Preferred Stock, Series D, at an exercise price of $105.00. The Rights will become exercisable upon the earlier of ten days after the first public announcement that a person or group has acquired beneficial ownership of 15% or more of the Common Stock or ten business days after a person or group announces an offer, the consummation of which would result in such person or group beneficially owning 15% or more of the Common Stock (even if no purchases actually occur), unless such time periods are deferred by appropriate Board action. The Plan excludes FMR Corp. from causing the rights to become exercisable until such time as FMR Corp., together with certain affiliated and associated persons, collectively own 20% or more of the Common Stock.

     If any person or group acquires beneficial ownership of 15% or more (or 20% or more in the case of FMR Corp.) of the Common Stock, the Rights will entitle a holder (other than such person or any member of such group) to buy, at the exercise price, a number of additional shares of Common Stock having a market value of twice the exercise price of each Right. Alternatively, if a person or group has acquired 15% or more (or 20% or more in the case of FMR Corp.) of the Common Stock, but less than 50% of the Common Stock, the Company may at its option exchange each Right of a holder (other than such person or any member of such group) for one share of Common Stock. If the Company is involved in a merger or other business combination at any time after a person or group has acquired beneficial ownership of 15% or more (or 20% or more in the case of FMR Corp.) of the Common Stock or if, after reaching such 15% threshold, the Company were to sell 50% or more of its assets or earning power, the Rights will entitle a holder to buy, at the exercise price, a number of shares of Common Stock of the acquiring Company having a market value of twice the exercise price of each Right. In general, the Rights are redeemable at $.01 per Right until 15 days after the Rights become exercisable as described above. Unless earlier redeemed, the Rights will expire on October 12, 2006.

Stock Options

     Stock options granted under the Amended and Restated Centex Corporation 2003 Equity Incentive Plan (the “2003 Plan”), the Amended and Restated Centex Corporation 2001 Stock Plan (the “2001 Plan”) and the Eighth Amended and Restated 1998 Centex Corporation Employee Non-Qualified Stock Option Plan (the “1998 Plan”) may not be granted at less than fair market value. Although the Centex Corporation Amended and Restated 1987 Stock Option Plan (the “1987 Plan”) provides that stock options may be granted at less than fair market value, the Company has consistently followed the practice of issuing options at or above fair market value. No options could be awarded under the 1987 Plan past fiscal 2001. The 1998 Plan provides for the grant of stock options to employees of the Company, other than officers and directors of the Company. Under all plans, the option periods and the dates that the shares covered by the options may first become exercisable within a maximum period of ten years at which time these options expire.

     The Company records proceeds from the exercise of stock options as additions to Common Stock and capital in excess of par value. The federal tax benefit, if any, is considered additional capital in excess of par value. On April 1, 2003, the Company adopted the fair value measurement provisions of SFAS No. 123 under which the Company recognizes compensation expense of a stock-based award to an employee on a straight-line basis over the vesting period based on the fair value of the award on the grant date. The fair value method has been applied to awards granted or modified after April 1, 2003 (the prospective method), whereas awards granted prior to such date continued to be accounted for in accordance with APB No. 25, and related interpretations. In general, under APB No. 25, no expense is recognized related to the Company’s stock options because the stock options are granted at or above fair market value.

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     A summary of the activity of the stock option plans is presented below:

	For the Years Ended March 31,
	2004					2003					2002
				Weighted-					Weighted-					Weighted-
				Average					Average					Average
	Number			Exercise		Number			Exercise		Number			Exercise
	of Shares			Price		of Shares			Price		of Shares			Price
Options Outstanding, Beginning of Year		16,210,186		$	17.66		14,277,810		$	15.68		13,744,338		$	13.76
Options Granted at Fair Market Value		2,855,480		$	35.51		3,450,980		$	25.21		3,405,420		$	19.71
Options Issued as Part of Modification		1,737,528		$	—		—		$	—		—		$	—
Options Exercised		(3,480,371	)	$	16.25		(1,040,164	)	$	15.05		(2,771,318	)	$	11.10
Options Cancelled		(125,466	)	$	22.73		(478,440	)	$	18.67		(100,630	)	$	16.06
Options Outstanding, End of Year		17,197,357		$	19.09		16,210,186		$	17.66		14,277,810		$	15.68
Options Exercisable, End of Year		11,614,372					10,102,092					7,553,746
Shares Available for Future Stock Option Grants, End of Year		8,808,656					4,777,486					4,935,476
Weighted-Average Fair Value of Options Granted During the Year	$	12.43				$	10.12				$	10.66

     Using the treasury stock method, which assumes that any proceeds together with the related tax benefits from the exercise of options would be used to purchase Common Stock at current prices, the dilutive effect of the options on outstanding shares as of March 31, 2004 would have been 4.7%. This is significantly less than appears on a gross basis when compared to the 122,660,357 shares of Common Stock outstanding as of March 31, 2004.

     The following table summarizes information about stock options outstanding at March 31, 2004:

	Options Outstanding						Options Exercisable
			Weighted-
			Average		Weighted-				Weighted-
	Number		Remaining		Average		Number		Average
	of Shares		Contractual		Exercise		of Shares		Exercise
Range of Exercise Prices	Outstanding		Life (Years)		Price		Outstanding		Price
$  5.68 - $10.72		3,990,944		4.6	$	9.69		3,153,552	$	9.44
$11.00 - $17.45		4,157,447		3.9	$	16.71		4,084,562	$	16.73
$17.70 - $22.75		5,928,176		4.3	$	20.37		3,362,472	$	19.83
$23.20 - $41.00		3,089,682		5.9	$	31.71		1,013,786	$	31.74
$42.00 - $45.00		31,108		6.6	$	44.52		—	$	—
		17,197,357		4.5	$	19.09		11,614,372	$	16.96

     At March 31, 2003, the Company was following the disclosure-only provisions of SFAS No. 123. Accordingly, no compensation cost had been recognized for the stock options. As noted above, effective April 1, 2003, the Company adopted the fair value measurement provisions of SFAS No. 123. On January 30, 2004, the Company modified all of its stock options and long-term incentive plan rights outstanding, in order to keep the holders in the same economic position as before the spin-off of Centex Construction Products, Inc. (“Construction Products”). The modification resulted in a reduction of the exercise price and an increase in the number of shares. This adjustment is a modification under the provisions of SFAS No. 123 and accordingly, compensation expense of $12.2 million will be expensed over the remaining vesting periods. Subsequent to January 30, 2004, the Company has no outstanding options or other stock rights accounted for under the

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provisions of APB No. 25. Had compensation cost for the Company’s stock option plans been determined based on the fair value at the grant date for all awards in fiscal 2004, 2003 and 2002, the Company’s net earnings and earnings per share would have been reduced to the pro forma amounts detailed in Note (A), “Significant Accounting Policies.”

     The fair value of each option grant was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:

	For the Years Ended March 31,
	2004			2003			2002
Expected Volatility		42.5	%		38.6	%		47.0	%
Risk-Free Interest Rate		2.1	%		4.7	%		5.4	%
Dividend Yield		0.2	%		0.3	%		0.4	%
Expected Life (Years)		4			5			7

     The following table summarizes information about equity compensation plans, other than tax qualified plans, as of March 31, 2004:

								(c)
								Number of
								securities
			(a)					remaining available
			Number of					for future issuance
			securities to be		(b)			under equity
			issued upon		Weighted-average			compensation plans
			exercise of		exercise price of			[excluding
			outstanding		outstanding			securities
			options, warrants		options, warrants			reflected in column
Plan Category	Plan		and rights		and rights			(a)]
Equity Compensation Plans		1987		6,816,872	$	14.02			—
Approved by		2001		1,987,084	$	26.27			1,628,598
Stockholders		2003		—	$	—			6,665,970
Equity Compensation Plans		1998		8,393,401	$	21.50			514,088
not Approved by	Long-Term
Stockholders	Incentive Plan			1,088,574	$	—			19,198
Total				18,285,931	$	19.09	(1)		8,827,854

(1) Weighted-average exercise price excludes any items with an exercise price of $0.

     See the discussion of the 1987 Plan, 1998 Plan, 2001 Plan and 2003 Plan above. The Company also grants stock units, which are converted into shares of Centex Common Stock at payout, to certain employees under its Long-Term Incentive Plan. Pursuant to the Long-Term Incentive Plan, participants may receive awards of deferred stock units representing the right to receive an equal number of shares of Centex Common Stock at the time the award is paid. Awards vest over a three-year period or upon a change in control, as defined in such Plan, and are generally paid upon the earlier of seven years or retirement, although the Compensation Committee is permitted to make an early payout at its discretion. The Company also issues restricted stock under the 2001 Plan and issues stock awards, restricted stock, stock units and performance awards under the 2003 Plan. At March 31, 2004, there were 163,336 shares of restricted stock outstanding.

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Employee Benefit Plans

     Benefits are provided to eligible employees of the Company and certain subsidiaries under the Company’s profit sharing plans. The plans operate on a calendar year. The aggregate cost of these plans to the Company was $32.6 million in fiscal 2004, $27.1 million in fiscal 2003 and $23.5 million in fiscal 2002.

(N) DERIVATIVES AND HEDGING

     The Company is exposed to the risk of interest rate fluctuations on its debt and other obligations. As part of its strategy to manage the obligations that are subject to changes in interest rates, the Company has entered into various interest rate swap agreements, designated as cash flow hedges as described below. The swap agreements are recorded at their fair value in Other Assets or Accrued Liabilities in the consolidated balance sheets. To the extent the hedging relationship is effective, gains or losses in the fair value of the derivative are deferred as a component of Stockholders’ Equity through Other Comprehensive (Loss) Income. Fluctuations in the fair value of the ineffective portion of the derivative are reflected in the current period earnings, although such amounts are insignificant.

     At March 31, 2004, Centex Corporation has interest rate swap agreements that, in effect, fix the variable interest rates on (i) $25 million of its outstanding debt at 6.7% and expires in October 2005 and (ii) £50 million of its outstanding debt at 4.0% and expires in March 2006. During the year ended March 31, 2004, the hedges related to these derivatives were effective. Amounts to be received or paid under the swap agreements are recognized as changes in interest incurred on the related debt instruments. Based on the balance in Accumulated Other Comprehensive Income at March 31, 2004 related to these derivatives, the Company estimates increases in interest incurred over the next 12 months to be approximately $766.0 thousand. As of March 31, 2004, the balance in Accumulated Other Comprehensive Loss related to these derivatives was $796.4 thousand ($444.3 thousand net of tax).

     Financial Services, through Home Equity, uses interest rate swaps to hedge the market risk associated with the anticipated issuance of fixed rate securitization debt used to finance sub-prime mortgages. At March 31, 2004, Home Equity had $60 million of these interest rate swap hedging instruments in place at a weighted-average interest rate of 3.2%. Changes in fair value of these derivatives are deferred in Accumulated Other Comprehensive Income and recorded through current earnings as an adjustment of the interest incurred over the life of the securitization debt. Home Equity also uses interest rate swaps that, in effect, fix the interest rate on its variable interest rate debt. Amounts to be received or paid as a result of these swap agreements are recognized as adjustments to interest incurred on the related debt instrument. At March 31, 2004, Home Equity was hedging $2.00 billion of its outstanding debt with these interest rate swaps at a weighted-average interest rate of 1.9%. These swaps expire at varying times through March 2007. Based on the balance in Accumulated Other Comprehensive Income at March 31, 2004 related to interest rate hedging activities, the Company estimates increases in interest incurred over the next 12 months to be approximately $8.7 million. During the year ended March 31, 2004, the hedges related to substantially all of Home Equity’s interest rate swaps were effective and the ineffective portion was insignificant. As of March 31, 2004, the balance in Accumulated Other Comprehensive Loss related to these derivatives was $8.7 million ($5.7 million net of tax).

     Financial Services, through CTX Mortgage Company, LLC and its related companies, enters into interest rate lock commitments (“IRLCs”) with its customers under which CTX Mortgage Company, LLC and its related companies agree to make mortgage loans at agreed upon rates within a period of time, generally from 1 to 30 days, if certain conditions are met. Initially, the IRLCs are treated as derivative instruments and their fair value is recorded on the balance sheet in Other Assets or Accrued Liabilities. The fair value of these loan commitment derivatives does not include future cash flows related to the associated servicing of the loan or the value of any internally-developed intangible assets. Subsequent changes in the fair value of the IRLCs are recorded as an adjustment to earnings. To hedge the interest rate risk related to its IRLCs, CTX Mortgage

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Company, LLC and its related companies execute mandatory forward trade commitments (i.e., “forward trade commitments”). CTX Mortgage Company, LLC and its related companies also execute forward trade commitments to hedge the interest rate risk related to its portfolio of mortgage loans held for sale, including mortgage loans held by HSF-I. As discussed in Note (F), “Indebtedness,” HSF-I is a variable interest entity that has been consolidated with Financial Services effective July 1, 2003, pursuant to FIN 46. In connection with the consolidation of HSF-I, CTX Mortgage Company, LLC and its related companies elected as of July 1, 2003 to utilize hedge accounting treatment under SFAS No. 133 for forward trade commitments that serve as a hedge for loans held for sale. These forward trade commitments have been designated as fair value hedges. Accordingly, changes in the fair value of the forward trade commitments and the mortgage loans, for which the hedge relationship is deemed effective, are recorded as an adjustment to earnings. To the extent the hedge is effective, gains or losses in the value of the hedged loans due to interest rate movement will be offset by an equal and opposite gain or loss in the value of the forward trade commitment. This will result in net zero impact to earnings. To the extent the hedge contains some ineffectiveness, the ineffectiveness is recognized immediately in earnings. The amount of hedge ineffectiveness included in earnings was a gain of approximately $16 million for the year ended March 31, 2004. Forward trade commitments not designated as hedges are treated as derivative instruments, and their fair value is recorded on the balance sheet in Other Assets or Accrued Liabilities. Subsequent changes in the fair value of these forward trade commitments are recorded as an adjustment to earnings. The net change in the estimated fair value of derivative positions not subject to hedge accounting resulted in a loss of approximately $12 million for the year ended March 31, 2003.

(O) RELATED PARTY TRANSACTIONS

     The following related party transactions with the Partnership for fiscal year 2004 includes only related party transactions and amounts through February 29, 2004, the date of acquisition of the Partnership. Related party transactions and amounts occurring after the Partnership’s consolidation are not included in the amounts below as the related party amounts have been eliminated in consolidation.

     Centex Homes purchased land from the Partnership during fiscal 2004 and 2003 totaling $19.0 million and $34.5 million, respectively. Centex Homes also entered into agreements to reimburse the Partnership for certain costs and fees incurred by the Partnership in the purchase and ownership of these tracts of land. During the years ended March 31, 2004 and 2003, Centex Homes paid $1.9 million and $3.5 million, respectively, to the Partnership in fees and reimbursements pursuant to these agreements.

     Construction Services has historically executed construction contracts with the Partnership. At March 31, 2003, contracts for the construction of two industrial facilities were completed and no additional contracts were outstanding. At February 29, 2004, a $10.0 million contract for the construction of an office building had been executed with the Partnership and was outstanding. During the eleven months ended February 29, 2004 and the year ended March 31, 2003, the Partnership paid $7.4 million and $5.3 million, respectively, to Construction Services pursuant to these contracts.

(P) FAIR VALUE OF FINANCIAL INSTRUMENTS

     Statement of Financial Accounting Standards No. 107, “Disclosures about Fair Value of Financial Instruments,” requires companies to disclose the estimated fair value of their financial instrument assets and liabilities. The estimated fair values shown below have been determined using current quoted market prices where available and, where necessary, estimates based on present value methodology suitable for each category of financial instruments. Considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that the Company could realize in a current market exchange. All assets and liabilities that are not considered financial instruments have been valued using historical cost accounting.

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     The consolidated carrying values of Cash and Cash Equivalents, Restricted Cash, Mortgage Securitization Residual Interest, Other Receivables, Accounts Payable and Accrued Liabilities and Short-term Debt approximate their fair values. The carrying values and estimated fair values of other financial assets and liabilities were as follows:

	March 31,
	2004					2003
	Carrying		Fair			Carrying		Fair
	Value		Value			Value		Value
Financial Assets
Residential Mortgage Loans Held for Investment	$	6,498,155	$	6,675,546	(1)	$	4,642,826	$	4,713,045	(1)
Residential Mortgage Loans Held for Sale	$	1,819,605	$	1,820,739	(1)	$	303,328	$	306,765	(1)
Financial Liabilities
Centex Long-term Debt	$	2,418,190	$	2,445,061	(2)	$	2,080,623	$	2,295,103	(2)
Financial Services Long-term Debt	$	6,197,674	$	6,262,086	(2)	$	4,156,590	$	4,234,593	(2)

(1)	Fair values are based on quoted market prices for similar instruments.
(2)	Fair values are based on a present value discounted cash flow with the discount rate approximating current market for similar instruments.

(Q) OFF-BALANCE SHEET OBLIGATIONS

     The Company enters into various “off-balance sheet” transactions in the normal course of business in order to reduce financing costs and improve access to liquidity, facilitate homebuilding activities and manage exposure to changing interest rates. Further discussion regarding these transactions can be found above in Note (H), “Commitments and Contingencies.”

(R) SPIN-OFF OF SUBSIDIARIES

     In June 2003, the Company spun off substantially all of its manufactured housing operations, which had previously been included in the Other segment. As a result of the spin-off, the manufactured housing operations’ earnings have been reclassified to discontinued operations in the Statements of Consolidated Earnings. All prior period information related to these discontinued operations has been reclassified to be consistent with the March 31, 2004 presentation.

     In January 2004, the Company spun off its entire equity interest in Construction Products, which had previously been reported as a separate business segment. As a result of the spin-off, the Construction Products’ earnings have been reclassified to discontinued operations in the Statements of Consolidated Earnings, and all related assets and liabilities have been disclosed separately on the Consolidated Balance Sheets. All prior period information related to these discontinued operations has been reclassified to be consistent with the March 31, 2004 presentation. In connection with the tax-free distribution of our interests in Construction Products, we recognized as a component of discontinued operations, a tax benefit of $33.5 million. The tax benefit is a result of the reversal of a deferred tax liability for the difference between the financial carrying amount of our investment in Construction Products and the respective tax basis, which was no longer required given the tax-free nature of the distribution.

     For the years ended March 31, 2004, 2003 and 2002 discontinued operations had revenues of $461.9 million, $643.2 million and $593.0 million and operating earnings of $49.9 million, $47.5 million and $38.5 million, respectively. In connection with the spin-offs, we recorded a dividend to stockholders of $420.3 million representing our net investment in manufactured housing operations and Construction Products on the respective spin-off dates.

93

(S) SUBSEQUENT EVENT

     On May 5, 2004, we issued $350 million aggregate principal amount of senior notes with an interest rate of 5.70%, maturing in fiscal year 2015.

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Report of Independent Auditors

TO THE BOARD OF DIRECTORS OF CENTEX CORPORATION AND SUBSIDIARIES:

     We have audited the accompanying consolidated balance sheets of Centex Corporation and subsidiaries as of March 31, 2004 and 2003, and the related statements of consolidated earnings, consolidated stockholders’ equity and consolidated cash flows for each of the three years in the period ended March 31, 2004. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

     We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

     In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Centex Corporation and subsidiaries at March 31, 2004 and 2003, and the consolidated results of their operations and their cash flows for each of the three years in the period ended March 31, 2004, in conformity with accounting principles generally accepted in the United States.

     As discussed in Note (A) to the consolidated financial statements, the Company adopted the fair value recognition provisions of Statement of Financial Accounting Standard No. 123, “Accounting for Stock Issued to Employees,” utilizing the prospective method of adoption as permitted by Statement of Financial Accounting Standard No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure.” Also, as discussed in Note (A) to the consolidated financial statements, the Company adopted Financial Accounting Standard Board Interpretation No. 46, “Consolidation of Variable Interest Entities” as revised.

     Our audits were conducted for the purpose of forming an opinion on the basic consolidated financial statements taken as a whole. The supplemental balance sheet and cash flow data of Centex Corporation and Financial Services and the supplemental revenue and earnings data by line of business are presented for purposes of additional analysis and are not a required part of the basic consolidated financial statements. Such information has been subjected to the auditing procedures applied in our audits of the basic consolidated financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic consolidated financial statements taken as a whole.

Dallas, Texas

May 17, 2004

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Quarterly Results (Unaudited)⁽¹⁾
(Dollars in thousands, except per share data)

	For the Quarters Ended 2004 and 2003
	Q1		Q2			Q3		Q4
2004
Revenues	$	2,172,629	$	2,428,326		$	2,569,857	$	3,192,579
Earnings from Continuing Operations(2)	$	133,217	$	188,055		$	187,870	$	267,989
Earnings from Discontinued Operations, net of Taxes		9,573		11,334			10,800		32,108
Cumulative Effect of a Change in Accounting Principle, net of Taxes		—		(13,260	)		—		—
Net Earnings	$	142,790	$	186,129		$	198,670	$	300,097
Earnings from Continuing Operations Per Share(2)(3)
Basic	$	1.09	$	1.53		$	1.51	$	2.05
Diluted	$	1.04	$	1.46		$	1.43	$	2.17
Net Earnings Per Share
Basic	$	1.17	$	1.51		$	1.60	$	2.43
Diluted	$	1.12	$	1.44		$	1.52	$	2.30
Average Shares Outstanding
Basic		122,490,530		123,427,650			124,076,292		123,525,669
Diluted		127,865,692		129,076,874			130,659,958		130,515,294
2003
Revenues	$	1,682,638	$	1,908,121		$	2,124,785	$	2,713,161
Earnings from Continuing Operations(2)	$	77,201	$	105,275		$	145,765	$	198,571
Earnings from Discontinued Operations, net of Taxes		10,554		10,334			10,119		(1,900	)
Net Earnings	$	87,755	$	115,609		$	155,884	$	196,671
Earnings from Continuing Operations Per Share(2)(3)
Basic	$	0.63	$	0.87		$	1.21	$	1.64
Diluted	$	0.61	$	0.84		$	1.17	$	1.58
Net Earnings Per Share
Basic	$	0.72	$	0.95		$	1.29	$	1.62
Diluted	$	0.69	$	0.92		$	1.25	$	1.56
Average Shares Outstanding
Basic		122,337,554		121,751,344			120,894,936		121,274,618
Diluted		127,194,232		126,072,580			124,935,330		126,048,272

(1) The quarterly results presented in this table for the periods covered by the financial statements included in this Report and all prior periods have been adjusted to reflect our Construction Products operations (spun off in January 2004) and our manufactured housing operations (spun off in June 2003) as discontinued operations.

(2) Earnings from Continuing Operations are Before Cumulative Effect of a Change in Accounting Principle. For more detailed discussion of the change in accounting principle, see Note (F), “Indebtedness” of the Notes to Consolidated Financial Statements on pages 74-78 of this Report.

(3) On March 12, 2004, we completed a two-for-one stock split in the form of a 100 percent stock dividend to our stockholders of record as of February 29, 2004. All prior period earnings per share amounts have been restated to give retroactive application to the stock split.

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ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

     Not applicable.

ITEM 9A.  CONTROLS AND PROCEDURES

     An evaluation has been performed under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2004. Based on that evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective as of March 31, 2004, to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. There has been no change in our internal controls over financial reporting subsequent to the date of the foregoing evaluation that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     Except for the information relating to the executive officers of the Company that follows Item 4 of Part I of Part A of this Report and is incorporated herein by reference, the information called for by Items 10, 11, 12 and 13 is incorporated herein by reference to the information included and referenced under the following captions in the Company’s Proxy Statement for the July 15, 2004 Annual Meeting of Stockholders:

Item	Caption in the 2004 Proxy Statement
10	Election of Directors and Related Matters
10	Other Matters — Section 16(a) Beneficial Ownership Reporting Compliance
10	Corporate Governance and Related Matters
11	Executive Compensation
12	Stock Ownership
12	Executive Compensation — Equity Compensation Plans
13	Certain Transactions

     The policies comprising Centex’s code of conduct are set forth in the Company’s code of ethics manual, The Centex Way: A Guide to Decision-Making on Business Conduct Issues. These policies satisfy the SEC’s requirements for a “code of ethics,” and apply to all directors, officers and employees. The code of ethics manual is published on the corporate governance section of the Company’s website at www.centex.com. The board will not permit any waiver of any ethics policy for any director or executive officer.

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ITEM 11.  EXECUTIVE COMPENSATION

     See Item 10 above.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

     See Item 10 above.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     See Item 10 above.

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

     The information called for by Item 14 is incorporated herein by reference to the information included and referenced under the caption “Ratification of Appointment of Independent Auditors” in the Company’s Proxy Statement for the July 15, 2004 Annual Meeting of Stockholders.

PART IV

ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

a) The following documents are filed as part of this Report:

(1) Financial Statements

The consolidated balance sheets of Centex Corporation and subsidiaries as of March 31, 2004 and 2003, and the related consolidated statements of earnings, stockholders’ equity and cash flows for each of the three years in the period ended March 31, 2004, together with the accompanying Notes to Consolidated Financial Statements and the Report of Independent Auditors on pages 54-95 of this Report.

(2) Schedules

Schedules are omitted because they are not applicable or not required or the information required to be set forth therein is included in the consolidated financial statements referenced above in section (a) (1) of this Item 15.

(3) Exhibits

The information on exhibits required by this Item 15 is set forth in the Index to Exhibits appearing on pages 100-103 of this Report.

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b) Reports on Form 8-K:

Current Report on Form 8-K of Centex Corporation dated January 6, 2004 announcing the retirement of Laurence Hirsch as Chairman and Chief Executive Officer of Centex.

Current Report on Form 8-K of Centex Corporation dated January 12, 2004 announcing home building order increases for both the quarter and the nine month period ended December 31, 2003.

Current Report on Form 8-K of Centex Corporation dated January 14, 2004 announcing the special meeting date of stockholders to vote on a proposal to amend Centex’s charter to increase Centex’s authorized common stock and a proposal to terminate the tandem trading relationship with 3333 Holding Corporation and Centex Development Company, L.P.

Current Report on Form 8-K of Centex Corporation dated January 15, 2004 announcing distribution ratios for shares of Centex Construction Products, Inc. to be received by Centex stockholders in the tax-free spin-off of CXP by Centex.

Current Report on Form 8-K of Centex Corporation dated January 20, 2004 announcing Centex’s results of operations for the quarter and nine months ended December 31, 2003.

Current Report on Form 8-K of Centex Corporation dated January 21, 2004 filing a letter to Centex stockholders describing the proposed distribution by Centex of its equity interest in Centex Construction Products, Inc.

Current Report on Form 8-K of Centex Corporation dated January 30, 2004 announcing that Centex has completed the distribution to its stockholders of all shares of common stock of Centex Construction Products, Inc.

Current Report on Form 8-K of Centex Corporation dated February 13, 2004 confirming that the administrative processing required under Centex’s employee benefit plans as a result of the spin-off of Centex Construction Products, Inc. has been completed, and the temporary suspension of transactions by plan participants in the Centex Common Stock Fund ended on February 13, 2004.

Current Report on Form 8-K of Centex Corporation dated February 25, 2004 announcing that Centex’s stockholders have approved a proposal to amend Centex’s charter to increase its authorized common stock.

Current Report on Form 8-K of Centex Corporation dated March 1, 2004 announcing (1) the completion of the merger of (i) 3333 Acquisition Corp. with and into 3333 Holding Corporation, with 3333 Holding Corporation surviving as a wholly owned subsidiary of Centex Corporation and (ii) the merger of Centex Development Acquisition, L.P. with and into Centex Development Company, L.P., with Centex Development Company, L.P. surviving as an indirect partnership subsidiary of Centex Corporation, and (2) the termination of the tandem trading relationship.

Current Report on Form 8-K of Centex Corporation dated March 4, 2004 announcing unit sales (orders) at Centex Homes for the first eight weeks of the fiscal quarter.

Current Report on Form 8-K of Centex Corporation dated March 12, 2004 announcing that Centex completed a previously announced two-for-one stock split.

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INDEX TO EXHIBITS

CENTEX CORPORATION

Exhibit		Filed Herewith or
Number	Exhibit	Incorporated by Reference
3.1	Restated Articles of Incorporation of Centex Corporation (“Centex”), as amended	Filed herewith
3.2	Amended and Restated By-laws of Centex dated May 15, 2003	Exhibit 3.2 to Centex’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2003 (the “Form 10-Q, quarter ended June 30, 2003”)
4.1	Specimen Centex common stock certificate (with Rights Agreement legend)	Filed herewith
4.2	Rights Agreement, dated as of October 2, 1996, between Centex and ChaseMellon Shareholder Services, L.L.C., as rights agent	Exhibit 4 to Centex’s Registration Statement on Form 8-A (File No. 1-6776) filed on October 8, 1996 (the “1996 Form 8-A”)
4.3	Amendment No. 1 to Rights Agreement, dated as of February 18, 1999, between Centex and ChaseMellon Shareholder Services, L.L.C., as rights agent	Exhibit 4.2 to Amendment No. 1 to the 1996 Form 8-A, filed on February 22, 1999
4.4	Amendment No. 2 to Rights Agreement, dated as of April 29, 2002, between Centex and Mellon Investor Services L.L.C. (f/k/a ChaseMellon Shareholder Services, L.L.C.), as rights agent	Exhibit 4.3 to Amendment No. 2 to the 1996 Form 8-A, filed on May 2, 2002
4.5	Instruments with respect to long-term debt, which do not exceed 10% of the total assets of Centex and its subsidiaries, have not been filed; Centex agrees to furnish a copy of such instruments to the Securities and Exchange Commission upon request	Not Applicable
10.1	Centex Corporation Amended and Restated 1987 Stock Option Plan*	Filed herewith
10.2	Eighth Amended and Restated 1998 Centex Corporation Employee Non-Qualified Stock Option Plan*	Filed herewith

100

10.3	Amended and Restated Centex Corporation 2001 Stock Plan (the “2001 Stock Plan”)*	Filed herewith
10.3a	Form of stock option agreement for 2001 Stock Plan*	Filed herewith
10.3b	Form of restricted stock agreement for 2001 Stock Plan*	Filed herewith
10.4	Amended and Restated Centex Corporation Long Term Incentive Plan (the “LTIP”)*	Filed herewith
10.4a	Form of award agreement LTIP*	Filed herewith
10.5	Centex Corporation 2003 Annual Incentive Compensation Plan*	Exhibit 10.13 to Centex’s Form 10-Q, quarter ended June 30, 2003
10.6	Amended and Restated Centex Corporation 2003 Equity Incentive Plan (the “2003 Equity Incentive Plan”)*	Filed herewith
10.6a	Form of stock option agreement for 2003 Equity Incentive Plan*	Filed herewith
10.6b	Form of stock unit agreement for 2003 Equity Incentive Plan*	Filed herewith
10.7	Amended and Restated Supplemental Executive Retirement Plan of Centex Corporation*	Exhibit 10.8 to Centex’s Annual Report on Form 10-K for the fiscal year ended March 31, 2003
10.8	Centex Corporation Deferred Compensation Plan*	Exhibit 4 to Centex’s Registration Statement on Form S-8 (File No. 333-37956) filed on May 26, 2000
10.9	Centex Corporation Executive Deferred Compensation Plan*	Filed herewith
10.10	Centex Corporation Salary Continuation Plan*	Filed herewith
10.11	Consulting Agreement, dated as of March 31, 2002, between Centex and David W. Quinn*	Filed herewith
10.12	Termination Agreement, dated as of March 31, 2004, between Centex and David W. Quinn*	Filed herewith
10.13	Executive Employment Agreement, dated as of June 1, 2000, between Centex and Leldon E. Echols*	Exhibit 10.5a to Centex’s Annual Report on Form 10-K for the fiscal year ended March 31, 2001

101

10.14	Distribution Agreement between Centex, Cavco Industries L.L.C. and Cavco Industries, Inc.	Exhibit 10.15 to Centex’s Form 10-Q, quarter ended June 30, 2003
10.15	Amendment No. 1 to Distribution Agreement between Centex, Cavco Industries L.L.C. and Cavco Industries, Inc.	Exhibit 10.19 to Centex’s Form 10-Q, quarter ended June 30, 2003
10.16	Administrative Services Agreement between Centex Service Company and Cavco Industries, Inc.	Exhibit 10.16 to Centex’s Form 10-Q, quarter ended June 30, 2003
10.17	Tax Sharing Agreement between Centex and affiliates and Cavco Industries, Inc.	Exhibit 10.17 to Centex’s Form 10-Q, quarter ended June 30, 2003
10.18	Agreement to Assign Trademark Rights and Limited Consent to Use Centex Trademarks between Centex and Cavco Industries, Inc.	Exhibit 10.18 to Centex’s Form 10-Q, quarter ended June 30, 2003
10.19	Credit Agreement, dated as of August 7, 2003 among Centex, Bank of America, N.A., as Administrative Agent, and the lenders named therein	Exhibit 10.1 to Centex’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2003 (the “Form 10-Q, quarter ended September 30, 2003”)
10.20	Letter of Credit and Reimbursement Agreement, dated as of August 7, 2003 among Centex, Bank of America, N.A., as Administrative Agent, and the lenders named therein	Exhibit 10.2 to Centex’s Form 10-Q, quarter ended September 30, 2003
10.21	Amended and Restated Distribution Agreement, dated as of November 4, 2003, between Centex and Centex Construction Products, Inc.	Exhibit 99.1 to Amendment No. 3 to Centex’s Schedule 13D filed on November 5, 2003
10.22	Amended and Restated Agreement and Plan of Merger, dated as of November 4, 2003, among Centex, ARG Merger Corporation and Centex Construction Products, Inc.	Exhibit 99.2 to Amendment No. 3 to Centex’s Schedule 13D filed on November 5, 2003
21	List of Subsidiaries of Centex	Filed herewith
23	Consent of Independent Auditors	Filed herewith
24.1	Powers of Attorney	Filed herewith
31.1	Certification of the Chief Executive Officer of Centex pursuant to Rule 13a–14(a) promulgated under the Securities Exchange Act of 1934	Filed herewith

102

31.2	Certification of the Chief Financial Officer of Centex pursuant to Rule 13a–14(a) promulgated under the Securities Exchange Act of 1934	Filed herewith
32.1	Certification of the Chief Executive Officer of Centex pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith
32.2	Certification of the Chief Financial Officer of Centex pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith

*     Management contract or compensatory plan or arrangement

103

SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

		CENTEX CORPORATION
		Registrant
May 28, 2004	By:	/s/ TIMOTHY R. ELLER
		Timothy R. Eller, Chairman of the Board and
		Chief Executive Officer

     Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated.

May 28, 2004	By:	/s/ TIMOTHY R. ELLER
		Timothy R. Eller, Chairman of the Board and
		Chief Executive Officer
		(principal executive officer)
May 28, 2004	By:	/s/ LELDON E. ECHOLS
		Leldon E. Echols, Executive Vice President and
		Chief Financial Officer
		(principal financial officer)
May 28, 2004	By:	/s/ MARK D. KEMP
		Mark D. Kemp, Vice President — Controller
		(principal accounting officer)
	Directors:	Barbara T. Alexander, Dan W. Cook, III, Juan L. Elek,
		Timothy R. Eller, Thomas J. Falk, Clint W. Murchison, III,
		Frederic M. Poses, David W. Quinn,
		Thomas M. Schoewe and Paul T. Stoffel
May 28, 2004	By:	/s/ TIMOTHY R. ELLER
		Timothy R. Eller,
		Individually and as
		Attorney-in-Fact*

* Pursuant to authority granted by powers of attorney, copies of which are filed herewith.

104

EX-3.1

                                                                     EXHIBIT 3.1

         DEAN HELLER
         SECRETARY OF STATE
[SEAL]   204 NORTH CARSON STREET, SUITE 1
         CARSON CITY, NEVADA 89701-4299
         (775) 684 5708                                 FILED# C2323-68
         WEBSITE: SECRETARYOFSTATE.BIZ

         CERTIFICATE OF AMENDMENT                        FEB 25 2004
     (PURSUANT TO NRS 78.385 and 78.390)               IN THE OFFICE OF
                                                       /s/ Dean Heller
                                                DEAN HELLER, SECRETARY OF STATE.

IMPORTANT: READ ATTACHED INSTRUCTIONS BEFORE COMPLETING FORM.

                       ABOVE SPACE IS FOR OFFICE USE ONLY

              CERTIFICATE OF AMENDMENT TO ARTICLES OF INCORPORATION
                         FOR NEVADA PROFIT CORPORATIONS

          (PURSUANT TO NRS 78.385 AND 78.390 - AFTER ISSUANCE OF STOCK)

1. Name of corporation:

Centex Corporation

2. The articles have been amended as follows (provide article numbers, if
available):

Article Fourth of the Restated Articles of Incorporation has been amended to
read in its entirety as follows:

FOURTH: The total number of shares of all classes of stock which the Corporation
is authorized to issue is Three Hundred Five Million (305,000,000). All such
shares are to have par value and are classified as (i) Five Million (5,000,000)
shares of Preferred Stock ("Preferred Stock"), each share of such stock having
such par value as the Board of Directors of the Corporation may from time to
time designate in the resolutions providing for the issuance thereof, as
hereinafter provided, and (ii) Three Hundred Million (300,000,000) shares of
Common Stock (the "Common Stock"), each share of such stock having par value of
$0.25.

3. The vote by which the stockholders holding shares in the corporation
entitling them to exercise at least a majority of the voting power, or such
greater proportion of the voting power as may be required in the case of a vote
by classes or series, or as may be required by the provisions of the * articles
of incorporation have voted in favor of the amendment is: Majority

4. Effective date of filing (optional): __________________________________
                                         (must not be later than 90 days
                                         after the certificate is filed)

5. Officer Signature (required): /s/ Raymond G. Smerge Exec. Vice President,
                                     Chief Legal Officer and Secretary

* If any proposed amendment would alter or change any preference or any relative
or other right given to any class or series of outstanding shares, then the
amendment must be approved by the vote, In addition to the affirmative vote
otherwise required, of the holders of shares representing a majority of the
voting power of each class or series affected by the amendment regardless of
limitations or restrictions on the voting power thereof.

IMPORTANT: Failure to include any of the above information and submit the proper
fees may cause this filing to be rejected.

THIS FORM MUST BE ACCOMPANIED     NEVADA SECRETARY OF STATE AM 78,385 AMEND 2003
BY APPROPRIATE FEES.                                        REVISED ON: 11/03/03
SEE ATTACHED FEE SCHEDULE.





                                             STATE OF NEVADA
                                            Secretary of State
                                 I hereby certify that this is a true and
                                 complete copy of the document as filed in
                                 this office.

                                             FEB 25 2004

                                 By /s/ Dean Heller
                                    -------------------------------------



         FILED
  IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
   STATE OF NEVADA

                            CERTIFICATE OF AMENDMENT

                                       OF

                       RESTATED ARTICLES OF INCORPORATION

          FEB 12 1998
          No C2323-68
        /s/ Dean Heller
DEAN HELLER, SECRETARY OF STATE

                                     *******

      Pursuant to the provisions of Section 78.390 of the Nevada General
Corporation Law, CENTEX CORPORATION ("Corporation"), a Nevada corporation, by
its Executive Vice President, Secretary and Chief Legal Officer, does hereby
execute this Certificate of Amendment to its Restated Articles of Incorporation
and does hereby certify as follows:

      1. On February 4, 1998, the stockholders of the Corporation adopted an
amendment to its Restated Articles of Incorporation whereby Article Fourth was
amended to read in its entirety as follows:

            FOURTH: The total number of shares of all classes of stock which the
      Corporation is authorized to issue is One Hundred Five Million
      (105,000,000). All such shares are to have a par value and are classified
      as (i) Five Million (5,000,000) shares of Preferred Stock ("Preferred
      Stock"), each share of such stock having such par value as the Board of
      Directors of the Corporation may from time to time designate in the
      resolutions providing for the issuance thereof, as hereinafter provided,
      and (ii) One Hundred Million (100,000,000) shares of Common Stock (the
      "Common Stock"), each share of such stock having a par value of $0.25.

      2. The number of shares of the Corporation that were outstanding at the
time of the adoption of the above amendment to the Restated Articles of
Incorporation of the Corporation was 29,690,412; the number of shares that were
entitled to vote thereon was 29,690,412.



      3. The number of shares of the Corporation that were voted for the
adoption of the above amendment to the Restated Articles of Incorporation of the
Corporation was 23,825,938; the number of shares that were voted against such
amendment was 242,902.

      IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Amendment on behalf of the Corporation and has caused its corporate seal to be
affixed hereto this 12th day of February 1998.

                                               CENTEX CORPORATION

                                          By: /s/ Raymond G. Smerge
                                              ----------------------------------
                                              Raymond G. Smerge
                                              Executive Vice President,
                                              Secretary and Chief Legal Officer

[SEAL OF CENTEX CORPORATION]

                                          By: /s/ Eleanor J. Thompson
                                             -----------------------------------
                                              Eleanor J. Thompson
                                              Assistant Secretary

                                    *******

STATE OF TEXAS       }
                     }
COUNTY OF DALLAS     }

      On this 12th day of February 1998, personally appeared before me, a Notary
Public, Raymond G. Smerge, Executive Vice President, Chief Legal Officer and
Secretary, and Eleanor J. Thompson, Assistant Secretary, of CENTEX CORPORATION,
who acknowledged that they executed the above instrument.

[SEAL]

                                          By: /s/ Pam Burton
                                              ----------------------------------
                                              Notary Public
                                              My commission expires:



                                                              
       DEAN HELLER                   STATE OF NEVADA                TELEPHONE 702.687.5203
    SECRETARY OF STATE        OFFICE OF THE SECRETARY OF STATE      FAX 702.687.3471
                                 101 N. CARSON ST., STE. 3          WEB SITE http://sos.state.nv.us
                               CARSON CITY, NEVADA 89701-4786       FILING FEE: $




          FILED
   IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
      STATE OF NEVADA

       NOV 06 1998
       No. C2323-68
      /s/ Dean Heller
DEAN HELLER, SECRETARY OF STATE

                            CERTIFICATE OF CORRECTION
                      (PURSUANT TO NRS 78.0295 AND 80.007)
                             - REMIT IN DUPLICATE -

1. The name of the CORPORATION for which correction is being made:
       Centex Corporation

2. Description of the original document for which correction is being made:
      Certificate of Amendment of Restated Articles of Incorporation

3. Filing date of the original document: 02/12/1998.

4. Description of the incorrect statement and the reason it is incorrect or the
   manner in which the execution or other formal authentication was defective:
   Typographical error -- The words "the first paragraph of" were omitted from
   the second line of the first certification between "whereby" and "Article".

5. Correction of the incorrect statement or defective execution or
   authentication:

            1. On February 4, 1998, the stockholders of the Corporation adopted
      an amendment to its Restated Articles of Incorporation whereby the first
      paragraph of Article Fourth was amended to read in its entirety as
      follows:

6. Signature:


                                Executive Vice President,
                                Chief Legal  Officer, General
By: /s/ Raymond G. Smerge       Counsel and Secretary          November 5, 1998
    --------------------------  -----------------------------  ----------------
    SIGNATURE OF CORPORATE      TITLE OF OFFICER               DATE
    OFFICER

[SEAL]

IMPORTANT: Failure to include any of the above information and remit the proper
fees may cause this filing to be rejected.



        FILED
 IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
   STATE OF NEVADA

      JUN 25 1993

                                    RESTATED

                            ARTICLES OF INCORPORATION

                                       OF

                               CENTEX CORPORATION

CHERYL A. LAU SECRETARY OF STATE
/s/ Cheryl A. Lau
No. 2323-68

      FIRST: The name of the corporation is CENTEX CORPORATION.

      SECOND: Its principal office in the State of Nevada is located at One East
First Street, Reno, Washoe County, Nevada. The name and address of its resident
agent is The Corporation Trust Company, One East First Street, Reno, Nevada.

      THIRD: The purpose of the Corporation is to engage in any lawful act,
activity and/or business for which corporations may be organized under the
General Corporation Laws of the State of Nevada.

      FOURTH: The total number of shares of all classes of stock which the
Corporation is authorized to issue is Fifty Five Million (55,000,000). All
such shares are to have a par value and are classified as (i) Five Million
(5,000,000) shares of Preferred Stock (the "Preferred, Stock"), each share of
such stock having such par value as the Board of directors of the Corporation
may from time to time designate in the resolutions providing for the
issuance thereof, as hereinafter provided, and (ii) Fifty Million (50,000,000)
shares of Common Stock (the "Common Stock"), each share of such stock having a
par value of $.25.

      The designations and the powers, preferences, rights, qualifications,
limitations and restrictions of the Preferred Stock and the Common Stock of the
Corporation are as follows:

      A. Provisions Relating to the Preferred Stock.

            1. The Preferred Stock may be issued from time to time in one or
      more classes or series, the shares of each class or series to have such
      designations and powers, preferences and rights, and qualifications,

                                        1



      limitations and restrictions thereof as are stated and expressed herein
      and in the resolution or resolutions providing for the issue of such class
      or series adopted by the Board of Directors as hereafter prescribed.

            2. Authority is hereby expressly granted to and vested in the Board
      of Directors to authorize the issuance of the Preferred Stock from time to
      time in one or more classes or series, and with respect to each class or
      series of the Preferred Stock, to fix and state by the resolution or
      resolutions from time to time adopted providing for the issuance thereof
      the following:

                  (i) Whether or not the class or series is to have voting
            rights, full or limited, or is to be without voting rights;

                  (ii) The number of shares to constitute the class or series
            and the designations thereof;

                  (iii) The par value, preferences and relative, participating,
            optional or other special rights, if any, and the qualifications,
            limitations, or restrictions thereof, if any, with respect to any
            class or series;

                  (iv) Whether or not the shares of any class or series shall be
            redeemable and if redeemable the redemption price or prices, and the
            time or times at which, and the terms and conditions upon which,
            such shares shall be redeemable and the manner of redemption;

                  (v) Whether or not the shares of a class or series shall be
            subject to the operation of retirement or sinking funds to be
            applied to the purchase or redemption of such shares for retirement,
            and if such retirement or sinking fund or funds be established, the
            annual amount thereof and the terms and provisions relative to the
            operation thereof;

                  (vi) The dividend rate, whether dividends are payable in

                                       2



            cash, stock of the Corporation, or other property, the conditions
            upon which and the times when such dividends are payable, the
            preference to or the relation to the payment of dividends payable on
            any other class or classes or series of stock, whether or not such
            dividend shall be cumulative or noncumulative, and if cumulative,
            the date or dates from which such dividends shall accumulate;

                  (vii) The preferences, if any, and the amounts thereof which
            the holders of any class or series thereof shall be entitled to
            receive upon the voluntary or involuntary dissolution of, or upon
            any distribution of the assets of, the Corporation;

                  (viii) Whether or not the shares of any class or series shall
            be convertible into, or exchangeable for, the shares of any other
            class or classes or of any other series of the same of any other
            class or classes of stock of the Corporation and the conversion
            price or prices or ratio or ratios or the rate or rates at which
            such exchange may be made, with such adjustments, if any, as shall
            be stated and expressed or provided for in such resolution or
            resolutions; and

                  (ix) Such other special rights and protective provisions with
            respect to any class or series as may to be Board of Directors deem
            advisable.

            3. The shares of each class or series of the Preferred Stock may
      vary from the shares of any other series thereof in any or all of the
      foregoing respects. The Board of Directors may increase the number of
      shares of the Preferred Stock designated for any existing class or series
      by a resolution adding to such class or series authorized and unissued
      shares of the Preferred Stock not designated for any other class or
      series. The Board of Directors may decrease the number of shares of the

                                       3



      Preferred Stock designated for any existing class or series by a
      resolution, subtracting from such series unissued shares of the Preferred
      Stock designated for such class or series, and the shares subtracted shall
      become authorized, unissued and undesignated shares of the Preferred
      Stock.

            4. The shares of Preferred Stock, Series A, heretofore authorized in
      resolutions adopted by Unanimous Written Consents of the Board of
      Directors, dated February 17, 1970, and November 13, 1970, the shares of
      Preferred Stock, Series B, heretofore authorized in resolutions adopted by
      Unanimous Written Consent of the Board of Directors, dated February 17,
      1970, and the shares of Preferred Stock, Series C, heretofore authorized
      in resolutions adopted by Unanimous Written Consent of the Board of
      Directors dated June 24, 1970, shall, notwithstanding anything else to the
      contrary, have the following voting power and privileges:

                  A. Each holder of Preferred Stock, Series A, Preferred Stock,
            Series B, or Preferred Stock, Series C, shall be entitled to one
            vote on each matter submitted to a vote of the stockholders for each
            whole share of Common Stock into which each share of Preferred Stock
            standing in such holder's name on the records of the Corporation is
            convertible, irrespective of whether or not the conversion privilege
            may be exercised by the holder of such Preferred Stock as of the
            record date for the determination of stockholders entitled to vote
            on each matter at the meeting of the stockholders called and held
            for such purpose.

                  B. Provisions Relating to the Common Stock.

                        1. Except as otherwise required by law, each holder of
                  Common Stock shall be entitled to one vote for each share of
                  Common Stock standing in such holder's name on the records of

                                       4



                  the Corporation on each matter submitted to a vote of the
                  stockholders.

                        2. Subject to the rights of the holders of the Preferred
                  Stock, the holders of the Common Stock shall be entitled to
                  receive when, as and if declared by the Board of Directors,
                  out of funds legally available therefor, dividends payable in
                  cash, stock or otherwise.

                        3. Upon any liquidation, dissolution or winding up of
                  the Corporation, whether voluntary or involuntary, and after
                  the holders of the Preferred Stock shall have been paid in
                  full the amounts to which they shall be entitled (if any), or
                  a sum sufficient for such payment in full shall have been set
                  aside, the remaining net assets of the Corporation shall be
                  distributed pro rata to the holders of the Common Stock in
                  accordance with their respective rights and interests, to the
                  exclusion of the holders of the Preferred Stock.

                  C. General.

                        1. Subject to the provisions of law and the foregoing
                  provisions of these Articles of Incorporation, the Corporation
                  may issue shares of its Preferred Stock and Common Stock from
                  time to time for such consideration (not less than the par
                  value or stated value thereof) as may be fixed by the Board of
                  Directors, which is expressly authorized to fix the same in
                  its absolute and uncontrolled discretion subject to the
                  foregoing conditions. Shares so issued for which the
                  consideration shall have been paid or delivered to the
                  Corporation shall be deemed fully paid stock and shall not be
                  liable to any further call or assessment thereon and the

                                       5



                  holders of such shares shall not be liable for any further
                  payments in respect of such shares.

                        2. No stockholder of this Corporation shall have, by
                  reason of his holding shares of any class of stock of this
                  Corporation, any preemptive or preferential rights to purchase
                  or subscribe for any other shares (including treasury shares)
                  of any class of this Corporation now or hereafter to be
                  authorized, or any notes, debentures, bonds, or other
                  securities convertible into or carrying options or warrants to
                  purchase shares of any class, now or hereafter to be
                  authorized, whether or not the issuance of any such shares, or
                  such notes, debentures, bonds or other securities, would
                  adversely affect the dividend or voting rights of such
                  stockholder.

                        3. Cumulative voting by any stockholder is hereby
                  expressly denied.

      FIFTH: The members of the governing board shall be styled "directors" and
the number thereof shall be not less than three (3) nor more than thirteen (13),
the exact number to be fixed as provided by the Bylaws of the Corporation,
provided that the number so fixed as provided by the Bylaws may be increased or
decreased within the limits above specified from time to time as provided by the
Bylaws.

      The names and post office addresses of the first Board of Directors, which
shall consist of three (3) members, are as follows:

                                       6



           Name                          Address

      Frank M. Crossen         4600 Republic National Bank Tower
                               Dallas, Texas 75201

      Paul R. Seegers          4600 Republic National Bank Tower
                               Dallas, Texas 75201

      E. L. Higgins            4600 Republic National Bank Tower
                               Dallas, Texas 75201

      SIXTH: The names and post office addresses of each of the incorporators
signing the Articles of Incorporation are as follows:

                Name                Address

      Donald L. Carano         2520 Faretto Drive
                               Reno, Nevada 89502

      Linda A. Barozzi         3485 Bryan Street
                               Reno, Nevada 89503

      Marilyn Hart             19765 Miner Lane
                               Reno, Nevada 89502

      SEVENTH: The Corporation shall have perpetual existence.

      EIGHTH: The Board of Directors is expressly authorized to make, repeal,
alter, amend or rescind the Bylaws of the Corporation. The stockholders of the
Corporation shall not make, repeal, alter, amend or rescind the Bylaws of the
Corporation except by the vote of the holders of 66 2/3 percent or more of the
combined voting power of the then outstanding shares of stock of all classes and
series of the Corporation entitled to vote generally in the election of
directors, voting together as a single class. In addition to any requirement of
law and any other provisions of these Articles of Incorporation or any
resolution or resolutions of the Board of Directors adopted pursuant to Article
Fourth of these Articles of Incorporation (and notwithstanding the fact that a
lesser percentage may be specified by law, these Articles of Incorporation or
any such resolution or resolutions), the affirmative vote of the holders of 66
2/3 percent

                                       7



or more of the combined voting power of the then outstanding shares of stock of
all classes and series of the Corporation entitled to vote generally in the
election of directors, voting together as a single class, shall be required to
amend, alter or repeal, or adopt any provision inconsistent with, this Article
Eighth.

      NINTH: No contract or other transaction between the Corporation and any
other corporation and no other act of the Corporation shall, in the absence of
fraud, be invalidated or in any way affected by the fact that any of the
directors of the Corporation are pecuniarily or otherwise interested in such
contract, transaction, or other act, or are directors or officers of such
corporation. Any director of the Corporation, individually or any firm or
association of which any such director may be a member, may be a party to, or
may be pecuniarily or otherwise interested in, any contract or transaction of
the Corporation, provided that the fact that he individually or such firm or
association is so interested shall be disclosed or shall have been known to the
Board of Directors or a majority of such members thereof as shall be present at
any meeting of the Board of Directors at which action upon any such contract or
transaction shall be taken; and any director of the Corporation who is a
director or officer of such other corporation or who is so interested may be
counted in determining the existence of a quorum at any meeting of the Board of
Directors which shall authorize any such contract or transaction and may vote
thereat to authorize any such contract or transaction with like force and effect
as if he were not such director or officer of such other corporation or not so
interested; every director of the Corporation being hereby relieved from any
disability which might otherwise prevent him from carrying out transactions with
or contracting with the Corporation for the benefit of himself or any firm or
corporation,

                                       8



association, trust or organization in which or with which he may be in anywise
interested or connected.

      TENTH:

            1. Elimination of Director or Officer Liability.

            No director or officer of the Corporation shall be personally liable
      to the Corporation or any of its stockholders for damages for breach of
      fiduciary duty as a director or officer involving any act or omission of
      any such director or officer occurring on or after July 15, 1987;
      provided, however, that the foregoing provision shall not eliminate or
      limit the liability of a director or officer (i) for acts or omissions
      which involve intentional misconduct, fraud or a knowing violation of law,
      or (ii) the payment of dividends in violation of Section 78.300 of the
      Nevada Revised Statutes. Any repeal or modification of this paragraph 1 of
      Article TENTH by the stockholders of the Corporation shall be prospective
      only, and shall not adversely affect any limitation on the personal
      liability of a director or officer of the Corporation for acts or
      omissions prior to such repeal or modification.

            2. Indemnification.

                  (a) The Corporation shall have power to indemnify any person
            who was or is a party or is threatened to be made a party to any
            threatened, pending or completed action, suit or proceeding, whether
            civil, criminal, administrative or investigative (other than an
            action by or in the right of the Corporation), by reason of the fact
            that he is or was a director, officer, employee or agent of the
            Corporation, or is or was serving at the request of the Corporation
            as a director, officer, employee or agent of another corporation,
            partnership, joint venture, trust, or other enterprise, against
            expenses (including attorneys, fees), judgments, fines, and amounts

                                       9



            paid in settlement actually and reasonably incurred by him in
            connection with the action, suit or proceeding, if he acted in good
            faith and in a manner which he reasonably believed to be in or not
            opposed to the best interests of the Corporation, and, with respect
            to any criminal action or proceeding had no reasonable cause to
            believe his conduct was unlawful. The termination of any action,
            suit or proceeding by judgment, order, settlement or conviction, or
            upon a plea of nolo contendere or its equivalent, does not, of
            itself, create a presumption that the person did not act in good
            faith and in a manner which he reasonably believed to be in or not
            opposed to the best interests of the Corporation, and that, with
            respect to any criminal action or proceeding, he had reasonable
            cause to believe that his conduct was unlawful.

                  (b) The Corporation shall have power to indemnify any person
            who was or is a party or is threatened to be made a party to any
            threatened, pending or completed action or suit by or in the right
            of the Corporation to procure a judgment in its favor by reason of
            the fact that he is or was a director, officer, employee or agent of
            the Corporation, or is or was serving at the request of the
            Corporation as a director, officer, employee or agent of another
            corporation, partnership, joint venture, trust or other enterprise,
            against expenses, including amounts paid in settlement and
            attorneys' fees, actually and reasonably incurred by him in
            connection with the defense or settlement of the action or suit if
            he acted in good faith and in a manner he reasonably believed to be
            in or not opposed to the best interests of the Corporation.
            Indemnification may not be made for any claim, issue or matter as to
            which such a person has been adjudged by a court of competent

                                       10



            jurisdiction, after exhaustion of all appeals therefrom, to be
            liable to the Corporation or for amounts paid in settlement to the
            Corporation, unless and only to the extent that the court in which
            the action or suit was brought or other court of competent
            jurisdiction determines upon application that in view of all the
            circumstances of the case, the person is fairly and reasonably
            entitled to indemnity for such expenses as the court deems proper.

                  (c) To the extent that a director, officer, employee or agent
            of the Corporation has been successful on the merits or otherwise in
            defense of any action, suit or proceeding referred to in
            subparagraphs (a) and (b), or in defense of any claim, issue or
            matter therein, he must be indemnified by the Corporation against
            expenses (including attorneys' fees) actually and reasonably
            incurred by him in connection with the defense.

                  (d) Any indemnification under subparagraphs (a) and (b),
            unless ordered by a court or advanced pursuant to subparagraph (e),
            must be made by the Corporation only as authorized in the specific
            case upon a determination that indemnification of the director,
            officer, employee or agent is proper in the circumstances. The
            determination must be made (1) by the Board of Directors by majority
            vote of a quorum consisting of directors who were not parties to the
            action, suit or proceeding, or (2) if a majority vote of a quorum
            consisting of directors who were not parties to the action, suit or
            proceeding so orders, by independent legal counsel in a written
            opinion, or (3) if a quorum Consisting of directors who were not
            parties to the action, suit or proceeding cannot be obtained, by
            independent legal counsel in a written opinion, or (4) by the
            stockholders.

                                       11



                  (e) The expenses of officers and directors incurred in
            defending a civil or criminal action, suit or proceeding must be
            paid by the Corporation as they are incurred and in advance of the
            final disposition of the action, suit or proceeding upon receipt of
            an undertaking by or on behalf of the director or officer to repay
            the amount if it shall be determined by a court of competent
            jurisdiction that he is not entitled to be indemnified by the
            Corporation. The provisions of this subparagraph do not affect any
            rights to advancement of expenses to which corporate personnel other
            than directors or officers may be entitled under any contract or
            otherwise.

                  (f) The indemnification and advancement of expenses authorized
            in or ordered by a court pursuant to this paragraph 2 of Article
            TENTH (1) shall not be deemed exclusive of any other rights to which
            a person seeking indemnification or advancement of expenses may be
            entitled under any bylaw, agreement, vote of stockholders
            disinterested directors, or otherwise, for either an action in his
            official capacity or an action in another capacity while holding his
            office, except that indemnification, unless ordered by a court
            pursuant to subparagraph (b) or for the advancement of expenses made
            pursuant to subparagraph (e), may not be made to or on behalf of any
            director or officer if a final adjudication establishes that his
            acts or omissions involved intentional misconduct, fraud or a
            knowing violation of the law and was material to the cause of
            action, and (2) continues for a person who has ceased to be a
            director, officer, employee or agent and inures to the benefit of
            the heirs, executors and administrators of such a person.

                                       12



                  (g) To the extent permitted by law, the Corporation shall have
            power to purchase and maintain insurance or make other financial
            arrangements on behalf of any person who is or was a director,
            officer, employee or agent of the Corporation, or is or was serving
            at the request of the Corporation as a director, officer, employee
            or agent of another corporation, partnership, joint venture, trust
            or other enterprise for any liability asserted against him and any
            liability and expenses incurred by him in any such capacity or
            arising out of his status as such.

      ELEVENTH: The vote of stockholders of the Corporation required to approve
Business Combinations (as hereinafter defined) shall be as set forth in this
Article Eleventh.

            1. Higher Votes Required for Certain Business Combinations. In
      addition to any affirmative vote required by law or by these Articles of
      Incorporation or any resolution or Resolutions of the Board of Directors
      adopted pursuant to Article Fourth of these Articles of Incorporation, and
      except as otherwise expressly provided in paragraph 3 of this Article
      Eleventh:

                  (a) any merger or consolidation of the Corporation with (i)
            any Interested Stockholder or (ii) any other corporation (whether or
            not itself an Interested Stockholder) that is, or after such merger
            or consolidation would be, an Affiliate or Associate of an
            Interested Stockholder; or

                  (b) any sale, lease, exchange, mortgage, pledge, transfer, or
            dividend or distribution (other than on a pro rata basis to all
            stockholders) or other disposition (in one transaction or a series
            of transactions) to, with or from any Interested Stockholder or any

                                       13



            Affiliate or Associate of any Interested Stockholder of any assets
            of the Corporation or of any Subsidiary having an aggregate Fair
            Market Value of $40,000,000 or more; or

                  (c) the issuance or transfer by the Corporation or any
            Subsidiary (in one transaction or a series of transactions) to any
            Interested Stockholder or any Affiliate or Associate of any
            Interested Stockholder of any securities of the Corporation or any
            Subsidiary in exchange for cash, securities or other property (or a
            combination thereof) having an aggregate Fair Market Value of
            $40,000,000 or more, other than the issuance of securities upon the
            conversion of convertible securities of the Corporation or any
            Subsidiary that were not acquired by such Interested Stockholder (or
            such Affiliate or Associate) from the Corporation or a Subsidiary;
            or

                  (d) the adoption of any plan or proposal for the liquidation
            or dissolution of the Corporation proposed by or on behalf of any
            Interested Stockholder or any Affiliate or Associate of any
            Interested Stockholder; or

                  (e) any reclassification of securities (including any reverse
            stock split), or recapitalization of the Corporation, or any merger
            or consolidation of the Corporation with any of its Subsidiaries, or
            any other transaction (whether or not with or into or otherwise
            involving any Interested Stockholder), which in any such case has
            the effect, directly or indirectly, of increasing the proportionate
            share of the outstanding shares of any class or series of stock or
            securities convertible into stock of the Corporation or any
            Subsidiary that is directly or indirectly beneficially owned by any

                                       14



            Interested Stockholder or any Affiliate or Associate of any
            Interested Stockholder; or

                  (f) any series or combination of transactions directly or
            indirectly having the same effect as any of the foregoing; or

                  (g) any agreement, contract or other arrangement providing
            directly or indirectly for any of the foregoing;

      shall not be consummated without (i) the affirmative vote of the holders
      of at least 66 2/3 percent of the combined voting power of the then
      outstanding shares of stock of all classes and series of the Corporation
      entitled to vote generally in the election of directors ('Voting Stock'),
      and (ii) the affirmative vote of a majority of the combined voting power
      of the then outstanding shares of Voting Stock held by Disinterested
      Stockholders, in each case voting together as a single class. Such
      affirmative vote shall be required notwithstanding the fact that no vote
      may be required, or that a lesser percentage may be specified, by law or
      by these Articles of Incorporation or any resolution or resolutions of the
      Board of Directors adopted pursuant to Article Fourth of these Articles of
      Incorporation or in any agreement with any national securities exchange or
      otherwise.

            2. Definition of 'Business Combination'. The term 'Business
      Combination' as used in this Article Eleventh shall mean any transaction
      that is referred to in any one or more of subparagraphs (a) through (g) of
      paragraph 1 of this Article Eleventh.

            3. Exceptions to Higher Voting Requirements. The provisions of
      paragraph 1 of this Article Eleventh shall not be applicable to any
      particular Business Combination, and such Business Combination shall
      require only such affirmative vote as is required by law and any other

                                       15



      provision of these Articles of Incorporation and any resolution or
      resolutions of the Board of Directors adopted pursuant to Article Fourth
      of these Articles of Incorporation, if all the conditions specified in
      either of the following subparagraphs (a) or (b) are met:

                  (a) all the six conditions specified in the following clauses
            (i) through (vi) shall have been met:

                        (i) if the transaction constituting the Business
                  Combination shall provide for a consideration to be received
                  by holders of the Common Stock in exchange for all their
                  shares of the Common Stock, the aggregate amount of the cash
                  and the Fair Market Value as of the date of the consummation
                  of the Business Combination of any consideration other than
                  cash to be received per share by holders of the Common Stock
                  in such Business Combination shall be at least equal to the
                  highest of the following:

                              (A) (if applicable) the highest per share price
                        (including any brokerage commissions, transfer taxes and
                        soliciting dealers' fees) paid in order to acquire any
                        shares of the Common Stock beneficially owned by the
                        Interested Stockholder that were acquired (x) within the
                        two-year period immediately prior to the Announcement
                        Date or (y) in the transaction in which it became an
                        Interested Stockholder, whichever is higher; and

                              (B) the Fair Market Value per share of the Common
                        Stock on the Announcement Date or on the Determination
                        Date, whichever is higher; and

                        (ii) if the transaction constituting the Business
                  Combination shall provide for a consideration to be received

                                       16



                  by holders of any class or series of outstanding Voting Stock
                  other than the Common Stock, the aggregate amount of the cash
                  and the Fair Market Value as of the date of the consummation
                  of the Business Combination of any consideration other than
                  cash to be received per share by holders of shares of such
                  Voting Stock shall be at least equal to the highest of the
                  following (it being intended that the requirements of this
                  clause (a)(ii) shall be required to be met with respect to
                  every class and series of such outstanding Voting Stock,
                  whether or not the Interested Stockholder beneficially owns
                  any shares of a particular class or series of Voting Stock):

                              (A) (if applicable) the highest per share price
                        (including any brokerage commissions, transfer taxes and
                        soliciting dealers' fees) paid in order to acquire any
                        shares of such class or series of Voting Stock
                        beneficially owned by the Interested Stockholder that
                        were acquired (x) within the two-year period immediately
                        prior to the Announcement Date or (y) in the transaction
                        in which it became an Interested-Stockholder, whichever
                        is higher;

                              (B) (if applicable) the highest preferential
                        amount per share to which the holders of such class or
                        series of Voting Stock are entitled in the event of any
                        voluntary or involuntary liquidation, dissolution or
                        winding up of this corporation; and

                              (C) the Fair Market Value per share of such class
                        or series of Voting Stock on the Announcement Date or on
                        the Determination Date, whichever is higher; and

                                       17



                        (iii) the consideration to be received by holders of a
                  particular class or series of outstanding Voting Stock
                  (including the Common Stock) shall be in cash or in the same
                  form as was previously paid in order to acquire shares of such
                  class or series of Voting Stock that are beneficially owned by
                  the Interested Stockholder, and if the Interested Stockholder
                  beneficially owns shares of any class or series of Voting
                  Stock that were acquired with varying forms of consideration,
                  the form of consideration to be received by holders of such
                  class or series of Voting Stock shall be either cash or the
                  form used to acquire the largest number of shares of such
                  class or series of Voting Stock beneficially owned by it; and

                        (iv) after such Interested Stockholder has become an
                  Interested Stockholder and prior to the consummation of such
                  Business Combination:

                              (A) except as approved by a majority of the
                        Disinterested Directors, there shall have been no
                        failure to declare and pay at the regular dates therefor
                        the full amount of any dividends (whether or not
                        cumulative) payable on any class or series of stock
                        having a preference over the Common Stock as to
                        dividends or upon liquidation;

                              (B) there shall have been no reduction in the
                        annual rate of dividends paid on the Common Stock
                        (except as necessary to reflect any subdivision of the
                        Common Stock), except as approved by a majority of the
                        Disinterested Directors, and an increase in such annual
                        rate of dividends (as necessary to prevent any such

                                       18



                        reduction) in the event of any reclassification
                        (including any reverse stock split), recapitalization,
                        reorganization or any similar transaction that has the
                        effect of reducing the number of outstanding shares of
                        the Common Stock, unless the failure so to increase such
                        annual rate is approved by a majority of the
                        Disinterested Directors; and

                              (C) such Interested Stockholder shall not have
                        become the beneficial owner of any additional shares of
                        Voting Stock except as part of the transaction in which
                        it became an Interested Stockholder; and

                        (v) after such Interested Stockholder has become an
                  Interested Stockholder, such Interested Stockholder shall not
                  have received the benefit, directly or indirectly (except
                  proportionately as a stockholder), of any loans, advances,
                  guarantees, pledges or other financial assistance provided by
                  the Corporation whether in anticipation of or in connection
                  with such Business Combination or otherwise; and

                        (vi) a proxy or information statement describing the
                  proposed Business Combination and complying with the
                  requirements of the Securities Exchange Act of 1934 and the
                  rules and regulations thereunder (or any subsequent provisions
                  replacing such Act, rules or regulations) shall be mailed to
                  public stockholders of the Corporation at least 30 days prior
                  to the consummation of Such Business Combination (whether or
                  not such proxy or information statement is required to be
                  mailed pursuant to such Act or subsequent provisions); and/or

                                       19



                  (b) such Business Combination shall have been approved by a
            majority of the Disinterested Directors.

            4. Certain Definitions. For purposes of this Article Eleventh:

                  (a) A 'person' shall mean any individual, firm, group,
            corporation, partnership, trust or other entity or any 'person' or
            'group' of persons or entities (as such terms are used in Regulation
            13d under the Securities Exchange Act of 1934 (the 'Exchange Act')
            as in effect on May 1, 1984).

                  (b) 'Interested Stockholder' shall mean any person (other than
            the Corporation or any Subsidiary) who or that:

                        (i) is, at the date in question, the beneficial owner
                  (as hereinafter defined), directly or indirectly, of 20
                  percent or more of the combined voting power of the then
                  outstanding shares of Voting Stock; or

                        (ii) is an Affiliate of the Corporation and at any time
                  within the two-year period immediately prior to the date in
                  question was the beneficial owner (as hereinafter defined),
                  directly or indirectly, of 20 percent or more of the combined
                  voting power of the then outstanding shares of Voting Stock;
                  or

                        (iii) is an assignee of or has otherwise succeeded to
                  the beneficial ownership of any shares of Voting Stock that
                  were at any time within the two-year period immediately prior
                  to the date in question beneficially owned by any Interested
                  Stockholder, if such assignment or succession shall have
                  occurred in the course of a transaction or series of
                  transactions other than a public offering within the meaning
                  of the Securities Act of 1933.

                                       20



                  (c) 'Disinterested Stockholder' shall mean a stockholder of
            the Corporation who is not an Interested Stockholder or an Affiliate
            or Associate of an Interested Stockholder.

                  (d) A person shall be a 'beneficial owner' of any Voting
            Stock:

                        (i) as to which such person or any of its Affiliates or
                  Associates is the beneficial owner (as defined in Rule 13d-3
                  under the Exchange Act as in effect on May 1, 1984), directly
                  or indirectly; or

                        (ii) that such person or any of its Affiliates has (A)
                  the right to acquire (whether such right is exercisable
                  immediately or only after the passage of time) pursuant to any
                  agreement, arrangement or understanding, or upon the exercise
                  of conversion rights, exchange rights, warrants or options, or
                  otherwise, or (B) the right to vote or to direct the voting of
                  pursuant to any agreement, arrangement or understanding, or
                  otherwise; or

                        (iii) that are beneficially owned, directly or
                  indirectly, by any other person with which such person or any
                  of its Affiliates or Associates has any agreement, arrangement
                  or understanding for the purpose of acquiring, holding, voting
                  or disposing of any shares of Voting Stock.

                  (e) For the purposes of determining whether a person is an
            Interested Stockholder pursuant to subparagraph (b) of this
            paragraph 4, the number of shares of Voting Stock deemed to be
            outstanding shall include shares deemed owned by such person through
            application of subparagraph (d) of this paragraph 4 but shall not
            include any other shares of Voting Stock that may be issuable to

                                       21



            other persons pursuant to any agreement, arrangement or
            understanding, or upon exercise of conversion rights, exchange
            rights, warrants or options, or otherwise.

                  (f) 'Affiliate' and 'Associate' shall have the respective
            meanings ascribed to such terms in Rule 12b-2 under the Exchange Act
            as in effect on May 1, 1984.

                  (g) 'Subsidiary' shall mean any corporation more than 50
            percent of whose outstanding stock having ordinary voting power in
            the election of directors is owned by the Corporation, by a
            Subsidiary or by the Corporation and one or more Subsidiaries;
            provided, however, that for the purposes of the definition of
            Interested Stockholder set forth in subparagraph (b) of this
            paragraph 4, the term 'Subsidiary' shall mean only a corporation of
            which a majority of each class of equity security is owned by the
            Corporation, by a Subsidiary or by the Corporation and one or more
            Subsidiaries.

                  (h) 'Disinterested Director' shall mean any member of the
            Board of Directors of the Corporation who is unaffiliated with, and
            not a nominee of, any Interested Stockholder and was a member of the
            Board of Directors immediately prior to the time that the Interested
            Stockholder became an Interested Stockholder, and any successor to a
            Disinterested Director who is unaffiliated with, and not a nominee
            of, any Interested Stockholder and who is recommended to succeed a
            Disinterested Director by a majority of Disinterested Directors then
            on the Board of Directors.

                  (i) 'Fair Market Value' shall mean: (A) in the case of stock,
            the highest closing sale price during the 30-day period immediately
            preceding the date in question of a share of such stock

                                       22



            on the New York Stock Exchange Composite Tape, or, if such stock is
            not quoted on the Composite Tape, on the New York Stock Exchange,
            or, if such stock is not listed on such Exchange, on the principal
            United States securities exchange registered under the Securities
            Exchange Act of 1934 on which such stock is listed, or, if such
            stock is not listed on any such exchange, the highest closing sale
            price or bid quotation with respect to a share of such stock during
            the 30-day period preceding the date in question on the National
            Association of Securities Dealers, Inc. Automated Quotations System
            or any system then in use, or, if no such quotations are available,
            the fair market value on the date in question of a share of such
            stock as determined by a majority of the Disinterested Directors in
            good faith; and (B) in the case of stock of any class or series that
            is not traded on any securities exchange or in the over-the-counter
            market or in the case of property other than cash or stock, the fair
            market value of such stock or property, as the case may be, on the
            date in question as determined by a majority of the Disinterested
            Directors in good faith.

                  (j) 'Announcement Date' shall mean the date of first public
            announcement of the proposed Business Combination.

                  (k) 'Determination Date' shall mean the date on which an
            Interested Stockholder becomes an Interested Stockholder.

            5. Determinations by the Board of Directors. A majority of the
      Disinterested Directors of the Corporation shall have the power and duty
      to determine, on the basis of information known to them after reasonable
      inquiry, all facts necessary to determine compliance with this Article
      Eleventh, including, without limitation, (a) whether a person is an
      Interested Stockholder, (b) the number of shares of Voting Stock

                                       23



      beneficially owned by any person, (c) whether a person is an Affiliate or
      Associate of another person, (d) whether the requirements of paragraph 3
      of this Article Eleventh have been met with respect to any Business
      Combination, and (e) whether the assets that are the subject of any
      Business Combination have, or the consideration to be received for the
      issuance or transfer of securities by the Corporation or any Subsidiary in
      any Business Combination has, an aggregate Fair Market Value of
      $40,000,000 or more, and the good faith determination of a majority of the
      Disinterested Directors on such matters shall be conclusive and binding
      for all purposes of this Article Eleventh.

            6. No Effect on Fiduciary Obligations of Interested Stockholders.
      Nothing contained in this Article Eleventh shall be construed to relieve
      any Interested Stockholder from any fiduciary obligation imposed by law.

            7. Amendments. In addition to any requirement of law and any other
      provisions of these Articles of Incorporation or any resolution or
      resolutions of the Board of Directors adopted pursuant to Article Fourth
      of these Articles of Incorporation (and notwithstanding the fact that a
      lesser percentage may be specified by law, these Articles of Incorporation
      or any such resolution or resolutions), the affirmative vote of the
      holders of (i) 66 2/3 percent or more of the combined voting power of the
      then outstanding shares of Voting Stock and (ii) the affirmative vote of a
      majority of the combined voting power of the then outstanding shares of
      Voting Stock held by Disinterested Stockholders, in each case voting
      together as a single class, shall be required to amend, alter or repeal,
      or adopt any provision inconsistent with, this Article Eleventh.

      TWELFTH: Subject to the rights of the holders of the Preferred Stock or
any other class or series of stock that may have a preference over the Common

                                       24



Stock as to dividends or upon liquidation, any action required or permitted to
be taken by the stockholders of the Corporation must be effected at a duly
called annual or special meeting of stockholders of the Corporation and may not
be effected by any consent in writing by such stockholders. Except as otherwise
required by law and subject to the rights of the holders of the Preferred Stock
or any other class or series of stock having a preference over the Common Stock
as to dividends or upon liquidation, special meetings of stockholders of the
Corporation may be called only by the Board of Directors pursuant to a
resolution approved by a majority of the entire Board of Directors or as
otherwise provided in the Bylaws of the Corporation. In addition to any
requirement of law and any other provisions of these Articles of Incorporation
or any resolution or resolutions of the Board of Directors adopted pursuant to
Article Fourth of these Articles of Incorporation (and notwithstanding the fact
that a lesser percentage may be specified by law, these Articles of
Incorporation or any such resolution or resolutions), the affirmative vote of
the holders of 66 2/3 percent or more of the combined voting power of the then
outstanding shares of Voting Stock, voting together as a single class, shall be
required to amend, alter or repeal, or adopt any provision inconsistent with,
this Article Twelfth.

      IN WITNESS WHEREOF, Centex Corporation has caused its Vice President,
Chief Legal Officer and Secretary and its Associate General Counsel and
Assistant Secretary to execute this Restated Articles of Incorporation of Centex
Corporation on this 23rd day of June 1993.

                                         By: /s/ RAYMOND G. SMERGE
                                             -----------------------------------
                                             Raymond G. Smerge
                                             Vice President, Chief Legal Officer
                                               and Secretary

                                         By: /s/ JAMES H. GRAASS
                                             -----------------------------------
                                             James H. Graass
                                             Associate General Counsel and
                                               Assistant Secretary

                                       25



STATE OF TEXAS    }
                  }
COUNTY OF DALLAS  }

      Raymond G. Smerge and James H. Graass, being first duly sworn, depose and
say as follows:

      That Raymond G. Smerge is Vice President, Chief Legal Officer and
Secretary of Centex Corporation, the corporation mentioned and described in the
foregoing Restated Articles of Incorporation of Centex Corporation; that James
H. Graass is the Associate General Counsel and Assistant Secretary of said
corporation; that said officers were authorized to execute this Certificate by
resolution of the Executive Committee of the Board of Directors of said
corporation duly adopted by unanimous consent of such Executive Committee on
June 23, 1993; and that the foregoing instrument correctly sets forth the
complete text of the Articles of Incorporation of Centex Corporation as amended
to the date hereof.

                                         By: /s/ Raymond G. Smerge
                                             -----------------------------------
                                            Raymond G. Smerge
                                            Vice President, Chief Legal Officer
                                               and Secretary

                                         By: /s/ James H. Graass
                                             -----------------------------------
                                             James H. Graass
                                             Associate General Counsel and
                                               Assistant Secretary

                                       26



STATE OF TEXAS        }
                      }
COUNTY OF DALLAS      }

      On this 23rd day of June, 1993, personally appeared before me, a Notary
Public, Raymond G. Smerge, Vice President, Chief Legal Officer and Secretary of
Centex Corporation, and James H. Graass, Associate General Counsel and Assistant
Secretary of Centex Corporation, who severally acknowledged that they executed
the above instrument.

[SEAL]

                                     By: /s/ Betty Newman
                                         ---------------------------------------
                                         Notary Public in and for the State of
                                         Texas. My commission expires:
                                         5/14/96

                                       27



               THIS FORM SHOULD ACCOMPANY AMENDED AND/OR RESTATED
               ARTICLES OF INCORPORATION FOR A NEVADA CORPORATION

1. Name of corporation: Centex Corporation

2. Date of adoption of Amended and/or Restated Articles: June 23, 1993

3. If the articles were amended, please indicate what changes have been made:
   None

   (a) Was there a name change? Yes [ ] No [x]. If yes, what is the new name?

      --------------------------------------------------------------------------
   (b) Did you change your resident agent? Yes [ ] No [x]. If yes, please
       indicate new address:

      --------------------------------------------------------------------------

   (c) Did you change the purposes? Yes [ ] No [x] Did you add Banking? [ ].
       Gaming? [ ], Insurance? [ ], None of these? [x].

   (d) Did you change the capital stock? Yes [ ] No [x]. If yes, what is the
       new capital stock?

      --------------------------------------------------------------------------

   (e) Did you change the directors? Yes [ ] No [x]. If yes, indicate the
       change:------------------------------------------------------------------

      --------------------------------------------------------------------------

   (f) Did you add the directors liability provision? Yes [ ] No [x].

   (g) Did you change the period of existence? Yes [ ] No [x] If yes, what is
       the new existence?

      --------------------------------------------------------------------------

   (h) If none of the above apply, and you have amended or modified the
       articles, how did you change your [ILLEGIBLE]----------------------------

      --------------------------------------------------------------------------

                 Restatement of information currently on record

                                                By  /s/ James H. Graass
                                                    ----------------------------
                                                Name: James H. Graass
                                                Title: Assistant Secretary
                                                Date: June 24, 1993

      FILED
  IN THE OFFICE
SECRETARY OF STATE
 STATE OF NEVADA

JUN 25 1993
2323-68
CHERYL A. LAU SECRETARY OF STATE

STATE OF Texas               }
                             } ss.
COUNTY OF Dallas             }

On June 24, 1993 personally appeared before me, a Notary Public, James H.
Graass, who acknowledged that [ILLEGIBLE] executed the above document.

[SEAL]

                                  By: /s/ Betty Newman
                                      ------------------------------------------
                                      Betty Newman, Notary Public in and for the
                                      State of Texas. My commission expires:
                                      May 14, 1996

                                                                   RECEIVED
                                                                  JUN 25 1993
                                                                  [ILLEGIBLE]
                                                              Secretary of State

EX-4.1

[GREEN CERTIFICATE BORDER] EXHIBIT 4.1

COMMON STOCK COMMON STOCK

INCORPORATED UNDER THE	LAWS OF THE STATE OF NEVADA	SEE REVERSE SIDE FOR LEGEND
CENTEX CORPORATION
THIS CERTIFICATE IS TRANSFERABLE IN THE CITY OF NEW YORK, NEW YORK, OR IN RIDGEFIELD PARK, NEW JERSEY		CUSIP 152312 10 4 SEE REVERSE FOR CERTAIN DEFINITIONS

THIS IS TO CERTIFY THAT

Centex Corporation (hereinafter called the Corporation), transferable upon the books of the Corporation by
the holder hereof in person or by duly authorized attorney upon surrender of this certificate properly endorsed.
This certificate is not valid unless countersigned by the Transfer Agent and registered by the Registrar.
Witness the seal of the Corporation and the signatures of its duly authorized officers.

IS THE OWNER OF

FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK OF

AUTHORIZED SIGNATURE

[SEAL]

DATED:
/s/ RAYMOND G. SMERGE	[CENTEX LOGO]	/s/ TIMOTHY R. ELLER
SECRETARY		CHAIRMAN OF THE BOARD      CHIEF EXECUTIVE OFFICER

COUNTERSIGNED AND REGISTERED:
	MELLON INVESTOR SERVICES LLC
BY		TRANSFER AGENT AND REGISTRAR

      This certificate also evidences and entitles the holder hereof to certain Rights as set forth in the Rights Agreement between Centex Corporation (“Centex”) and Mellon Investor Services LLC (the “Rights Agent”), dated as of October 2, 1996, as amended (the “Rights Agreement”), the terms of which are hereby Incorporated herein by reference and a copy of which is on file at the principal offices of Centex. Under certain circumstances, as set forth in the Rights Agreement, such Rights will be evidenced by separate certificates and will no longer be evidenced by this certificate. Centex will mail to the holder of this certificate a copy of the Rights Agreement, as in effect on the date of mailing, without charge promptly after receipt of a written request therefor. Under certain circumstances set forth in the Rights Agreement, Rights issued to, or held by, any Person who is, was or becomes an Acquiring Person or any Affiliate or Associate thereof (as such terms are defined in the Rights Agreement), whether currently held by or on behalf of such Person or by any subsequent holder, may become null and void.

CENTEX CORPORATION

KEY TO ABBREVIATIONS

     The following abbreviations shall be construed as though the words set forth below opposite each abbreviation were written out in full where such abbreviation appears:

TEN COM	—	as tenants in common	(Name) GUST (Name) UNIF	—	(Name) as Custodian for (Name)
TEN ENT	—	as tenants by the entireties	GIFT MIN ACT (State)		under the (State) Uniform
JT TEN	—	as joint tenants with right of survivorship and not as tenants in common			Gifts to Minors Act

Additional abbreviations may also be used though not in the above list.

     THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO REQUESTS THE DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OR SERIES THEREOF OF THE CORPORATION, AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND/OR RIGHTS. SUCH REQUEST MAY BE MADE TO THE CORPORATION IN DALLAS, TEXAS OR TO THE TRANSFER AGENT.

     For value received, __________________ hereby sell, assign and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
   IDENTIFYING NUMBER OF ASSIGNEE

___________________________________________________________________________________________________________

___________________________________________________________________________________________________________

PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE

___________________________________________________________________________________________________________

___________________________________________________________________________________________________________

_____________________________________________________________________________________________________Shares
represented by the within Certificate, and do hereby irrevocably constitute and appoint

___________________________________________________________________________________________________________
Attorney to transfer the said shares on the books of the within-named Corporation with full power of substitution in the premises.

Dated ________________

	X
NOTICE:	(SIGNATURE)
THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
	X
	(SIGNATURE)
	THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15.
	SIGNATURE(S) GUARANTEED BY:

EX-10.1

                                                                    EXHIBIT 10.1

                               CENTEX CORPORATION
                   AMENDED AND RESTATED 1987 STOCK OPTION PLAN
                         (LAST AMENDED ON MAY 13, 2004)

1.    PURPOSE

      The purpose of this Plan is to assist Centex Corporation, a Nevada
corporation, in attracting and retaining as officers and key employees of the
Company and its Affiliates, and as non-employee directors of the Company,
individuals of training, experience and ability and to furnish additional
incentive to such individuals by encouraging them to become owners of Shares of
the Company's capital stock, by granting to such individuals Incentive Options,
Nonqualified Options, Restricted Stock, or any combination of the foregoing.

2.    DEFINITIONS

      Unless the context otherwise requires, the following words as used herein
shall have the following meanings:

      "ACT" -- The Securities Exchange Act of 1934, as amended.

      "AFFILIATES" -- Any corporation or other entity which is a direct or
indirect parent or subsidiary (including, without limitation, partnerships and
limited liability companies) of the Company.

      "AGREEMENT" -- The written agreement between the Company and the Optionee
evidencing the Option granted by the Company and the understanding of the
parties with respect thereto.

      "BOARD" -- The Board of Directors of the Company as the same may be
constituted from time to time.

      "CODE" -- The Internal Revenue Code of 1986, as amended from time to time.

      "COMMITTEE" -- The Committee provided for in Section 3 of this Plan, as
such Committee may be constituted from time to time.

      "COMPANY" -- Centex Corporation, a Nevada corporation.

      "FAIR MARKET VALUE" -- If a Share is traded on one or more established
market or exchanges, the closing price of the Share in the primary market or
exchange on which the Share is traded, and if the Share is not so traded or the
Share does not trade on the relevant date, the value determined in good faith by
the Board. For purposes of valuing Shares to be made subject to Incentive
Options, the Fair Market Value of stock shall be determined without regard to
any restriction other than one which, by its terms, will never lapse.

      "INCENTIVE OPTION" -- Stock Options that are intended to satisfy the
requirements of Section 422 of the Code and Section 16 of this Plan.

                                                                               1


      "NON-EMPLOYEE DIRECTOR" -- An individual who satisfies the requirements of
Rule 16b-3 promulgated under the Act.

      "NONQUALIFIED OPTIONS" -- Stock Options which do not satisfy the
requirements of Section 422 of the Code.

      "OPTION" -- An option to purchase one or more Shares of the Company
granted under and pursuant to the Plan. Such Option may be either an Incentive
Option or a Nonqualified Option.

      "OPTIONEE" -- An individual who has been granted an Option under this Plan
and who has executed a written option Agreement with the Company.

      "PLAN" -- This Centex Corporation 1987 Stock Option Plan.

      "PERMITTED TRANSFEREES" -- (i) members of the Optionee's immediate family,
(ii) one or more trusts for the benefit of such members of the Optionee's
immediate family, (iii) partnerships in which such immediate family members are
the only partners and (iv) limited liability companies in which such immediate
family members are the only members.

      "RESTRICTED STOCK" -- Shares issued pursuant to Section 19 of the Plan.

      "SENIOR MANAGEMENT" -- Members of the senior management group of the
Company and its Affiliates, such senior managers to be identified by the
Chairman and Vice Chairman of the Board of the Company.

      "SHARE" -- A share of the Company's present twenty-five cents ($0.25) par
value common stock and any share or shares of capital stock or other securities
of the Company hereafter issued or issuable upon, in respect of or in
substitution or in exchange for each present share. Such Shares may be unissued
or reacquired Shares, as the Board, in its sole and absolute discretion, shall
from time to time determine.

3.    ADMINISTRATION

      The Plan shall be administered by a committee (the "Committee") comprised
of two or more Non-employee Directors appointed by the Board from time to time.
The Committee shall (a) select the eligible employees or directors who are to
receive Options or awards of Restricted Stock under the Plan, (b) determine the
type, number, vesting requirements and other features and conditions of Options
or awards of Restricted Stock, (c) interpret the Plan, and (d) make all other
determinations necessary or advisable for the administration of the Plan. The
Committee may adopt such rules or guidelines as it deems appropriate to
implement the Plan. The Committee's determinations under the Plan shall be final
and binding on all persons.

4.    SHARES SUBJECT TO PLAN

      (a) A maximum of 7,065,139 Shares shall be subject to grants of Options
and awards of Restricted Stock under the Plan; provided that such maximum shall
be increased or decreased as provided below in Section 12.

                                                                               2


      (b) At any time and from time to time after the Plan takes effect, the
Committee, pursuant to the provisions herein set forth, may grant Options and
award Restricted Stock until the maximum number of Shares shall be exhausted or
the Plan shall be sooner terminated; provided, however, that no Option shall be
granted and no Restricted Stock shall be awarded after May 19, 2001.

      (c) Should any Option expire or be cancelled without being fully
exercised, or should any Restricted Stock previously awarded be reacquired by
the Company, the number of Shares with respect to which such Option shall not
have been exercised prior to its expiration or cancellation and the number of
Shares of such Restricted Stock so reacquired may again be optioned or awarded
pursuant to the provisions hereof.

      (d) Any Shares withheld pursuant to subsection 18(c) shall not be
available after such withholding for being optioned or awarded pursuant to the
provisions hereof.

5.    ELIGIBILITY

      Eligibility for the receipt of the grant of Options under the Plan shall
be confined to (a) a limited number of persons who are employed by the Company,
or one or more of its Affiliates and who are officers of or who, in the opinion
of the Committee, hold other key positions in or for the Company or one or more
of its Affiliates and (b) directors of the Company, including directors who are
not employees of the Company or its Affiliates; provided that only employees of
the Company or its Affiliates shall be eligible for the grant of Incentive
Options. In addition, an individual who becomes a director of the Company, but
who is not at the time he becomes a director also an employee of the Company,
shall not be eligible for a grant of Options or an award of Restricted Stock,
and shall not be eligible for the grant of an option, stock allocation, or stock
appreciation right under any other plan of the Company or its affiliates (within
the meaning of Rule 12b-2 promulgated under the Act) until the Board expressly
declares such person eligible by resolution. In no event may an Option be
granted to an individual who is not an employee of the Company or an Affiliate
or a director of the Company.

6.    GRANTING OF OPTIONS

      (a) From time to time while the Plan is in effect, the Committee may in
its absolute discretion, select from among the persons eligible to receive a
grant of Options under the Plan (including persons who have already received
such grants of Options) such one or more of them as in the opinion of the
Committee should be granted Options. The Committee shall thereupon, likewise in
its absolute discretion, determine the number of Shares to be allotted for
option to each person so selected; provided, however, that the total number of
Shares subject to Options granted to any one person, including directors of the
Company, when aggregated with the number of Shares of Restricted Stock awarded
to such person, shall not exceed 706,513 Shares.

      (b) Each person so selected shall be offered an Option to purchase the
number of Shares so allotted to him, upon such terms and conditions, consistent
with the provisions of the Plan, as the Committee may specify. Each such person
shall have a reasonable period of time, to be fixed by the Committee, within
which to accept or reject the proffered Option. Failure to accept within the
period so fixed may be treated as a rejection.

                                                                               3


      (c) Each person who accepts an Option offered to him shall enter into an
Agreement with the Company, in such form as the Committee may prescribe, setting
forth the terms and conditions of the Option, whereupon such person shall become
a participant in the Plan. In the event an individual is granted both one or
more Incentive Options and one or more Nonqualified Options, such grants shall
be evidenced by separate Agreements, one each for the Incentive Option grants
and one each for the Nonqualified Options grants. The date which the Committee
specifies to be the grant date of an Option to an individual shall constitute
the date on which the Option covered by such Agreement is granted. In no event,
however, shall an Optionee gain any rights in addition to those specified by the
Committee in its grant, regardless of the time that may pass between the grant
of the Option and the actual signing of the Agreement by the Company and the
Optionee.

7.    OPTION PRICE

      The option price for each Share covered by each Incentive Option shall not
be less than the greater of (a) the par value of each such Share or (b) the Fair
Market Value of the Share at the time such Option is granted, except as provided
hereinafter. The option price for each Share covered by each Nonqualified Option
shall not be less than the greater of (a) the par value of each such Share or
(b) 85% of the Fair Market Value of the Share at the time the Option is granted;
provided, however, that the number of Shares covered by Nonqualified Options
granted under this Plan that have an option price less than the Fair Market
Value of a Share at the time the respective Option is granted shall not exceed
10% of the total number of Shares authorized to be issued under this Plan. If
the Company or an Affiliate agrees to substitute a new Option under the Plan for
an old Option, or to assume an old Option, by reason of a corporate merger,
consolidation, acquisition of property or stock, separation, reorganization, or
liquidation (any of such events being referred to herein as a "Corporate
Transaction"), the option price of the Shares covered by each such new Option or
assumed Option may be other than the Fair Market Value of the stock at the time
the Option is granted as determined by reference to a formula, established at
the time of the Corporate Transaction, which will give effect to such
substitution or assumption; provided, however, in no event shall --

      (a) the excess of the aggregate Fair Market Value of the Share subject to
the Option immediately after the substitution or assumption over the aggregate
option price of such Shares be more than the excess of the aggregate Fair Market
Value of all Shares subject to the Option immediately prior to the substitution
or assumption over the aggregate option price of such Shares

      (b) in the case of an Incentive Option, the new Option or the assumption
of the old Option give the Optionee additional benefits which he would not have
under the old Option; or

      (c) the ratio of the option price to the Fair Market Value of the stock
subject to the Option immediately after the substitution or assumption be more
favorable to the Optionee than the ratio of the option price to the Fair Market
Value of the stock subject to the old Option immediately prior such substitution
or assumption, on a Share by Share basis.

      Notwithstanding the above, the provisions of this Section 7 with respect
to the Option price in the event of a Corporate Transaction shall, in case of an
Incentive Option, be subject to

                                                                               4


the requirements of Section 424(a) of the Code and the Treasury regulations and
revenue rulings promulgated thereunder. In the case of an Incentive Option, in
the event of a conflict between the terms of this Section 7 and the above cited
statute, regulations, and rulings, or in the event of an omission in this
Section 7 of a provision required by said laws, the latter shall control in all
respects and are hereby incorporated herein by reference as if set out at
length.

8.    OPTION PERIOD

      (a) Each Option shall run for such period of time as the Committee may
specify, but in no event for longer than ten (10) years from the date when the
Option is granted, including the period of time provided in subsections (i) and
(ii) of this subsection (a); and subject to such limits, and the further
condition that, unless designated otherwise by the Committee, no Incentive
Option shall become exercisable prior to one year from the date of its grant,

            (i) Except as provided below in this subsection (i) and in paragraph
      8.(b) below, all rights to exercise an Option shall terminate within three
      months after the date the Optionee ceases to be an employee of at least
      one of the employers in the group of employers consisting of the Company
      and its Affiliates, or after the date the Optionee ceases to be a director
      of the Company, whichever may occur later, for any reason other than
      death, except that, (x) in the case of a Nonqualified Option which is held
      by an Optionee who is, on the date of cessation referred to in this
      clause, an officer or director of the Company (within the meanings thereof
      under Section 16b) of the Act), all rights to exercise such Option shall
      terminate within seven months after the date the Optionee ceases to be an
      employee of at least one of the employers in the group of employers
      consisting of the Company and its Affiliates, or, if later, after the date
      the Optionee ceases to be a director of the Company, for any reason other
      than death; and, except that, (y) the Committee, in its discretion, may
      provide in new Option grants or amend outstanding Options to provide an
      extended period of time during which an Optionee can exercise a
      Nonqualified Option to the maximum permissible period for which such
      Optionee's Option would have been exercisable in the absence of the
      Optionee's ceasing to be an employee of the Company and its Affiliates or
      ceasing to be a director of the Company; and, except that (z) in case the
      employment of the Optionee is terminated for cause, the Option shall
      thereafter be null and void for all purposes.

            (ii) If the Optionee ceases to be employed by at least one of the
      employers in the group of employers consisting of the Company and its
      Affiliates, or ceases to be a director of the Company, whichever may occur
      later, by reason of his death, all rights to exercise such Option shall
      terminate fifteen (15) months thereafter.

            (iii) If an Option is granted with a term shorter than ten (10)
      years, the Committee may extend the term of the Option, but for not more
      than ten (10) years from the date when the Option was originally granted.

      (b) Attached hereto are resolutions adopted on May 13, 2004 by the
Committee relating to vesting and exercise.

                                                                               5


9.    OPTIONS NOT TRANSFERABLE

      No Option or interest therein shall be transferable by the person to whom
it is granted otherwise than by will or by the applicable laws of descent and
distribution. Notwithstanding the foregoing, the Committee may, in its sole
discretion, provide in the Agreement relating to the grant of an Option that the
Optionee may transfer such Option, without consideration, to members of the
Optionee's immediate family or to one or more trusts for the benefit of such
immediate family members or partnerships in which such immediate family members
are the only partners. For purposes of this Section 9, "immediate family" shall
mean the Optionee's spouse, parents, children (including adopted children) and
grandchildren.

      Further, notwithstanding the foregoing, the Committee may, in its sole
discretion, provide in each of those Agreements relating to the grant of an
Option whose term will expire in 2000, 2001, 2003, 2004, 2005, 2006 or 2007 that
a Director or Senior Management Optionee may transfer such Option to one or more
Permitted Transferees with or without consideration to the Optionee provided
that the following conditions are satisfied with respect to such transfer: (i)
such transfer is made pursuant to the program that the Company has created to
facilitate the reduction of its stock option overhang and is accomplished on or
before March 5, 2000; (ii) the Permitted Transferee exercises the Option not
more than 30 days following such transfer; (iii) all fees and expenses charged
by accounting firms, law firms and all other third party consultants in
connection with such transfer are paid by the Optionee, and such fees and
expenses are not otherwise paid or reimbursed by the Company or any of its
Affiliates; (iv) the Permitted Transferee agrees to be bound by all of the terms
of the Agreement, except that once transferred by the Optionee to such Permitted
Transferee, the Option may not be subsequently transferred except back to the
Optionee; (v) if the consideration tendered by the Permitted Transferee for the
Option is a term obligation, the principal amount under such term obligation
will be due in full no later than the fifth anniversary of the Option's
expiration date; and (vi) the Permitted Transferee agrees to inform the
Company's Stock Plan Administrator upon (a) the sale or other transfer of the
shares underlying the Option and (b) any other event or action taken by the
Permitted Transferee with respect to the Option, the shares underlying the
Option or the consideration for the Option, where such event or action will give
rise to a recognizable event for the Company.

10.   EXERCISE OF OPTIONS

      (a) During the lifetime of an Optionee only he or his guardian or legal
representative or transferee may exercise an Option granted to him. In the event
of his death, any then exercisable portion of his Option may, within fifteen
(15) months thereafter, or earlier date of termination of the Option, be
exercised in whole or in part by any person empowered to do so under the
deceased Optionee's will or under the applicable laws of descent and
distribution.

      (b) At any time, and from time to time, during the period when any Option,
or a portion thereof, is exercisable, such Option, or portion thereof, may be
exercised in whole or in part; provided, however, that the Committee may require
any Option which is partially exercised to be so exercised with respect to at
least a stated minimum number of Shares.

                                                                               6


      (c) The option price of the Shares for which an Option is exercised must
be paid prior to issuance of the Shares. Such purchase price shall be payable
(i) in cash, certified or cashiers' check, or wire transfer; (ii) at the option
of the holder of such Option, in Stock theretofore owned by such holder for at
least six (6) months by either actual delivery of shares or by attestation;
(iii) by a combination of cash and such Stock; or (iv) delivery of a properly
executed exercise notice together with irrevocable instructions to a broker
satisfactory to the Company to promptly deliver to the Company the amount of
sale or loan proceeds required to pay the exercise price and applicable
withholding taxes. For purposes of determining the amount, if any, of the
purchase price satisfied by payment in Stock, such Stock shall be valued at its
Fair Market Value on the date of exercise. Any Stock delivered in satisfaction
of all or a portion of the purchase price shall be appropriately endorsed for
transfer and assignment to the Company. No holder of an Option shall be, or have
any of the rights or privileges of, a shareholder of the Company in respect of
any Shares unless and until certificates representing such Shares shall have
been delivered by the Company to such holder or such holder's interest in such
Shares shall have been evidenced by an entry on the Company's books and records.

      (d) No Shares shall be issued until full payment therefor has been made,
and an Optionee shall have none of the rights of a stockholder until Shares are
issued to him.

      (e) Nothing herein or in any Agreement executed or Option granted
hereunder shall require the Company to issue any Shares upon exercise of an
Option if such issuance would, in the opinion of counsel for the Company,
constitute a violation of the Securities Act of 1933, as amended, or any similar
or superseding statute or statutes, or any other applicable statute or
regulation, as then in effect. Upon the exercise of an Option or portion or part
thereof, the Optionee shall give to the Company satisfactory evidence that he is
acquiring such Shares for the purpose of investment only and not with a view to
their distribution; provided, however, if or to the extent that the Shares
subject to the Option shall be included in a registration statement filed by the
Company, or one of its Affiliates, such investment representation shall be
abrogated.

11.   DELIVERY OF STOCK CERTIFICATES

      As promptly as may be practicable after an Option, or a portion or part
thereof, has been exercised as hereinabove provided, the Company shall make
delivery of one or more certificates for the appropriate number of Shares. In
the event that an Optionee exercises both an Incentive Option, or a portion
thereof, and a Nonqualified Option, or a portion thereof, separate stock
certificates shall be issued, one for the Shares subject to the Incentive Option
and one for the Shares subject to the Nonqualified Option.

12.   CHANGES IN COMPANY'S SHARES AND CERTAIN CORPORATE TRANSACTIONS

      (a) In the event of any subdivision or consolidation of outstanding Shares
of the Company, declaration of a dividend payable in Shares of the Company or
other stock split, then (i) the maximum number of Shares then available for
option or award as Restricted Stock under the Plan, (ii) the number of Shares of
the Company covered by outstanding Options and awards of Restricted Stock, and
(iii) the option price in respect of outstanding Options, and (iv) the total
Options and shares of Restricted Stock that may be awarded to any one person
shall each be proportionately adjusted by the Board as appropriate to reflect
such transaction. In the event of

                                                                               7


any other recapitalization or capital reorganization of the Corporation, any
consolidation or merger of the Corporation with another corporation or entity,
the adoption by the Corporation of any plan of exchange affecting Common Stock
or any distribution to holders of Common Stock of securities or property (other
than normal cash dividends or dividends payable in Common Stock), the Board
shall make appropriate adjustments to (i) the maximum number of Shares then
available for option or award as Restricted Stock under the Plan, (ii) the
number of Shares of the Company covered by outstanding Options and awards of
Restricted Stock, and (iii) the option price in respect of outstanding Options,
and (iv) the total Options and shares of Restricted Stock that may be awarded to
any one person to reflect such transaction; provided that such adjustments under
(ii) and (iii) shall only be such as are necessary to maintain the proportionate
interest of the holders of the Options and awards of Restricted Stock and
preserve, without increasing, the value of such Options and awards of Restricted
Stock. In the event of a corporate merger, consolidation, acquisition of
property or stock, separation, reorganization or liquidation, the Board shall be
authorized (x) to assume under the Plan previously issued compensatory awards,
or to substitute new Awards for previously issued compensatory awards, including
Awards, as part of such adjustment or (y) to cancel Awards that are Options or
SARs and give the Participants who are the holders of such Awards notice and
opportunity to exercise for 30 days prior to such cancellation. Section 7 of the
Plan shall not apply to any transaction covered in this Section 12 (a).

      Except as is otherwise expressly provided herein, the issue by the Company
of shares of its capital stock of any class, or securities convertible into
shares of capital stock of any class, either in connection with a direct sale or
upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, shall not affect, and no adjustment by reason thereof shall
be made with respect to, the number of or option price of Shares then subject to
outstanding Options granted under the Plan. Furthermore, the presence of
outstanding Options granted under the Plan shall not affect in any manner the
right or power of the Company to make, authorize or consummate (i) any or all
adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business; (ii) any merger or consolidation of
the Company; (iii) any issue by the Company of debt securities or preferred or
preference stock which would rank above the Shares subject to outstanding
Options granted under the Plan; (iv) the dissolution or liquidation of the
Company; (v) any sale, transfer or assignment of all or any part of the assets
or business of the Company; or (vi) any other corporate act or proceeding,
whether of a similar character or otherwise.

      (b) Notwithstanding anything to the contrary above, a dissolution or
liquidation of the Company, a merger (other than a merger effecting a
reincorporation of the Company in another state) or consolidation in which the
Company is not the surviving corporation (or survives only as a subsidiary of
another corporation in a transaction in which the stockholders of the parent of
the Company and their proportionate interests therein immediately after the
transaction are not substantially identical to the stockholders of the Company
and their proportionate interests therein immediately prior to the transaction),
a transaction in which another corporation becomes the owner of 50% or more of
the total combined voting power of all classes of stock of the Company, or a
change in control (as specified below), shall cause every Option then
outstanding to become exercisable in full, subject to the limitation on the
aggregate Fair Market Value of Shares that may become first exercisable during
any calendar year set forth in Section 16,

                                                                               8


immediately prior to such dissolution, liquidation, merger, consolidation,
transaction, or change in control, to the extent not theretofore exercised,
without regard to the determination as to the periods and installments of
exercisability contained in the Agreements if (and only if) such Options have
not at that time expired or been terminated. For purposes of this paragraph, a
change in control shall be deemed to have taken place if: (i) a third person,
including a "group" as defined in Section 13(d)(3) of the Act, becomes the
beneficial owner of Shares of the Company having 50% or more of the total number
of votes that may be cast for the election of directors of the Company; or (ii)
as a result of, or in connection with, a contested election for directors, the
persons who were directors of the Company immediately before such election shall
cease to constitute a majority of the Board. Notwithstanding the foregoing
provisions of this paragraph, in the event of any such dissolution, merger,
consolidation, transaction, or change in control, the Board may completely
satisfy all obligations of the Company and its Affiliates with respect to any
Option outstanding on the date of such event by delivering to the Optionee cash
in an amount equal to the difference between the aggregate exercise price for
Shares under the Option and the Fair Market Value of such Shares on the date of
such event, such payment to be made within a reasonable time after such event.

13.   EFFECTIVE DATE

      The Plan shall be effective on May 20, 1987, the date of its adoption by
the Board, but shall be submitted to the stockholders of the Company for
ratification at the next regular or special meeting thereof to be held within
twelve (12) months after the Board shall have adopted the Plan. If at such a
meeting of the stockholders of the Company a quorum is present, the Plan shall
be presented for ratification, and unless at such a meeting the Plan is ratified
by the affirmative vote of a majority of the outstanding $0.25 par value common
stock of the Company, then and in such event, the Plan and all Options granted
under the Plan and all awards of Restricted Stock under the Plan shall become
null and void and of no further force or effect.

14.   AMENDMENT, SUSPENSION OR TERMINATION

      (a) Subject to the other terms and condition of this Plan and the
limitations set forth in subsection 14(b) below, the Board may at any time
amend, suspend or terminate the Plan; provided, however, that after the
stockholders have ratified the Plan, the Board may not, without approval of the
stockholders of the Company, amend the Plan so as to:

            (i) Increase the maximum number of Shares subject thereto, as
      specified above in Sections 4(a) and 12; or

            (ii) Increase the proportionate number of Shares which may be
      purchased pursuant to Option by any one person or awarded as Restricted
      Stock to any one person, as specified above in Section 6(a) or below in
      Section 19(a).

      (b) Neither the Board nor the Committee may amend the Plan or any
Agreement to reduce the option price of an outstanding Option or modify, impair
or cancel any existing Option without the consent of the holder thereof.

                                                                               9


15.   REQUIREMENTS OF LAW

      Notwithstanding anything contained herein to the contrary, the Company
shall not be required to sell or issue Shares under any Option if the issuance
thereof would constitute a violation by the Optionee or the Company of any
provisions of any law or regulation of any governmental authority or any
national securities exchange; and as a condition of any sale or issuance of
Shares under Option the Company may require such agreements or undertakings, if
any, as the Company may deem necessary or advisable to assure compliance with
any such law or regulation.

16.   INCENTIVE STOCK OPTIONS

      The Committee, in its discretion, may designate any Option granted under
the Plan as an Incentive Option intended to qualify under Section 422 of the
Code. Any provision of the Plan to the contrary notwithstanding, (i) no
Incentive Option shall be granted to any person who, at the time such Incentive
Option is granted, owns stock possessing more than 10 percent of the total
combined voting power of all classes of stock of the Company or any Affiliate
unless the purchase price under such Incentive Option is at least 110 percent of
the Fair Market Value of the Shares subject to an Incentive Option at the date
of its grant and such Incentive Option is not exercisable after the expiration
of five years from the date of its grant, and (ii) the aggregate Fair Market
Value of the Shares subject to such Incentive Option and the aggregate Fair
Market Value of the shares of stock of any Affiliate (or a predecessor of the
Company or an Affiliate) subject to any other incentive stock option (within the
meaning of Section 422 of the Code) of the Company and its Affiliates (or a
predecessor corporation of any such corporation), that may become first
exercisable in any calendar year, shall not (with respect to any Optionee)
exceed $100,000, determined as of the date the Incentive Option is granted. For
purposes of this Section 16, "predecessor corporation" means a corporation that
was a party to a transaction described in Section 424(a) of the Code (or which
would be so described if a substitution or assumption under such section had
been effected) with the Company, or a corporation which, at the time the new
incentive stock option (within the meaning of Section 422 of the Code) is
granted, is an Affiliate of the Company or a predecessor corporation of any such
corporations.

17.   MODIFICATION OF OPTIONS

      Subject to the terms and conditions of and within the limitations of the
Plan, the Committee may modify, extend or renew outstanding Options granted
under the Plan, or accept the surrender of Options outstanding hereunder (to the
extent not theretofore exercised) and authorize the granting of new Options
hereunder in substitution therefor (to the extent not theretofore exercised).
Notwithstanding the foregoing provisions of this Section 17, no modification of
an Option granted hereunder shall, without the consent of the Optionee, alter or
impair any rights or obligations under any Option theretofore granted hereunder
to such Optionee under the Plan, except as may be necessary, with respect to
Incentive Options, to satisfy the requirements of Section 422 of the Code.

                                                                              10


18.   AGREEMENT PROVISIONS

      (a) Each Agreement shall contain such provisions (including, without
limitation, restrictions or the removal of restrictions upon the exercise of the
Option and the transfer of shares thereby acquired) as the Committee shall deem
advisable. Each Agreement shall identify the Option evidenced thereby as an
Incentive Option or Nonqualified Option, as the case may be. Incentive Options
and Nonqualified Options may not both be covered by a single Agreement. Each
such Agreement relating to Incentive Options granted hereunder shall contain
such limitations and restrictions upon the exercise of the Incentive Option as
shall be necessary for the Incentive Option to which such Agreement related to
constitute an incentive stock option, as defined in Section 422 of the Code.

      (b) The Plan shall be annexed to each Agreement and each Agreement shall
recite that it is subject to the Plan and that the Plan shall govern where there
is any inconsistency between the Plan and the Agreement.

      (c) Each Agreement shall contain an agreement and covenant by the
Optionee, in such form as the Committee may require in its discretion, that he
consents to and will take whatever affirmative actions are required, in the
opinion of the Board or Committee, to enable the Company or appropriate
Affiliate to satisfy its Federal income tax and FICA withholding obligations. An
Agreement may contain such provisions as the Committee deems appropriate to
enable the Company or its Affiliates to satisfy such withholding obligations,
including provisions permitting the Company, on exercise of an Option, to
withhold Shares otherwise issuable to the Optionee exercising the Option to
satisfy the applicable withholding obligations.

      (d) Each Agreement relating to an Incentive Option shall contain a
covenant by the Optionee immediately to notify the Company in writing of any
disqualifying disposition (within the meaning of section 421(b) of the Code) of
an Incentive Option.

19.   RESTRICTED STOCK

      (a) Shares of Restricted Stock may be awarded by the Committee to such
individuals as are eligible for grants of Options, as the Committee may
determine at any time and from time to time before the termination of the Plan.
The total number of Shares of Restricted Stock awarded to any one person,
including directors of the Company, when aggregated with the number of Shares
subject to Options in favor of such person, shall not exceed shall not exceed
706,513 Shares.

      (b) A Share of Restricted Stock is a Share that does not irrevocably vest
in the holder or that may not be sold, exchanged, pledged, transferred, assigned
or otherwise encumbered or disposed of until the terms and conditions set by the
Committee at the time of the award of the Restricted Stock have been satisfied.
A Share of Restricted Stock shall be subject to a minimum three-year vesting
period and shall contain such other restrictions, terms and conditions as the
Committee may establish, which may include, without limitation, the rendition of
services to the Company or its Affiliates for a specified time or the
achievement of specific goals. The Committee may, when it deems it appropriate,
require the recipient of an award of Restricted

                                                                              11


Stock to enter into an agreement with the Company evidencing the understanding
of the parties with respect to such award.

      If an individual receives Shares of Restricted Stock, whether or not
escrowed as provided below, the individual shall be the record owner of such
Shares and shall have all the rights of a stockholder with respect to such
Shares (unless the escrow agreement, if any, specifically provides otherwise),
including the right to vote and the right to receive dividends or other
distributions made or paid with respect to such Shares. Any certificate or
certificates representing Shares of Restricted Stock shall bear a legend similar
to the following:

            THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT
      TO THE TERMS OF THE CENTEX CORPORATION 1987 STOCK OPTION PLAN AND MAY NOT
      BE SOLD, PLEDGED, TRANSFERRED, ASSIGNED OR OTHERWISE ENCUMBERED IN ANY
      MANNER EXCEPT AS SET FORTH IN THE TERMS OF SUCH AWARD DATED____________ ,
      19 .

      In order to enforce the restrictions, terms and conditions that may be
applicable to an individual's Shares of Restricted Stock, the Committee may
require the individual, upon the receipt of a certificate or certificates
representing such Shares, or at any time thereafter, to deposit such certificate
or certificates, together with stock powers and other instruments of transfer,
appropriately endorsed in blank, with the Company or an escrow agent designated
by the Company under an escrow agreement in such form as shall be determined by
the Committee.

      After the satisfaction of the terms and conditions set by the Committee at
the time of an award of Restricted Stock to an individual, which award is not
subject to a non-lapse feature, a new certificate, without the legend set forth
above, for the number of Shares that are no longer subject to such restrictions,
terms and conditions shall be delivered to the individual.

      If an individual to whom Restricted Stock has been awarded dies after
satisfaction of the terms and conditions for the payment of all or a portion of
the award but prior to the actual payment of all or such portion thereof, such
payment shall be made to the individual's beneficiary or beneficiaries at the
time and in the same manner that such payment would have been made to the
individual.

      The Committee may cancel all or any portion of any outstanding
restrictions prior to the expiration of such restrictions with respect to any or
all of the Shares of Restricted Stock awarded to an individual hereunder only
upon the individual's death, disability or retirement on or after the earlier of
(i) age 65 or (ii) such time as the sum of the individual's age and years of
service equals 70, provided such individual is at least 55. With respect to the
occurrence of any event specified in the last paragraph of Section 12, the
restrictions, if any, applicable to any outstanding Shares awarded as Restricted
Stock shall lapse immediately prior to the occurrence of the event.

      (c) Subject to the provisions of subsection 19(b) above, if an individual
to whom Restricted Stock has been awarded ceases to be employed by at least one
of the employers in the group of employers consisting of the Company and its
Affiliates, or ceases to be a director of the Company, whichever may occur
later, for any reason prior to the satisfaction of any terms and conditions of
an award, any Restricted Stock remaining subject to restrictions shall thereupon
be

                                                                              12


forfeited by the individual and transferred to, and reacquired by, the Company
or an Affiliate at no cost to the Company or the Affiliate. In such event, the
individual, or in the event of his death, his personal representative, shall
forthwith deliver to the Secretary of the Company the certificates for the
Shares of Restricted Stock remaining subject to such restrictions, accompanied
by such instruments of transfer, if any, as may reasonably be required by the
Secretary of the Company.

      (d) In case of any consolidation or merger of another corporation into the
Company in which the Company is the surviving corporation and in which there is
a reclassification or change (including a change to the right to receive cash or
other property) of the Shares (other than a change in par value, or from par
value to no par value, or as a result of a subdivision or combination, but
including any change in such shares into two or more classes or series of
shares), the Committee may provide that payment of Restricted Stock shall take
the form of the kind and amount of shares of stock and other securities
(including those of any new direct or indirect parent of the Company), property,
cash or any combination thereof receivable upon such reclassification, change,
consolidation or merger.

20.   GENERAL

      (a) The proceeds received by the Company from the sale of Shares pursuant
to Options shall be used for general corporate purposes.

      (b) Nothing contained in the Plan, or in any Agreement, shall confer upon
any Optionee or recipient of Restricted Stock the right to continue in the
employ of the Company or any Affiliate, or interfere in any way with the rights
of the Company or any Affiliate to terminate his employment at any time.

      (c) Neither the members of the Board nor any member of the Committee shall
be liable for any act, omission, or determination taken or made in good faith
with respect to the Plan or any Option or Restricted Stock granted under it; and
the members of the Board and the Committee shall be entitled to indemnification
and reimbursement by the Company in respect of any claim, loss, damage or
expense (including counsel fees) arising therefrom to the full extent permitted
by law and under any directors and officers liability or similar insurance
coverage that may be in effect from time to time.

      (d) As partial consideration for the granting of each Option or award of
Restricted Stock hereunder, the Optionee or recipient shall agree with the
Company that he will keep confidential all information and knowledge which he
has relating to the manner and amount of his participation in the Plan;
provided, however, that such information may be disclosed as required by law or
given in confidence to the individual's spouse, tax or financial advisors, or to
a financial institution to the extent that such information is necessary to
secure a loan. In the event any breach of this promise comes to the attention of
the Committee, it shall take into consideration such breach, in determining
whether to grant any future Option or award any future Restricted Stock to such
individual, as a factor militating against the advisability of granting any such
future Option or awarding any such future Restricted Stock to such individual.

                                                                              13


      (e) Participation in the Plan shall not preclude an individual from
eligibility in any other stock option plan of the Company or any Affiliate or
any old age benefit, insurance, pension, profit sharing, retirement, bonus, or
other extra compensation plans which the Company or any Affiliate has adopted,
or may, at any time, adopt for the benefit of its employees or directors.

      (f) Any payment of cash or any issuance or transfer of Shares to the
Optionee, or to his legal representative, heir, legatee, or distributee, in
accordance with the provisions hereof, shall, to the extent thereof, be in full
satisfaction of all claims of such persons hereunder. The Board or Committee may
require any Optionee, legal representative, heir, legatee, or distributee, as a
condition precedent to such payment, to execute a release and receipt therefor
in such form as it shall determine.

      (g) Neither the Committee nor the Board nor the Company guarantees the
Shares from loss or depreciation.

      (h) All expenses incident to the administration, termination, or
protection of the Plan, including, but not limited to, legal and accounting
fees, shall be paid by the Company or its Affiliates.

      (i) Records of the Company and its Affiliates regarding an individual's
period of employment, termination of employment and the reason therefor, leaves
of absence, re-employment, tenure as a director and other matters shall be
conclusive for all purposes hereunder, unless determined by the Board or
Committee to be incorrect.

      (j) The Company and its Affiliates shall, upon request or as may be
specifically required hereunder, furnish or cause to be furnished, all of the
information or documentation which is necessary or required by the Board or
Committee to perform its duties and functions under the Plan.

      (k) The Company assumes no obligation or responsibility to an Optionee or
recipient of Restricted Stock or his personal representatives, heirs, legatees,
or distributees for any act of, or failure to act on the part of, the Board or
Committee.

      (l) Any action required of the Company shall be by resolution of its Board
or by a person authorized to act by resolution of the Board. Any action required
of the Committee shall be by resolution of the Committee or by a person
authorized to act by resolution of the Committee.

      (m) If any provision of this Plan or any Agreement is held to be illegal
or invalid for any reason, the illegality or invalidity shall not affect the
remaining provisions of the Plan or the Agreement, as the case may be, but such
provision shall be fully severable and the Plan or the Agreement, as the case
may be, shall be construed and enforced as if the illegal or invalid provision
had never been included herein or therein.

      (n) Whenever any notice is required or permitted hereunder, such notice
must be in writing and personally delivered or sent by mail. Any notice required
or permitted to be delivered hereunder shall be deemed to be delivered on the
date on which it is personally

                                                                              14


delivered, or, whether actually received or not, on the third business day after
it is deposited in the United States mail, certified or registered, postage
prepaid, addressed to the person who is to receive it at the address which such
person has theretofore specified by written notice delivered in accordance
herewith. The Company, an Optionee or a recipient of Restricted Stock may
change, at any time and from time to time, by written notice to the other, the
address which it or he had theretofore specified for receiving notices. Until
changed in accordance herewith, the Company and each Optionee and recipient of
Restricted Stock shall specify as its and his address for receiving notices the
address set forth in the Agreement pertaining to the shares of Stock to which
such notice relates.

      (o) Any person entitled to notice hereunder may waive such notice.

      (p) The Plan shall be binding upon the Optionee or recipient of Restricted
Stock, his heirs, legatees, and legal representatives, upon the Company, its
successors, and assigns, and upon the Board and Committee, and their successors.

      (q) The titles and headings of Sections and paragraphs are included for
convenience of reference only and are not to be considered in construction of
the provisions hereof.

      (r) All questions arising with respect to the provisions of the Plan shall
be determined by application of the laws of the State of Nevada except to the
extent Nevada law is preempted by federal law. The obligation of the Company to
sell and deliver Shares hereunder is subject to applicable laws and to the
approval of any governmental authority required in connection with the
authorization, issuance, sale, or delivery of such Shares.

      (s) Words used in the masculine shall apply to the feminine where
applicable, and wherever the context of this Plan dictates, the plural shall be
read as the singular and the singular as the plural.

21.   WITHHOLDING TAXES

      Federal, state, or local law may require the withholding of taxes
applicable to gains resulting from the exercise of Nonqualified Options granted
hereunder. Unless otherwise prohibited by the Committee, each participant may
satisfy any such withholding tax obligation by electing (i) to tender a cash
payment to the Company, (ii) to authorize the Company to withhold from the
shares of stock of the Company otherwise issuable to the participant as a result
of the exercise of the Nonqualified Option a number of shares having a fair
market value, as of the date the withholding tax obligation arises, equal to the
withholding obligations, or, at the election of the participant, up to the
maximum of taxes due (the "Share Withholding Alternative"), (iii) to deliver to
the Company previously acquired shares of common stock of the Company having a
fair market value, as of the date the withholding tax obligation arises, equal
to the amount to be withheld, or at the election of the participant, up to the
maximum of taxes due, or (iv) any combination of the foregoing, provided the
combination permits the payment of all withholding taxes attributable to the
exercise of the Nonqualified Option. A Participant's election to pay the
withholding tax obligation must be made in writing delivered to the Company
before the time of exercise, or simultaneously with the exercise, of such
Participant's Nonqualified Option. A valid and binding written election of the
Share Withholding Alternative shall be

                                                                              15


irrevocable. A participant's failure to elect a withholding alternative prior to
the time such election is required to be made shall be deemed to be an election
to pay the withholding tax by tendering a cash payment to the Company. For
purposes of this Section 21, the fair market value of the shares used to pay
withholding taxes is the mean between the highest and lowest price quoted on the
New York Stock Exchange for one share of common stock of the Company on the Tax
Date. Also, as used in this Section 21, "Tax Date" shall mean the date on which
a withholding tax obligation arises in connection with an exercise of a
nonqualified stock option, which date shall be presumed to be the date of
exercise, unless shares subject to a substantial risk of forfeiture (as defined
in section 83(c)(1) or (c)(3) of the Code) are issuable on exercise of the
option and the participant does not make a timely election under section 83(b)
of the Code with respect thereto, in which case the Tax Date for such shares is
the date on which the substantial risk of forfeiture lapses. Fractional shares
remaining after payment of the withholding taxes shall be paid to the
participant in cash.

                                                                              16


RESOLUTION RELATED TO STOCK OPTIONS ADOPTED BY THE COMPENSATION AND MANAGEMENT
DEVELOPMENT COMMITTEE OF THE BOARD OF DIRECTORS OF CENTEX CORPORATION ON MAY 13,
2004.

      RESOLVED, that all non-qualified options held by Full Time Employees to
acquire common stock of Centex Corporation awarded under any of the stock plans
listed below, whether awarded before or after May 13, 2004, shall be subject to
the following from and after May 13, 2004:

1.    If an optionee shall voluntarily terminate employment and at such time he
      or she is age 55 or older, has at least 10 Years of Service and the sum of
      age and Years of Service equals at least 70, then all non-qualified
      options held by him or her shall immediately vest upon the termination of
      employment ("Vested Retirement").

2.    All rights to exercise such vested options will terminate 12 months
      following the date of such Vested Retirement. However, to the extent that
      an option agreement provides a longer time to exercise following voluntary
      termination of employment, then such agreement will control.

3.    As used herein: "Full Time Employee" means a person actively and regularly
      engaged in work at least 40 hours a week; and "Years of Service" means an
      optionee's years of employment with Centex Corporation or any of its
      Affiliates. An optionee shall be credited with a Year of Service on each
      anniversary of the date on which he or she was first employed by Centex
      Corporation or its Affiliate, provided that the optionee continues to be
      employed by such employer on such anniversary date.

4.    The stock plans covered are:

      -     Centex Corporation Amended and Restated 1987 Stock Option Plan

      -     Seventh Amended and Restated 1998 Centex Corporation Employee
            Non-Qualified Stock Option Plan

      -     Amended and Restated Centex Corporation 2001 Stock Plan

      -     Amended and Restated Centex Corporation 2003 Equity Incentive Plan

      FURTHER RESOLVED, that the appropriate officers of the Corporation are
hereby directed to take all steps that they deem necessary or appropriate to
communicate the substance of the foregoing resolution to option holders who are
affected and, where they deem necessary, to document the substance of this
resolution by way of amendments to the stock plans and to existing option
agreements.

                                                                              17

EX-10.2

                                                                    EXHIBIT 10.2

                           EIGHTH AMENDED AND RESTATED
                             1998 CENTEX CORPORATION
                    EMPLOYEE NON-QUALIFIED STOCK OPTION PLAN
                         (LAST AMENDED ON MAY 13, 2004)

1.    PURPOSE OF THE PLAN.

      This 1998 Centex Corporation Employee Non-Qualified Stock Option Plan (the
"PLAN") is intended as an employment incentive to retain in the employ of Centex
Corporation (the "COMPANY"), and any Affiliate (including any entity that
becomes an Affiliate), persons of training, experience and ability, to attract
new employees whose services are considered valuable, to encourage the sense of
proprietorship of such persons, and to stimulate the active interest of such
persons in the development and financial success of the Company. For purposes of
the Plan, "AFFILIATE" shall mean any direct or indirect subsidiary or parent of
the Company and any partnership, joint venture, limited liability company or
other business venture or entity in which the Company owns at least 50% of the
ownership interest in such entity, as determined by the Committee in its sole
and absolute discretion (such determination by the Committee to be conclusively
established by the grant of options by the Committee to an officer or employee
of such an entity). It is further intended each option granted pursuant to the
Plan (herein, an "OPTION") shall constitute non-qualified stock options within
the meaning of Section 83 of the Code.

2.    ADMINISTRATION OF THE PLAN.

      The Board of Directors shall appoint and maintain a Compensation and Stock
Option Committee (hereinafter called the "COMMITTEE") of the Board of Directors
to administer the Plan. Subject to the terms and conditions of the Plan, the
Committee shall have full power and authority to designate persons to whom
Options will be granted, to determine the terms and provisions of respective
option agreements (which need not be identical), and to interpret the provisions
and supervise the administration of the Plan. The Committee shall have the
authority, exercisable in its sole discretion, to grant Options containing such
terms and conditions, consistent with the provisions of the Plan, as the
Committee shall determine.

3.    DESIGNATION OF PARTICIPANTS.

      The persons eligible for participation in the Plan as recipients of
Options shall include all employees of the Company or of any Affiliate,
including employees of any entity that becomes an Affiliate after the date that
the Plan is adopted, other than any of the following persons (herein, an
"INELIGIBLE PERSON"):

      (a) any person who is an executive officer, as defined by Rule 3b-7
promulgated under the Securities Exchange Act of 1934, as amended, or director
of the Company;

      (b) any "officer" of the Company as defined by Rule 16a-1(f) promulgated
under the Securities Exchange Act of 1934, as amended; or

                                                                               1


      (c) any "covered employee" of the Company as defined by Section 162(m)(3)
of the Internal Revenue Code.

      Each Option granted hereunder shall be evidenced by an agreement between
the Company and the Optionee, which shall contain such terms and conditions as
the Committee shall determine in its sole and absolute discretion. Any person
who has been granted an Option hereunder (herein, an "OPTIONEE") may be granted
an additional Option or Options, if the Committee shall so determine.
Participation in the Plan shall not preclude an Optionee from participating in
any other stock option, benefit, bonus, or other compensation plan which the
Company or any Affiliate has adopted, or may, from time to time, adopt for the
benefit of its employees.

4.    STOCK RESERVED FOR THE PLAN.

      Subject to any adjustment provided in Paragraph 9 hereof, a total of
5,500,000 shares of common stock, $0.25 par value, of the Company (the "STOCK")
shall be subject to the Plan. As of May 13, 2004 the number of shares available
for Option issuance is 514,088. The shares of Stock subject to the Plan shall
consist of unissued shares or previously issued shares reacquired and held by
the Company, or any Affiliate, and such amount of shares shall be and hereby is
reserved for delivery under the Plan. Any of such shares which may remain unsold
and which are not subject to outstanding Options at the termination of the Plan
shall cease to be reserved for the purpose of the Plan, but until termination of
the Plan the Company shall at all times reserve a sufficient number of shares of
Stock to meet the requirements of the Plan. Should any Option expire or be
canceled prior to its exercise or relinquishment in full, the shares theretofore
subject to such Option may again be subjected to an Option under the Plan. If
the purchase price or tax withholding is permitted to be satisfied by the tender
or withholding of shares of Stock to the Company (by either actual delivery or
attestation), the number of shares of Stock tendered or withheld shall be
eligible for reissuance under the Plan.

5.    PURCHASE PRICE.

      (a) The purchase price of each share placed under option pursuant to the
Plan (a "Share") shall be determined by the Committee, but in no event shall be
less than 100% of the Fair Market Value of such Share on the date the Option is
granted. If an Option is granted as part of an Optionee's compensation package
at the commencement of an Optionee's employment by the Company or an Affiliate,
the Option shall be deemed to have been granted on the date of commencement of
such Optionee's employment by the Company or any Affiliate (the "Commencement
Date") and the purchase price of a Share shall be equal to the Fair Market Value
of such Share on the Commencement Date, so long as such Option is not granted
more than ninety (90) days following the Commencement Date.

      (b) "FAIR MARKET VALUE" of a share of Stock means, as of a particular
date, the closing price per share of Stock reported on the consolidated
transaction reporting system for the New York Stock Exchange, or, if there shall
have been no such sale so reported on that date, on the last preceding date on
which such a sale was so reported.

                                                                               2


6.    OPTION PERIOD.

      The Options granted under the Plan shall be for any term set by the
Committee, but not more than ten (10) years from the date of granting of each
Option. All rights to exercise an Option shall terminate within three (3) months
after the date the Optionee ceases to be an employee of the Company or any
Affiliate, except that

      (a) the Committee, in its discretion, may provide in new option grants or
amend outstanding Options to provide an extended period of time during which an
Optionee can exercise an Option up to the maximum permissible period which such
Optionee's Option would have been exercisable in the absence of the Optionee
ceasing to be an employee of the Company or an Affiliate;

      (b) if an Optionee ceases to be employed by the Company or an Affiliate by
reason of such Optionee's death, all rights to exercise such Option shall
terminate fifteen (15) months after such death; and

      (c) if the Optionee is terminated for cause, as determined by the
Committee in its sole and absolute discretion, any Option granted to such
Optionee hereunder shall terminate on the date of such termination.

      (d) Attached hereto are resolutions adopted by the Compensation and
Management Development Committee of the Board of Directors of the Company, now
the "Committee", relating to vesting and exercise.

7.    Exercise OF Options.

      (a) Any Option granted hereunder shall be exercisable from time to time
under the terms specified in the Plan, by the Committee, or in the agreement
relating to the grant of such Option.

      (b) Each exercise of an Option or a portion of an Option shall be
evidenced by a notice in writing by or on behalf of the Optionee to the Company,
stating the number of shares with respect to which the Option is being
exercised.

      (c) Options may be exercised solely by the Optionee or a Permitted
Transferee (hereafter defined).

      (d) The purchase price of the Shares for which an Option is exercised must
be paid prior to issuance of the Shares. Such purchase price shall be payable
(i) in cash, certified or cashiers' check, or wire transfer, (ii) at the option
of the holder of such Option, in Stock theretofore owned by such holder for at
least six (6) months by either actual delivery of shares or by attestation,
(iii) by a combination of cash and such Stock; or (iv) by delivery of a properly
executed exercise notice together with irrevocable instructions to a broker
satisfactory to the Company to promptly deliver to the Company the amount of
sale or loan proceeds required to pay the exercise price and applicable
withholding taxes. For purposes of determining the amount, if any, of the
purchase price satisfied by payment in Stock, such Stock shall be valued at its
Fair Market Value on the date of exercise. Any Stock delivered in satisfaction
of all or a portion of the purchase price shall be appropriately endorsed for
transfer and assignment to the Company. No holder of an Option shall be, or have
any

                                                                               3


of the rights or privileges of, a shareholder of the Company in respect of any
Shares unless and until certificates representing such Shares shall have been
delivered by the Company to such holder or such holder's interest in such shares
shall have been evidenced by an entry on the Company's books and records.

      (e) If any law or regulation requires the Company to take any action with
respect to the Shares specified in such notice, the time for delivery thereof,
which would otherwise be as promptly as possible, shall be postponed for the
period of time necessary to take such action.

8.    ASSIGNABILITY.

      Unless otherwise permitted by the Committee, no Option or interest therein
shall be transferable by the Optionee otherwise than by will or by the
applicable laws of descent and distribution. Any person to whom an Option is
transferred in accordance with this Section 8 is referred to herein as a
"PERMITTED TRANSFEREE".

9.    ADJUSTMENTS.

      (a) In the event of any subdivision or consolidation of outstanding Stock
of the Company, declaration of a dividend payable in shares of Stock of the
Company or other stock split, then (i) the number of Shares reserved under this
Plan, (ii) the number of Shares covered by outstanding Options, and (iii) the
purchase price per share in respect of such Options shall each be
proportionately adjusted by the Board as appropriate to reflect such
transaction. In the event of any other recapitalization or capital
reorganization of the Company, any consolidation or merger of the Company with
another corporation or entity, the adoption by the Company of any plan of
exchange affecting shares of Stock of the Company or any distribution to holders
of shares of Stock of the Company of securities or property (other than normal
cash dividends or dividends payable in shares of Stock of the Company), the
Board shall make appropriate adjustments to (i) the number of Shares reserved
under this Plan, (ii) the number of Shares covered by outstanding Options, and
(iii) the purchase price per share in respect of such Options to reflect such
transaction; provided that such adjustments under (ii) and (iii) shall only be
such as are necessary to maintain the proportionate interest of the holders of
the Options and preserve, without increasing, the value of such Options. In the
event of a corporate merger, consolidation, acquisition of property or stock,
separation, reorganization or liquidation, the Board shall be authorized (x) to
assume under the Plan previously issued compensatory options, or to substitute
new Options for previously issued compensatory Options as part of such
adjustment or (y) to cancel Options and give the Participants who are the
holders of such Options notice and opportunity to exercise for 30 days prior to
such cancellation.

      (b) Except as is otherwise expressly provided herein, the issue by the
Company of shares of its capital stock of any class, or securities convertible
into shares of capital stock of any class, either in connection with a direct
sale or upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, shall not affect, and no adjustment by reason thereof shall
be made with respect to, the number of or purchase price of Shares. Furthermore,
the presence of outstanding Options granted under the Plan shall not affect in
any manner the right or power of the Company to make, authorize or consummate
(i) any or all adjustments, recapitalizations, reorganizations or other changes
in the

                                                                               4


Company's capital structure or its business; (ii) any merger or consolidation of
the Company; (iii) any issue by the Company of debt securities or preferred or
preference stock (whether or not such issue is prior to, on a party with or
junior to the Stock); (iv) the dissolution or liquidation of the Company; (v)
any sale, transfer or assignment of all or any part of the assets or business of
the Company; or (vi) any other corporate act or proceeding, whether of a similar
character or otherwise.

      (c) Notwithstanding anything to the contrary above, a dissolution or
liquidation of the Company, a merger (other than a merger effecting a
reincorporation of the Company in another state) or consolidation in which the
Company is not the surviving corporation (or survives only as a subsidiary of
another corporation in a transaction in which the stockholders of the parent of
the Company and their proportionate interests therein immediately after the
transaction are not substantially identical to the stockholders of the Company
and their proportionate interests therein immediately prior to the transaction),
a transaction in which another corporation becomes the owner of 50% or more of
the total combined voting power of all classes of stock of the Company, or a
change in control (as specified below), shall cause every Option then
outstanding to become exercisable in full immediately prior to such dissolution,
liquidation, merger, consolidation, transaction, or change in control, to the
extent not theretofore exercised, without regard to the determination as to the
periods and installments of exercisability contained in the Agreements if (and
only if) such Options have not at that time expired or been terminated. For
purposes of this paragraph, a change in control shall be deemed to have taken
place if: a third person, including a "group" as defined in Section 13(d)(3) of
the Act, becomes the beneficial owner of shares of the Company having fifty
percent (50%) or more of the total number of votes that may be cast for the
election of directors of the Company; or as a result of, or in connection with,
a contested election for directors, the persons who were directors of the
Company immediately before such election shall cease to constitute a majority of
the Board. Notwithstanding the foregoing provisions of this paragraph:

            (i) an event, transaction, or corporate action shall not have the
      effect of accelerating the exercisability of Options if: (A) persons who
      were the directors of the Company and persons who were the executive
      officers of the Company as of six months prior to such event immediately
      after such event constitute a majority of the directors and constitute a
      majority of executive officers, respectively, for, and own in the
      aggregate at least ten percent of the voting securities or equity
      interests of, the Company or the surviving or resulting corporation or the
      parent of such surviving or resulting corporation; and (B) if the Company
      is not the surviving or resulting corporation, such surviving or resulting
      corporation or parent of such surviving or resulting corporation
      substitutes substantially identical options for any outstanding Options;
      and

            (ii) in the event of any dissolution, merger, consolidation,
      transaction, or change in control, the Board may completely satisfy and
      extinguish all obligations of the Company and its Affiliates with respect
      to any Option outstanding on the date of such event by delivering to the
      Optionee cash in an amount equal to the difference between the aggregate
      purchase price for Shares under the Option and the Fair Market Value of
      such Shares on the date of such event, such payment to be made within a
      reasonable time after such event.

                                                                               5


10.   TAX WITHHOLDING.

      The Company shall have the right to deduct applicable taxes from any
Option and withhold, at the time of delivery of Shares under the Plan, an
appropriate number of Shares for payment of taxes required by law or to take
such other action as may be necessary in the opinion of the Company to satisfy
all obligations for withholding of such taxes. The Committee may also permit
withholding to be satisfied by the transfer to the Company of Stock theretofore
owned by the holder of the Option with respect to which withholding is required.
If Shares or Stock are used to satisfy tax withholding, such Shares or Stock
shall be valued based on the Fair Market Value when the tax withholding is
required to be made.

11.   EFFECTIVE DATE OF PLAN.

      The effective date of the Plan shall be February 19, 1998. No Option shall
be granted pursuant to the Plan after February 19, 2005.

12.   AMENDMENT, MODIFICATION, SUSPENSION OR TERMINATION.

      The Board may amend, modify, suspend or terminate the Plan at any time for
the purpose of meeting or addressing any changes in legal requirements or for
any other purpose permitted by law, except that no amendment, modification,
suspension or termination shall be made (i) that would impair the rights of any
Optionee under any Option previously granted to such Optionee without such
Optionee's written consent, (ii) prior to approval by the Company's shareholders
if such approval is then required thereby, or (iii) that would reduce the
purchase price of any outstanding Option, other than as provided by Section
9(a)(ii).

13.   REQUIREMENTS OF LAW.

      (a) The Plan, and the granting and exercise of Options hereunder, and the
obligation of the Company to sell and deliver shares under such Options, shall
be subject to all applicable laws, rules and regulations, and to such approvals
by any governmental agencies or national securities exchanges as may be
required.

      (b) Nothing herein or in any Agreement executed or Option granted
hereunder shall require the Company to deliver any Shares upon exercise of an
Option if such delivery would, in the opinion of counsel for the Company,
constitute a violation of the Securities Act of 1933, as amended, or any similar
or superseding statute or statutes, or any other applicable statute or
regulation, as then in effect. Upon the exercise of an Option or portion or part
thereof, the Optionee may be required to give to the Company satisfactory
evidence that he is acquiring such Shares for the purpose of investment only and
not with a view to their distribution; provided, however, if or to the extent
that the Shares subject to the Option shall be included in a registration
statement filed by the Company, or one of its Affiliates, such investment
representation shall be abrogated.

                                                                               6


14.   MISCELLANEOUS.

      (a) Nothing contained in the Plan shall confer upon any Optionee the right
to continue in the employ of the Company or any Affiliate, or interfere in any
way with the rights of the Company or any Affiliate to terminate his employment
at any time.

      (b) Any payment of cash or any delivery of Shares to the Optionee, or to
an Optionee's Permitted Transferee, in accordance with the provisions hereof,
shall, to the extent thereof, be in full satisfaction of all claims of such
person with respect to the Option being exercised (or portion thereof). The
Committee may require any Optionee, or Permitted Transferee, as a condition
precedent to such payment or delivery, to execute a release and receipt therefor
in such form as it shall determine.

      (c) Neither the Committee nor the Company guarantees the Shares from loss
or depreciation.

      (d) Records of the Company and its Affiliates regarding an individual's
period of employment, termination of employment and the reason therefor, leaves
of absence, re-employment and other matters shall be conclusive for all purposes
hereunder, unless determined by the Committee to be incorrect in its sole and
absolute discretion.

      (e) The Company assumes no obligation or responsibility to an Optionee or
any Permitted Transferee for any act of, or failure to act on the part of, the
Committee.

      (f) If any provision of the Plan is held to be illegal or invalid for any
reason, the illegality or invalidity shall not affect the remaining provisions
of the Plan, but such provision shall be fully severable and the Plan shall be
construed and enforced as if the illegal or invalid provision had never been
included herein.

      (g) The titles and headings of Sections are included for convenience of
reference only and are not to be considered in construction of the provisions
hereof.

      (h) All questions arising with respect to the provisions of the Plan shall
be determined by application of the laws of the State of Nevada except to the
extent Nevada law is preempted by federal law. The obligation of the Company to
sell and deliver Shares hereunder is subject to applicable laws and to the
approval of any governmental authority required in connection with the
authorization, issuance, sale, or delivery of such Shares.

      Words used in the masculine shall apply to the feminine where applicable,
and wherever the context of the Plan dictates, the plural shall be read as the
singular and the singular as the plural.

                                                                               7


RESOLUTION RELATED TO STOCK OPTIONS ADOPTED BY THE COMPENSATION AND MANAGEMENT
DEVELOPMENT COMMITTEE OF THE BOARD OF DIRECTORS OF CENTEX CORPORATION ON MAY 13,
2004.

      RESOLVED, that all non-qualified options held by Full Time Employees to
acquire common stock of Centex Corporation awarded under any of the stock plans
listed below, whether awarded before or after May 13, 2004, shall be subject to
the following from and after May 13, 2004:

1.    If an optionee shall voluntarily terminate employment and at such time he
      or she is age 55 or older, has at least 10 Years of Service and the sum of
      age and Years of Service equals at least 70, then all non-qualified
      options held by him or her shall immediately vest upon the termination of
      employment ("Vested Retirement").

2.    All rights to exercise such vested options will terminate 12 months
      following the date of such Vested Retirement. However, to the extent that
      an option agreement provides a longer time to exercise following voluntary
      termination of employment, then such agreement will control.

3.    As used herein: "Full Time Employee" means a person actively and regularly
      engaged in work at least 40 hours a week; and "Years of Service" means an
      optionee's years of employment with Centex Corporation or any of its
      Affiliates. An optionee shall be credited with a Year of Service on each
      anniversary of the date on which he or she was first employed by Centex
      Corporation or its Affiliate, provided that the optionee continues to be
      employed by such employer on such anniversary date.

4.    The stock plans covered are:

      -     Centex Corporation Amended and Restated 1987 Stock Option Plan

      -     Seventh Amended and Restated 1998 Centex Corporation Employee
            Non-Qualified Stock Option Plan

      -     Amended and Restated Centex Corporation 2001 Stock Plan

      -     Amended and Restated Centex Corporation 2003 Equity Incentive Plan

      FURTHER RESOLVED, that the appropriate officers of the Corporation are
hereby directed to take all steps that they deem necessary or appropriate to
communicate the substance of the foregoing resolution to option holders who are
affected and, where they deem necessary, to document the substance of this
resolution by way of amendments to the stock plans and to existing option
agreements.

                                                                               8

EX-10.3

                                                                    EXHIBIT 10.3

                              AMENDED AND RESTATED
                       CENTEX CORPORATION 2001 STOCK PLAN
                         (LAST AMENDED ON MAY 13, 2004)

1.    PURPOSE

      The purpose of the Plan is to assist the Company in attracting and
retaining as officers and key employees of the Company and its Affiliates, and
as Directors of the Company, individuals of training, experience and ability,
and to furnish additional incentive to such individuals by encouraging them to
become owners of Shares, by granting to such individuals Options or Restricted
Stock.

2.    DEFINITIONS

      Unless the context otherwise requires, the following words as used herein
shall have the following meanings:

      "AFFILIATE" -- Any corporation or other entity that is a direct or
indirect parent or subsidiary (including, without limitation, partnerships and
limited liability companies) of the Company.

      "AGREEMENT" -- The written agreement, whether delivered on paper or by
electronic medium, between the Company and the Optionee or holder of Restricted
Stock evidencing the Option or Restricted Stock granted by the Company, which
shall be in such form and contain such provisions as the Committee may
prescribe.

      "BOARD" -- The Board of Directors of the Company, as the same may be
constituted from time to time.

      "CODE" -- The Internal Revenue Code of 1986, as amended from time to time.

      "COMMITTEE" -- The Compensation and Stock Option Committee of the Board,
composed solely of two or more Directors who are appointed by the Board from
time to time and who satisfy the requirements of Rule 16b-3(b)(3) promulgated
under the Securities Exchange Act of 1934, or any successor provision.

      "COMPANY" -- Centex Corporation, a Nevada corporation.

      "DIRECTOR" -- An individual who is a member of the Board.

      "DISABILITY" -- Total and permanent disability as set forth in Section
22(e)(3) of the Code, or any successor provision.

      "EMPLOYER" -- The Company and any Affiliate.

                                                                               1


      "FAIR MARKET VALUE" -- The closing price per Share reported on the
consolidated transaction reporting system for the New York Stock Exchange as of
a particular date or, if there shall have been no such sale so reported on that
date, on the last preceding date on which such a sale was reported.

      "FULL TIME EMPLOYEE" means a person actively and regularly engaged in work
at least 40 hours a week.

      "OPTION" -- A nonqualified option to purchase one or more Shares granted
under and pursuant to the Plan. A nonqualified option does not satisfy the
requirements of Section 422 of the Code, or any successor provision.

      "OPTIONEE" -- An individual who has been granted an Option under the Plan.

      "PARTICIPANT" -- An individual who has been granted Restricted Stock or an
Option under the Plan.

      "PLAN" -- This Centex Corporation 2001 Stock Plan.

      "RESTRICTED STOCK" -- Shares issued pursuant to Section 17 of the Plan.

      "RETIREMENT" -- The Participant's voluntary termination of employment from
the Employer including, where the context indicates, Vested Retirement.

      "SHARE" -- A share of the Company's present twenty-five cents ($0.25) par
value common stock and any share or shares of capital stock or other securities
of the Company hereafter issued or issuable upon, in respect of or in
substitution or in exchange for each present share. Such Shares may be unissued
or reacquired Shares, as the Board, in its sole and absolute discretion, shall
from time to time determine.

      "VESTED RETIREMENT" -- The voluntary termination of all employment of an
Optionee or a Participant (excluding a Non-employee Director) who is a Full Time
Employee from the Employer at any time after he or she (1) is age 55 or older,
(2) has at least 10 Years of Service and (3) the combination of age and Years of
Service equal at least 70. Calculation of eligibility for Vested Retirement
shall be based on whole years of age and Years of Service on the date as of
which the calculation is being made. Any partial years shall be disregarded.

      "YEARS OF SERVICE" -- The Optionee's or Participant's years of employment
with an Employer. An Optionee or Participant shall be credited with a Year of
Service on each anniversary of the date on which he or she was first employed
with an Employer, provided that the Optionee or Participant continues to be
employed by an Employer on such anniversary date.

3.    Administration

      Subject to the provisions hereof, the Committee shall have full and
exclusive power and authority to administer this Plan and to take all actions
that are specifically contemplated hereby or are necessary or appropriate in
connection with the administration hereof. The Committee

                                                                               2


shall also have full and exclusive power to interpret this Plan and to adopt
such rules, regulations and guidelines for carrying out this Plan as it may deem
necessary or proper, all of which powers shall be exercised in the best
interests of the Company and in keeping with the objectives of this Plan. The
Committee may, in its discretion, provide for the extension of the
exercisability of an Option, accelerate the vesting or exercisability of an
Option or Restricted Stock award, eliminate or make less restrictive any
restrictions applicable to an Option or Restricted Stock award, waive any
restriction or other provision of this Plan or an Option or Restricted Stock
award or otherwise amend or modify an Option or Restricted Stock award in any
manner that is either (i) not adverse to the Optionee or holder of Restricted
Stock to whom such Option or Restricted Stock was granted or (ii) consented to
by the Optionee or holder of Restricted Stock. The Committee may correct any
defect or supply any omission or reconcile any inconsistency in this Plan or in
any award in the manner and to the extent the Committee deems necessary or
desirable to further the Plan purposes. Any decision of the Committee in the
interpretation and administration of this Plan shall lie within its sole and
absolute discretion and shall be final, conclusive and binding on all parties
concerned.

4.    SHARES SUBJECT TO PLAN

      (a) A maximum of 1,750,000 Shares shall be subject to grants of Options or
awards of Restricted Stock under the Plan; provided, however, that of such
number of Shares, no more than 175,000 Shares shall be subject to awards of
Restricted Stock; and provided further, that such maximum shall be increased or
decreased as provided in Section 12 hereof. The Shares subject to the Plan shall
consist of unissued Shares or previously issued Shares reacquired and held by
the Company or any Affiliate.

      (b) At any time and from time to time after the Plan takes effect, the
Committee, pursuant to the provisions herein set forth, may grant Options and
award Restricted Stock until the maximum number of Shares shall be exhausted or
the Plan shall be sooner terminated.

      (c) If any Option expires or is canceled without being fully exercised or
is settled in cash, or if any Restricted Stock previously awarded is reacquired
by the Company, the number of Shares with respect to which such Option shall not
have been exercised prior to its expiration or cancellation and the number of
Shares of such Restricted Stock so reacquired may again be optioned or awarded
pursuant to the provisions hereof.

      (d) If the option price or any applicable tax withholding obligation
payable upon exercise of an Option is satisfied by the tender or withholding of
Shares to or by the Company (by either actual delivery or attestation), the
number of Shares so tendered or withheld shall be eligible for reissuance under
the Plan.

5.    Eligibility

      Eligibility for receipt of a grant of Options under the Plan shall be
confined to (a) a limited number of persons who are employed by the Company or
an Affiliate and hold key positions in and for the Company or an Affiliate and
(b) Directors.

                                                                               3


6.    GRANTING OF OPTIONS

      (a) From time to time while the Plan is in effect, the Committee may in
its absolute discretion select from among the persons eligible to receive a
grant of Options under the Plan (including persons who have already received
such grants of Options) such one or more of them as in the opinion of the
Committee should be granted Options. The Committee shall thereupon, likewise in
its absolute discretion, determine the number of Shares to be allotted for
option to each person so selected.

      (b) Each person so selected shall be granted an Option to purchase the
number of Shares so allotted to him, upon such terms and conditions, consistent
with the provisions of the Plan, as the Committee may specify.

      (c) Each Option granted under the Plan shall be evidenced by an Agreement
setting forth the terms and conditions of the Option. The date that the
Committee specifies to be the grant date of an Option to an individual shall
constitute the date on which the Option covered by such Agreement is granted. In
no event, however, shall an Optionee gain any rights in addition to those
specified by the Committee in its grant, regardless of the time that may pass
between the grant of the Option and the actual execution of the Agreement by the
Company and the Optionee.

      (d) No person may be granted Options under this Plan for more than 250,000
Shares in any one-year period.

7.    OPTION PRICE

      The option price for each Share covered by each Option shall not be less
than 100% of the Fair Market Value of the Share at the time the Option is
granted. Notwithstanding the foregoing, if there occurs any transaction of a
type described in Section 12(a), (b) or (c) hereof, the option price of the
Shares subject to each existing Option adjusted pursuant to such provisions or
any new Option or assumed option issued pursuant to such provisions may be
different than the Fair Market Value of the Shares at the time the Option is
granted; provided, however, in no event shall -

      (a) the excess of the aggregate Fair Market Value of the Shares subject to
the Option immediately after the transaction over the aggregate option price of
such Shares be more than the excess of the aggregate Fair Market Value of all
shares subject to the other option immediately prior to the transaction over the
aggregate option price of shares subject to the other option; and

      (b) the ratio of the option price to the Fair Market Value of the Shares
subject to the Option immediately after the transaction be more favorable to the
Optionee than the ratio of the option price to the Fair Market Value of the
shares subject to the other option immediately prior to such transaction,
determined on a share-by-share basis.

                                                                               4


8.    OPTION PERIOD

      Each Option shall run for such period of time as the Committee may
specify, but in no event for longer than seven (7) years from the date when the
Option is granted, including the period of time provided in the subsections of
this Section 8; and subject to the following limits:

      (a) Except as provided below in this subsection (a) or in subsection (f),
all rights to exercise an Option shall terminate within four (4) months after
the date the Optionee ceases to be an employee of the Company or an Affiliate,
or after the date the Optionee ceases to be a Director, whichever may occur
later, for any reason other than death or Disability (but in no event later than
the end of the original period of the Option); except that (i) in the case of an
Optionee who is a Director and, on the date the Optionee ceases to be a Director
(and if also an employee ceases to be an employee), has (A) at least ten (10)
years of service as a Director, all Shares subject to such Option will vest on
such date and all rights to exercise such Option shall terminate three (3) years
after the date the Optionee ceases to be a Director (but in no event later than
the end of the original period of the Option), or (B) less than ten (10) years
of service as a Director, all Shares subject to such Option will continue to
vest in accordance with its terms for a period of three (3) years following such
date, and all rights to exercise such Option shall terminate three (3) years
after such date; and (ii) if the Optionee's employment or service as a Director
is terminated for cause, the entire Option, including both exercisable and
unexercisable Shares, shall immediately terminate and thereafter be null and
void for all purposes.

      (b) In the case of an Optionee who satisfies the test for Vested
Retirement, all Options held by such Optionee will automatically vest upon
Vested Retirement.

      (c) If the Optionee ceases to be employed by the Company and its
Affiliates, or ceases to be a Director, whichever may occur later, by reason of
his death, all rights to exercise any Option held by such Optionee shall
terminate fifteen (15) months after his death (but in no event later than the
end of the original period of the Option).

      (d) If the employment of the Optionee with the Company or any of its
Affiliates shall terminate as a result of a Disability, he may, within six (6)
months following such date (but in no event later than the end of the original
period of the Option), exercise any Option held by such Optionee, in each case,
to the extent he was entitled to exercise such Option on the date of termination
of employment. To the extent that the Shares covered by his Option were
unexercisable as of such termination of employment, the Option shall terminate.
If the Optionee does not exercise such Option (which he was entitled to exercise
as of such termination) within the time specified herein, the Option shall
thereupon terminate.

      (e) If an Option is granted with a term shorter than seven (7) years, the
Committee may extend the term of the Option, but for not more than seven (7)
years from the date when the Option was originally granted.

      (f) Notwithstanding the foregoing, if an Option is held by an Optionee who
retires and satisfies the test for Vested Retirement, then all rights to
exercise any and all Options will

                                                                               5


terminate 12 months following the date of the Vested Retirement. To the extent
that an Agreement provides for a longer time to exercise, then such Agreement
will control.

9.    OPTIONS NOT TRANSFERABLE

      Unless otherwise determined by the Committee and provided in the
Agreement, no Option or interest therein shall be transferable by an Optionee
otherwise than by will or by the applicable laws of descent and distribution.
The Committee may prescribe and include in an Agreement any applicable
restrictions or conditions on transfer of Options. Any attempted assignment in
violation of this Section 9 shall be null and void.

10.   EXERCISE OF OPTIONS

      (a) During the lifetime of an Optionee, only he or his guardian or legal
representative or transferee may exercise an Option granted to him. In the event
of his death, any then exercisable portion of his Option may, within fifteen
(15) months thereafter or earlier date of termination of the original period of
Option, be exercised in whole or in part by any person empowered to do so under
the deceased Optionee's will or under the applicable laws of descent and
distribution.

      (b) At any time, and from time to time, during the period when any Option,
or a portion thereof, is exercisable, such Option, or portion thereof, may be
exercised in whole or in part; provided, however, that the Committee may require
in the Agreement that any Option which is partially exercised be so exercised
with respect to at least a stated minimum number of Shares.

      (c) Each exercise of an Option or portion or part thereof shall be
evidenced by a notice in writing by or on behalf of the Optionee to the Company.
The purchase price of the Shares for which an option is exercised must be paid
prior to issuance of the Shares. The Exercise price of an Option must be paid by
cash, certified or cashiers' check, wire transfer, delivery (either actually or
by attestation) of whole Shares that have been acquired or held by the Optionee
for at least six months prior to the date the option is exercised, or any
combination of the aforementioned methods of payment, prior to issuance of the
Shares. For purposes of determining the amount, if any, of the option price
satisfied by in Shares, such Shares shall be valued at their Fair Market Value
on the date of exercise. Any Shares actually delivered in satisfaction of all or
a portion of the option price shall be appropriately endorsed for transfer and
assignment to the Company.

      (d) No Shares shall be issued until full payment therefor has been made,
and an Optionee shall have none of the rights of a stockholder until Shares are
issued to him.

      (e) Nothing herein or in any Agreement evidencing an Option granted
hereunder shall require the Company to issue any Shares upon exercise of an
Option if such issuance would, in the opinion of counsel for the Company,
constitute a violation of the Securities Act of 1933, as amended, or any similar
or superseding statute or statutes, or any other applicable statute or
regulation, as then in effect. Upon the exercise of an Option or portion or part
thereof, the

                                                                               6


Optionee shall give to the Company satisfactory evidence that he is acquiring
such Shares for the purpose of investment only and not with a view to their
distribution; provided, however, if or to the extent that the Shares subject to
the Option shall be included in a registration statement filed by the Company or
an Affiliate, such investment representation shall not be required.

11.   DELIVERY OF SHARES UPON EXERCISE

      As promptly as may be practicable after an Option, or a portion or part
thereof, has been exercised as hereinabove provided, the Company shall make
delivery of the Shares acquired upon exercise of such Option to the Optionee or
shall cause such Optionee's interest in such Shares to be evidenced by an entry
on the Company's books and records.

12.   CHANGES IN COMPANY'S SHARES AND CERTAIN CORPORATE TRANSACTIONS

      (a) If at any time while the Plan is in effect there shall occur any
subdivision or consolidation of outstanding Shares, declaration of a dividend
payable in Shares or other stock split, then, and in each such event, the
Committee shall make proportionate adjustments to:

            (i) the maximum number of Shares then subject to being optioned or
      awarded as Restricted Stock under the Plan, to the end that the same
      proportion of the Company's issued and outstanding Shares shall continue
      to be subject to being so optioned and awarded;

            (ii) the number of Shares and the option price per Share thereof
      then subject to purchase pursuant to each Option previously granted, to
      the end that the same proportion of the Company's issued and outstanding
      Shares shall remain subject to purchase at the same aggregate option
      price;

            (iii) the number of Shares of Restricted Stock previously awarded
      under the Plan, to the end that each award represents the same proportion
      of the Company's issued and outstanding Shares; and

            (iv) the number of Shares subject to Options that may be granted to
      any person in any one-year period pursuant to the limitation set forth in
      Section 6(d), to the end that each such limitation represents the same
      proportion of the Company's issued and outstanding Shares.

      (b) If at any time while the Plan is in effect there shall occur any other
recapitalization or capital reorganization of the Company, any consolidation or
merger of the Company with another corporation or entity, the adoption by the
Company of any plan of exchange affecting the Shares or any distribution to
holders of Shares of securities or property (other than normal cash dividends or
dividends payable in Shares), the Committee may make proportionate adjustments
to:

            (i) the number of Shares and the option price per Share thereof then
      subject to purchase pursuant to each Option previously granted;

                                                                               7


            (ii) the number of Shares of Restricted Stock previously awarded
      under the Plan;

            (iii) the number of Shares subject to Options that may be granted to
      any person in any one-year period pursuant to the limitation set forth in
      Section 6(d); and

            (iv) the maximum number of Shares then subject to being optioned or
      awarded as Restricted Stock under the Plan;

      in each case, in order to reflect the transaction and (in the case of
clauses (i) and (ii) above) to the end of maintaining the proportionate interest
of the holders of Options and Shares of Restricted Stock; provided, however,
that such adjustments shall only be made to the extent necessary to preserve,
without exceeding, the value of such Options and Shares of Restricted Stock.

      (c) In the event of a merger, consolidation, acquisition of property or
stock, separation, reorganization or liquidation, the Committee shall be
authorized to issue or assume new Options or Shares of Restricted Stock as it
determines is appropriate in substitution for, or to reflect the assumption of,
any other option, restricted stock grant or other award, whether or not awarded
under this Plan.

      (d) Except as is otherwise expressly provided herein, the issuance by the
Company of shares of its capital stock of any class or securities convertible
into shares of capital stock of any class, either in connection with a direct
sale or upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, shall not affect, and no adjustment by reason thereof shall
be made with respect to, the number of or option price of Shares then subject to
outstanding Options granted under the Plan. Furthermore, the presence of
outstanding Options granted under the Plan shall not affect in any manner the
right or power of the Company to make, authorize or consummate (i) any or all
adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business; (ii) any merger or consolidation of
the Company; (iii) any issuance by the Company of debt securities or preferred
or preference stock that would rank above the Shares subject to outstanding
Options or Shares of Restricted Stock granted under the Plan; (iv) the
dissolution or liquidation of the Company; (v) any sale, transfer or assignment
of all or any part of the assets or business of the Company; or (vi) any other
corporate act or proceeding, whether of a similar character or otherwise.

      (e) Notwithstanding anything to the contrary above, a dissolution or
liquidation of the Company, a merger (other than a merger effecting a
reincorporation of the Company in another state) or consolidation in which the
Company is not the surviving corporation (or survives only as a subsidiary of
another corporation in a transaction in which the stockholders of the parent of
the Company and their proportionate interests therein immediately after the
transaction are not substantially identical to the stockholders of the Company
and their proportionate interests therein immediately prior to the transaction)
or a change in control (as specified below) shall cause every Option then
outstanding to become exercisable in full and shall cause every restriction with
respect to any Shares of Restricted Stock to terminate immediately prior to such

                                                                               8


dissolution, liquidation, merger, consolidation or change in control, to the
extent not theretofore exercisable or free of restrictions, without regard to
the determination as to the periods and installments of exercisability or
termination of restrictions contained in the Agreements if, and only if, such
Options have not at that time theretofore expired or been terminated or such
Shares of Restricted Stock have not at that time theretofore been cancelled or
forfeited. For purposes of this Section 12(c), a change in control shall be
deemed to have taken place if (i) a third person, including a "group" as defined
in Section 13(d)(3) of the Securities Exchange Act of 1934, becomes the
beneficial owner of Shares of the Company having 50% or more of the total number
of votes that may be cast for the election of directors of the Company or (ii)
as a result of, or in connection with, a contested election for directors, the
persons who were directors of the Company immediately before such election shall
cease to constitute a majority of the Board. Notwithstanding the foregoing
provisions of this paragraph, in the event of any such dissolution, merger,
consolidation or change in control, the Board may completely satisfy all
obligations of the Company and its Affiliates with respect to any Options or
Shares of Restricted Stock outstanding on the date of such event and cancel such
Options or Shares of Restricted Stock by (A) in the case of Options, delivering
to the Optionee cash in an amount equal to the difference between the aggregate
option price for Shares under the Options and the Fair Market Value of such
Shares on the date of such event and (B) in the case of Shares of Restricted
Stock, delivering to the holder of such Shares cash in an amount equal to the
Fair Market Value of such Shares on the date of such event, which payment shall
in either case be made within a reasonable time after such event.

      (f) As of May 13, 2004 the number of shares available for issuance of
Options or awards of Restricted Stock is 1,628,598 and no more than 68,260 shall
be subject to awards of Restricted Stock.

13.   EFFECTIVE DATE

      The Plan shall be effective on May 17, 2001, the date of its adoption by
the Board, but shall be submitted to the stockholders of the Company for
approval at the next regular or special meeting thereof to be held within twelve
(12) months after the Board shall have adopted the Plan. If, at such a meeting
of the stockholders of the Company, the Plan is not approved by the affirmative
vote of a majority of the $0.25 par value common stock of the Company present
and entitled to vote at such meeting, then, and in such event, the Plan and all
Options granted under the Plan and all awards of Restricted Stock under the Plan
shall become null and void and of no further force or effect.

14.   AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN

      The Board may amend, suspend or terminate this Plan for the purpose of
meeting or addressing any changes in legal requirements or for any other purpose
permitted by law, except that (a) no amendment or alteration that would
adversely affect the rights of any holder under any award previously granted to
such person shall be made without the consent of such person and (b) after the
stockholders of the Company have ratified the Plan, no amendment or alteration
that would increase the maximum number of Shares subject to the Plan (as
provided in Section 4(a)) or decrease the option price of an Option below 100%
of the Fair Market Value as of the date

                                                                               9


such Option was granted (as provided in Section 7) may be made without obtaining
approval of the stockholders.

15.   REQUIREMENTS OF LAW

      Notwithstanding anything contained herein to the contrary, the Company
shall not be required to sell or issue Shares under any Option if the issuance
thereof would constitute a violation by the Optionee or the Company of any
provisions of any law or regulation of any governmental authority or any
national securities exchange. As a condition of any sale or issuance of Shares
under an Option, the Company may require such agreements or undertakings, if
any, as the Company may deem necessary or advisable to ensure compliance with
any such law or regulation.

16.   MODIFICATION OF OPTIONS

      Except as provided in Section 12, notwithstanding any other provision of
this Plan to the contrary, (i) after an Option has been awarded, the price at
which Shares may be purchased upon exercise of such Option shall not be amended
and (ii) no Option shall be granted in exchange for a previously granted Option
if the option price of such previously granted Option is greater than the option
price of such replacement Option. Notwithstanding the foregoing provisions of
this Section 16, no modification or cancellation of an Option granted hereunder
shall, without the consent of the Optionee, alter or impair any rights or
obligations under any Option theretofore granted hereunder to such Optionee
under the Plan.

17.   RESTRICTED STOCK

      (a) Subject to the terms and conditions of, and within the limitations of,
the Plan, Shares of Restricted Stock may be awarded by the Committee to such
individuals as are eligible for grants of Options, as the Committee may
determine at any time and from time to time before the termination of the Plan.
Each award of Restricted Stock shall be evidenced by an Agreement setting forth
the terms and conditions of the award.

      (b) A Share of Restricted Stock is a Share that does not irrevocably vest
in the holder or that may not be sold, exchanged, pledged, transferred, assigned
or otherwise encumbered or disposed of until the terms and conditions set by the
Committee at the time of the award of the Restricted Stock have been satisfied.
A Share of Restricted Stock shall be subject to such other restrictions, terms
and conditions as the Committee may establish, which may include, without
limitation, the rendition of services to the Company or its Affiliates for a
specified time or the achievement of specific goals.

      (c) If an individual receives Shares of Restricted Stock, whether or not
escrowed as provided below, the individual shall be the record owner of such
Shares and shall have all the rights of a stockholder with respect to such
Shares (unless the escrow agreement, if any, specifically provides otherwise),
including the right to vote and the right to receive dividends or other
distributions made or paid with respect to such Shares. Any certificate or
certificates representing Shares of Restricted Stock may bear a legend similar
to the following:

                                                                              10


                  The shares represented by this certificate have been issued
            pursuant to the terms of the Centex Corporation 2001 Stock Plan and
            may not be sold, pledged, transferred, assigned or otherwise
            encumbered in any manner except as set forth in the terms of such
            award dated ________________, 20___.

      (d) In order to enforce the restrictions, terms and conditions that may be
applicable to an individual's Shares of Restricted Stock, the Committee may
require the individual, upon the receipt of a certificate or certificates
representing such Shares, or at any time thereafter, to deposit such certificate
or certificates, together with stock powers and other instruments of transfer,
appropriately endorsed in blank, with the Company or an escrow agent designated
by the Company under an escrow agreement in such form as shall be determined by
the Committee.

      (e) After the satisfaction of the terms and conditions set by the
Committee at the time of an award of Restricted Stock to an individual, if the
original certificate was legended, a new certificate, without the legend set
forth above, for the number of Shares that are no longer subject to such
restrictions, terms and conditions shall be delivered to the individual, either
by delivery of a physical certificate or an electronic transfer to a broker.

      (f) The Committee may cancel all or any portion of any outstanding
restrictions prior to the expiration of such restrictions with respect to any or
all of the Shares of Restricted Stock awarded to an individual hereunder on such
terms as the Committee may deem appropriate.

      (g) Subject to the other provisions of this Section 17, including
paragraph (i) below, and unless otherwise determined by the Committee, if an
individual to whom Restricted Stock has been awarded ceases to be employed by
the Company or an Affiliate, or ceases to be a director of the Company,
whichever may occur later, for any reason prior to the satisfaction of any terms
and conditions of an award, any Restricted Stock remaining subject to
restrictions shall thereupon be forfeited by the individual and transferred to,
and reacquired by, the Company or an Affiliate at no cost to the Company or the
Affiliate. In such event, the individual, or in the event of his death, his
personal representative, shall forthwith deliver to the Secretary of the Company
the certificates for the Shares of Restricted Stock remaining subject to such
restrictions, accompanied by such instruments of transfer, if any, as may
reasonably be required by the Secretary of the Company.

      (h) The Committee may determine that an award of Restricted Stock will be
subject to restriction until one or more performance goals established by the
Committee have been achieved. With respect to such an award, the restrictions
shall lapse and the award shall vest only upon achievement of the attainment of
one or more pre-established, objective performance goals established by the
Committee prior to the earlier to occur of (x) 90 days after the commencement of
the period of service to which the performance goal relates and (y) the lapse of
25% of the period of service (as established in good faith at the time the goal
is established), and in any event while the outcome is substantially uncertain.
A performance goal is objective if a third party having knowledge of the
relevant facts could determine whether the goal is met. Such a performance goal
may be based on one or more business criteria that apply to the individual, one
or more business units of the Company, or the Company as a whole, and may

                                                                              11


include one or more of the following: operating income, operating margin,
earnings before interest, taxes, depreciation and amortization (EBITDA), pre-tax
income, net income, net earnings per share, net earnings per share growth,
return on beginning stockholder's equity, return on average net assets, total
shareholder return relative to other companies in Centex Corporation's industry
group, debt/capitalization ratio and customer satisfaction. Unless otherwise
stated, such a performance goal need not be based upon an increase or positive
result under a particular business criterion and could include, for example,
maintaining the status quo or limiting economic losses (measured, in each case,
by reference to specific business criteria). In interpreting Plan provisions
applicable to performance goals, it is the intent of the Plan to conform with
the standards of Section 162(m) of the Code and Treasury Regulation
ss.1.162-27(e)(2)(i), and the Committee in establishing such goals and
interpreting the Plan shall be guided by such provisions. Prior to the payment
of any compensation based on the achievement of performance goals, the Committee
must certify in writing that applicable performance goals and any of the
material terms thereof were, in fact, satisfied. No individual may be granted
Restricted Stock awards subject to performance goals designed to comply with
Section 162(m) of the Code having a value of more than $6,000,000 in any given
one-year period.

      (i) The restrictions set forth in an Agreement relative to Restricted
Stock will terminate immediately if the Participant retires and at the time of
retirement he or she qualifies for Vested Retirement under the Plan.

18.   TAX WITHHOLDING

      The Company shall have the right to take whatever affirmative actions are
required, in the opinion of the Committee, to enable the Company or appropriate
Affiliate to satisfy any applicable payroll tax withholding requirements in
connection with the exercise of Options granted or Restricted Stock awarded
under the Plan. Without limiting the generality of the foregoing provision, the
Company shall have the right to (a) withhold cash from a same-day-sale exercise
of an Option, (b) deduct applicable taxes from any Option or Restricted Stock
award by withholding, at the time of delivery and/or vesting of Shares under the
Plan, an appropriate number of Shares for payment of taxes required by law, (c)
permit its withholding obligations to be satisfied by the transfer to the
Company of Shares theretofore owned by the holder of the Option or recipient of
Restricted Stock with respect to which withholding is required, in which case
such Shares shall be valued based on the Fair Market Value thereof when the tax
withholding is required to be made, or (d) take such other action as may be
necessary in the opinion of the Company to satisfy all applicable tax
withholding obligations.

19.   GENERAL

      (a) The proceeds received by the Company from the sale of Shares pursuant
to Options shall be used for general corporate purposes.

      (b) Nothing contained in the Plan or in any Agreement shall confer upon
any Optionee or recipient of Restricted Stock the right to continue in the
employ of the Company or

                                                                              12


any Affiliate or interfere in any way with the rights of the Company or any
Affiliate to terminate such Optionee's or recipient's employment at any time.

      (c) Neither the members of the Board nor any member of the Committee shall
be liable for any act, omission or determination taken or made in good faith
with respect to the Plan or any Option or award of Restricted Stock granted
under it, and the members of the Board and the Committee shall be entitled to
indemnification and reimbursement by the Company in respect of any claim, loss,
damage or expense (including counsel fees) arising therefrom to the full extent
permitted by law and under any directors and officers liability or similar
insurance coverage that may be in effect from time to time.

      (d) As partial consideration for the granting of each Option or award of
Restricted Stock hereunder, the Optionee or recipient shall agree with the
Company that he will keep confidential all information and knowledge that he has
relating to the manner and amount of his participation in the Plan; provided,
however, that such information may be disclosed as required by law or given in
confidence to the individual's spouse, tax or financial advisors or to a
financial institution to the extent that such information is necessary to secure
a loan.

      (e) Participation in the Plan shall not preclude an individual from
eligibility in any other stock option plan of the Company or any Affiliate or
any old-age benefit, insurance, pension, profit sharing, retirement, bonus or
other extra compensation plans that the Company or any Affiliate has adopted or
may, at any time, adopt for the benefit of its employees or directors.

      (f) Any payment of cash or any issuance or transfer of Shares to the
Optionee or to his legal representative, heir, legatee or distributee in
accordance with the provisions hereof shall, to the extent thereof, be in full
satisfaction of all claims of such persons hereunder. The Board or Committee may
require any Optionee or recipient of an award of Restricted Stock, legal
representative, heir, legatee or distributee, as a condition precedent to such
payment, to execute a release and receipt therefor in such form as it shall
determine.

      (g) Neither the Committee, the Board nor the Company guarantees the Shares
from loss or depreciation.

      (h) All expenses incident to the administration of the Plan, including,
but not limited to, legal and accounting fees, shall be paid by the Company or
its Affiliates.

      (i) Records of the Company and its Affiliates regarding an individual's
period of employment, termination of employment and the reason therefor, leaves
of absence, reemployment, tenure as a Director and other matters shall be
conclusive for all purposes hereunder, unless determined by the Board or
Committee to be incorrect.

      (j) The Company and its Affiliates shall, upon request or as may be
specifically required hereunder, furnish or cause to be furnished all of the
information or documentation that is necessary or required by the Board or
Committee to perform their duties and functions under the Plan.

                                                                              13


      (k) The Company assumes no obligation or responsibility to an Optionee or
recipient of Restricted Stock, or to such Optionee's or recipient's personal
representatives, heirs, legatees or distributees, for any act of, or failure to
act on the part of, the Board or Committee.

      (l) Any action required of the Company shall be by resolution of the Board
or by a person authorized to act by resolution of the Board. Any action required
of the Committee shall be by resolution of the Committee or by a person
authorized to act by resolution of the Committee.

      (m) If any provision of the Plan or any Agreement is held to be illegal or
invalid for any reason, the illegality or invalidity shall not affect the
remaining provisions of the Plan or the Agreement, as the case may be, but such
provision shall be fully severable and the Plan or the Agreement, as the case
may be, shall be construed and enforced as if the illegal or invalid provision
had never been included herein or therein.

      (n) Whenever any notice is required or permitted hereunder, such notice
must be in writing and personally delivered or sent by mail. Any notice required
or permitted to be delivered hereunder shall be deemed to be delivered on the
date on which it is personally delivered or, whether actually received or not,
on the third business day after it is deposited in the United States mail,
certified or registered, postage prepaid, addressed to the person who is to
receive it at the address that such person has theretofore specified by written
notice delivered in accordance herewith. The Company, an Optionee or a recipient
of Restricted Stock may change, at any time and from time to time, by written
notice to the other, the address that it, he or she had theretofore specified
for receiving notices. Until changed in accordance herewith, the Company and
each Optionee and recipient of Restricted Stock shall specify as its and his
address for receiving notices the address set forth in the Agreement pertaining
to the shares of Stock to which such notice relates or otherwise provided to the
other in accordance with the Company's policies for maintaining such
information.

      (o) Any person entitled to notice hereunder may waive such notice.

      (p) The Plan shall be binding upon the Optionee or recipient of Restricted
Stock, his heirs, legatees and legal representatives, upon the Company, its
successors and assigns, and upon the Board and Committee and their successors.

      (q) The titles and headings of Sections and paragraphs are included for
convenience of reference only and are not to be considered in construction of
the provisions hereof.

      (r) All questions arising with respect to the provisions of the Plan shall
be determined by application of the laws of the State of Nevada, except to the
extent Nevada law is preempted by federal law. The obligation of the Company to
sell and deliver Shares hereunder is subject to applicable laws and to the
approval of any governmental authority required in connection with the
authorization, issuance, sale or delivery of such Shares.

                                                                              14


      (s) Words used in the masculine shall apply to the feminine where
applicable, and wherever the context of the Plan dictates, the plural shall be
read as the singular and the singular as the plural.

      (t) Transactions related to the Plan, including but not limited to the
delivery and acceptance of any Agreement and the exercise of any Option, whether
in whole or in part, may be evidenced by either signed documentation or on-line
transactions through the Corporate Stock Benefit Services web site of the
Company's designated broker, UBS PaineWebber Inc., or the successor thereof.

                                                                              15

EX-10.3A

                                                                   EXHIBIT 10.3a

PLEASE SIGN & RETURN                                         Option to Employees
                                                                  2001 Plan

                                 FY 2004 Award

Dear <>:

         Effective May 14, 2004 you have been granted a Non-qualified Option to
purchase up to <> shares of the common stock, par value $.25
per share, of Centex Corporation (the "Company") for $______ per share (the
"Option"). This Option is granted under the Centex Corporation 2001 Stock Plan
(as such plan may be amended from time to time, the "Plan"). A copy of the Plan
is available to you upon request to the Law Department during the term of this
Option. This Option will terminate upon the close of business on May 14, 2011,
unless earlier terminated as described herein or in the Plan. This Award will
vest at the rate of 8 1/4% per quarter in fiscal year 2005, 8 1/4% per quarter
in fiscal year 2006 and 8 1/2% per quarter in fiscal year 2007. The amounts and
dates are shown below:

                                                         



         If for any reason you cease to be an employee of at least one of the
employers in the group of employers consisting of the Company and its Affiliates
(i) this Option will immediately terminate as to any unvested portion on the
date of such cessation and (ii) any portion of this Option vested but not
exercised by you on or before such date of cessation may be exercised after such
date only as provided in the Plan. However, if you are a Full Time Employee and
you retire from all employment with the Company and its Affiliates before this
Option has fully vested and at the time of your retirement you are age 55 or
older, you have at least 10 Years of Service and the sum of age and Years of
Service equals at least 70, then this Option will immediately vest upon
termination of employment ("Vested Retirement"). You will have 12 months to
exercise this Option following the date of such Vested Retirement.

         The Company may cancel and revoke this Option and/or replace it with a
revised option at any time if the Company determines, in its good faith
judgment, that this Option was granted to you in error or that this Option
contains an error. In the event of such determination by the Company, and
written notice thereof to you at your business or home address, all of your
rights and all of the Company's obligations as to any unvested portion of this
Option shall immediately terminate. If the Company replaces this Option with a
revised option, then you will have all of the benefits conferred under the
revised option, effective at such time as the new option goes into effect.

         This Option is subject to the Plan, and the Plan will govern where
there is any inconsistency between the Plan and this Option. The provisions of
the Plan are also provisions of this Option, and all terms, provisions and
definitions set forth in the Plan are incorporated in this Option and made a
part of this Option for all purposes. Capitalized terms used but not defined in
this Option will have the meanings assigned to such terms in the Plan. This
Option has been signed in duplicate by Centex Corporation and delivered to you,
and (when you sign below) has been accepted by you effective as of May 14, 2004.

ACCEPTED                                  CENTEX CORPORATION
as of May 14, 2004

_______________________________           _____________________________________
<>                              Timothy R. Eller
                                          Chairman & Chief Executive Officer

EX-10.3B

                                                                   EXHIBIT 10.3b

PLEASE SIGN & RETURN                                            Restricted Stock
                                                                   2001 Plan

                                 FY 2004 Award

Dear <>:

         Effective May 14, 2004 you have been awarded <> shares
of the common stock, par value $.25 per share, of Centex Corporation (the
"Company"). This award (the "Award") is made pursuant to, and subject to the
terms and conditions of, the Centex Corporation 2001 Stock Plan (as such plan
may be amended from time to time, the "Plan"). The Shares awarded hereby
constitute Shares of Restricted Stock under the Plan. A copy of the Plan is
available to you upon request to the Law Department.

         This Award will vest at the rate of 8 1/4% per quarter in fiscal year
2005, 8 1/4% per quarter in fiscal year 2006 and 8 1/2% per quarter in fiscal
year 2007. The amounts and dates are shown below:

                                                                



         The restrictions set forth in the Plan and this Award will terminate
coterminously with the vesting described above, unless earlier terminated as
described in the Plan or this Award. The date on which the restrictions
terminate as to vested shares is called the "Lapse Date". Vested Shares of
Restricted Stock will become freely transferable on the day following the
related Lapse Date.

         You will forfeit all unvested Shares of Restricted Stock if, prior to
the Lapse Date, you cease for any reason to be an employee of at least one of
the employers in the group of employers consisting of the Company and its
Affiliates. However, the restrictions set forth in the Plan and this Award will
terminate immediately and all of the shares covered by this Award will
immediately vest (i) in the event of your death or permanent disability or (ii)
if you retire from employment at the Company prior to the Lapse Date and at
retirement you satisfy the definition of Vested Retirement, i.e., you are a Full
Time Employee at least 55 years old, have at least 10 Years of Service and the
sum of your age and Years of Service equals at least 70. Whether you have
suffered a permanent disability will be determined by the Committee, in its sole
and absolute discretion. In the event of your death, the person or persons to
whom the Shares of Restricted Stock have been validly transferred pursuant to
will or the laws of descent and distribution will have all rights to the Shares
of Restricted Stock.

         The Company may cancel and revoke this Award and/or replace it with a
revised award at any time if the Company determines, in its good faith judgment,
that this Award was granted in error or that this Award contains an error. In
the event of such determination by the Company, and written notice thereof to
you at your business or home address, all of your rights and all of the
Company's obligations as to any unvested portion of this Award shall immediately
terminate. If the Company replaces this Award with a revised award, then you
will have all of the benefits conferred under the revised award, effective as of
such time as the revised award goes into effect.

         This Award is subject to the Plan, and the Plan will govern where there
is any inconsistency between the Plan and this Award. The provisions of the Plan
are also provisions of this Award, and all terms, provisions and definitions set
forth in the Plan are incorporated in this Award and made a part of this Award
for all purposes. Capitalized terms used but not defined in this Award will have
the meanings assigned to such terms in the Plan. This Award has been signed in
duplicate by the Company and delivered to you, and (when you sign below) has
been accepted by you effective as of May 14, 2004.

ACCEPTED                                      CENTEX CORPORATION
as of May 14, 2004

_______________________________________       ___________________________
<>                                  Timothy R. Eller
                                              Chairman & Chief Executive Officer

EX-10.4

                                                                    EXHIBIT 10.4

                              AMENDED AND RESTATED

                   CENTEX CORPORATION LONG TERM INCENTIVE PLAN

                            EFFECTIVE OCTOBER 1, 2001

                         (LAST AMENDED ON MAY 13, 2004)

1.    OBJECTIVES

      The Centex Corporation Long Term Incentive Plan (the "Plan") is designed
to retain selected employees of Centex Corporation and all subsidiaries,
partnerships and affiliates of Centex Corporation with regard to which Centex
Corporation owns, directly or indirectly, at least 80% of the ownership interest
therein, and reward them for making significant contributions to the success of
Centex Corporation. These objectives are to be accomplished by making awards
under the Plan and thereby providing participants with a financial interest in
the growth and performance of Centex Corporation. The Plan shall not constitute
a "qualified plan" subject to the limitations of Section 401(a) of the Internal
Revenue Code of 1986, as amended, nor shall it constitute a "funded plan" for
purposes of such requirements. This Plan shall be exempt from the participation
and vesting requirements of Part 2 of Title I of ERISA, the funding requirements
of Part 3 of Title I of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and the fiduciary requirements of Part 4 of Title I of ERISA
by reason of the exclusions afforded to plans which are unfunded and maintained
by an employer primarily for the purpose of providing deferred compensation for
a select group of highly compensated employees.

2.    DEFINITIONS

      As used herein, the terms set forth below shall have the following
respective meanings:

      "ACT" means the Securities Exchange Act of 1934, as amended.

      "ADMINISTRATOR" means the Compensation and Management Development
Committee of the Board.

      "AFFILIATE" means any direct or indirect subsidiary or parent of Centex
Corporation and any partnership, joint venture, limited liability company or
other business venture or entity in which Centex Corporation owns directly or
indirectly at least 80% of the ownership interest in such entity, as determined
by the Administrator in its sole and absolute discretion (such determination by
the Administrator to be conclusively established by the grant of an Award by the
Administrator to an officer or employee of such an entity).

      "AWARD" means an award of Deferred Stock granted to a Participant pursuant
to any applicable terms, conditions and limitations as the Administrator may
establish in order to fulfill the objectives of the Plan.

      "AWARD AGREEMENT" means a written agreement between Centex Corporation and
a Participant that sets forth the terms, conditions and limitations applicable
to an Award.

                                       1


      "BENEFICIARY" means such person or persons, or the trustee of an inter
vivos trust for the benefit of natural persons, designated by the Participant in
a written election filed with the Administrator as entitled to receive the
Participant's Award(s) in the event of the Participant's death, or if no such
election shall have been so filed, or if no designated Beneficiary survives the
Participant or can be located by the Administrator, the person or persons
entitled thereto under the last will of such deceased Participant, or if such
decedent left no will, to the legal heirs of such decedent determined in
accordance with the laws of intestate succession of the state of the decedent's
domicile.

      "BOARD" means the Board of Directors of Centex Corporation as the same may
be constituted from time to time.

      "CENTEX CORPORATION" means Centex Corporation, a Nevada corporation, or
any successor thereto.

      "CODE" means the Internal Revenue Code of 1986, as amended.

      "COMPANY" means each of Centex Corporation and every Affiliate.

      "DEFERRED STOCK" means a right to receive at Payout the number of Shares
covered by an Award, subject to the terms of this Plan and the Award Agreement.
Deferred Stock does not represent any actual legal or beneficial interest in
Centex Corporation.

      "DISABILITY" means a disability that entitles the Participant to benefits
under the long-term disability plan sponsored by the Company which covers the
Participant.

      "EMPLOYMENT" means employment with a Company.

      "EXPIRATION DATE" means, as to an Award, that date which is seven years
past the Grant Date of such Award or such other period as the Administrator may
determine.

      "FAIR MARKET VALUE" means the closing price per Share as of a particular
date reported on the consolidated transaction reporting system for the New York
Stock Exchange or, if there shall have been no such sale so reported on that
date, on the last preceding date on which such a sale was reported.

      "FULL TIME EMPLOYEE" means a person actively and regularly engaged in work
at least 40 hours a week.

      "GRANT DATE" means the date an Award is made to a Participant hereunder,
which will be April 1 of the year in which such Award is made, or any other date
selected by the Administrator.

      "PARTICIPANT" means an employee of a Company to whom an Award has been
made under this Plan.

      "PAYOUT" means the distribution of vested Deferred Stock under the Plan.

                                       2


      "PAYOUT DATE" means the date an Award becomes payable pursuant to Section
8.

      "PLAN" means this Centex Corporation Long Term Incentive Plan, as set
forth herein and as may be amended from time to time.

      "SHARE" means a share of Centex Corporation's present twenty-five cents
($0.25) par value common stock and any share or shares of capital stock or other
securities of Centex Corporation hereafter issued or issuable upon, in respect
of or in substitution or in exchange for each present share. Such Shares may be
unissued or reacquired Shares, as the Board, in its sole and absolute
discretion, shall from time to time determine.

      "TERMINATION DATE" means the last date on which the Participant is carried
on a Company's payroll as an employee.

      "VESTED RETIREMENT" means the voluntary termination by a Participant who
is a Full Time Employee of all Employment at any time after the Participant is
age 55 or older, completes at least 10 Years of Service and the sum of age and
Years of Service with one or more Companies equals at least 70.

      "YEARS OF SERVICE" means the Participant's years of employment with a
Company. A Participant shall be credited with a Year of Service on each
anniversary of the date on which he or she was first employed with a Company,
provided that the Participant continues to be employed by a Company on such
anniversary date.

3.    ELIGIBILITY

      Only highly compensated employees of a Company are eligible for Awards
under this Plan, as determined in the sole discretion of the Administrator. The
Administrator shall select the Participants in the Plan from time to time as
evidenced by the grant of Awards under the Plan.

4.    PLAN ADMINISTRATION

      The Plan shall be administered by the Administrator, which shall have full
and exclusive power to interpret this Plan and to adopt such rules, regulations
and guidelines for carrying out this Plan as it may deem necessary or
appropriate in its sole discretion. The Administrator shall determine all terms
and conditions of the Awards. The Administrator may, in its discretion,
accelerate the vesting or Payout of an Award, eliminate or make less restrictive
any restrictions contained in an Award Agreement, waive any restriction or other
provision of this Plan or an Award Agreement or otherwise amend or modify an
Award in any manner that is either (i) not materially adverse to the Participant
holding the Award or (ii) consented to by such Participant. The Administrator
may delegate to one or more employees of Centex Corporation the performance of
non-discretionary functions under this Plan, including distributions of Payouts.

                                       3


5.    AWARDS

      (a)   The granting of Awards under this Plan shall be entirely
discretionary, and nothing in this Plan shall be deemed to give any employee of
a Company any right to participate in this Plan or to be granted an Award.

      (b)   Awards shall be granted to Participants at such times, and subject
to paragraph 5(d) below, in such amounts as the Administrator, in its sole and
absolute discretion, shall determine. No credit for cash dividends on Deferred
Stock will be allowed (or accrued) prior to Payout.

      (c)   The term of an Award shall run from the Grant Date to the Expiration
Date, subject to early Payout as described in Section 8 below or forfeiture as
described in Section 7 below.

      (d)   The maximum number of Shares that may be awarded under this Plan,
subject to Section 13 below, is 500,000. As of May 13, 2004 a total of 22,422
shares are available to be awarded.

      (e)   If an Award is forfeited, the number of Shares with respect to which
such Award shall not have been exercised prior to its forfeiture may again be
awarded pursuant to the provisions hereof.

6.    VESTING OF AWARDS

      (a)   Unless different terms are set by the Administrator, an Award shall
be immediately 25% vested on its Grant Date and shall become vested in
cumulative 25% increments on each of the first through third anniversaries of
such Grant Date, so that on the third anniversary of the Grant Date the Award
will be 100% vested; provided, however, that the Participant must be in
continuous Employment from the Grant Date through the date of the applicable
anniversary in order for the Award to vest.

      (b)   A Participant's Award shall be fully vested, irrespective of the
limitations set forth in subparagraph (a) above, in the event of (i) a change in
control, as provided for in Section 13 below, provided that the Participant has
been in continuous Employment from the Grant Date until the date of such change
in control or (ii) Retirement of the Participant.

7.    FORFEITURE OF AWARDS

      If a Participant's Employment is terminated other than through Retirement,
the Participant shall forfeit his or her Award(s) with respect to any portion
that is not vested as of such Participant's Termination Date.

8.    PAYOUTS OF AWARDS

      Payouts will occur as follows:

                                       4


      (a)   Automatic Payout on Expiration Date. To the extent that a
Participant's Award has vested, such Award shall have an automatic Payout on the
Expiration Date of such Award.

      (b)   Early Payouts. In addition to automatic Payout on the Expiration
Date, there may be an early Payout of the vested portion of an Award as follows:

            (i)   Termination of Employment (whether voluntary or involuntary).
      The vested portion of each Award shall have an automatic Payout on the
      Participant's Termination Date.

            (ii)  Death. If a Participant dies prior to the Expiration Date,
      such Participant's Award, to the extent vested, shall have an automatic
      Payout as of the date of the Participant's death and be made to the
      Participant's Beneficiary.

            (iii) Disability. Prior to the Expiration Date, an Award, with the
      approval of the Administrator, shall both be fully vested and have an
      automatic Payout on the date the Participant satisfies the definition of
      Disability.

            (iv)  Early Payout Request. At or subsequent to the time an Award is
      made, a Participant may elect, in the form and manner prescribed by the
      Administrator in its sole discretion, that the Payout Date for such Award
      shall be when each portion of the Award vests pursuant to paragraph 6(a).
      Thereafter, such election of timing of distribution for an Award may be
      revoked and a new election substituted therefor during any subsequent
      calendar year at such times as designated by the Administrator in its sole
      discretion; provided, however, that such new election (i) shall only be
      effective with respect to distributions during a calendar year subsequent
      to the calendar year during which the new election is made and (ii) the
      new distribution date shall not exceed the applicable Expiration Date with
      respect to the amounts to be distributed.

9.    FORM OF PAYOUT

      As soon as practicable following a determination that Payout of a
Participant's Award shall be made as described in Section 8, but not later than
five business days after the required Payout Date, Centex Corporation shall make
a Payout to the Participant. Payouts shall be made in Shares except that no
fractional shares will be issued and in lieu thereof cash will be paid to the
Participant.

10.   DELIVERY OF SHARE CERTIFICATES

      As promptly as may be administratively practicable following a Payout,
Centex Corporation shall make delivery of one or more Share certificates, and,
at the election of the Participant, either by delivery of a physical certificate
or an electronic transfer to a broker, for the appropriate number of Shares.

                                       5


11.   TAX WITHHOLDING

      Centex Corporation shall deduct applicable taxes with respect to any Award
or Payout and withhold, at the time of Award or Payout, as appropriate, a number
of Shares, based on the Fair Market Value on such date, for payment of taxes
required by law.

12.   NON-ASSIGNABILITY

      Unless otherwise determined by the Administrator, no Award or Payout or
any other benefit under this Plan shall be assignable or otherwise transferable
except to a Beneficiary or by will, the laws of descent and distribution or a
domestic relations order. The Administrator may prescribe other restrictions on
transfer. Any attempted assignment of an Award or any other benefit under this
Plan in violation of this Section 12 shall be null and void.

13.   CHANGES IN SHARES AND CERTAIN CORPORATE TRANSACTIONS

      (a)   In the event of any subdivision or consolidation of outstanding
Shares, declaration of a dividend payable in Shares or other stock split, then
(i) the number of Shares available for Awards under this Plan, and (ii) the
number of Shares covered by outstanding Awards, shall each be proportionately
adjusted by the Board as appropriate to reflect such transaction. In the event
of any other recapitalization or capital reorganization of the Centex
Corporation, any consolidation or merger of the Centex Corporation with another
corporation or entity, the adoption by the Centex Corporation of any plan of
exchange affecting Shares or any distribution to holders of Shares of securities
or property (other than normal cash dividends or dividends payable in Shares),
the Board shall make appropriate adjustments to (i) the number of Shares
available for Awards under this Plan, and (ii) the number of Shares covered by
outstanding Deferred Awards, to reflect such transaction; provided that such
adjustment under (ii) shall only be such as are necessary to maintain the
proportionate interest of the holders of the Awards and preserve, without
increasing, the value of such Awards.

      Except as is otherwise expressly provided herein, the issuance by Centex
Corporation of shares of its capital stock of any class, or securities
convertible into shares of capital stock of any class, either in connection with
a direct sale or upon the exercise of rights or warrants to subscribe therefor,
or upon conversion of shares or obligations of Centex Corporation convertible
into such shares or other securities, shall not affect, and no adjustment by
reason thereof shall be made with respect to, the number of Shares then subject
to outstanding Awards granted under the Plan. Furthermore, the presence of
outstanding Awards granted under the Plan shall not affect in any manner the
right or power of Centex Corporation to make, authorize or consummate (i) any or
all adjustments, recapitalizations, reorganizations or other changes in Centex
Corporation's capital structure or its business, including the issuance of
capital stock; (ii) any merger or consolidation of Centex Corporation; (iii) any
issuance by Centex Corporation of debt securities or preferred or preference
stock which would rank above the Shares subject to outstanding Awards granted
under the Plan; (iv) the dissolution or liquidation of Centex Corporation; (v)
any sale, transfer or assignment of all or any part of the assets or business of
Centex Corporation; or (vi) any other corporate act or proceeding, whether of a
similar character or otherwise.

                                       6


      (b)   Notwithstanding anything to the contrary above, a dissolution or
liquidation of Centex Corporation, a merger (other than a merger effecting a
reincorporation of Centex Corporation in another state) or consolidation in
which Centex Corporation is not the surviving corporation (or survives only as a
subsidiary of another corporation in a transaction in which the stockholders of
the parent of Centex Corporation and their proportionate interests therein
immediately after the transaction are not substantially identical to the
stockholders of Centex Corporation and their proportionate interests therein
immediately prior to the transaction), a transaction in which another
corporation becomes the owner of 50% or more of the total combined voting power
of all classes of stock of Centex Corporation, or a change in control (as
specified below), shall cause every Award then outstanding to become fully
vested immediately prior to such dissolution, liquidation, merger,
consolidation, transaction, or change in control, to the extent not theretofore
exercised, without regard to the determination as to the periods and
installments of vesting contained in the Agreements if (and only if) such Awards
have not at that time expired or been terminated. For purposes of this Section
13, a change in control shall be deemed to have taken place if:

            (i)   a third person, including a "Group" as defined in Section
      13(d)(3) of the Act, becomes the beneficial owner of Shares of Centex
      Corporation having 50% or more of total number of votes that may be cast
      for the election of directors of Centex Corporation; or

            (ii)  as a result of, or in connection with, a contested election
      for directors, persons who were directors of Centex Corporation
      immediately before such election shall cease to constitute a majority of
      the Board.

      Notwithstanding the foregoing provisions of this paragraph, in the event
of any such dissolution, merger, consolidation, transaction or change in
control, the Board may completely satisfy all obligations of Centex Corporation
and its Affiliates with respect to any Award outstanding on the date of such
event by delivering to the Participant cash in an amount equal to the Fair
Market Value of such Shares on the date of such event, such payment to be made
within reasonable time after such event.

14.   PLAN YEAR

      The Plan, as amended and restated, shall be effective as of October 1,
2001 and will continue in effect until the Administrator terminates the same.
The Plan year will be April 1 through March 31 while this Plan is in effect.

15.   REQUIREMENTS OF LAW

      Notwithstanding anything herein to the contrary, Centex Corporation shall
not be required to issue Shares under any Award if the issuance thereof would
constitute a violation by the Participant or Centex Corporation of any
provisions of any law or regulation of any governmental authority or any
national securities exchange; and as a condition of any issuance of Shares under
any Award, Centex Corporation may require such agreements or undertakings, if
any, as Centex Corporation may deem necessary or advisable to ensure compliance
with any such law or regulation.

                                       7


16.   AMENDMENT, SUSPENSION OR TERMINATION

      The Board may amend, suspend or terminate the Plan at any time for the
purpose of meeting or addressing any changes in legal requirements or for any
other purpose permitted by law, except that no amendment, suspension or
termination shall be made that would impair the rights of any Participant as to
a vested Award previously granted to such Participant without his or her written
consent.

17.   UNFUNDED PLAN

      This Plan shall be unfunded. Although bookkeeping accounts may be
established with respect to Participants representing Awards, any such accounts
shall be used merely as a bookkeeping convenience. Centex Corporation shall not
be required to segregate any assets that may at any time be represented by
Awards, nor shall this Plan be construed as providing for such segregation, nor
shall Centex Corporation, the Board or the Administrator (or any delegate
thereof) be deemed to be a trustee of any Awards to be granted under this Plan.
Any liability or obligation of Centex Corporation to any Participant with
respect to a grant of Awards under this Plan shall be based solely upon any
contractual obligations that may be created under this Plan, and no such
liability or obligation of Centex Corporation shall be deemed to be secured by
any pledge or other encumbrance on any property of Centex Corporation. None of
Centex Corporation or any other Company, the Board or the Administrator (or any
delegate thereof) shall be required to give any security or bond for the
performance of any obligation that may be created by this Plan.

      Notwithstanding the foregoing, upon the occurrence of a change in control,
as described in Section 13(b), each Company whose employees are Participants
shall, as soon as possible, but in no event longer than 15 days following the
change in control, make an irrevocable contribution to a trust established by
Centex Corporation in an amount sufficient to fully pay the entire benefit to
which each Participant employed by such Company would be entitled pursuant to
the terms of this Plan as of the date on which such change in control occurs. In
its sole discretion, Centex Corporation may establish such a trust at any time
prior to a change in control and may make contributions to such trust in Shares
or in cash which would be used to acquire Shares to transfer to Participant. Any
such trust shall be designed to assist Centex Corporation in satisfying its
obligations under this Plan; but it shall remain subject to the claims of its
creditors.

18.   NO EMPLOYMENT GUARANTEED

      No provision of this Plan or any Award Agreement hereunder shall confer
any right upon any employee to continued employment with a Company.

19.   NO STOCKHOLDER RIGHTS

      A Participant shall have no rights as a holder of Shares with respect to
Awards granted hereunder. In particular, no Award shall entitle a Participant to
be considered a holder of Shares or to have any rights to dividends or other
distributions made to holders of Shares prior to the Payout of such Award.

                                       8


20.   GOVERNING LAW

      This Plan and all determinations made and actions taken pursuant hereto,
to the extent not otherwise governed by mandatory provisions of the Act or other
securities laws of the United States, shall be governed by and construed in
accordance with the laws of the State of Texas, without reference to any
conflicts of law principles thereof that would require the application of the
laws of another jurisdiction.

21.   INDEMNIFICATION

      Neither the members of the Board, any member of the Compensation and
Management Development Committee, acting in the capacity of Administrator, nor
any delegates of the Administrator, shall be liable for any act, omission or
determination taken or made in good faith with respect to the Plan or any Award
granted under it, and the members of the Board and the Compensation and Stock
Option Committee (or its delegate) shall be entitled to indemnification and
reimbursement by Centex Corporation in respect of any claim, loss, damage or
expense (including counsel fees) arising therefrom to the full extent permitted
by law and under any directors and officers liability or similar insurance
coverage that may be in effect from time to time.

22.   RELEASE

      Any issuance or transfer of Shares to a Participant or to his legal
representative, heir, legatee or distributee in accordance with the provisions
hereof shall, to the extent thereof, be in full satisfaction of all claims of
such persons hereunder. The Board or Administrator may require any Participant
or legal representative, heir, legatee or distributee, as a condition precedent
to such payment, to execute a release and receipt therefor in such form as it
shall determine.

                                       9

EX-10.4A

                                                                   EXHIBIT 10.4a

PLEASE SIGN & RETURN                                            LTIP Stock Units

                                 FY 2004 Award

Dear <>:

         You have been granted an Award as of May 14, 2004 of <> units of Deferred Stock under the Centex Corporation Long Term
Incentive Plan (as such plan may be amended from time to time, the "Plan"),
giving you the right to receive a Payout of an equivalent number of Shares of
the common stock of Centex Corporation (the "Company") on May 14, 2011, provided
you are still employed by the Company or an Affiliate. This Award will vest at
the rate of 8 1/4% per quarter in fiscal year 2005, 8 1/4% per quarter in fiscal
year 2006 and 8 1/2% per quarter in fiscal year 2007. The amounts and dates are
shown below:

                                                         



         As described in the Plan, under certain circumstances an early Payout
may occur. For example, if you retire from employment at the Company and its
Affiliates before this Award has fully vested and at the time of your retirement
you satisfy the definition of Vested Retirement, i.e., you are a Full Time
Employee at least 55 years old, have at least 10 Years of Service and the sum of
your age and Years of Service equals at least 70, then any unvested portion of
this Award shall vest as of the date of your Vested Retirement and you will
receive a Payout of the Award upon Vested Retirement, as provided in the Plan.
Also, if you so elect in the form and manner prescribed by the Administrator,
Payout will occur when each portion of the Award vests, subject to your
subsequent revocation of the timing of Payout and substitution of a new Payout
election during any subsequent calendar year. Conversely, if for any other
reason you cease to be employed by the Company or any of its Affiliates, in most
cases you will forfeit any portion of this Award that has not vested as of your
Termination Date and, unless discharged for cause, you will receive a Payout of
the then vested portion of this Award, as provided in the Plan.

         The Company may cancel and revoke this Award and/or replace it with a
revised award at any time if the Company determines, in its good faith judgment,
that this Award was granted in error or that this Award contains an error. In
the event of such determination by the Company, and written notice thereof to
you at your business or home address, all of your rights and all of the
Company's obligations as to any unvested portion of this Award shall immediately
terminate. If the Company replaces this Award with a revised award, then you
will have all of the benefits conferred under the revised award, effective as of
such time as the revised award goes into effect.

         This Award is subject to the Plan, and the Plan will govern where there
is any inconsistency between the Plan and this Award. The provisions of the Plan
are also the provisions of this Award, and all terms, provisions and definitions
set forth in the Plan are incorporated into this Award and made a part of this
Award for all purposes. Capitalized terms used and not otherwise defined in the
Plan have the meanings ascribed to such terms in the Plan. A copy of the Plan is
available to you upon request to the Law Department during the term of this
Award.

         This Award has been signed in duplicate by Centex Corporation and
delivered to you, and (when you sign below) has been accepted by you effective
as of May 14, 2004.

ACCEPTED                                      CENTEX CORPORATION
as of May 14, 2004

______________________________________        _________________________________
<>                                  Timothy R. Eller
                                              Chairman & Chief Executive Officer

EX-10.6

                                                                    EXHIBIT 10.6

                              AMENDED AND RESTATED

                  CENTEX CORPORATION 2003 EQUITY INCENTIVE PLAN

                         (LAST AMENDED ON MAY 13, 2004)

1.    PLAN

      The Centex Corporation 2003 Equity Incentive Plan (the "Plan") was adopted
by the Corporation to reward certain key Employees of the Corporation and its
Affiliates and Non-employee Directors of the Corporation by providing for
certain cash benefits and by enabling them to acquire shares of Common Stock of
the Corporation.

2.    OBJECTIVES

      The purpose of this Centex Corporation 2003 Equity Incentive Plan is to
further the interests of the Corporation and its shareholders by providing
incentives in the form of Awards to key Employees and Non-employee Directors who
can contribute materially to the success and profitability of the Corporation
and its Affiliates. Such Awards will recognize and reward outstanding
performances and individual contributions and give Participants in the Plan an
interest in the Corporation parallel to that of the shareholders, thus enhancing
the proprietary and personal interest of such Participants in the Corporation's
continued success and progress. This Plan will also enable the Corporation and
its Affiliates to attract and retain such Employees and Non-employee Directors.

3.    DEFINITIONS

      As used herein, the terms set forth below shall have the following
respective meanings:

      "AFFILIATE" means a Subsidiary or Joint Venture.

      "AUTHORIZED OFFICER" Means the Chief Executive Officer of the Corporation
(or any other senior officer of the Corporation to whom he or she shall delegate
the authority to execute any Award Agreement, where applicable).

      "AWARD" means an Employee Award or a Director Award.

      "AWARD AGREEMENT" means a written agreement setting forth the terms,
conditions and limitations applicable to an Award, to the extent the Committee
determines such agreement is necessary.

      "BOARD" means the Board of Directors of the Corporation.

      "BLACK-SCHOLES VALUE" means the formula given by the option pricing model
of such name used to calculate the theoretical fair value of a stock option at
any given time.

      "CHANGE IN CONTROL" unless otherwise defined by the Committee, means a
change in control of a nature that would be required to be reported in response
to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934, as amended,

                                       1


whether or not the Corporation is then subject to such reporting requirement;
provided, that, without limitation, such a change in control shall be deemed to
have occurred if:

            (i)   a third person, including a "Group" as defined in Section
      13(d)(3) of the Exchange Act, becomes the beneficial owner of Common Stock
      having fifty (50) percent or more of total number of votes that may be
      cast for the election of Directors; or

            (ii)  as a result of, or in connection with, a contested election
      for Directors, persons who were Directors immediately before such election
      shall cease to constitute a majority of the Board.

      "CODE" means the Internal Revenue Code of 1986, as amended from time to
time.

      "COMMITTEE" means the independent Compensation Committee of the Board as
is designated by the BOARD to administer the Plan.

      "COMMON STOCK" means Centex Corporation common stock, par value $.25 per
share.

      "CORPORATION" means Centex Corporation, a Nevada corporation, or any
successor thereto.

      "DIRECTOR" means an individual who is a member of the Board.

      "DIRECTOR AWARD" means any Option, Stock Award or Performance Award
granted, whether singly, in combination or in tandem, to a Participant who is a
Non-employee Director pursuant to such applicable terms, conditions and
limitations (including treatment as a Performance Award) as the Committee may
establish in order to fulfill the objectives of the Plan.

      "DISABILITY" means a disability that renders the Participant unable to
engage in any occupation in accordance with the terms of the Long Term
Disability Plan of Centex Corporation.

      "DIVIDEND EQUIVALENTS" means, with respect to Stock Units or shares of
Restricted Stock that are to be issued at the end of the Restriction Period, an
amount equal to all dividends and other distributions (or the economic
equivalent thereof) that are payable to stockholders of record during the
Restriction Period on a like number of shares of Common Stock.

      "EMPLOYEE" means an employee of the Corporation or any of its Affiliates.

      "EMPLOYEE AWARD" means any Option, Stock Award, or Performance Award
granted, whether singly, in combination or in tandem, to a Participant who is an
Employee pursuant to such applicable terms, conditions and limitations
(including treatment as a Performance Award) as the Committee may establish in
order to fulfill the objectives of the Plan.

      "EMPLOYEE DIRECTOR" means an individual serving as a member of the Board
who is an Employee of the Corporation or any of its Affiliates.

      "EMPLOYER" means the Corporation and any Subsidiary or Joint Venture.

                                       2


      "EQUITY AWARD" means any Option, Stock Award, or Performance Award (other
than a Performance Award denominated in cash) granted to a Participant under the
Plan.

      "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

      "FAIR MARKET VALUE" of a share of Common Stock means, as of a particular
date, (i) (A) if Common Stock is listed on a national securities exchange, the
mean between the highest and lowest sales price per share of such Common Stock
on the consolidated transaction reporting system for the principal national
securities exchange on which shares of Common Stock are listed on that date, or,
if there shall have been no such sale so reported on that date, on the next
succeeding date on which such a sale was so reported, or, at the discretion of
the Committee, the price prevailing on the exchange at the time of exercise, (B)
if Common Stock is not so listed but is quoted on the NASDAQ National Market,
the mean between the highest and lowest sales price per share of Common Stock
reported by the NASDAQ National Market on that date, or, if there shall have
been no such sale so reported on that date, on the next succeeding date on which
such a sale was so reported or, at the discretion of the Committee, the price
prevailing on the NASDAQ National Market at the time of exercise, (C) if Common
Stock is not so listed or quoted, the mean between the closing bid and asked
price on that date, or, if there are no quotations available for such date, on
the next succeeding date on which such quotations shall be available, as
reported by the NASDAQ Stock Market, or, if not reported by the NASDAQ Stock
Market, by the National Quotation Bureau Incorporated or (D) if Common Stock is
not publicly traded, the most recent value determined by an independent
appraiser appointed by the Corporation for such purpose, or (ii) if applicable,
the price per share as determined in accordance with the procedures of a third
party administrator retained by the Corporation to administer the Plan.

      "FULL TIME EMPLOYEE" means a person actively and regularly engaged in work
at least 40 hours a week.

      "GRANT DATE" means the date an Award is granted to a Participant pursuant
to the Plan. The Grant Date for a substituted award is the Grant Date of the
original award.

      "GRANT PRICE" means the price at which a Participant may exercise his or
her right to receive cash or Common Stock, as applicable, under the terms of an
Award.

      "JOINT VENTURE" means any joint venture, partnership, limited liability
company or other non-corporate entity in which the Corporation has at least 50%
ownership, voting, capital or profit interests (in whatever form).

      "NON-EMPLOYEE DIRECTOR" means an individual serving as a member of the
Board who is not an Employee of the Corporation or any of its Affiliates.

      "OPTION" means a right to purchase a specified number of shares of Common
Stock at a specified Grant Price, which is not intended to comply with the
requirements set forth in Section 422 of the Code.

      "PARTICIPANT" means an Employee or Non-employee Director to whom an Award
has been granted under this Plan.

                                       3


      "PERFORMANCE AWARD" means an Award made pursuant to this Plan that is
subject to the attainment in the future of one or more Performance Goals.

      "PERFORMANCE GOAL" means a standard established by the Committee, to
determine in whole or in part whether a Qualified Performance Award shall be
earned.

      "QUALIFIED PERFORMANCE AWARD" means a Performance Award made to a
Participant who is an Employee that is intended to qualify as qualified
performance-based compensation under Section 162(m) of the Code, as described in
Section 8(a)(iii)(B) of the Plan.

      "RESTRICTED STOCK" means Common Stock that is restricted or subject to
forfeiture provisions.

      "RESTRICTION PERIOD" means a period of time beginning as of the Grant Date
of an Award of Restricted Stock and ending as of the date upon which the Common
Stock subject to such Award is no longer restricted or subject to forfeiture
provisions.

      "RETIREMENT" means the Participant's voluntary termination of employment
from the Employer, and where the context indicates, includes Vested Retirement.

      "STOCK AWARD" means an Award in the form of shares of Common Stock or
Stock Units, including an award of Restricted Stock.

      "STOCK UNIT" means a unit equal to one share of Common Stock (as
determined by the Committee) granted to either an Employee or a Non-employee
Director.

      "SUBSIDIARY" means any corporation of which the Corporation directly or
indirectly owns shares representing 50% or more of the combined voting power of
the shares of all classes or series of capital stock of such corporation which
have the right to vote generally on matters submitted to a vote of the
stockholders of such corporation.

      "VESTED RETIREMENT" means the voluntary termination of all employment by a
Participant (excluding a Non-employee Director) who is a Full Time Employee from
the Employer at any time after the Participant is age 55 or older, has at least
10 Years of Service and the sum of age and Years of Service equals at least 70.
Calculation of eligibility for Vested Retirement shall be based on whole years
of age and Years of Service on the date as of which the calculation is being
made. Any partial years shall be disregarded.

      "YEARS OF SERVICE" means the Participant's years of employment with an
Employer. A Participant shall be credited with a Year of Service on each
anniversary of the date on which he or she was first employed with an Employer,
provided that the Participant continues to be employed by an Employer on such
anniversary date.

4.    ELIGIBILITY

      (a)   Employees. Employees eligible for the grant of Employee Awards under
this Plan are those Employee Directors and Employees who hold positions of
responsibility and whose performance, in the judgment of the Committee, can have
a significant effect on the success of the Corporation and its Affiliates.

                                       4


      (b)   Directors. Members of the Board eligible for the grant of Director
Awards under this Plan are those who are Non-employee Directors.

5.    COMMON STOCK AVAILABLE FOR AWARDS

      Subject to the provisions of paragraph 15 hereof, no Award shall be
granted if it shall result in the aggregate number of shares of Common Stock
issued under the Plan plus the number of shares of Common Stock covered by or
subject to Awards then outstanding (after giving effect to the grant of the
Award in question) to exceed 6,665,970 shares. No more than 2,221,990 shares of
Common Stock shall be available for Stock Awards, other than Options or
Performance Awards. The number of shares of Common Stock that are the subject of
Awards under this Plan that are forfeited or terminated, expire unexercised, are
settled in cash in lieu of Common Stock or in a manner such that all or some of
the shares covered by an Award are not issued to a Participant or are exchanged
for Awards that do not involve Common Stock, shall again immediately become
available for Awards hereunder. If the Grant Price or other purchase price of
any Option or other Award granted under the Plan is satisfied by tendering
shares of Common Stock to the Corporation by either actual delivery or by
attestation, or if the tax withholding obligation resulting from the settlement
of any such Option or other Award is satisfied by tendering or withholding
shares of Common Stock, only the number of shares of Common Stock issued net of
the shares of Common Stock tendered or withheld shall be deemed delivered for
purposes of determining the maximum number of shares of Common Stock available
for delivery under the Plan. Shares of Common Stock delivered under the Plan in
settlement, assumption or substitution of outstanding awards or obligations to
grant future awards under the plans or arrangements of another entity shall not
reduce the maximum number of shares of Common Stock available for delivery under
the Plan, to the extent that such settlement, assumption or substitution is a
result of the Corporation or an Affiliate acquiring another entity or an
interest in another entity. The Committee may from time to time adopt and
observe such procedures concerning the counting of shares against the Plan
maximum as it may deem appropriate. The Board and the appropriate officers of
the Corporation shall from time to time take whatever actions are necessary to
file any required documents with governmental authorities, stock exchanges and
transaction reporting systems to ensure that shares of Common Stock are
available for issuance pursuant to Awards.

6.    ADMINISTRATION

      (a)   This Plan shall be administered by the Committee except as otherwise
provided herein.

      (b)   Subject to the provisions hereof, the Committee shall have full and
exclusive power and authority to administer this Plan and to take all actions
that are specifically contemplated hereby or are necessary or appropriate in
connection with the administration hereof. The Committee shall also have full
and exclusive power to interpret this Plan and to adopt such rules, regulations
and guidelines for carrying out this Plan as it may deem necessary or proper,
all of which powers shall be exercised in the best interests of the Corporation
and in keeping with the objectives of this Plan. The Committee may, in its
discretion, provide for the extension of the exercisability of an Award,
accelerate the vesting or exercisability of an Award, eliminate or make less
restrictive any restrictions applicable to an Award, waive any restriction or
other provision of this Plan (insofar as such provision relates to Awards) or an
Award or

                                       5


otherwise amend or modify an Award in any manner that is either (i) not adverse
to the Participant to whom such Award was granted or (ii) consented to by such
Participant. The Committee may correct any defect or supply any omission or
reconcile any inconsistency in this Plan or in any Award in the manner and to
the extent the Committee deems necessary or desirable to further the Plan
purposes. Any decision of the Committee, with respect to Awards, in the
interpretation and administration of this Plan shall lie within its sole and
absolute discretion and shall be final, conclusive and binding on all parties
concerned.

      (c)   No member of the Committee or officer of the Corporation to whom the
Committee has delegated authority in accordance with the provisions of paragraph
7 of this Plan shall be liable for anything done or omitted to be done by him or
her, by any member of the Committee or by any officer of the Corporation in
connection with the performance of any duties under this Plan, except for his or
her own willful misconduct or as expressly provided by statute.

7.    DELEGATION OF AUTHORITY

      Following the authorization of a pool of cash or shares of Common Stock to
be available for Awards, the Committee may authorize the Chief Executive Officer
of the Corporation or a committee consisting solely of members of the Board to
grant individual Employee Awards from such pool pursuant to such conditions or
limitations as the Committee may establish. The Committee may also delegate to
the Chief Executive Officer and to other executive officers of the Corporation
its administrative duties under this Plan (excluding its granting authority)
pursuant to such conditions or limitations as the Committee may establish. The
Committee may engage or authorize the engagement of a third party administrator
to carry out administrative functions under the Plan.

8.    AWARDS

      (a)   The Committee shall determine the type or types of Awards to be made
under this Plan and shall designate from time to time the Participants who are
to be the recipients of such Awards. Each Award may, in the discretion of the
Committee, be embodied in an Award Agreement, which shall contain such terms,
conditions and limitations as shall be determined by the Committee in its sole
discretion and, if required by the Committee, shall be signed by the Participant
to whom the Award is granted and by an Authorized Officer for and on behalf of
the Corporation. Awards may consist of those listed in this paragraph 8(a) and
may be granted singly, in combination or in tandem. Awards may also be granted
in combination or in tandem with, in replacement of, or as alternatives to,
grants or rights under this Plan or any other plan of the Corporation or any of
its Affiliates, including the plan of any acquired entity. An Award may provide
for the grant or issuance of additional, replacement or alternative Awards upon
the occurrence of specified events. All or part of an Award may be subject to
conditions established by the Committee, which may include, but are not limited
to, continuous service with the Corporation and its Affiliates, achievement of
specific business objectives, increases in specified indices, attainment of
specified growth rates and other comparable measurements of performance.

            (i)   Option. An Employee Award or Director Award may be in the form
      of an Option. The Grant Price of an Option shall be not less than the Fair
      Market Value of the Common Stock subject to such Option on the Grant Date.
      Notwithstanding anything

                                       6


      contrary contained in this Plan including Sections 8(a)(i)(A) and (B), in
      no event shall the term of the Option extend more than ten (10) years
      after the Grant Date. Options may not include provisions that "reload" the
      option upon exercise. Subject to the foregoing provisions, the terms,
      conditions and limitations applicable to any Options awarded to
      Participants pursuant to this Plan, including the Grant Price, the term of
      the Options, the number of shares subject to the Option and the date or
      dates upon which they become exercisable, shall be determined by the
      Committee.

                  (A)   Except as is otherwise provided in the Award Agreement
            and subject to Committee discretion as provided in Section 6(b):

                        (1)   all rights to exercise an Option shall terminate
                  within four (4) months after the date the Participant ceases
                  to be an Employee, or ceases to be a Director, whichever may
                  occur later, for any reason other than death or Disability
                  (but in no event later than the end of the original period of
                  the Option).

                        (2)   In the event of a Participant's death, an Option
                  will terminate fifteen (15) months thereafter.

                        (3)   In the event of a Participant's Disability and
                  resulting termination of employment, an Option will terminate
                  six (6) months after such Participant's employment termination
                  date.

                        (4)   In the event the employment of the Participant is
                  terminated for cause (as determined by the Committee), all
                  Options whether or not vested shall terminate immediately.

                        (5)   All unvested Options are cancelled upon
                  termination of employment; except that all non-qualified
                  options shall immediately vest upon Vested Retirement.

                  (B)   However, if an Option is held by a Director who, on the
            date he or she ceases to be a Director (and, if also an Employee,
            ceases to be an Employee), has at least ten (10) years of service as
            a Director, then all Common Stock subject to such Option will vest
            on the date the Director ceases to be a Director, and all rights to
            exercise such Option will terminate three (3) years thereafter (but
            in no event later than the original period of the Option). Also, if
            an Option is held by a Director who, on the date he or she ceases to
            be a Director (and, if also an Employee, ceases to be an Employee),
            has less than ten (10) years of service as a Director, then all
            Common Stock subject to such Option will continue to vest in
            accordance with its terms for a period of three (3) years following
            such date, and all rights to exercise such Option will terminate
            three (3) years after such date (but in no event later than the
            original period of the Option). If Options are awarded in the final
            two (2) years of the term of a Director who is approaching age 70,
            or an Employee Director who is at least age 55 with at least ten
            (10) years of service and his or her age plus years of service equal
            at least 70, the outside exercise date is the one provided in the
            Option or

                                       7


            seven (7) years from the grant date, whichever occurs earlier. This
            paragraph 8(a)(i)(B) shall not apply to a Participant who is
            terminated for cause (as determined by the Committee).

                  (C)   However, if an Option is held by a Participant who
            retires and satisfies the test for Vested Retirement, then all
            rights to exercise any and all Options will terminate twelve (12)
            months following the date of the Vested Retirement. To the extent
            that an Award provides a longer term to exercise, such Award will
            control.

                  (D)   Attached hereto are resolutions adopted by the Committee
            on May 13, 2004 pertaining to vesting and exercise. The provisions
            of section 8(a)(i)(A)(5) and 8(a)(i)(C) above are intended to
            incorporate such resolutions. To the extent of any conflict between
            the terms of such resolutions and this Plan, the resolutions will
            control.

            (ii)  Stock Award. An Employee Award or Director Award may be in the
      form of a Stock Award. The terms, conditions and limitations applicable to
      any Stock Awards granted to Participants pursuant to this Plan shall be
      determined by the Committee; provided that any Stock Award which is not a
      Performance Award shall have a minimum Restriction Period of three years
      from the Grant Date, provided that (i) the Committee may provide for
      earlier vesting upon a termination of employment by reason of death,
      Disability or Retirement, (ii) such three-year minimum Restriction Period
      shall not apply to a Stock Award that is granted in lieu of salary or
      bonus, (iii) vesting of a Stock Award may occur incrementally over the
      three-year minimum Restricted Period and (iv) the restrictions set forth
      in a Stock Award will terminate immediately if the Participant retires
      prior to the date on which the restrictions would otherwise terminate and
      at Retirement he or she is age 65 or older or, if not yet age 65, the
      Participant satisfies the test for vested Retirement.

            (iii) Performance Award. Without limiting the type or number of
      Employee Awards or Director Awards that may be made under the other
      provisions of this Plan, an Employee Award or Director Award may be in the
      form of a Performance Award. The terms, conditions and limitations
      applicable to any Performance Awards granted to Participants pursuant to
      this Plan shall be determined by the Committee; provided that any Stock
      Award which is a Performance Award shall have a minimum Restriction Period
      of one year from the Grant Date, provided that the Committee may provide
      for earlier vesting upon a termination of employment by reason of death,
      Disability or Retirement. The Committee shall set Performance Goals in its
      discretion which, depending on the extent to which they are met, will
      determine the value and/or amount of Performance Awards that will be paid
      out to the Participant.

                  (A)   Nonqualified Performance Awards. Performance Awards
            granted to Employees or Directors that are not intended to qualify
            as qualified performance-based compensation under Section 162(m) of
            the Code shall be based on achievement of such goals and be subject
            to such terms, conditions and restrictions as the Committee or its
            delegate shall determine.

                                       8


                  (B)   Qualified Performance Awards. Performance Awards granted
            to Employees under the Plan that are intended to qualify as
            qualified performance-based compensation under Section 162(m) of the
            Code shall be paid, vested or otherwise deliverable solely on
            account of the attainment of one or more pre-established, objective
            Performance Goals established by the Committee prior to the earlier
            to occur of (x) 90 days after the commencement of the period of
            service to which the Performance Goal relates and (y) the lapse of
            25% of the period of service (as scheduled in good faith at the time
            the goal is established), and in any event while the outcome is
            substantially uncertain. A Performance Goal is objective if a third
            party having knowledge of the relevant facts could determine whether
            the goal is met. Such a Performance Goal may be based on one or more
            business criteria that apply to the Employee, one or more business
            units or divisions of the Corporation or the applicable sector, or
            the Corporation as a whole, and if so desired by the Committee, by
            comparison with a peer group of companies. A Performance Goal may
            include one or more of the following: (a) earnings, either in the
            aggregate or on a per-share basis, reflecting such dilution of
            shares as the Committee deems appropriate, including operating
            earnings, pre-tax earnings, earnings before interest and taxes, and
            earnings before interest, taxes, depreciation and amortization; (b)
            gross or net revenue; (c) operating or net cash flow; (d) financial
            return ratios (e.g., return or net return on one or more of the
            following: assets, net assets, equity, invested capital, revenue);
            (e) margins, including net, operating or pre-tax margins; (f) total
            shareholder return; (g) financial ratios (e.g., debt to
            capitalization or debt to equity); (h) growth in financial measures
            or ratios (e.g., revenue, earnings, cash flow, stockholders' equity,
            margins); or (i) customer satisfaction, based on specified objective
            goals, or a customer survey sponsored by the Corporation or one or
            more business units or divisions of the Corporation.

                  (C)   Unless otherwise stated, such a Performance Goal need
            not be based upon an increase or positive result under a particular
            business criterion and could include, for example, maintaining the
            status quo or limiting economic losses (measured, in each case, by
            reference to specific business criteria). In interpreting Plan
            provisions applicable to Performance Goals and Qualified Performance
            Awards, it is the intent of the Plan to conform with the standards
            of Section 162(m) of the Code and Treasury Regulation
            Section 1.162-27(e)(2)(i), as to grants to those Employees whose
            compensation is, or is likely to be, subject to Section 162(m) of
            the Code, and the Committee in establishing such goals and
            interpreting the Plan shall be guided by such provisions. Prior to
            the payment of any compensation based on the achievement of
            Performance Goals, the Committee must certify in writing that
            applicable Performance Goals and any of the material terms thereof
            were, in fact, satisfied. Subject to the foregoing provisions, the
            terms, conditions and limitations applicable to any Qualified
            Performance Awards made pursuant to this Plan shall be determined by
            the Committee.

      (b)   Notwithstanding anything to the contrary contained in this Plan, the
following limitations shall apply to any Employee Awards made hereunder:

                                       9


            (i)   no Participant may be granted, during any fiscal year,
      Employee Awards consisting of Options (including Options that are granted
      as Performance Awards) that are exercisable for more than 1,110,995 shares
      of Common Stock;

            (ii)  no Participant may be granted, during any fiscal year,
      Employee Awards consisting of Stock Awards (including Stock Awards that
      are granted as Performance Awards) covering or relating to more than
      555,497 shares of Common Stock (the limitation set forth in this clause
      (ii), together with the limitation set forth in clause (i) above and
      (c)(i) and (ii) below, being hereinafter collectively referred to as the
      "Stock Based Awards Limitations"); and

            (iii) no Participant may be granted Employee Awards under this Plan
      consisting of cash (including Awards that are granted as Performance
      Awards) in respect of any fiscal year having a value determined on the
      Grant Date in excess of an amount equal to 2% of the consolidated net
      income of the Corporation and its subsidiaries for such fiscal year plus
      the Black-Scholes Value, determined as of the Option Grant Date, of
      Options on 219,977 shares of Common Stock determined as if such Options
      had an Option Grant Date on the effective date of the Employee Award.

      (c)   Notwithstanding anything to the contrary contained in this Plan the
following limitations shall apply to any Director Awards made hereunder:

                  (A) no Participant may be granted, during any fiscal year,
            Director Awards consisting of Options (including Options that are
            granted as Performance Awards) that are exercisable for more than
            53,327 shares of Common Stock and

                  (B)   no Participant may be granted, during any fiscal year,
            Director Awards consisting of Stock Awards (including Stock Awards
            that are granted as Performance Awards) covering or relating to more
            than 33,330 shares of Common Stock.

9.    CHANGE IN CONTROL

      Notwithstanding the provisions of paragraph 8 hereof, unless otherwise
expressly provided in the applicable Award Agreement, or as otherwise specified
in the terms of an Equity Award, in the event of a Change in Control during a
Participant's employment (or service as a Non-employee Director) with the
Corporation or one of its Affiliates, each Equity Award granted under this Plan
to the Participant shall become immediately vested and fully exercisable, with
performance-based equity awards vested at target level (regardless of the
otherwise applicable vesting or exercise schedules or Performance Goals provided
for under the Award Agreement or the terms of the Equity Award).

10.   PAYMENT OF AWARDS

      (a)   General. Payment made to a Participant pursuant to an Award may be
made in the form of cash or Common Stock, or a combination thereof, and may
include such restrictions as the Committee shall determine, including, in the
case of Common Stock, restrictions on

                                       10


transfer and forfeiture provisions. If such payment is made in the form of
Restricted Stock, the Committee shall specify whether the underlying shares are
to be issued at the beginning or end of the Restriction Period. In the event
that shares of Restricted Stock are to be issued at the beginning of the
Restriction Period, the certificates evidencing such shares (to the extent that
such shares are so evidenced) shall contain appropriate legends and restrictions
that describe the terms and conditions of the restrictions applicable thereto.
In the event that shares of Restricted Stock are to be issued at the end of the
Restricted Period, the right to receive such shares shall be evidenced by book
entry registration or in such other manner as the Committee may determine.

      (b)   Deferral. With the approval of the Committee, amounts payable in
respect of Awards may be deferred and paid either in the form of installments or
as a lump-sum payment. The Committee may permit selected Participants to elect
to defer payments of some or all types of Awards or any other compensation
otherwise payable by the Corporation in accordance with procedures established
by the Committee and may provide that such deferred compensation may be payable
in shares of Common Stock. Any deferred payment pursuant to an Award, whether
elected by the Participant or specified by the Award Agreement or the terms of
the Award or by the Committee, may be forfeited if and to the extent that the
Award Agreement or the terms of the Award so provide.

      (c)   Dividends, Earnings and Interest. Rights to dividends or Dividend
Equivalents may be extended to and made part of any Stock Award, subject to such
terms, conditions and restrictions as the Committee may establish. The Committee
may also establish rules and procedures for the crediting of interest or other
earnings on deferred cash payments and Dividend Equivalents for Stock Awards.

      (d)   Substitution of Awards. Subject to paragraphs 13 and 15, at the
discretion of the Committee, a Participant who is an Employee may be offered an
election to substitute an Employee Award for another Employee Award or Employee
Awards of the same or different type.

11.   OPTION EXERCISE

      Following exercise the Grant Price shall be paid in full in cash at the
time of delivery of the stock or, if permitted by the Committee and elected by
the optionee, the optionee may purchase such shares by means of tendering Common
Stock valued at Fair Market Value on the date of exercise, or any combination
thereof. The Committee shall determine acceptable methods for Participants to
tender Common Stock or other Awards. The Committee may provide for procedures to
permit the exercise or purchase of such Awards by use of the proceeds to be
received from the sale of Common Stock issuable pursuant to an Award. The
Committee may adopt additional rules and procedures regarding the exercise of
Options from time to time, provided that such rules and procedures are not
inconsistent with the provisions of this paragraph.

      An optionee desiring to pay the Grant Price of an Option by tendering
Common Stock using the method of attestation may, subject to any such conditions
and in compliance with any such procedures as the Committee may adopt, do so by
attesting to the ownership of Common Stock of the requisite value in which case
the Corporation shall issue or otherwise deliver to the optionee upon such
exercise a number of shares of Common Stock subject to the Option equal to

                                       11


the result obtained by dividing (a) the excess of the aggregate Fair Market
Value of the shares of Common Stock subject to the Option for which the Option
(or portion thereof) is being exercised over the Grant Price payable in respect
of such exercise by (b) the Fair Market Value per share of Common Stock subject
to the Option, and the optionee may retain the shares of Common Stock the
ownership of which is attested.

12.   TAXES

      The Corporation or its designated third party administrator shall have the
right to deduct applicable taxes from any Employee Award payment and withhold,
at the time of delivery or vesting of cash or shares of Common Stock under this
Plan, an appropriate amount of cash or number of shares of Common Stock or a
combination thereof for payment of taxes or other amounts required by law or to
take such other action as may be necessary in the opinion of the Corporation to
satisfy all obligations for withholding of such taxes. The Committee may also
permit withholding to be satisfied by the transfer to the Corporation of shares
of Common Stock theretofore owned by the holder of the Employee Award with
respect to which withholding is required. If shares of Common Stock are used to
satisfy tax withholding, such shares shall be valued based on the Fair Market
Value when the tax withholding is required to be made. The Committee may provide
for loans, on either a short term or demand basis, from the Corporation to a
Participant who is an Employee to permit the payment of taxes required by law.

13.   AMENDMENT, MODIFICATION, SUSPENSION OR TERMINATION OF THE PLAN

      The Board may amend, modify, suspend or terminate this Plan for the
purpose of meeting or addressing any changes in legal requirements or for any
other purpose permitted by law, except that (i) no amendment or alteration that
would adversely affect the rights of any Participant under any Award previously
granted to such Participant shall be made without the consent of such
Participant and (ii) no amendment or alteration shall be effective prior to its
approval by the stockholders of the Corporation to the extent such approval is
required by applicable legal requirements or the requirements of the securities
exchange on which the Corporation's stock is listed. Notwithstanding anything
herein to the contrary, without the prior approval of the Corporation's
stockholders, Options issued under the Plan will not be repriced, replaced, or
regranted through cancellation or by decreasing the exercise price of a
previously granted Option.

14.   ASSIGNABILITY

      Unless otherwise determined by the Committee and provided in the Award
Agreement or the terms of the Award or to a family limited partnership, trust or
similar entity pre-approved by the Committee, no Award or any other benefit
under this Plan shall be assignable or otherwise transferable except by will,
beneficiary designation or the laws of descent and distribution. In the event
that a beneficiary designation conflicts with an assignment by will, the
beneficiary designation will prevail. The Committee may prescribe and include in
applicable Award Agreements or the terms of the Award other restrictions on
transfer. Any attempted assignment of an Award or any other benefit under this
Plan in violation of this paragraph 14 shall be null and void.

                                       12


15.   ADJUSTMENTS

      (a)   The existence of outstanding Awards shall not affect in any manner
the right or power of the Corporation or its stockholders to make or authorize
any or all adjustments, recapitalizations, reorganizations or other changes in
the capital stock of the Corporation or its business or any merger or
consolidation of the Corporation, or any issue of bonds, debentures, preferred
or prior preference stock (whether or not such issue is prior to, on a parity
with or junior to the existing Common Stock) or the dissolution or liquidation
of the Corporation, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding of any kind, whether or not
of a character similar to that of the acts or proceedings enumerated above.

      (b)   In the event of any subdivision or consolidation of outstanding
shares of Common Stock, declaration of a dividend payable in shares of Common
Stock or other stock split, then (i) the number of shares of Common Stock
reserved under this Plan, (ii) the number of shares of Common Stock covered by
outstanding Awards, (iii) the Grant Price or other price in respect of such
Awards, (iv) the appropriate Fair Market Value and other price determinations
for such Awards, and (v) the Stock Based Awards Limitations shall each be
proportionately adjusted by the Board as appropriate to reflect such
transaction. In the event of any other recapitalization or capital
reorganization of the Corporation, any consolidation or merger of the
Corporation with another corporation or entity, the adoption by the Corporation
of any plan of exchange affecting Common Stock or any distribution to holders of
Common Stock of securities or property (other than normal cash dividends or
dividends payable in Common Stock), the Board may make appropriate adjustments
to (i) the number of shares of Common Stock reserved under this Plan, (ii) the
number of shares of Common Stock covered by Awards, (iii) the Grant Price or
other price in respect of such Awards, (iv) the appropriate Fair Market Value
and other price determinations for such Awards, and (v) the Stock Based Awards
Limitations to reflect such transaction; provided that such adjustments shall
only be such as are necessary to maintain the proportionate interest of the
holders of the Awards and preserve, without increasing, the value of such
Awards. In the event of a corporate merger, consolidation, acquisition of
property or stock, separation, reorganization or liquidation, the Board shall be
authorized (x) to assume under the Plan previously issued compensatory awards,
or to substitute new Awards for previously issued compensatory awards, including
Awards, as part of such adjustment or (y) to cancel Awards that are Options and
give the Participants who are the holders of such Awards notice and opportunity
to exercise for 30 days prior to such cancellation.

16.   RESTRICTIONS

      No Common Stock or other form of payment shall be issued with respect to
any Award unless the Corporation shall be satisfied based on the advice of its
counsel that such issuance will be in compliance with applicable federal and
state securities laws. Certificates evidencing shares of Common Stock delivered
under this Plan (to the extent that such shares are so evidenced) may be subject
to such stop transfer orders and other restrictions as the Committee may deem
advisable under the rules, regulations and other requirements of the Securities
and Exchange Commission, any securities exchange or transaction reporting system
upon which the Common Stock is then listed or to which it is admitted for
quotation and any applicable federal or state securities law. The Committee may
cause a legend or legends to be placed upon such certificates (if any) to make
appropriate reference to such restrictions.

                                       13


17.   UNFUNDED PLAN

      This Plan shall be unfunded. Although bookkeeping accounts may be
established with respect to Participants under this Plan, any such accounts
shall be used merely as a bookkeeping convenience, including bookkeeping
accounts established by a third party administrator retained by the Corporation
to administer the Plan. The Corporation shall not be required to segregate any
assets for purposes of this Plan or Awards hereunder, nor shall the Corporation,
the Board or the Committee be deemed to be a trustee of any benefit to be
granted under this Plan. Any liability or obligation of the Corporation to any
Participant with respect to an Award under this Plan shall be based solely upon
any contractual obligations that may be created by this Plan and any Award
Agreement or the terms of the Award, and no such liability or obligation of the
Corporation shall be deemed to be secured by any pledge or other encumbrance on
any property of the Corporation. Neither the Corporation nor the Board nor the
Committee shall be required to give any security or bond for the performance of
any obligation that may be created by this Plan.

18.   RIGHT TO EMPLOYMENT

      Nothing in the Plan or an Award Agreement shall interfere with or limit in
any way the right of the Corporation to terminate any Participant's employment
or other service relationship at any time, nor confer upon any Participant any
right to continue in the capacity in which he or she is employed or otherwise
serves the Corporation.

19.   SUCCESSORS

      All obligations of the Corporation under the Plan with respect to Awards
granted hereunder shall be binding on any successor to the Corporation, whether
the existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Corporation.

20.   GOVERNING LAW

      This Plan and all determinations made and actions taken pursuant hereto,
to the extent not otherwise governed by mandatory provisions of the Code or the
securities laws of the United States, shall be governed by and construed in
accordance with the laws of the State of Texas.

21.   EFFECTIVENESS

      The Plan will be submitted to the stockholders of the Corporation for
approval at the 2003 annual meeting of shareholders and, if approved, will
become retroactively effective as of April 1, 2003.

                                       14


RESOLUTION RELATED TO STOCK OPTIONS ADOPTED BY THE COMPENSATION AND MANAGEMENT
DEVELOPMENT COMMITTEE OF THE BOARD OF DIRECTORS OF CENTEX CORPORATION ON MAY 13,
2004.

      RESOLVED, that all non-qualified options held by Full Time Employees to
acquire common stock of Centex Corporation awarded under any of the stock plans
listed below, whether awarded before or after May 13, 2004, shall be subject to
the following from and after May 13, 2004:

      1.    If an optionee shall voluntarily terminate employment and at such
            time he or she is age 55 or older, has at least 10 Years of Service
            and the sum of age and Years of Service equals at least 70, then all
            non-qualified options held by him or her shall immediately vest upon
            the termination of employment ("Vested Retirement").

      2.    All rights to exercise such vested options will terminate 12 months
            following the date of such Vested Retirement. However, to the extent
            that an option agreement provides a longer time to exercise
            following voluntary termination of employment, then such agreement
            will control.

      3.    As used herein: "Full Time Employee" means a person actively and
            regularly engaged in work at least 40 hours a week; and "Years of
            Service" means an optionee's years of employment with Centex
            Corporation or any of its Affiliates. An optionee shall be credited
            with a Year of Service on each anniversary of the date on which he
            or she was first employed by Centex Corporation or its Affiliate,
            provided that the optionee continues to be employed by such employer
            on such anniversary date.

      4.    The stock plans covered are:

            -     Centex Corporation Amended and Restated 1987 Stock Option Plan

            -     Seventh Amended and Restated 1998 Centex Corporation Employee
                  Non-Qualified Stock Option Plan

            -     Amended and Restated Centex Corporation 2001 Stock Plan

            -     Amended and Restated Centex Corporation 2003 Equity Incentive
                  Plan

      FURTHER RESOLVED, that the appropriate officers of the Corporation are
hereby directed to take all steps that they deem necessary or appropriate to
communicate the substance of the foregoing resolution to option holders who are
affected and, where they deem necessary, to document the substance of this
resolution by way of amendments to the stock plans and to existing option
agreements.

                                       15

EX-10.6A

                                                                   EXHIBIT 10.6a

PLEASE SIGN & RETURN                                         Option to Employees
                                                                  2003 Plan

                                 FY 2004 Award

Dear <>:

      Effective May 14, 2004 you have been granted a Non-qualified Option to
purchase up to <> shares of the common stock, par value $.25
per share, of Centex Corporation (the "Company") for $________ per share (the
"Option"). This Option is granted under the Centex Corporation Amended and
Restated 2003 Equity Incentive Plan (as such plan may be amended from time to
time, the "Plan"). A copy of the Plan is available to you upon request to the
Law Department during the term of this Option. This Option will terminate upon
the close of business on May 14, 2011, unless earlier terminated as described
herein or in the Plan. This Award will vest at the rate of 8 1/4% per quarter in
fiscal year 2005, 8 1/4% per quarter in fiscal year 2006 and 8 1/2% per quarter
in fiscal year 2007. The amounts and dates are shown below:

                                              



      If for any reason you cease to be an employee of at least one of the
employers in the group of employers consisting of the Company and its Affiliates
(i) this Option will immediately terminate as to any unvested portion on the
date of such cessation and (ii) any portion of this Option vested but not
exercised by you on or before such date of cessation may be exercised after such
date only as provided in the Plan. However, if you are a Full Time Employee and
you retire from all employment with the Company and its Affiliates before this
Option has fully vested and at the time of your retirement you are age 55 or
older, you have at least 10 Years of Service and the sum of age and Years of
Service equals at least 70, then this Option will immediately vest upon
termination of employment ("Vested Retirement"). You will have 12 months to
exercise this Option following the date of such Vested Retirement.

      The Company may cancel and revoke this Option and/or replace it with a
revised option at any time if the Company determines, in its good faith
judgment, that this Option was granted to you in error or that this Option
contains an error. In the event of such determination by the Company, and
written notice thereof to you at your business or home address, all of your
rights and all of the Company's obligations as to any unvested portion of this
Option shall immediately terminate. If the Company replaces this Option with a
revised option, then you will have all of the benefits conferred under the
revised option, effective at such time as the new option goes into effect.

      This Option is subject to the Plan, and the Plan will govern where there
is any inconsistency between the Plan and this Option. The provisions of the
Plan are also provisions of this Option, and all terms, provisions and
definitions set forth in the Plan are incorporated in this Option and made a
part of this Option for all purposes. Capitalized terms used but not defined in
this Option will have the meanings assigned to such terms in the Plan. This
Option has been signed in duplicate by Centex Corporation and delivered to you,
and (when you sign below) has been accepted by you effective as of May 14, 2004.

ACCEPTED                                      CENTEX CORPORATION
as of May 14, 2004

_____________________________________         _____________________________
<>                                  Timothy R. Eller
                                              Chairman & Chief Executive Officer

EX-10.6B

                                                                   EXHIBIT 10.6b

PLEASE SIGN & RETURN                                                 Stock Units
                                                                       2003 Plan

                                 FY 2004 Award

Dear <>:

         You have been granted an Award as of May 14, 2004 of <> Stock Units of Centex Corporation (the "Company") under the Amended
and Restated Centex Corporation 2003 Equity Incentive Plan (as such plan may be
amended from time to time, the "Plan"). The Stock Units awarded hereby will each
be converted to a share of the common stock of the Company ("Share") following
vesting, provided you have delivered a notice of conversion to the Committee, in
the form prescribed by it. Following conversion, such Shares will be freely
transferable. A copy of the Plan is available to you upon request to the Law
Department.

         This Award will vest at the rate of 8 1/4% per quarter in fiscal year
2005, 8 1/4% per quarter in fiscal year 2006 and 8 1/2% per quarter in fiscal
year 2007. The amounts and dates are shown below:

                                              



         All Stock Units not then terminated will vest in full on March 31,
2007, unless earlier vested as described in the Plan or this Award. The date on
which a Stock Unit vests is called the "Vesting Date". Vested units not yet
converted by you will automatically convert into Shares and become freely
transferable on May 14, 2011.

         You will forfeit all unvested Stock Units if you cease for any reason
to be an employee of at least one of the employers in the group of employers
consisting of the Company and its Affiliates. However, the restrictions set
forth in the Plan and this Award will terminate immediately and all Stock Units
covered by this Award will immediately vest (i) in the event of your death or
permanent disability or (ii) if you retire from employment at the Company and at
retirement you satisfy the definition of Vested Retirement, i.e., you are a Full
Time Employee at least 55 years old, have at least 10 Years of Service and the
sum of your age and Years of Service equals at least 70. Whether you have
suffered a permanent disability will be determined by the Committee, in its sole
and absolute discretion. In the event of your death, the person or persons to
whom the Stock Units have been validly transferred pursuant to will or the laws
of descent and distribution will have all rights to the Stock Units.

         The Company may cancel and revoke this Award and/or replace it with a
revised award at any time if the Company determines, in its good faith judgment,
that this Award was granted in error or that this Award contains an error. In
the event of such determination by the Company, and written notice thereof to
you at your business or home address, all of your rights and all of the
Company's obligations as to any unvested portion of this Award shall immediately
terminate. If the Company replaces this Award with a revised award, then you
will have all of the benefits conferred under the revised award, effective as of
such time as the revised award goes into effect.

         This Award is subject to the Plan, and the Plan will govern where there
is any inconsistency between the Plan and this Award. The provisions of the Plan
are also provisions of this Award, and all terms, provisions and definitions set
forth in the Plan are incorporated in this Award and made a part of this Award
for all purposes. Capitalized terms used but not defined in this Award will have
the meanings assigned to such terms in the Plan. This Award has been signed in
duplicate by the Company and delivered to you, and (when you sign below) has
been accepted by you effective as of May 14, 2004.

ACCEPTED                                      CENTEX CORPORATION
as of May 14, 2004

_________________________________             ________________________________
<>                                  Timothy R. Eller
                                              Chairman & Chief Executive Officer

EX-10.9

                                                                    EXHIBIT 10.9

                               CENTEX CORPORATION

                      EXECUTIVE DEFERRED COMPENSATION PLAN

                       EFFECTIVE AS OF APRIL 1, 2003, AND

                            LAST AMENDED MAY 13, 2004



                               CENTEX CORPORATION
                      EXECUTIVE DEFERRED COMPENSATION PLAN

                          EFFECTIVE AS OF APRIL 1, 2003

                                TABLE OF CONTENTS



                                                                                                         Page
                                                                                                         ----
                                                                                                      
ARTICLE I.   NATURE OF PLAN..........................................................................      1

ARTICLE II.  DEFINITIONS AND CONSTRUCTION............................................................      2
      2.1    Definitions.............................................................................      2
      2.2    Word Usage..............................................................................      5

ARTICLE III. ELIGIBILITY TO PARTICIPATE..............................................................      6
      3.1    Date of Participation...................................................................      6
      3.2    Change in Employment Status.............................................................      6

ARTICLE IV.  DEFERRED CASH COMPENSATION AWARDS.......................................................      7
      4.1    Award from Company......................................................................      7
      4.2    Agreement...............................................................................      7
      4.3    Crediting of Amounts....................................................................      7
      4.4    Interest................................................................................      7
      4.5    Vesting.................................................................................      7
      4.6    Distribution............................................................................      7
      4.7    Forfeiture..............................................................................      7
      4.8    Death, Disability or Vested Retirement..................................................      8
      4.9    Change in Control.......................................................................      8
      4.10   Employee Directors......................................................................      8

ARTICLE V.   PARTICIPANT ACCOUNTS....................................................................      9
      5.1    Participant Accounts....................................................................      9
      5.2    Accounting for Distributions............................................................      9

ARTICLE VI.  DISTRIBUTION OF BENEFITS................................................................     10
      6.1    Election for Form of Distribution of Benefits...........................................     10
      6.2    Time of Distribution....................................................................     11
      6.3    Distributions In the Event of the Participant's Death...................................     12
      6.4    Withdrawals in the Event of an Unforeseeable Financial Emergency........................     13
      6.5    Notice to Trustee.......................................................................     13


                                       -i-


                                                                                                       
ARTICLE VII. AMENDMENTS AND TERMINATION..............................................................     14
      7.1    Amendment by Company....................................................................     14
      7.2    Plan Termination........................................................................     14

ARTICLE VIII.TRUST...................................................................................     15
      8.1    Establishment of Trust..................................................................     15
      8.2    Funding.................................................................................     15

ARTICLE IX.  PLAN ADMINISTRATION.....................................................................     16
      9.1    Powers and Responsibilities of the Committee............................................     16
      9.2    Claims and Review Procedures............................................................     16

ARTICLE X.   MISCELLANEOUS...........................................................................     18
      10.1   Communication to Participants...........................................................     18
      10.2   Limitation of Rights....................................................................     18
      10.3   Spendthrift Provision...................................................................     18
      10.4   Spousal Claims..........................................................................     18
      10.5   Withholding.............................................................................     18
      10.6   Facility of Payment.....................................................................     18
      10.7   Overpayment and Underpayment of Benefits................................................     18
      10.8   Governing Law...........................................................................     19



                                      -ii-


                               CENTEX CORPORATION
                      EXECUTIVE DEFERRED COMPENSATION PLAN

                          EFFECTIVE AS OF APRIL 1, 2003

                                   ARTICLE I.

                                 NATURE OF PLAN

      Centex Corporation (the "Company") establishes the Centex Corporation
Executive Deferred Compensation Plan (the "Plan"), effective as of April 1,
2003, for the benefit of certain of its Eligible Employees. The purpose of the
Plan is to provide non-qualified Deferred Cash Compensation Awards to Eligible
Employees.

      The Plan is intended to be an unfunded deferred compensation plan
maintained for the benefit of a select group of management or highly compensated
employees under sections 201(2), 301(a)(3) and 401(a)(1) of ERISA.

      NOW, THEREFORE, Centex Corporation hereby authorizes the establishment of
the Plan, effective as of April 1, 2003, to read as follows:

                                      -1-


                                   ARTICLE II.

                          DEFINITIONS AND CONSTRUCTION

      2.1   DEFINITIONS. Wherever used herein, the following terms have the
meanings set forth below, unless a different meaning is clearly required by the
context:

            "ACCOUNT" means an account established on the books of the Employer
for the purpose of recording amounts credited on behalf of a Participant and any
income, expenses, gains or losses included thereon as described in Article V.

            "BENEFICIARY" means the person or persons entitled under Section 6.3
to receive benefits under the Plan upon the death of a Participant.

            "BOARD" means the Board of Directors of the Company.

            "CHANGE IN CONTROL" means, unless otherwise defined by the
independent Compensation Committee of the Board, a change in control of a nature
that would be required to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A promulgated under the Securities Exchange Act of 1934, as
amended (the "Act"), whether or not the Company is then subject to such
reporting requirement; provided, that, without limitation, such a change in
control shall be deemed to have occurred if:

            (1)   a third person, including a "Group" as defined in Section
      13(d)(3) of the Act, becomes the beneficial owner of Company common stock,
      par value $0.25 per share, having 50% or more of total number of votes
      that may be cast for the election of Directors; or

            (2)   as a result of, or in connection with, a contested election
      for Director, persons who were Directors immediately before such election
      shall cease to constitute a majority of the Board.

            "CODE" means the Internal Revenue Code of 1986, as amended from time
to time.

            "COMMITTEE" means the Compensation Committee of the Board.

            "COMPANY" means Centex Corporation, a Nevada corporation, or any
successor thereto which shall adopt this Plan.

            "DEFERRAL ELECTION FORM" means an election, in the form and subject
to the conditions prescribed by the Committee, pursuant to which a Participant
elects the time and form of distribution of his Account under the Plan.

            "DEFERRED CASH COMPENSATION" means deferred cash compensation
granted to an Eligible Employee as a bonus following the conclusion of a fiscal
year pursuant to Article IV.

                                      -2-


            "DEFERRED CASH COMPENSATION AWARD" means an award of Deferred Cash
Compensation.

            "DEFERRED COMPENSATION AGREEMENT" means an agreement between the
Company and an Eligible Employee, in the form and subject to the conditions
prescribed by the Committee, pursuant to which an Eligible Employee is granted a
Deferred Cash Compensation Award from the Company, and which specifies:

            (1)   that the Eligible Employee agrees to participate in this Plan
      in accordance with its provisions; and

            (2)   that this Plan is incorporated by reference and the Deferred
      Compensation Agreement shall be subject to this Plan in all respects.

            "DIRECTOR" means an individual who is a member of the Board.

            "DISABILITY" means a disability which entitles a Participant to
benefits under the Employer's long-term disability plan or which would entitle
the Participant to benefits under such plan were the Participant an employee at
the time of such disability.

            "ELIGIBLE EMPLOYEE" means (1) prior to January 1, 2004, an Employee
of the Employer who is a member of the Senior Management Team, and (2) after
December 31, 2003, an Employee who is an officer of the Employer.

            "EMPLOYEE" means any employee of the Employer.

            "EMPLOYEE DIRECTOR" means an individual (1) who is both a member of
the Board and an Employee of the Company at the time of the grant of the
Deferred Cash Compensation Award or (2) who was an Employee whose date of
Retirement is before the Deferred Cash Compensation Award is granted, but who
qualifies for such award in accordance with an incentive compensation plan of
the Company.

            "EMPLOYER" means the Company and any Related Employer.

            "ERISA" means the Employee Retirement Income Security Act of 1974,
as from time to time amended.

            "FORM OF DISTRIBUTION" means one of the distribution options set
forth in Section 6.1(b).

            "FULL TIME EMPLOYEE" means a person actively and regularly engaged
in work at least 40 hours a week.

            "MAXIMUM DEFERRAL DATE" means December 31st of the 7th year after
the year in which a Deferred Cash Compensation Award is granted to a
Participant.

                                      -3-


            "PARTICIPANT" means any Eligible Employee who participates in the
Plan in accordance with Article III and Article IV.

            "PLAN" means the Centex Corporation Executive Deferred Compensation
Plan, as set forth herein and as may be amended from time to time.

            "PLAN YEAR" means the 12-consecutive month period beginning January
1 and ending December 31.

            "RELATED EMPLOYER" means any employer other than the Company named
herein, if the Company and such other employer are members of a controlled group
of corporations (as defined in Section 414(b) of the Code) or an affiliated
service group (as defined in Section 414(m)), or are trades or businesses
(whether or not incorporated) which are under common control (as defined in
Section 414(c)), or such other employer is required to be aggregated with the
Company pursuant to regulations issued under Code Section 414(o). Related
Employer shall also include any joint venture in which the Company or a
subsidiary of the Company is a partner, if the Company or a subsidiary of the
Company manages such joint venture, and any Affiliated Business Arrangement. For
purposes of this definition of Related Employer, an "Affiliated Business
Arrangement" means any entity in which either CTX Mortgage Ventures Corporation,
a Nevada corporation, CTX Mortgage Ventures, LLC, a Delaware limited liability
company, or a subsidiary of the Company owns an interest and in which a
non-Company owned entity also owns an interest, and may take the form of a
limited partnership, a limited liability limited partnership, a limited
liability company or such other ownership and management structure as CTX
Mortgage Ventures Corporation, CTX Mortgage Ventures, LLC, or a subsidiary of
the Company, as applicable, may deem appropriate. In addition, predecessors to
the Company and its subsidiaries are Related Employers.

            "RETIREMENT" means the Participant's voluntary termination of
employment from the Employer and, where the context indicates, will include
Vested Retirement.

            "SENIOR MANAGEMENT TEAM" means Messrs. Leldon E. Echols, Timothy R.
Eller, Laurence E. Hirsch, Raymond G. Smerge, and Robert S. Stewart.

            "TRUST" means a trust fund established, if any, pursuant to the
Article VIII hereof.

            "TRUSTEE" means the corporation or individuals named in the
agreement establishing a Trust and such successor and/or additional trustees as
may be named in accordance with a trust agreement, if one is established.

            "UNFORESEEABLE FINANCIAL EMERGENCY" means an unanticipated emergency
that is caused by an event beyond the control of the Participant that would
result in severe financial hardship to the Participant resulting from (i) sudden
and unexpected illness or accident of the Participant, the Participant's spouse,
or a dependent of the Participant, (ii) a loss of the Participant's property due
to casualty, or (iii) such other extraordinary and unforeseeable

                                      -4-


circumstances arising as a result of events beyond the control of the
Participant, all as determined in the sole discretion of the Committee.

            "VESTED RETIREMENT" means the voluntary termination by a Participant
who is a Full Time Employee of all employment from the Employer at any time
after the Participant is age 55 or older, has at least 10 Years of Service and
the sum of age and Years of Service equals at least 70. Calculation of
eligibility for Vested Retirement shall be based on whole years of age and Years
of Service on the date as of which the calculation is being made. Any partial
years shall be disregarded.

            "WEIGHTED AVERAGE COST OF FUNDS" means the Company's weighted
average borrowing cost as determined quarterly by the Company's Treasurer.

            "YEARS OF SERVICE" means the Participant's years of employment with
an Employer. A Participant shall be credited with a Year of Service on each
anniversary of the date on which he was first employed with an Employer,
provided that the Participant continues to be employed by an Employer on such
anniversary date.

      2.2   WORD USAGE. Words used in the masculine shall apply to the feminine
where applicable, and wherever the context of the Plan dictates, the plural
shall be read as the singular and the singular as the plural. The words
"herein," "hereof," "hereinafter" and other conjunctive uses of the word "here"
shall be construed as reference to another portion of this Plan document. The
terms "Section" or "Article" when used as a cross-reference shall refer to other
Sections or Articles contained in the Plan and not to another instrument,
document or publication unless specifically stated otherwise.

                                      -5-


                                  ARTICLE III.

                           ELIGIBILITY TO PARTICIPATE

      3.1   DATE OF PARTICIPATION. An Eligible Employee shall become a
Participant in the Plan as of the date he is granted a Deferred Cash
Compensation Award, pursuant to Section 4.1, subject to his timely execution of
a Deferred Compensation Agreement.

      3.2   CHANGE IN EMPLOYMENT STATUS. If any Participant continues in the
employ of the Employer or Related Employer but ceases to be an Eligible
Employee, the individual shall continue to be a Participant while he remains
employed and the Deferred Cash Compensation Award will continue to vest and be
paid in accordance with its terms; provided, however, the individual shall not
be eligible for new grants of Deferred Cash Compensation Awards on and after the
date he is no longer an Eligible Employee.

                                      -6-


                                   ARTICLE IV.

                        DEFERRED CASH COMPENSATION AWARDS

      4.1   AWARD FROM COMPANY. From time to time while the Plan is in effect,
the Committee may in its absolute discretion select from among Eligible
Employees such one or more of them as in the opinion of the Committee should
receive a Deferred Cash Compensation Award from the Company. The Committee will
also, in its absolute discretion, determine the amount of the Deferred Cash
Compensation Award for each Eligible Employee so selected.

      4.2   AGREEMENT. Each Deferred Cash Compensation Award under the Plan
shall be evidenced by, and subject to, a timely executed Deferred Compensation
Agreement setting forth the terms and conditions of the award.

      4.3   CREDITING OF AMOUNTS. An Employer shall credit a Participant's
Account with the amount of Deferred Cash Compensation that has been awarded to
the Participant in accordance with Section 4.1. Such amount shall be credited to
a Participant's Account on the date specified under the applicable Deferred
Compensation Agreement.

      4.4   INTEREST. A Participant's Account shall accrue interest until paid
to the Participant, and shall be credited with interest at the Weighted Average
Cost of Funds on the last business day of each calendar quarter or as otherwise
provided in the applicable Deferred Compensation Agreement. The foregoing
notwithstanding, unless otherwise provided in the applicable Deferred
Compensation Agreement, if all or a portion of a Participant's Account is
distributed on a date other than the last business day of a calendar quarter,
then, with respect to such distributed amount, his Account will be credited with
prorated interest based on a fraction, the numerator of which shall be the
number of days in the quarter of distribution prior to the distribution date and
the denominator of which shall be the total number of days in the quarter of
distribution, at the Weighted Average Cost of Funds for the last business day of
the calendar quarter immediately preceding the calendar quarter of such
Participant's distribution.

      4.5   VESTING. A Participant's Deferred Cash Compensation Award shall vest
in accordance with a schedule established by the Committee, in its sole and
absolute discretion, and as described in the applicable Deferred Compensation
Agreement. The schedules established by the Committee for each Deferred Cash
Compensation Award may differ among Participants.

      4.6   DISTRIBUTION. The distribution of any vested portion of a Deferred
Cash Compensation Award shall be as provided in the applicable Deferred
Compensation Agreement, subject to the provisions of Article VI below.

      4.7   FORFEITURE. Subject to Sections 4.8, 4.9 and 4.10 below and except
as otherwise provided in a Deferred Compensation Agreement or as otherwise
determined by the Committee, any unvested portion of an Account attributable to
a Deferred Cash Compensation Award shall be immediately forfeited automatically
upon termination of employment of the Participant for any reason other than
death, Disability or Vested Retirement.

                                      -7-


      4.8   DEATH, DISABILITY OR VESTED RETIREMENT. Notwithstanding Section 4.5
to the contrary, unless (i) otherwise expressly provided in the applicable
Deferred Compensation Agreement or (ii) previously forfeited under Section 4.7,
in the event of the Participant's death, Disability or Vested Retirement, each
Deferred Cash Compensation Award granted to such Participant shall become
immediately vested in its entirety.

      4.9   CHANGE IN CONTROL. In the event of a Change in Control during a
Participant's employment with the Employer, each Deferred Cash Compensation
Award granted under this Plan to the Participant shall become immediately vested
and payable and shall be paid in a lump sum in cash (regardless of the otherwise
applicable distribution and vesting provided for under the Deferred Compensation
Agreement or the terms of the Deferred Cash Compensation Award) unless otherwise
expressly provided in such Deferred Compensation Agreement or Deferred Cash
Compensation Award.

      4.10  EMPLOYEE DIRECTORS. An Employee Director's entire Deferred Cash
Compensation Award will vest in full on the date the Employee Director ceases to
be both a Director and an Employee.

                                      -8-


                                   ARTICLE V.

                              PARTICIPANT ACCOUNTS

      5.1   PARTICIPANT ACCOUNTS. The Company will establish and maintain an
Account for each Participant to which shall be credited all Employer
contributions and any earnings attributable to the Participant's Account. The
Committee will establish and maintain such other accounts and records as it
decides in its discretion to be reasonably required or appropriate in order to
discharge its duties under the Plan. Participants will be furnished statements
of their Account values at least once each Plan Year.

      5.2   ACCOUNTING FOR DISTRIBUTIONS. As of any date of a distribution to a
Participant or a Beneficiary hereunder, the distribution to the Participant or
to the Participant's Beneficiary(ies) shall be charged to the Participant's
Account.

                                      -9-


                                   ARTICLE VI.

                            DISTRIBUTION OF BENEFITS

      6.1   ELECTION FOR FORM OF DISTRIBUTION OF BENEFITS.

            (a)   A Participant shall elect the Form of Distribution to be made
      from the Participant's Account when such Participant first enters into a
      Deferred Compensation Agreement and at such other designated times as
      provided in Section 6.2(b).

            (b)   Participants may elect to receive distribution of their
      Account with respect to the amounts scheduled to vest in the following
      year from among the following Forms of Distribution, subject to Section
      6.2 of the Plan:

                  (1)   For a distribution following death, Disability, or
      Retirement prior to the Maximum Deferral Date:

                        (A)   a lump sum in cash; or

                        (B)   a series of substantially equal quarterly,
                  semi-annual or annual installments in cash over a period
                  certain which does not exceed the Maximum Deferral Date; or

                        (C)   two installments in cash in amounts (stated as
                  percentages of the Account that total 100%) payable as of the
                  dates elected by the Participant which do not exceed the
                  Maximum Deferral Date.

                  (2)   For a distribution during employment prior to the
            Maximum Deferral Date:

                        (A)   a lump sum in cash of all or a portion of the
                  Participant's Account payable as of the date(s) elected by the
                  Participant which do not exceed the Maximum Deferral Date; or

                        (B)   two installments in cash in amounts (stated as
                  percentages of the Account that total 100%) payable as of the
                  dates elected by the Participant which do not exceed the
                  Maximum Deferral Date.

            (c)   Notwithstanding anything herein to the contrary, if a
      Participant has not elected a Form of Distribution at the time the
      Participant terminates employment or, if earlier, the Maximum Deferral
      Date(s), then his vested Account shall be distributed in a lump sum in
      cash on or about the earlier of his termination date or, if applicable,
      the Maximum Deferral Date(s).

                                      -10-


      6.2   TIME OF DISTRIBUTION.

            (a)   A Participant may elect to receive a distribution as follows:

                  (1)   If the Participant elects a lump sum distribution, he
            can elect that the distribution be made:

                        (A)   within 30 days following his death, Disability, or
                  Retirement; or

                        (B)   in January of the year following death, Disability
                  or Retirement;

            provided, however, that if the Maximum Deferral Date for the amount
            to be distributed occurs prior to the Participant's death,
            Disability or Retirement, then such lump sum distribution shall be
            made on (or as soon as administratively practicable after) the
            Maximum Deferral Date.

                  (2)   If the Participant elects a distribution in quarterly,
            semi-annual or annual installments, the distribution will commence
            in January of the year following death, Disability, or Retirement;
            provided, however, that if the Maximum Deferral Date for the amount
            to be distributed occurs prior to the Participant's death,
            Disability or Retirement, then such amount shall be distributed in
            lump sum on (or as soon as administratively practicable after) the
            Maximum Deferral Date.

                  (3)   If the Participant elects a lump sum distribution during
            employment, he can elect that the distribution be made after a set
            number of years not to exceed the Maximum Deferral Date for the
            amount to be distributed, provided, however, that if the Participant
            terminates employment prior to such date, then the Plan's provisions
            with respect to distribution following death, Disability, or
            Retirement, or the general provisions of this Section, shall control
            the distribution of his Account.

      An election pursuant to this Section shall be made by the Participant when
      the Participant first enters into a Deferred Compensation Agreement
      pursuant to a Deferral Election Form and at other such times as permitted
      by the Committee on subsequent Deferral Election Forms.

            (b)   An election of timing of distribution for a prior Plan Year
      award may be revoked and a new election substituted therefor during any
      subsequent Plan Year; provided, however, that such new election (i) shall
      only be effective with respect to distributions during a Plan Year
      subsequent to the Plan Year during which the new election is made and (ii)
      the new distribution date shall not exceed the applicable Maximum Deferral
      Date with respect to the amounts to be distributed.

                                      -11-


            (c)   Notwithstanding a Participant's election regarding timing of a
      distribution, in the event that a Participant terminates employment other
      than due to death, Disability, or Retirement and such termination date is
      prior to the Maximum Deferral Date for the amounts to be distributed, then
      the Participant's vested Account shall be distributed in a lump sum as
      soon as administratively practicable after such date; provided, however,
      that the Committee may, in its sole and absolute discretion, choose to
      continue the deferral until the Participant's Account would otherwise be
      payable for a period not to exceed the earlier of (i) the end of the
      following Plan Year or (B) the applicable Maximum Deferral Date for the
      amounts to be distributed, subject to the right of the Committee to revoke
      the deferral at any time and cause a distribution to occur.

            (d)   Notwithstanding the foregoing or any other provision of the
      Plan to the contrary, in no event will distribution of a Participant's
      vested Account balance be deferred later than the date specified by the
      Participant in his election to defer his Deferred Cash Compensation Award
      or, if earlier, the applicable Maximum Deferral Date with respect to each
      Deferred Cash Compensation Award, subject to Section 6.2(c).

      6.3   DISTRIBUTIONS IN THE EVENT OF THE PARTICIPANT'S DEATH. If a
Participant dies before the distribution of his Account has commenced, or before
such distribution has been completed, his designated Beneficiary or
Beneficiaries will be entitled to receive, to the extent vested, the balance or
remaining balance of his Account, plus any amounts thereafter credited to his
Account, in a lump sum as soon as administratively practicable after the
Participant's date of death and satisfaction of this Section 6.3.

            If a Participant is married, his Beneficiary is his spouse at the
time of his death. A Participant may designate a Beneficiary or Beneficiaries
other than his spouse, provided that the Participant's spouse either consents to
such designation or the Participant establishes to the satisfaction of the
Committee that the spouse's consent cannot be obtained because the spouse cannot
be located. Spousal consent must be in writing, must acknowledge the effect of
the designation, and must be witnessed by a Plan representative or a notary
public. Any consent by a spouse (or the establishment that a spouse cannot be
located) shall be valid only with respect to that spouse. The designation of a
nonspousal Beneficiary or a change in any prior designation of Beneficiary or
Beneficiaries shall be made by giving notice to the Committee on a form
designated by the Committee.

            If a Participant is not married, he may designate a Beneficiary or
Beneficiaries or change any prior designation of Beneficiary or Beneficiaries by
giving notice to the Committee on a form designated by the Committee.

            If more than one person is designated as the Beneficiary, their
respective interests shall be as indicated on the designation form.
Distributions shall be made in lump sum payments in cash as soon as
administratively practicable following the Committee's receipt of notice of the
Participant's death.

                                      -12-


            A copy of the death notice or other sufficient documentation must be
filed with and approved by the Committee. If upon the death of the Participant
there is, in the opinion of the Committee, no designated Beneficiary for part or
all of the Participant's vested Account, such amount will be paid to his
surviving spouse or, if none, to his estate (such spouse or estate shall be
deemed to be the Beneficiary for purposes of the Plan). If a Beneficiary dies
after benefits to such Beneficiary have commenced, but before they have been
completed, and, in the opinion of the Committee, no person has been designated
to receive such remaining benefits, then such benefits shall be paid to the
deceased Beneficiary's estate.

      6.4   WITHDRAWALS IN THE EVENT OF AN UNFORESEEABLE FINANCIAL EMERGENCY. If
the Participant experiences an Unforeseeable Financial Emergency, the
Participant may petition the Committee, in the manner and form specified by the
Committee, to receive a partial or full distribution of his vested Account. A
payout under this section shall not exceed the lesser of the vested balance in
the Participant's Account or the amount reasonably needed to satisfy the
Unforeseeable Financial Emergency. Approval of such a request shall be made by
the Committee in its sole discretion.

      6.5   NOTICE TO TRUSTEE. The Committee will notify the Trustee, if
applicable, in writing whenever any Participant or Beneficiary is entitled to
receive benefits under the Plan. The Committee's notice shall indicate the form,
amount and frequency of benefits that such Participant or Beneficiary shall
receive.

                                      -13-


                                  ARTICLE VII.

                           AMENDMENTS AND TERMINATION

      7.1   AMENDMENT BY COMPANY. The Company, by action of the Committee,
reserves the authority to amend the Plan at any time and in any manner, except
that no amendment shall apply retroactively to alter the rights of Participants
(or, following the Participants' death, their Beneficiaries) with respect to
past deferrals, nor shall any such amendment divest any Participant (or,
following the Participant's death, his Beneficiaries) of any deferral made prior
to the amendment. Amendments may be made as necessary or appropriate to enable
the Plan to satisfy the applicable requirements of the Code or ERISA or to
conform the Plan to any change in federal law or to any regulations or ruling
thereunder.

      7.2   PLAN TERMINATION. The Company has adopted the Plan with the
intention and expectation that the Plan will be continued indefinitely. However,
the Company has no obligation or liability whatsoever to maintain the Plan for
any length of time and may discontinue contributions under the Plan or, by
action of the Committee, terminate the Plan at any time. In the event of such
discontinuance, Accounts of Participants maintained under the Plan at the time
of termination shall continue to be governed by the terms of the Plan until paid
out in accordance with the terms of the Plan; provided, however, that the
Company reserves the right to distribute to each Participant the total amount
deferred, including accrued interest, of the Participant's Account at any time
or times.

                                      -14-


                                  ARTICLE VIII.

                                      TRUST

      8.1   ESTABLISHMENT OF TRUST. Benefits hereunder shall constitute an
unfunded, general obligation of the Company. The Company may, but shall not be
required to, establish a Trust between the Company and the Trustee, in
accordance with the terms and conditions as set forth in a separate agreement,
under which assets are held, administered and managed, subject to the claims of
the Company's creditors in the event of the Company's insolvency, until paid to
Participants and their Beneficiaries as specified in the Plan. Any such Trust
shall be treated as a grantor trust under the Code, and the establishment of any
such Trust is not intended to cause Participants to realize current income on
amounts contributed thereto. If a Trust is established under this Section 8.1,
then benefits may be paid by the Company or from the Trust.

      8.2   FUNDING. Notwithstanding the ability or obligation, as applicable,
of the Company to establish a Trust under this Article VIII, or to take other
action to create reserves or funds, benefits under this Plan shall constitute an
unfunded and unsecured promise to pay benefits. A Participant and his
Beneficiary(ies) shall be general creditors of the Company with respect to the
payment of any benefit under this Plan.

                                      -15-


                                  ARTICLE IX.

                               PLAN ADMINISTRATION

      9.1   POWERS AND RESPONSIBILITIES OF THE COMMITTEE. The Committee has the
full power and discretion and the full responsibility to interpret the Plan and
to administer the Plan in all of its details, subject, however, to the
applicable requirements of ERISA. The Committee's powers and responsibilities
include, but are not limited to, the following:

            (a)   To make and enforce such rules and regulations as it deems
      necessary or proper for the efficient administration of the Plan;

            (b)   To interpret the Plan, its interpretation thereof in good
      faith and discretion to be final and conclusive on all persons claiming
      benefits under the Plan;

            (c)   To decide all questions concerning the Plan and the
      eligibility of any person to participate in the Plan;

            (d)   To administer the claims and review procedures specified in
      Section 9.2;

            (e)   To compute the amount of benefits which will be payable to any
      Participant, former Participant or Beneficiary in accordance with the
      provisions of the Plan;

            (f)   To determine the person or persons to whom such benefits will
      be paid;

            (g)   To authorize the payment of benefits;

            (h)   To comply with the reporting and disclosure requirements of
      Part 1 of Subtitle B of Title I of ERISA;

            (i)   To designate such persons (which may include Employees of the
      Company), counsel, accountants, and consultants as may be required to
      assist in administering the Plan; and

            (j)   To allocate and delegate its responsibilities, including the
      formation of any other committees as appropriate to the administration of
      the Plan.

      9.2   CLAIMS AND REVIEW PROCEDURES.

            (a)   If any person believes he is entitled to any rights or
      benefits under the Plan, such person may file a claim in writing with the
      Committee, which shall be in appropriate detail to convey a clear
      understanding of such claim. If any such claim is wholly or partially
      denied, the Committee will notify such person of its decision in writing.
      Such notification will contain (i) specific reasons for the denial, (ii)
      specific reference to pertinent Plan provisions, (iii) a description of
      any additional material or

                                      -16-


      information necessary for such person to perfect such claim and an
      explanation of why such material or information is necessary, and (iv)
      information as to the steps to be taken if the person wishes to submit a
      request for review, the time limits applicable to such procedures, and a
      statement of the person's rights following an adverse benefit
      determination on review, including a statement of his right to file a
      lawsuit under ERISA if the claim is denied on appeal. Such notification
      will be given within 90 days after the claim is received by the Committee
      (or within 180 days, if special circumstances require an extension of time
      for processing the claim, and if written notice of such extension and
      circumstances is given to such person within the initial 90-day period).
      If such notification is not given within such period, the claim will be
      considered denied as of the last day of such period and such person may
      request a review of his claim.

            (b)   Within 60 days after the date on which a person receives a
      notice of denial (or within 60 days after the date on which such denial is
      considered to have occurred), such person (or his duly authorized
      representative) may (i) file a written request with the Committee for a
      review of his denied claim; (ii) review pertinent documents; and (iii)
      submit issues and comments in writing. The decision on review will be made
      within 60 days after the request for review is received by the Committee
      (or within 120 days, if special circumstances require an extension of time
      for processing the request, such as an election by the Committee to hold a
      hearing, and if written notice of such extension and circumstances is
      given to such person within the initial 60-day period). The decision on
      review shall be in written or electronic form, and include notice of the
      final determination. If the claim is denied in whole or part, such notice,
      which shall be in a manner calculated to be understood by the person
      receiving such notice, shall include (i) the specific reasons for the
      decision, (ii) the specific references to the pertinent plan provisions on
      which the decision is based, (iii) a statement that the person is entitled
      to receive, upon request and free of charge, reasonable access to, and
      copies of, all documents, records, and other information relevant to the
      claim for benefits, (iv) a description of any voluntary appeal procedures
      offered by the Plan and the person's right to obtain further information
      about any such procedures, and (v) a statement of the person's right to
      file a lawsuit under ERISA. If the decision on review is not made within
      such period, the claim will be considered denied.

            Benefits under this Plan will only be paid if the Committee decides,
in its discretion, that a person is entitled to them. Moreover, no action at law
or in equity shall be brought to recover benefits under this Plan prior to the
date the claimant has exhausted the administrative process of appeal available
under the Plan.

                                      -17-


                                   ARTICLE X.

                                  MISCELLANEOUS

      10.1  COMMUNICATION TO PARTICIPANTS. The Committee shall communicate the
terms of the Plan as soon as practicable after an Eligible Employee is
designated as a Participant.

      10.2  LIMITATION OF RIGHTS. Neither the establishment of the Plan and, if
applicable, the Trust, nor any amendment thereof, nor the creation of any fund
or account, nor the payment of any benefits, will be construed as giving to any
Participant or other person any legal or equitable right against the Company, an
Employer, the Committee (or its delegates) or Trustee, except as provided
herein. The Plan is not an employment contract, and in no event will the terms
of employment or service of any Participant be modified or in any way affected
hereby.

      10.3  SPENDTHRIFT PROVISION. Except as otherwise provided in Section 10.4,
the benefits provided hereunder will not be subject to alienation, assignment,
garnishment, attachment, execution or levy of any kind, either voluntarily or
involuntarily, and any attempt to cause such benefits to be so subjected will
not be recognized, except to such extent as may be required by law.

      10.4  SPOUSAL CLAIMS. Any claim against benefits under this Plan for child
support, spousal maintenance, alimony, property division or other matrimonial or
dependent obligations shall be paid in a single lump sum payment in cash as soon
as administratively practicable after the Committee (or its delegate) approves
such payment. Except as provided herein, such a claim under this Plan shall be
subject to the Plan's claims procedures, provisions and restrictions.

      10.5  WITHHOLDING. Any taxes required to be withheld from distributions
hereunder shall be deducted and withheld by the Employer, benefit provider or
funding agent.

      10.6  FACILITY OF PAYMENT. In the event the Committee determines, on the
basis of medical reports or other evidence satisfactory to the Committee, that
the recipient of any benefit payments under the Plan is incapable of handling
his affairs by reason of minority, illness, infirmity or other incapacity, the
Committee may, but is not obligated to, provide for disbursement of such
payments to such person's spouse or to any person or institution designated by a
court which has jurisdiction over such recipient or a person or institution
otherwise having the legal authority under applicable state law for the care and
control of such recipient. The receipt by any such person or institution of any
such payments therefor, and any such payment to the extent thereof, shall
discharge the liability of the Plan for the payment of benefits hereunder to
such recipient.

      10.7  OVERPAYMENT AND UNDERPAYMENT OF BENEFITS. The Committee may adopt,
in its sole discretion, whatever rules, procedures and accounting practices are
appropriate in providing for the collection of any overpayment of benefits. If
an overpayment is made to a Participant, spouse, other Beneficiary or alternate
payee, for whatever reason, the Committee may, in its sole discretion, withhold
payment of any further benefits under the Plan until the

                                      -18-


overpayment has been collected or may require repayment of benefits paid under
this Plan, without regard to further benefits to which the person may be
entitled and, to the extent deemed necessary by the Committee, in its sole
discretion, the Committee may seek repayment of such overpaid amounts through
any and all available legal actions, including, but not limited to, filing suit
in a court with appropriate jurisdiction. If a Participant, spouse, alternate
payee, or other Beneficiary receives an underpayment of benefits, the Committee
shall direct that immediate payment be made to make up for the underpayment.

      10.8  GOVERNING LAW. The Plan will be construed, administered and enforced
according to ERISA, and to the extent not preempted thereby, the laws of the
State of Texas.

                                      -19-


            IN WITNESS WHEREOF, Centex Corporation has executed these presents
as evidenced by the signature of its officer affixed hereto, in a number of
copies, all of which shall constitute but one and the same instrument, which may
be sufficiently evidenced by any executed copy hereof, this ______ day of
_____________________, _______.

                                     CENTEX CORPORATION

                                     By:________________________________________

                                     Its:_______________________________________

                                      -20-

EX-10.10

                                                                   EXHIBIT 10.10

                               CENTEX CORPORATION
                            SALARY CONTINUATION PLAN

               (As Amended and Restated Effective January 1, 2002)



                               CENTEX CORPORATION
                            SALARY CONTINUATION PLAN

               (As Amended and Restated Effective January 1, 2002)

                                      INDEX



                                                                                                                Page
                                                                                                                ----
                                                                                                             
ARTICLE I INTRODUCTION......................................................................................      2
       1.1         Purpose of the Plan......................................................................      2
       1.2         Scope of the Plan and Relationship to the Policy.........................................      2

ARTICLE II DEFINITIONS......................................................................................      3

ARTICLE III ELIGIBILITY.....................................................................................      4

ARTICLE IV BENEFITS.........................................................................................      5
       4.1         Salary Continuation Benefits.............................................................      5
       4.2         Withholding of Taxes.....................................................................      5

ARTICLE V NOTICE AND PROOF OF CLAIMS........................................................................      6

ARTICLE VI ADMINISTRATION AND FUNDING.......................................................................      7
       6.1         Plan Administrator.......................................................................      7
       6.2         Discretion to Interpret Plan.............................................................      7
       6.3         Powers and Duties........................................................................      7
       6.4         Expenses.................................................................................      7
       6.5         Right to Delegate........................................................................      8
       6.6         Reliance on Reports, Certificates, and Participant Information...........................      8
       6.7         Source of Funding........................................................................      8
       6.8         Indemnification..........................................................................      8
       6.9         Fiduciary Duty...........................................................................      9

ARTICLE VII GENERAL PROVISIONS..............................................................................     10
       7.1         No Employment Guaranteed.................................................................     10
       7.2         Prohibition of Assignment and Anticipation...............................................     10
       7.3         Governing Law............................................................................     10
       7.4         Amendment and Termination................................................................     10
       7.5         Effect of Amendment or Termination.......................................................     10
       7.6         Effect of Oral Statements................................................................     11
       7.7         Payments in Satisfaction of Claims.......................................................     11
       7.8         Payments Due Minors and Incompetents.....................................................     11
       7.9         No Guarantee of Tax Consequences.........................................................     11
       7.10        Unknown Whereabouts......................................................................     11
       7.11        Clerical Error...........................................................................     11
       7.12        Limitation of Rights.....................................................................     11
       7.13        Examination of Documents.................................................................     11
       7.14        Information to be Furnished..............................................................     12
       7.15        Statements...............................................................................     12
       7.16        Waiver or Estoppel.......................................................................     12
       7.17        Legal Proceedings........................................................................     12
       7.18        Miscellaneous............................................................................     12


                                      (i)


                               CENTEX CORPORATION
                            SALARY CONTINUATION PLAN

               (As Amended and Restated Effective January 1, 2002)

                                    RECITALS

      WHEREAS, the Company has established the Salary Continuation Plan (the
"Plan"), effective May 1, 1989, for the benefit of its eligible Employees; and,

      WHEREAS, effective January 1, 2002, the Company has authorized the
amendment and restatement of the Plan;

      NOW, THEREFORE, the Company hereby amends and restates in its entirety and
continues the Plan in the form prescribed herein to read as follows from and
after January 1, 2002:



                                    ARTICLE I

                                  INTRODUCTION

      1.1   PURPOSE OF THE PLAN. The purpose of the Plan is to provide salary
continuation benefits for selected key salaried Employees of the Company.

      1.2   SCOPE OF THE PLAN AND RELATIONSHIP TO THE POLICY. The Plan is
allowed to be funded either by the general assets of the Company, by policies of
group life insurance, policies of individual life insurance, annuity contracts
or some combination thereof. This Plan Document will be the sole document used
in determining the benefits provided hereunder for eligible Participants.

                                      -2-


                                   ARTICLE II

                                   DEFINITIONS

            "AFFILIATE" means any corporation which, together with the Company,
is a member of a controlled group of corporations under Code Section 414(b), is
a member of an affiliated service group under Code Section 414(m), or is under
common control pursuant to Code Section 414(c). The term also refers to any
organization in which the Company has a direct or indirect ownership interest.

            "BENEFICIARY" means such person or persons designated in writing by
a Participant and communicated sufficiently to the Plan Administrator, entitled
to receive a deceased Participant's benefits due hereunder.

            "COMPANY" means Centex Corporation, a Nevada corporation. References
to the Company herein shall incl ude, where applicable, any of its Subsidiaries
and/or Affiliates who meets the definition of a Participating Employer, or any
successor thereto.

            "EMPLOYEE" means a person who qualifies as an Employee in the Plan's
Summary Plan Description.

            "EMPLOYER" means the Company and each Affiliate and Subsidiary,
individually.

            "ERISA" means the Employee Retirement Income Security Act of 1974,
and its regulations, as amended from time to time.

            "INSURER" means the entity which issued the Policy(ies) from which
the Company funds, partially or totally, the benefits provided by the Plan.

            "PARTICIPANT" means an Employee of a Participating Employer who is
nominated by the president (or equivalent officer) of an Employer, and approved
by both the CEO (or equivalent officer) of the Employer and the Plan
Administrator to participate in the Plan.

            "PARTICIPATING EMPLOYER" means individually, the Company and any
Affiliate and/or Subsidiary of the Company that has been approved by the Company
to participate in the Plan.

            "PLAN" means the Centex Corporation Salary Continuation Plan, as
amended and restated effective January 1, 2002, as set forth herein and
hereafter amended from time to time.

            "PLAN ADMINISTRATOR" means the individual, committee or entity
appointed by the Compensation Committee of the Board of Directors to administer
the Plan or, if none is so appointed, Centex Corporation.

            "POLICY" means a group or individual life insurance policy(ies), or
annuity contracts, issued by the Insurer, and purchased by the Company to fund
the benefits hereunder.

            "SUBSIDIARY" means any Subsidiary corporation with respect to the
Company as defined in Section 425(f) of the Code.

                                      -3-


                                   ARTICLE III

                                   ELIGIBILITY

            The Plan Administrator may from time to time establish such
eligibility requirements for participation in the Plan as it may deem
appropriate in its sole discretion; provided, however, that only select, active
Employees of a Participating Employer shall be eligible to participate in the
Plan. Participation in the Plan shall terminate upon termination of employment
or termination of coverage, either as provided herein by the Plan Administrator
in its eligibility requirements, through termination or amendment of the Plan,
or as of the date an Employer no longer participates in the Plan.

                                      -4-


                                   ARTICLE IV

                                    BENEFITS

      4.1   SALARY CONTINUATION BENEFITS. The Plan may provide for salary
continuation benefits payable, in the event of the Employee's death while in the
active employment of a Participating Employer, to the surviving spouse or other
Beneficiary of the Participant in such amounts and for such periods of time and
subject to such conditions as the Plan Administrator in its discretion shall
determine to be appropriate and shall set forth in the Plan's Summary Plan
Description.

      4.2   WITHHOLDING OF TAXES. The Company shall deduct from the amount of
any benefits payable hereunder any taxes required to be withheld by the Federal,
or any state or local, government.

                                      -5-


                                    ARTICLE V

                           NOTICE AND PROOF OF CLAIMS

            Any person claiming benefits under this Plan shall make such claim
in accordance with the provisions established in the Plan's Summary Plan
Description. Furthermore, all such claims shall be subject to, and processed by
the Plan Administrator in accordance with, the terms of the Plan. Furthermore,
if any dispute still exists between a Participant or a Beneficiary and the Plan
Administrator after a review of a claim, or in the event any uncertainty shall
develop as to the person to whom payment of any benefit hereunder shall be made,
the Plan may withhold the payment of all or any part of the benefits payable
hereunder to the Participant or Beneficiary until such dispute has been resolved
by a court of competent jurisdiction or settled by the parties involved.

                                      -6-


                                   ARTICLE VI

                           ADMINISTRATION AND FUNDING

      6.1   PLAN ADMINISTRATOR. The general administration of the Plan shall be
vested in the Plan Administrator, who shall be appointed by the Compensation
Committee of the Board of Directors of Centex Corporation. For purposes of
ERISA, the Plan Administrator shall be the "administrator" and the "named
fiduciary" of the Plan.

      6.2   DISCRETION TO INTERPRET PLAN. The Plan Administrator shall have
absolute discretion to construe and interpret any and all provisions of the
Plan, including, but not limited to, the discretion to resolve ambiguities,
inconsistencies, or omissions conclusively; provided, however, that the Plan
Administrator shall not be arbitrary and capricious in all such matters. The
decisions of the Plan Administrator upon all matters within the scope of its
authority shall be binding and conclusive upon all persons.

      6.3   POWERS AND DUTIES. The Plan Administrator shall have all powers
necessary or proper to administer the Plan and to discharge its duties under the
Plan, including, but not limited to, the following powers:

                  (a) To make and enforce such rules, regulations, and
            procedures as it may deem necessary or proper for the orderly and
            efficient administration of the Plan;

                  (b) To enter into an Administrative Services Agreement with an
            individual or entity to perform services with respect to the Plan;

                  (c) In its discretion, to interpret and decide all matters of
            fact in granting or denying benefits under the Plan, its
            interpretation and decision thereof to be final and conclusive on
            all persons claiming benefits under the Plan;

                  (d) In its discretion, to determine eligibility under the
            terms of the Plan, its determination thereof to be final and
            conclusive on all persons;

                  (e) In its discretion, to determine the amount of and
            authorize the payment of benefits under the Plan, its determination
            and authorization thereof to be final and conclusive on all persons;

                  (f) To prepare and distribute information explaining the Plan;

                  (g) To obtain from any party such information as may be
            necessary for the proper administration of the Plan;

                  (h) To sue or cause suit to be brought in the name of the
            Plan; and

                  (i) To establish a claims and appeals procedure.

      6.4   EXPENSES. The Employer shall pay the reasonable expenses incident to
the administration of the Plan, including, but not limited to, the compensation
of any legal counsel, advisors, or other technical or clerical assistance as may
be required; and any other expenses

                                      -7-


incidental to the operation of the Plan that the Plan Administrator determines
are proper. Expenses of the Plan may be prorated, as determined by the Plan
Administrator, among the Company and Participating Employers.

      6.5   RIGHT TO DELEGATE. The Plan Administrator may from time to time
delegate to any other person or organization, any of its powers, duties, and
responsibilities with respect to the operation and administration of the Plan,
including, but not limited to, the administration of claims, the authority to
authorize payment of benefits, the review of denied or modified claims, and the
discretion to decide matters of fact and to interpret Plan provisions (subject
to the ultimate discretion of the Plan Administrator). The Plan Administrator
also may from time to time employ, and authorize any person to whom any of its
fiduciary responsibilities have been delegated to employ, persons to render
advice with regard to any fiduciary responsibility held hereunder. Upon
designation and acceptance of such delegation, employment, or authorization, the
Plan Administrator shall have no liability for the acts or omissions of any such
designee if the Plan Administrator does not violate its fiduciary responsibility
in making or continuing such designation. All delegations of fiduciary
responsibility shall be reviewed at least annually by the Plan Administrator and
shall be terminable upon such notice as the Plan Administrator in its discretion
deems reasonable and prudent under the circumstances.

      6.6   RELIANCE ON REPORTS, CERTIFICATES, AND PARTICIPANT INFORMATION. The
Plan Administrator shall be entitled to rely conclusively upon all tables,
valuations, certificates, opinions, and reports furnished by an actuary,
accountant, controller, counsel, insurance company, Administrative Services
Provider, Insurer or other person who is employed or engaged by the Plan.
Moreover, the Plan Administrator and the Employer shall be entitled to rely upon
information furnished to the Plan Administrator or the Employer by a Participant
or Beneficiary, including, but not limited to, such person's current mailing
address.

      6.7   SOURCE OF FUNDING. The Plan Administrator in its sole discretion may
adopt a funding mechanism as is necessary to carry out the purposes of the Plan,
which mechanism may be exclusively through Company and/or Participating Employer
contributions, Participant contributions, the Policies or any combination
thereof.

      6.8   INDEMNIFICATION. The Company shall indemnify and hold harmless the
Plan Administrator and each Employee of the Company who assists the Plan
Administrator against any and all expenses and liabilities arising out of such
member's or such Employee's Plan administrative functions or fiduciary
responsibilities, as applicable, including, but not limited to, any expenses and
liabilities that are caused by or result from an act or omission constituting
the negligence of such individual in the performance of such functions or
responsibilities, but excluding expenses and liabilities arising out of such
individual's own gross negligence or willful misconduct. Such expenses to be
indemnified hereunder include, but are not limited to, the amounts of any
settlement, judgment, costs, counsel fees, and related charges reasonably
incurred in connection with a claim asserted or a proceeding brought.
Notwithstanding the foregoing provisions of this Section, this Section shall not
apply to, and the Company shall not indemnify against, any expense that was
incurred without the consent or approval of the Company, which consent or
approval may be granted orally, it being understood that the Company does not
consent to or approve of a violation of the terms of the Plan or any action
constituting the gross negligence or willful misconduct of any of its employees.

                                      -8-


      6.9   FIDUCIARY DUTY.

            (a) Each fiduciary under the Plan shall discharge his duties and
      responsibilities with respect to the Plan solely in the interest of
      Participants and for the exclusive purpose of providing benefits to
      Participants and their Beneficiaries with the care, skill, prudence, and
      diligence under the circumstances then prevailing that a prudent person
      acting in a like capacity and familiar with such matters would use in the
      conduct of an enterprise of a like character and with like aims. Each
      fiduciary shall act in accordance with the documents and instruments
      governing the Plan insofar as such documents and instruments are
      consistent with applicable law.

            (b) The Plan Administrator shall not receive compensation from the
      Plan for its administration of the Plan, other than as wages for
      employment with the Company generally. Except to the extent required by
      ERISA or other applicable law, the Plan Administrator shall not be
      required to furnish bond or security for the performance of its duties
      hereunder.

                                      -9-


                                   ARTICLE VII

                               GENERAL PROVISIONS

      7.1   NO EMPLOYMENT GUARANTEED. The adoption and maintenance of the
provisions of this Plan shall not be deemed to constitute an employment contract
between any Employer and Employee, or to be a consideration for, or an
inducement or condition of, the employment of any person. Nothing herein
contained shall be deemed to give to any Employee the right to be retained in
the employ of an Employer or to interfere with the right of an Employer to
discharge an Employee at any time, nor shall it be deemed to give to an Employer
the right to require any Employee to remain in its employ, nor shall it
interfere with any Employee's right to terminate his employment at any time.

      7.2   PROHIBITION OF ASSIGNMENT AND ANTICIPATION. Benefits payable under
this Plan shall not be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, charge, garnishment, execution or
levy of any kind, whether voluntary or involuntary, by operation of law or
otherwise, prior to being received by the person entitled thereto under the
terms covered by this Plan and any attempt to anticipate, alienate, sell,
transfer, assign, pledge, encumber, charge or otherwise dispose of any right or
benefit hereunder shall be void.

      7.3   GOVERNING LAW. This Plan shall be construed, administered and
governed in all respects under applicable federal law, and to the extent that
the Plan Administrator determines federal law has been finally judged
inapplicable in any particular circumstance, under the laws of the State of
Texas as to such a circumstance. If any provision of this Plan shall be held by
a court or government agency of competent jurisdiction to be invalid or
unenforceable, the offending provision(s) shall no longer be effective for that
particular situation, and the remaining provisions hereof shall continue to be
fully effective.

      7.4   AMENDMENT AND TERMINATION. Notwithstanding any provision of any
other communication, either oral or written, made by an Employer, an
Administrative Services Provider, or any other individual or entity to
Employees, to any service provider, or to any other individual or entity, the
Company reserves the absolute and unconditional right to amend and/or terminate
the Plan and any or all benefits provided for hereunder from time to time on
behalf of itself and each Participating Employer, including, but not limited to,
the right to reduce or eliminate benefits provided pursuant to the provisions of
the Plan as such provisions currently exist or may hereafter exist, and the
right to amend prospectively or retroactively. Amendments to the Plan shall be
accomplished by written instrument signed by the Plan Administrator. Termination
of the Plan may be effected by resolution of the Compensation Committee of the
Board of Directors of the Company.

      7.5   EFFECT OF AMENDMENT OR TERMINATION. If the Plan is amended or
terminated, each Participant and Beneficiary shall have no further rights
hereunder and the Company and Employer shall have no further obligations
hereunder except as otherwise specifically provided under the terms of the Plan.
However, no modification, alteration, amendment, suspension, or termination
shall be made that would diminish any vested accrued benefits arising from
incurred but unpaid claims of Participants or Beneficiaries existing prior to
the effective date of such modification, alteration, amendment, suspension, or
termination.

                                      -10-


      7.6   EFFECT OF ORAL STATEMENTS. Any oral statements or representations
made by an Employer, the Company, the Plan Administrator, the Insurer, or any
other individual or entity that alter, modify, amend, or are inconsistent with
the written terms of the Plan shall be invalid and unenforceable and may not be
relied upon by any Participant or other individual or entity.

      7.7   PAYMENTS IN SATISFACTION OF CLAIMS. Any payment or distribution to
any person in accordance with the provisions of this Plan shall be in full
satisfaction of all claims under the Plan. Furthermore, such payments will
operate as a complete discharge of any liabilities against the Plan
Administrator, the Insurer, the Company and the Employers.

      7.8   PAYMENTS DUE MINORS AND INCOMPETENTS. If the Plan Administrator
determines that any person to whom a payment is due hereunder is a minor or is
incompetent by reason of physical or mental disability, the Plan Administrator
shall have power to cause the payments becoming due to such person to be made to
another for the benefit of such minor or incompetent, without the Plan
Administrator being responsible to see to the application of such payment.

      7.9   NO GUARANTEE OF TAX CONSEQUENCES. Neither the Company, the Plan, any
Employer, the Plan Administrator, the Insurer or any other person makes any
commitment or guarantee that any amounts paid as benefits hereunder will be
excludable from the recipient's gross income for federal or state income and
employment tax purposes, or that any other federal or state tax treatment will
apply to or be available to any recipient of benefits hereunder. It shall be the
obligation of each recipient to determine whether each payment hereunder is
excludable from their gross income for federal and state income and employment
tax purposes.

      7.10  UNKNOWN WHEREABOUTS. In the operation of this Plan, it shall be the
affirmative duty of each Participant to inform their Employer or its delegate
thereof, and to keep on file with such entity, the Participant's and
Beneficiary's, if different, current mailing address. If a Participant fails to
inform the Employer or its delegate of the Participant's and Beneficiary's
current mailing address, neither the Employer, the Company or any other entity
shall be responsible for any late payment or loss of benefits or for failure of
any notice to be provided or provided timely under the terms of the Plan.

      7.11  CLERICAL ERROR. Any clerical error by the Plan Administrator,
Insurer, or an agent thereof, in keeping pertinent records, or a delay in making
any changes, will not invalidate coverage otherwise validly in force or continue
coverage validly terminated. An equitable adjustment of benefits, if any is
required, will be made when the error or delay is discovered. If, due to a
clerical error, an overpayment occurs in a Plan payment, the Plan retains a
contractual right to the overpayment from the party paid.

      7.12  LIMITATION OF RIGHTS. Neither the establishment of the Plan, nor any
amendment thereof, nor the payment of any benefits will be construed as giving
to any person any legal or equitable right against the Employer, the Insurer,
the Company or the Plan Administrator, or their respective officers and
directors, as an Employee or otherwise, except as expressly provided herein.

      7.13  EXAMINATION OF DOCUMENTS. In the event a Participant requests copies
of Plan documents to which he/she is entitled under ERISA, the Plan
Administrator may charge a reasonable amount to cover the cost of furnishing
such documents in accordance with ERISA.

                                      -11-


      7.14  INFORMATION TO BE FURNISHED. Participants and/or Beneficiaries shall
provide the Company, the Insurer and the Plan Administrator with such
information and evidence as may reasonably be requested from time to time for
the purpose of administering the Plan.

      7.15  STATEMENTS. All coverage provided under the Plan is based on the
truthfulness of statements made to the Plan by Participants, Beneficiaries
and/or their medical providers. Coverages can be voided, and any claims
erroneously paid can be recovered by the Plan and/or Insurer, if such coverage
was provided or claim paid based on any misrepresentation or fraudulent
misstatement made to the Company, any Employer, the Plan Administrator, or the
Insurer by or on behalf of such Participant or Beneficiary.

      7.16  WAIVER OR ESTOPPEL. No term, condition or provision of the Plan
shall be waived, and there shall be no estoppel against the enforcement of any
provision of the Plan except by written direction of the Plan Administrator. No
such waiver shall be deemed a continuing waiver unless specifically stated. Each
waiver shall operate only as to the specific term or condition waived and shall
not constitute a waiver of such term or condition for the future or as to any
act other than that specifically waived. No failure to enforce any provision of
this Plan shall affect the right thereafter to enforce such provision, nor shall
such failure affect its right to enforce any other provision of this Plan.

      7.17  LEGAL PROCEEDINGS. No action at law or in equity shall be brought to
recover on the Plan prior to the complete expiration of the claims review and
appeal procedures of the Plan. At such a point and not before, Participants will
be considered to have exhausted all administrative remedies. Furthermore, no
such legal action shall be valid if brought more than 3 years from the
expiration of the time within which proof of loss is required by the Plan.

      7.18  MISCELLANEOUS. Words used in this Plan in the singular shall include
the plural and in the plural the singular, and the gender of words used shall be
construed to include whichever may be appropriate under any particular
circumstances of the masculine, feminine or neuter genders.

                                      -12-


            IN WITNESS WHEREOF, the Company has caused this Plan to be amended
and restated effective as of January 1, 2002, by action of the Plan's Plan
Administrator.

                                      CENTEX CORPORATION

                                      By________________________________________
                                          Michael S. Albright
                                          Senior Vice President - Administration

ATTEST:

_____________________________

                                      -13-

EX-10.11

                                                                   EXHIBIT 10.11

                              CONSULTING AGREEMENT

      This Consulting Agreement (the "Agreement") is made and entered into as of
March 31, 2002 by and between David W. Quinn ("Quinn"), an individual residing
in Dallas County, Texas and Centex Corporation, a Nevada corporation, with
offices in Dallas County, Texas.

                                    RECITALS

      Quinn has retired from employment with Centex Corporation and its
Affiliates as of March 31, 2002. However, Quinn will continue to serve on the
Boards of Directors of both Centex Corporation and CXP, as is set forth below.

      Centex Corporation and Quinn have agreed that beginning April 1, 2002 and
ending March 31, 2007 Centex Corporation will retain Quinn as a consultant,
subject to the terms and conditions of this Agreement.

                                   WITNESSETH

      NOW THEREFORE, in consideration of the covenants herein set forth, Centex
Corporation and Quinn agree as follows:

1.    DEFINITIONS. For the purposes of this Agreement, the following definitions
      shall apply unless the context requires otherwise.

      a.    "Affiliate" shall mean any entity or corporation that controls, is
            controlled by, or is under common control with Centex Corporation.

      b.    "Compensation Committee" shall mean the Compensation and Stock
            Option Committee of the Board of Directors of Centex Corporation.

      c.    "Consulting Period" shall mean the period beginning on April 1, 2002
            and ending on March 31, 2007, unless sooner terminated under the
            terms of this Agreement.

      d.    "CXP" shall mean Centex Construction Products, Inc., a Delaware
            corporation.

      e.    "Effective Date" shall mean April 1, 2002.

2.    CONSULTING SERVICES AND COMPENSATION.

      a.    Consulting Period: On April 1, 2002 Quinn shall be retained by
            Centex Corporation for the Consulting Period.



      b.    Services During Consulting Period: Quinn's duties to Centex
            Corporation as a consultant during the Consulting Period shall be to
            assist Centex Corporation and its Affiliates with, among other
            matters, the following:

            i.    pending litigation in the U.S. Court of Federal Claims
                  entitled Centex Corporation and CTX Holding Company v. United
                  States of America, including the damages award and any future
                  appeals;

            ii.   acquisitions from a structural standpoint;

            iii.  pursuit of new speciality acquisition opportunities;

            iv.   strategic business and financial planning, including related
                  tax matters;

            v.    dispositions and restructuring;

            vi.   special reviews or examinations; and

            vii.  corporate structural planning.

      c.    Compensation During Consulting Period: During the Consulting Period,
            with the understanding that Quinn will not accept full-time
            employment with any third party until April 1, 2004, Centex
            Corporation shall pay Quinn as follows:

            i.    $400,000 per year for the first 24 months. Such amounts shall
                  be paid as depicted on the schedule described in section 2. c.
                  iii. below.

            ii.   Until March 31, 2007 Centex Corporation shall provide Quinn
                  with such medical and dental coverages as were being provided
                  to Quinn as an employee of Centex Corporation at March 31,
                  2002. The provision of such coverage will be subject to any
                  changes of general application in the programs which provide
                  such coverages to employees of Centex Corporation.

            iii.  Prior to the conclusion of fiscal year 2001 Quinn and Centex
                  Corporation agreed that, with respect to such year, payment of
                  Quinn's annual bonus and payment of cash to Quinn in lieu of
                  his annual stock option award would be deferred until April
                  2002, and such deferred payments would accrue interest at the
                  rate of 7% per annum. The parties further agreed that
                  commencing April 2002, for a period of five years, Centex
                  Corporation would make amortizing monthly payments to Quinn of
                  such deferred amounts, together with interest thereon at the
                  rate of 7% per annum.

                                                                               2


                  As of the Effective Date the amount of such deferred bonus is
                  $2,889,000 and the amount of such deferred cash in lieu of
                  options is $1,797,600. Attached to this agreement is a
                  schedule which describes the dates and monthly payments of
                  said deferred amounts, and the consulting payments described
                  in section 2. c. i. above. Centex Corporation will make these
                  payments as scheduled, subject to all appropriate deductions.

            iv.   It is anticipated that Quinn will be awarded a bonus and cash
                  in lieu of stock option grant for the fiscal year concluded
                  March 31, 2002. Such awards will be determined and approved by
                  the Compensation Committee in its May 2002 meeting. Quinn had
                  elected, prior to March 31, 2002, to defer the receipt of such
                  bonus and cash in lieu of stock option grant for a period of
                  time not to exceed eighty-four (84) months from the Effective
                  Date. Interest will accrue on the amount of compensation so
                  deferred at the rate of 7% per annum commencing with the
                  Effective Date. Quinn may elect during any calendar year,
                  beginning in the calendar year 2002, to receive a distribution
                  of some portion or all of the deferred compensation, provided
                  that such distribution will not be made, or will not commence
                  if paid in installments, until the calendar year following the
                  year in which such election is made. In any case, any portion
                  of such deferred compensation not distributed to Quinn on or
                  before April 1, 2009 will automatically be distributed to
                  Quinn, whether or not he makes such election, within 30 days
                  following such date. Any distribution to Quinn will include
                  all interest accrued on the amount distributed.

            Quinn acknowledges and agrees that any liability or obligation of
            Centex Corporation to him under this Agreement will be based solely
            upon contractual obligations created in this Agreement, and no such
            liability or obligation of Centex Corporation shall be deemed to be
            secured by any pledge or other encumbrance on any property of Centex
            Corporation.

      d.    Stock Options: Quinn and Centex Corporation are parties to three
            subsisting stock option agreements. As of April 1, 2002 all of such
            options will be vested except 33,600 shares under the option whose
            grant date is April 1, 1999 and whose option price is $36.06 per
            share and 67,200 shares under the option whose grant date is April
            1, 2000 and whose option price is $23.81 per share. These subsisting
            stock option agreements will remain in full force and effect and
            will not be altered in any manner by the terms of this Agreement.

                                                                               3


3.    CENTEX CORPORATION BOARD OF DIRECTORS. Quinn agrees to continue to serve
      as a member of the Board of Directors of Centex Corporation until the end
      of his term, which is set to expire at the annual stockholders meeting in
      2004. Following the conclusion of such term, Quinn will remain eligible
      for re-election to such Board. From and after the Effective Date, Quinn
      will receive standard directors' fees for his service as a Director of
      Centex Corporation.

4.    CXP BOARD OF DIRECTORS. Quinn agrees to continue to serve as a member of
      the Board of Directors of CXP without any additional compensation (other
      than as is provided for in Section 2.c. above), until the annual
      stockholders meeting of CXP to be held in July 2003, and if re-elected in
      2003, until the annual stockholders meeting to be held in July 2004.
      Thereafter, Quinn will be eligible for re-election to the Board of
      Directors of CXP but from and after the annual stockholders meeting in
      July 2004, if Quinn does continue to serve as a Director, he will be
      compensated like any other outside Director of CXP.

5.    COOPERATION ON LEGAL MATTERS. During the Consulting Period Quinn will
      cooperate with Centex Corporation on a reasonable basis, and at the
      reasonable convenience of Quinn, by providing Centex Corporation with
      whatever information Quinn may have, as requested by Centex Corporation
      from time to time, with regard to legal matters on which Quinn worked for
      Centex Corporation or its Affiliates which occurred prior to the
      commencement of the Consulting Period in order to aid Centex Corporation
      in the conduct of its business. However, any reasonable expenses incurred
      by Quinn in providing such cooperation will be reimbursed by Centex
      Corporation upon request therefor, provided the same were approved by
      Centex Corporation before being incurred.

6.    NON-COMPETE. During the period April 1, 2002 through March 31, 2004 Quinn
      will not engage in, or have an interest (as stockholder, director,
      officer, employee, agent, partner or otherwise) in any corporation,
      partnership, association, limited liability company or other entity that
      engages in any business activity in which Centex Corporation or any of its
      Affiliates is engaged at any time during said two year period. This
      restriction will not apply to ownership by Quinn of one percent or less of
      any class of equities, securities or one or more publicly traded entities
      or his participation or interest in any business activity that results in
      annual revenues to him or to any such entity of $500,000 or less.

7.    APPLICABLE LAW. This Agreement shall be governed by and construed in
      accord with the laws of the State of Texas. Should a court or other body
      of competent jurisdiction determine that any provision of this Agreement
      is excessive in scope or otherwise invalid or unenforceable, such
      provision shall be adjusted rather than voided, if possible, so that it is
      enforceable to the maximum extent possible, and all other

                                                                               4


      provisions of this Agreement shall be deemed valid and enforceable to the
      extent possible.

8.    BINDING ON SUCCESSORS. This Agreement shall be binding upon and inure to
      the benefit of Centex Corporation and its Affiliates and Quinn, as well as
      their respective heirs, personal representatives, successors and assigns.
      However, except as provided in this Agreement, neither party may assign
      any rights hereunder nor delegate any duties hereunder without the prior
      written consent of the other, which consent will not be unreasonably
      withheld, conditioned or delayed.

9.    ENTIRE AGREEMENT. This Agreement represents the entire agreement between
      the parties respecting the subject matters contained herein and supersedes
      all other agreements, written or oral, respecting such subject matters.
      Quinn acknowledges and agrees that this Agreement supersedes in all
      respects that certain employment agreement made between Centex Corporation
      and Quinn in 1991, and waives and releases any and all claims he may have
      thereunder.

10.   NOTICE. Any notice to be given to Centex Corporation hereunder shall be
      deemed sufficient if addressed to Centex Corporation in writing and
      personally delivered or mailed by certified mail to its office at 2728
      North Harwood, Dallas, Texas 75201. Any notice to be given to Quinn
      hereunder shall be deemed sufficient if addressed to him in writing and
      personally delivered to him or mailed by certified mail to 2 Glenchester
      Court, Dallas, Texas 75225. Either party may, by notice as aforesaid,
      designate a different address or addresses.

      IN WITNESS WHEREOF, the parties hereto executed this Agreement on the day
first above written.

                                           CENTEX CORPORATION

/s/ David W. Quinn                         By:/s/ Laurence E. Hirsch
- -----------------------------------           ----------------------------------
David W. Quinn                                Laurence E. Hirsch
                                              Chairman of the Board and
                                              Chief Executive Officer

                                                                               5


                               Centex Corporation
                                   David Quinn
                               Summary of Payments

              [Schedule will be furnished to the SEC upon request].

EX-10.12

                                                                   EXHIBIT 10.12

                              TERMINATION AGREEMENT

      This Termination Agreement ("Agreement") is effective as of March 31, 2004
(the "Effective Date"), by and between David W. Quinn, an individual residing in
Dallas County, Texas ("Quinn"), and Centex Corporation, a Nevada corporation,
with offices in Dallas County, Texas ("Centex"). Quinn and Centex are
collectively referred to as "Parties" and individually as "Party."

                                    RECITALS

      WHEREAS, the Parties entered into a Consulting Agreement dated March 31,
2002 (the "Consulting Agreement") under which Centex retained Quinn as a
consultant to assist Centex and its Affiliates a variety of matters; and

      WHEREAS, the Parties now desire to mutually terminate the Consulting
Agreement.

      NOW, THEREFORE, in view of the foregoing premises and in consideration of
the mutual promises and covenants contained in the Agreement, Quinn and Centex
agree as follows:

ARTICLE 1. DEFINITIONS

      Capitalized terms used herein shall have the meaning as provided in the
Consulting Agreement, unless as otherwise set forth below.

ARTICLE 2. TERMINATION OF CONSULTING AGREEMENT

      2.1 Subject to the terms and conditions of this Agreement, as of the
Effective Date, the Parties hereby terminate the Consulting Agreement and any
and all rights, obligations or duties created thereunder. Each Party waives and
releases any and all claims that they may have against the other thereunder.

      2.2 Paragraph 2.1 notwithstanding, the Parties agree that:

      (a)   until March 31, 2007, Centex shall continue to provide Quinn with
            such medical and dental coverages as were being provided to Quinn as
            an employee of Centex at March 31, 2002. The provision of such
            coverage will continue to be subject to any changes of general
            application in the programs that provide such coverages to employees
            of Centex;

      (b)   all deferred compensation due and owing to Quinn as described in
            paragraphs 2(c)(iii) and 2(c)(iv) of the Consulting Agreement shall
            continue to be paid to Quinn in the manner described in the
            Consulting Agreement. The Parties acknowledge and agree that such
            deferred compensation has never been and is



            not now contingent in any way on Quinn's continued service in any
            capacity with Centex; and

      (c)   Quinn's subsisting stock option agreements remain in full force and
            effect and are not altered in any manner by the terms of this
            Agreement.

      2.3 Quinn hereby acknowledges that all monies due him from Centex pursuant
to paragraph 2(c)(i) of the Consulting Agreement have been paid.

      2.4 Centex hereby acknowledges that Quinn has fully satisfied his
non-compete obligations to Centex as described in paragraph 6 of the Consulting
Agreement.

ARTICLE 3. ENTIRE AGREEMENT

      This Agreement contains the entire agreement between the Parties hereto.
Terms of this termination are contractual and not a mere recital.

      IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
executed as of the date first shown herein.

CENTEX CORPORATION

/s/   Raymond G. Smerge

By:   Raymond G. Smerge
Its:  Executive Vice President,
      Chief Legal Officer and Secretary
Date: February 25, 2004

/s/ David W. Quinn
- ---------------------------------
David W. Quinn, individually

EX-21

Exhibit 21

Subsidiaries of Centex Corporation

	Jurisdiction
Subsidiary Name & DBAs	of Organization
3333 DEVELOPMENT CORPORATION	Nevada
3333 HOLDING CORPORATION	Delaware
AAA HOLDINGS, L.P.	Delaware
ABC HOMES LIMITED	United Kingdom
ADFINET, INC.	Nevada
ADFITECH, INC.	Nevada
Advanced Financial Technology, Inc.
Xsequor
AMERICAN LANDMARK MORTGAGE, LTD.	Florida
ARMOR INSURANCE COMPANY	Vermont
ASHLEY TURNER FINANCE, L.P.	Texas
AT-HOME MORTGAGE ASSOCIATES, LTD.	Florida
AUSTIN PARTNERS IN LENDING, L.P.	Texas
A.W. MORTGAGE, L.P.	Texas
BARRINGTON CARPET, LLC	Delaware
BATESON DAILEY, A JOINT VENTURE	Michigan
BENEFIT ASSET MANAGEMENT CORPORATION	California
BUILDER’S HOME MORTGAGE, L.P.	Washington
CALIFORNIA HOME MORTGAGE, L.P.	Texas
CDC2020 PLC	United Kingdom
CDMC HOLDING, INC.	Nevada
CENTEX-3D/I, A JOINT VENTURE	Texas
CENTEX-AIM CONSTRUCTION, L.L.C.	Michigan
CENTEX ATLANTIC, LLC	Delaware
CENTEX BUILDING SERVICES, INC.	Nevada
CENTEX COMMERCIAL DEVELOPMENT, LLC	Delaware
Centex Commercial Development GP, LLC
CENTEX COMMERCIAL DEVELOPMENT, L.P.	Delaware
Centex Commercial Development, Limited Partnership
Centex Commercial Development of North Carolina, Limited Partnership
CENTEX CONCORD	Tennessee
CENTEX CONCORD PROPERTY MANAGEMENT, L.L.C.	Tennessee
CENTEX CONSTRUCTION COMPANY, INC.	Nevada
Centex Facility Services
Centex Facilities Services
Centex Technology Construction Group Mid-Atlantic Division
Centex Technology Construction Group Southwest Division
CTX Construction Company
CENTEX CONSTRUCTION GROUP, INC.	Nevada
CENTEX CONSTRUCTION GROUP SERVICES, LLC	Delaware
CENTEX DEVELOPMENT COMPANY, L.P.	Delaware
CDC, LP
Centex Development Company, Limited Partnership
CENTEX DEVELOPMENT COMPANY UK LIMITED	United Kingdom
CENTEX DEVELOPMENT FUNDING COMPANY UK LIMITED	United Kingdom
CENTEX DEVELOPMENT MANAGEMENT COMPANY	Nevada
CENTEX ENGINEERING & CONSTRUCTION, INC.	Nevada
Centex Engineering & Construction
Centex Facility Services
Centex Technology Construction Group Midwest Division
CENTEX EQUITY CORPORATION	Nevada
CENTEX/F&S, L.L.C.	Delaware
CENTEX FINANCIAL SERVICES, INC.	Nevada

Page 1 of 8

Exhibit 21

Subsidiaries of Centex Corporation

	Jurisdiction
Subsidiary Name & DBAs	of Organization
CENTEX/FPC, L.L.C.	Delaware
CENTEX-GILFORD, A JOINT VENTURE	Virginia
CENTEX-GILFORD, A JOINT VENTURE II	Virginia
CENTEX GOLDEN CONSTRUCTION COMPANY	Nevada
CENTEX/HKS, CANYON, L.L.C.	Delaware
CENTEX/HKS, L.L.C.	Delaware
CENTEX/HKS II, L.L.C.	Delaware
CENTEX HOME EQUITY COMPANY, LLC	Delaware
Centex Home Equity
Centex Home Equity Company
CENTEX HOME SERVICES COMPANY	Nevada
Centex HomeTeam Services
HomeTeam Services
CENTEX HOMES	Nevada
At-Home America
Centex Destination Properties
Centex Development Company
Centex Pools & Spas
City Homes
CityHomes
CTX Builders Supply
Fox & Jacob Homes
Fox & Jacobs
Marquis Homes
Marquis Mountain Homes
Marquis Resort Homes
Marquis Resort Homes by Centex
New Homes Research Group
Real Homes
Riverwood Golf Club
Teal Building Corporation
Teal Homes
Timbercreek Forest Products
Vista Homes
Vista Property Company
Wayne Homes
Wayne Homes, a Division of Centex Homes
Wayne Homes by Centex
CENTEX HOMES, INC.	Texas
CENTEX HOMES, LLC	Delaware
Centex Homes
CENTEX HOMES INTERNATIONAL LIMITED	United Kingdom
CENTEX HOMES LIMITED	United Kingdom
CENTEX HOMES MARKETING, INC.	Georgia
CTX Realty
CENTEX HOMES OF CALIFORNIA, LLC	Delaware
CENTEX HOMES OF CALIFORNIA II, LLC	Delaware
CENTEX HOMES REALTY COMPANY	Nevada
CENTEX HOMES REALTY, INC.	Michigan
CENTEX HOMES UK LIMITED	United Kingdom

Page 2 of 8

Exhibit 21

Subsidiaries of Centex Corporation

	Jurisdiction
Subsidiary Name & DBAs	of Organization
CENTEX HOMETEAM LAWN CARE, LLC	Delaware
Certified Lawn Care
HomeTeam Lawn Care
King Green
Turf Guard
CENTEX HOUSING RELIEF FUND	Texas
CENTEX INDUSTRIAL CAMARILLO IV, LLC	Delaware
CENTEX INDUSTRIAL GENERAL PARTNER, LLC	Delaware
CENTEX INTERNATIONAL, INC.	Nevada
CENTEX INTERNATIONAL, LLC	Delaware
CENTEX-KIRCO INDUSTRIAL WESTLAKE VI, LLC	Delaware
CENTEX LAND HOLDINGS GENPAR, LLC	Delaware
CENTEX LAND HOLDINGS, L.P.	Delaware
CENTEX LAND INVESTMENTS, LLC	Delaware
CENTEX LAND INVESTMENTS II, LLC	Delaware
CENTEX LANDIS LIMITED LIABILITY COMPANY NO. 1	Louisiana
CENTEX LATIN AMERICA, INC.	Nevada
CENTEX LEE, LLC	Delaware
CENTEX LOST CREEK RANCH, LLC	Delaware
CENTEX MANAGEMENT SERVICES LIMITED	United Kingdom
CENTEX MANUFACTURED HOUSING GROUP, LLC	Delaware
CENTEX/MASHBURN, A JOINT VENTURE	North Carolina
CENTEX/MORRIS, L.L.C.	Delaware
CENTEX/MORRIS II, L.L.C.	Delaware
CENTEX MULTI-FAMILY COMMUNITIES, L.P.	Delaware
White Rock Apartment Homes
CENTEX MULTI-FAMILY COMMUNITIES, LLC	Delaware
CENTEX MULTI-FAMILY COMPANY	Nevada
Centex Multi-Family Development Company
CENTEX MULTI-FAMILY INVESTMENTS, L.P.	Delaware
CENTEX MULTI-FAMILY ST. PETE HOLDING COMPANY, L.L.C.	Delaware
CENTEX MULTI-FAMILY ST. PETE II, L.L.C.
Verandahs of Brighton Bay	Delaware
CENTEX MULTI-FAMILY UPPER LANDING, LLC	Delaware
CENTEX NORTHFIELD INVESTMENT COMPANY I, L.P.	Delaware
CENTEX OFFICE CITYMARK I GENERAL PARTNER, LLC	Delaware
Centex Development Office Citymark I General Partner, LLC
CENTEX OFFICE CITYMARK I, L.P.	Delaware
Centex Development Office Citymark I, L.P.
CENTEX OFFICE GENERAL PARTNER, LLC	Delaware
Centex Development Office General Partner, LLC
CENTEX OFFICE SOUTHPOINTE II, L.L.C.	Delaware
CENTEX OFFICE VISTA RIDGE LEWISVILLE II, L.P.	Delaware
Centex Development Office Vista Ridge Lewisville II, L.P.
CENTEX/OMNIPLAN, L.L.C.	Delaware
CENTEX/OMNIPLAN II, L.L.C.	Delaware
CENTEX/PEGASUS, A JOINT VENTURE	Texas
CENTEX REAL ESTATE CONSTRUCTION COMPANY	Nevada
CTX Builders Supply

Page 3 of 8

Exhibit 21

Subsidiaries of Centex Corporation

	Jurisdiction
Subsidiary Name & DBAs	of Organization
CENTEX REAL ESTATE CORPORATION	Nevada
Centex Custom Homes
Centex Homes
Centex Homes, a Nevada general partnership
Centex-Crosland Company
Centex-Crosland Homes
CTX Builders Supply
Fox & Jacobs
Fox & Jacobs Homes
Marquis Resort Homes
Selective Homes
The Selective Group
Timbercreek Forest Products
Vista Homes
Wayne Homes
Wayne Homes by Centex
CENTEX REALTY, INC.	Florida
Riverwood Properties
CENTEX RETAIL GENERAL PARTNER, LLC	Delaware
CENTEX RETAIL GENERAL PARTNER II, LLC	Delaware
CENTEX RETAIL RIVERMARK INVESTMENT COMPANY I, LLC	Delaware
CENTEX RETAIL VISTA RIDGE I, L.P.	Delaware
CENTEX RODGERS, INC.	Nevada
Centex Pharmaceutical/BioTech Group
Centex Resource Group
Centex Technology Construction Group Northeast Division
Centex Technology Construction Group (West Coast Division)
CENTEX ROONEY/BOND CLASSROOMS, LLC	Delaware
CENTEX-ROONEY CONSTRUCTION CO., INC.	Florida
Centex Civil Construction
Centex Rooney Facilities Group
Centex Rooney/Royal American, a Joint Venture
Centex Technology Construction Group Southeast Division
PCL/Centex Rooney, a Joint Venture
CENTEX-ROONEY CONSTRUCTION CO., INC./CONSTRUCT TWO CONSTRUCTION MANAGERS, INC., A JOINT VENTURE	Florida
CENTEX ROONEY CONSTRUCTION CO., INC./LANDIS COMPANY, INC., A JOINT VENTURE	Louisiana
CENTEX ROONEY CONSTRUCTION CO., INC./RATTLER CONSTRUCTION CONTRACTORS, INC., A JOINT VENTURE	Florida
CENTEX-ROONEY CONSTRUCTION CO. OF GEORGIA, LLC	Delaware
CENTEX ROONEY CONSTRUCTION COMPANY/ACI, A JOINT VENTURE	Florida
CENTEX ROONEY/GRAY CONSTRUCTION, A JOINT VENTURE	Florida
CENTEX ROONEY/HLM CORRECTIONAL DESIGN BUILDERS, LC	Florida
CENTEX ROONEY/LLT, A JOINT VENTURE	Florida
CENTEX ROONEY MARINE, INC.	Florida
CENTEX ROONEY/PEREZ & PEREZ DESIGN BUILDERS, L.L.C.	Delaware
CENTEX ROONEY/PGAL DESIGN BUILDERS, L.C.	Florida
CENTEX ROONEY/RS&H DESIGN BUILDERS, L.C.	Florida
CENTEX ROONEY/SCHENKEL SHULTZ DESIGN/BUILDERS, L.C.	Florida
CENTEX/SCHENKEL SCHULTZ, L.L.C.	Delaware

Page 4 of 8

Exhibit 21

Subsidiaries of Centex Corporation

	Jurisdiction
Subsidiary Name & DBAs	of Organization
CENTEX SECURITY, INC.	Nevada
Apartment Protection Systems
Apartment Protection Systems, Inc.
Centex HomeTeam Security
Centex HomeTeam Services
Centex Security
HomeTeam Alarms, Inc.
HomeTeam Security
HomeTeam Services, Inc.
Protection Systems, Inc.
CENTEX SEISMIC SERVICES, INC.	Nevada
CENTEX SERVICE COMPANY	Nevada
CENTEX SMITHGROUP, LLC	Delaware
CENTEX STRATEGIC LAND LIMITED	United Kingdom
CENTEX TECHNOLOGY, INC.	Nevada
CENTEX/THACKER, A JOINT VENTURE	Florida
CENTEX TITLE & ANCILLARY SERVICES, INC.	Nevada
CENTEX UK LTD	United Kingdom
CENTEX/WORTHGROUP, L.L.C.	Delaware
CHEC ASSET RECEIVABLE CORPORATION	Nevada
CHEC CONDUIT FUNDING, LLC	Delaware
CHEC FUNDING, LLC	Delaware
CHEC INDUSTRIAL LOAN COMPANY	Tennessee
CHEC INDUSTRIAL LOAN CORPORATION	Minnesota
CHEC RESIDUAL, LLC	Delaware
CITY HOMEBUILDERS, INC.	Texas
CityHomes
CKC FACILITIES GROUP, L.C.	Florida
CKC Design Builders, L.C.
Miramar Town Center Group
COMMERCE APPRAISAL SERVICES, LLC	Delaware
COMMERCE LAND TITLE AGENCY, LLC	Ohio
Commerce Title Company
COMMERCE LAND TITLE, INC.	Nevada
Commerce Company
Commerce Title Agency
Commerce Title Company
COMMERCE TITLE COMPANY	California
COMMERCE TITLE COMPANY, INC.	Alabama
COMMERCE TITLE COMPANY OF NEW MEXICO, LLC	Delaware
COMMERCE TITLE INSURANCE COMPANY	California
COMMERCE TITLE VENTURES, LLC	Delaware
COMMUNITY COMMITMENT GROUP BUILDERS, LLC	Delaware
CCG Builders
CORE MORTGAGE CONNECTION, L.P.	Texas
Credit Union Mortgage Connection, L.P.
CREC RISK HOLDING CORPORATION	Nevada
CROSLAND ACCEPTANCE ASSOCIATES V	North Carolina
CROSLAND BOND COMPANY	North Carolina
CTX BUILDERS SUPPLY SERVICES, LLC	Delaware
CTX HOLDING COMPANY	Nevada

Page 5 of 8

Exhibit 21

Subsidiaries of Centex Corporation

	Jurisdiction
Subsidiary Name & DBAs	of Organization
CTX MORTGAGE COMPANY, LLC	Delaware
Centex Mortgage Company
CTX Mortgage Company
CTX MORTGAGE FUNDING, LLC	Delaware
CTX MORTGAGE FUNDING III, LLC	Delaware
CTX MORTGAGE VENTURES CORPORATION	Nevada
CTX MORTGAGE VENTURES, LLC	Delaware
CTX Mortgage Ventures I, LLC
CTX SWAP I, LLC	Delaware
DARDEN FINANCIAL SERVICES, L.P.	Texas
DENALI FINANCIAL SERVICES, L.P.	Texas
DESARROLLOS EN LATINOAMERICA SERVICIOS ADMINSTRATIVOS S DE RL DE CV	Mexico
DFW INTEGRATED PARTNERS	Texas
DIAMOND LENDING GROUP, L.P.	Texas
DUNDEE INSURANCE AGENCY, INC.	Texas
EMPRESAS INMOBILIARIAS DE MEXICO, S. DE R.L. DE C.V.	Mexico
EXPRESS FINANCIAL SERVICES, LIMITED PARTNERSHIP	North Carolina
Express Financial Services, L.P.
FAIRCLOUGH HOMES GROUP LIMITED	United Kingdom
FAIRCLOUGH HOMES LIMITED	United Kingdom
FAIRWAY FINANCIAL GROUP, L.P.	Texas
FLORIDA LANDMARK MORTGAGE, L.P.	Texas
LandMark Mortgage of Florida, L.P.
FOUR OAKS MORTGAGE COMPANY, L.P.	North Carolina
FOX & JACOBS, INC.	Texas
GARDEN PLUS CO, INC.	California
Garden Plus Pest Control
Garden Plus Pest Control & Termite
Pestrid
GENBOND TWO, INC.	North Carolina
GHQ COMPANY, INC.	Nevada
GLG MORTGAGE, L.P.	Texas
GREAT LAKES DEVELOPMENT CO., INC.	Nevada
GV NORTHFIELD I LLC	Delaware
HARWOOD INSURANCE SERVICES, LLC	California
HARWOOD SERVICE COMPANY OF GEORGIA, LLC	Georgia
Harwood Service Company
HARWOOD SERVICE COMPANY OF NEW JERSEY, LLC	New Jersey
Harwood Service Company
HARWOOD SERVICE COMPANY, LLC	Delaware
Harwood Insurance Service, LLC
Harwood Service Company of Nebraska, LLC
HARWOOD STREET FUNDING II, LLC	Delaware
Main Street Funding, LLC
HEARTLAND MORTGAGE, L.P.	California
HOMEFRONT MORTGAGE, L.P.	Washington
HOMETEAM PEST DEFENSE, INC.	Nevada

Page 6 of 8

Exhibit 21

Subsidiaries of Centex Corporation

	Jurisdiction
Subsidiary Name & DBAs	of Organization
HOMETEAM PEST DEFENSE, LLC	Delaware
Callaghan’s Exterminating
Callaghan’s Pest Defense
Integrated Pest Defense
Wilson Pest Control
Wilson Pest Defense
INDEPENDENT GENERAL AGENCY, INC.	Texas
JACK JENNINGS & SONS/CENTEX ROONEY, A JOINT VENTURE	Florida
JOHN CROSLAND COMPANY	North Carolina
John Crosland Homes
KIRCHMAN/CENTEX, A JOINT VENTURE	Florida
LEWIS MORTGAGE COMPANY, L.P.	Texas
Lewis Mortgage Company
LMX FINANCIAL SERVICES, LTD.	Florida
LOWER MISSOURI RIVER, L.L.C.	Missouri
M&W GENERAL CONSTRUCTION COMPANY	Nevada
MARINA COMMUNITY PARTNERS, LLC	Delaware
MEADOW VISTA COMPANY, LLC	Delaware
Ocotillo Meadows, LLC
MELROSE PARK JOINT VENTURE	Florida
METROPOLITAN TAX SERVICE, INC.	Nevada
Metropolitan Tax & Abstract Services, Inc.
METROPOLITAN TITLE & GUARANTY COMPANY	Florida
Commerce Title Agency
Commerce Title Company
Commerce Title Company of Maryland
Commerce Title Company of Virginia
MH ACQUISITION COMPANY, LLC	Delaware
MORTGAGE ACCEPTANCE ASSOCIATES NO. 2	North Carolina
MORTGAGE COLLATERAL ASSOCIATES NO. 1	North Carolina
MORTGAGE COLLATERAL ASSOCIATES NO. 3	North Carolina
MORTGAGE PORTFOLIO SERVICES, INC.	Delaware
MPS FUNDING CORPORATION	Delaware
NAB ASSET COMPANY, LLC	Texas
NEW HOME MORTGAGE SPECIALISTS, L.P.	Washington
NOMAS CORP.	Nevada
PDG / PRESCOTT DEVELOPMENT GROUP, L.L.C.	Arizona
PDNB MORTGAGE COMPANY, L.P.	Texas
PENNSTAR FINANCIAL, LLC	Delaware
PINE RIDGE FINANCIAL, L.P.	Washington
PRIME HOME MORTGAGE, L.P.	Washington
REALTY TITLE PROFESSIONALS, LTD., LLLP	Florida
ROBERG FINANCIAL, L.P.	Texas
SEABREEZE, LLC	California
SELECTIVE — DELAWARE, L.L.C.	Delaware
ST LENDING, INC.	Delaware
SUN BUILT DEVELOPMENT, LLC	Delaware
SYCAMORE CREEK	California
THE JONES COMPANY BUILDING SERVICES, LLC	Nevada
THE JONES COMPANY HOMES, LLC	Nevada
The Jones Company
Lexington Homes
THE JONES COMPANY HOMES REALTY, LLC	Nevada

Page 7 of 8

Exhibit 21

Subsidiaries of Centex Corporation

	Jurisdiction
Subsidiary Name & DBAs	of Organization
TRIPLE A DELAWARE LIMITED, LLC	Delaware
TRIPLE A GENERAL, LLC	Delaware
T.W. LEWIS MORTGAGE COMPANY, L.P.	Texas
VENTURE TITLE AGENCY, LTD., LLLP	Florida
VIEWTON PROPERTIES LIMITED	United Kingdom
VISTA RIDGE BUSINESS PARK ASSOCIATION, INC.	Texas
WATERFORD AMERICAN MORTGAGE, LTD.	Florida
WAYNE HOMES, LLC	Delaware
Wayne Homes Centex, LLC
Wayne Homes Michigan, LLC
WAYNE HOMES MID ATLANTIC, LLC	Delaware
Wayne Homes
WESTWOOD INSURANCE AGENCY	California
HomeAdvantage Insurance Agency Services
HomeAdvantage Insurance Services
Massachusetts Westwood Insurance Agency
Westwood Agency
Westwood Insurance Agency, Inc.
Westwood Insurance Agency of Denver, Inc.
WMC Insurance Agency
WMC Insurance Agency Services
WMC Insurance Services
WMC Insurance Services, Inc.
WESTWOOD INSURANCE AGENCY	Nevada
WESTWOOD INSURANCE AGENCY OF ARIZONA, INC.	Arizona
WINFIELD AFFILIATED MORTGAGE, L.P.	Texas
AM&T Mortgage
XSEQUOR, LLC	Delaware

Page 8 of 8

EX-23

Exhibit 23

CONSENT OF INDEPENDENT AUDITORS

     We consent to the incorporation by reference in the following Registration Statements on Form S-3 and the related Prospectuses and in the following Registration Statements on Form S-8 of Centex Corporation of our report dated May 17, 2004, with respect to the consolidated financial statements of Centex Corporation included in the Annual Report (Form 10-K) for the year ended March 31, 2004.

Form S-3	Registration No. 333-49966	Form S-8	Registration No. 33-55083
	Registration No. 333-49966-01		Registration No. 33-55083-01
	Registration No. 333-49966-02		Registration No. 33-55083-02
	Registration No. 333-49966-03		Registration No. 333-28229
	Registration No. 333-49966-04		Registration No. 333-28229-01
	Registration No. 333-54722		Registration No. 333-28229-02
	Registration No. 333-54722-01		Registration No. 333-55717
	Registration No. 333-54722-02		Registration No. 333-55717-01
	Registration No. 333-83212		Registration No. 333-55717-02
	Registration No. 333-83212-01		Registration No. 333-74185
	Registration No. 333-83212-02		Registration No. 333-74185-01
	Registration No. 333-83212-03		Registration No. 333-74185-02
	Registration No. 333-83212-04		Registration No. 333-86041
			Registration No. 333-86041-01
			Registration No. 333-86041-02
			Registration No. 333-86041-02
			Registration No. 333-37956
			Registration No. 333-68790
			Registration No. 333-68790-01
			Registration No. 333-68790-02
			Registration No. 333-100682
			Registration No. 333-100682-01
			Registration No. 333-100682-02
			Registration No. 333-103440
			Registration No. 333-103440-01
			Registration No. 333-103440-02
			Registration No. 333-107701
			Registration No. 333-107701-01
			Registration No. 333-107701-02
			Registration No. 333-109869
			Registration No. 333-109869-01
			Registration No. 333-109869-02
			Registration No. 333-110269
			Registration No. 333-110269-01
			Registration No. 333-110269-02
			Registration No. 33-44575
			/s/ ERNST & YOUNG LLP

Dallas, Texas
May 24, 2004

EX-24.1

EXHIBIT 24.1

CENTEX CORPORATION

POWER OF ATTORNEY

THE UNDERSIGNED hereby constitutes and appoints Timothy R. Eller and Frederic M. Poses, or either of such individuals, with full power of substitution in the premises, as the undersigned’s true and lawful agents and attorneys-in-fact (the “Attorneys-in-Fact”), with full power and authority in the name and on behalf of the undersigned, in her capacity as a Director of Centex Corporation (the “Company”), to execute and file with the Securities and Exchange Commission the Company’s Annual Report on Form 10-K for the Company’s fiscal year ended March 31, 2004, together with any and all amendments thereto.

This Power of Attorney and all authority granted and conferred hereby shall continue indefinitely and, unless waived by the Attorneys-in-Fact, may not be revoked until the Attorneys-in-Fact have received five days’ written notice of such revocation.

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 14th day of May, 2004.

/s/ Barbara T. Alexander Barbara T. Alexander

Director

Centex Corporation

CENTEX CORPORATION

POWER OF ATTORNEY

THE UNDERSIGNED hereby constitutes and appoints Timothy R. Eller and Frederic M. Poses, or either of such individuals, with full power of substitution in the premises, as the undersigned’s true and lawful agents and attorneys-in-fact (the “Attorneys-in-Fact”), with full power and authority in the name and on behalf of the undersigned, in his capacity as a Director of Centex Corporation (the “Company”), to execute and file with the Securities and Exchange Commission the Company’s Annual Report on Form 10-K for the Company’s fiscal year ended March 31, 2004, together with any and all amendments thereto.

This Power of Attorney and all authority granted and conferred hereby shall continue indefinitely and, unless waived by the Attorneys-in-Fact, may not be revoked until the Attorneys-in-Fact have received five days’ written notice of such revocation.

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 14th day of May, 2004.

/s/ Dan W. Cook III Dan W. Cook III

Director

Centex Corporation

CENTEX CORPORATION

POWER OF ATTORNEY

THE UNDERSIGNED hereby constitutes and appoints Timothy R. Eller and Frederic M. Poses, or either of such individuals, with full power of substitution in the premises, as the undersigned’s true and lawful agents and attorneys-in-fact (the “Attorneys-in-Fact”), with full power and authority in the name and on behalf of the undersigned, in his capacity as a Director of Centex Corporation (the “Company”), to execute and file with the Securities and Exchange Commission the Company’s Annual Report on Form 10-K for the Company’s fiscal year ended March 31, 2004, together with any and all amendments thereto.

This Power of Attorney and all authority granted and conferred hereby shall continue indefinitely and, unless waived by the Attorneys-in-Fact, may not be revoked until the Attorneys-in-Fact have received five days’ written notice of such revocation.

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 14th day of May, 2004.

/s/ Juan L. Elek Juan L. Elek

Director

Centex Corporation

CENTEX CORPORATION

POWER OF ATTORNEY

THE UNDERSIGNED hereby constitutes and appoints Timothy R. Eller and Frederic M. Poses, or either of such individuals, with full power of substitution in the premises, as the undersigned’s true and lawful agents and attorneys-in-fact (the “Attorneys-in-Fact”), with full power and authority in the name and on behalf of the undersigned, in his capacity as a Director of Centex Corporation (the “Company”), to execute and file with the Securities and Exchange Commission the Company’s Annual Report on Form 10-K for the Company’s fiscal year ended March 31, 2004, together with any and all amendments thereto.

This Power of Attorney and all authority granted and conferred hereby shall continue indefinitely and, unless waived by the Attorneys-in-Fact, may not be revoked until the Attorneys-in-Fact have received five days’ written notice of such revocation.

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 14th day of May, 2004.

/s/ Clint W. Murchison, III Clint W. Murchison, III

Director

Centex Corporation

CENTEX CORPORATION

POWER OF ATTORNEY

THE UNDERSIGNED hereby constitutes and appoints Timothy R. Eller and Frederic M. Poses, or either of such individuals, with full power of substitution in the premises, as the undersigned’s true and lawful agents and attorneys-in-fact (the “Attorneys-in-Fact”), with full power and authority in the name and on behalf of the undersigned, in his capacity as a Director of Centex Corporation (the “Company”), to execute and file with the Securities and Exchange Commission the Company’s Annual Report on Form 10-K for the Company’s fiscal year ended March 31, 2004, together with any and all amendments thereto.

This Power of Attorney and all authority granted and conferred hereby shall continue indefinitely and, unless waived by the Attorneys-in-Fact, may not be revoked until the Attorneys-in-Fact have received five days’ written notice of such revocation.

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 14th day of May, 2004.

/s/ Thomas J. Falk Thomas J. Falk

Director

Centex Corporation

CENTEX CORPORATION

POWER OF ATTORNEY

THE UNDERSIGNED hereby constitutes and appoints Timothy R. Eller and Frederic M. Poses, or either of such individuals, with full power of substitution in the premises, as the undersigned’s true and lawful agents and attorneys-in-fact (the “Attorneys-in-Fact”), with full power and authority in the name and on behalf of the undersigned, in his capacity as a Director of Centex Corporation (the “Company”), to execute and file with the Securities and Exchange Commission the Company’s Annual Report on Form 10-K for the Company’s fiscal year ended March 31, 2004, together with any and all amendments thereto.

This Power of Attorney and all authority granted and conferred hereby shall continue indefinitely and, unless waived by the Attorneys-in-Fact, may not be revoked until the Attorneys-in-Fact have received five days’ written notice of such revocation.

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 14th day of May, 2004.

/s/ David W. Quinn David W. Quinn

Director

Centex Corporation

CENTEX CORPORATION

POWER OF ATTORNEY

THE UNDERSIGNED hereby constitutes and appoints Timothy R. Eller and Frederic M. Poses, or either of such individuals, with full power of substitution in the premises, as the undersigned’s true and lawful agents and attorneys-in-fact (the “Attorneys-in-Fact”), with full power and authority in the name and on behalf of the undersigned, in his capacity as a Director of Centex Corporation (the “Company”), to execute and file with the Securities and Exchange Commission the Company’s Annual Report on Form 10-K for the Company’s fiscal year ended March 31, 2004, together with any and all amendments thereto.

This Power of Attorney and all authority granted and conferred hereby shall continue indefinitely and, unless waived by the Attorneys-in-Fact, may not be revoked until the Attorneys-in-Fact have received five days’ written notice of such revocation.

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 14th day of May, 2004.

/s/ Thomas M. Schoewe Thomas M. Schoewe

Director

Centex Corporation

CENTEX CORPORATION

POWER OF ATTORNEY

THE UNDERSIGNED hereby constitutes and appoints Timothy R. Eller and Frederic M. Poses, or either of such individuals, with full power of substitution in the premises, as the undersigned’s true and lawful agents and attorneys-in-fact (the “Attorneys-in-Fact”), with full power and authority in the name and on behalf of the undersigned, in his capacity as a Director of Centex Corporation (the “Company”), to execute and file with the Securities and Exchange Commission the Company’s Annual Report on Form 10-K for the Company’s fiscal year ended March 31, 2004, together with any and all amendments thereto.

This Power of Attorney and all authority granted and conferred hereby shall continue indefinitely and, unless waived by the Attorneys-in-Fact, may not be revoked until the Attorneys-in-Fact have received five days’ written notice of such revocation.

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 14th day of May, 2004.

/s/ Paul T. Stoffel Paul T. Stoffel

Director

Centex Corporation

CENTEX CORPORATION

POWER OF ATTORNEY

THE UNDERSIGNED hereby constitutes and appoints Frederic M. Poses with full power of substitution in the premises, as the undersigned’s true and lawful agent and attorney-in-fact (the “Attorney-in-Fact”), with full power and authority in the name and on behalf of the undersigned, in his capacity as a Director of Centex Corporation (the “Company”), to execute and file with the Securities and Exchange Commission the Company’s Annual Report on Form 10-K for the Company’s fiscal year ended March 31, 2004, together with any and all amendments thereto.

This Power of Attorney and all authority granted and conferred hereby shall continue indefinitely and, unless waived by the Attorney-in-Fact, may not be revoked until the Attorney-in-Fact has received five days’ written notice of such revocation.

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 14th day of May, 2004.

/s/ Timothy R. Eller Timothy R. Eller

Director

Centex Corporation

EX-31.1

EXHIBIT 31.1

Certifications

I, Timothy R. Eller, certify that:

1. I have reviewed this annual report on Form 10-K of Centex Corporation;

2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures [as defined in Exchange Act Rules 13a-15 (e) and 15d-15(e)] for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedure to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

(b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this annual report based on such evaluation; and

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls.

Date: May 28, 2004

/s/ Timothy R. Eller

Timothy R. Eller
Chief Executive Officer

EX-31.2

EXHIBIT 31.2

Certifications

I, Leldon E. Echols, certify that:

1. I have reviewed this annual report on Form 10-K of Centex Corporation;

2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures [as defined in Exchange Act Rules 13a-15 (e) and 15d-15(e)] for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedure to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

(b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this annual report based on such evaluation; and

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls.

Date: May 28, 2004

/s/ Leldon E. Echols

Leldon E. Echols
Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CENTEX CORPORATION

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Centex Corporation and Subsidiaries (the “Company”) on Form 10-K for the year ended March 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Timothy R. Eller, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

     (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

     (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ TIMOTHY R. ELLER Timothy R. Eller

Chief Executive Officer

Date: May 28, 2004

EX-32.2

EXHIBIT 32.2

CENTEX CORPORATION

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Centex Corporation and Subsidiaries (the “Company”) on Form 10-K for the year ended March 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Leldon E. Echols, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

     (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

     (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ LELDON E. ECHOLS Leldon E. Echols

Chief Financial Officer

Date: May 28, 2004