##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

JOINT QUARTERLY REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Quarterly Period Ended

December 31, 2002

Commission File No. 1-6776

Centex Corporation

A Nevada Corporation

IRS Employer Identification No. 75-0778259
2728 N. Harwood
Dallas, Texas 75201
(214) 981-5000

Commission File Nos. 1-9624 and 1-9625, respectively

3333 Holding Corporation
A Nevada CorporationCentex Development Company, L.P.
A Delaware Limited Partnership

IRS Employer Identification Nos. 75-2178860 and 75-2168471, respectively
2728 N. Harwood
Dallas, Texas 75201
(214) 981-6770

The registrants have 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 and
have been subject to such filing requirements for the past 90 days.

Indicate the number of shares of each of the registrants classes of common
stock (or other similar equity securities) outstanding as of the close of
business on January 31, 2003:

|                                                                                                              |  |                                                                                                                       |  |                                                          
|------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------
|Centex Corporation
3333 Holding Corporation
Centex Development Company, L.P.
Centex Development Company, L.P. |  | Common Stock
Common Stock
Class A Units of Limited Partnership Interest
Class C Units of Limited Partnership Interest |  | 61,723,598 shares
1,000 shares
32,260 units
208,330 units





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TABLE OF CONTENTS



|                              |                                                                                               |                                                                  |  |  |  |  |  | 
|----------------------------- | --------------------------------------------------------------------------------------------- | ---------------------------------------------------------------- |  |  |  |  |  | 
|Part I. Financial Information
|                              | Item 1. Financial Statements                                                                 
|                              |                                                                                               | Statements of Consolidated Earnings                             
|                              |                                                                                               | Statements of Consolidated Earnings                             
|                              |                                                                                               | Consolidated Balance Sheets with Consolidating Details          
|                              |                                                                                               | Statements of Consolidated Cash Flows with Consolidating Details
|                              |                                                                                               | Notes to Consolidated Financial Statements                      
|                              | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                              | Item 3. Quantitative and Qualitative Disclosures About Market Risk                           
|                              | Item 4. Controls and Procedures                                                              
|Part II. Other Information   
|                              | Item 6. Exhibits and Reports on Form 8-K                                                     
|Signatures                   
|Certifications               
|Part I. Financial Information
|                              | Item 1. Financial Statements                                                                 
|                              |                                                                                               | Condensed Combining Statements of Operations                    
|                              |                                                                                               | Condensed Combining Balance Sheets                              
|                              |                                                                                               | Condensed Combining Statements of Cash Flows                    
|                              |                                                                                               | Notes to Condensed Combining Financial Statements               
|                              | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                              | Item 3. Quantitative and Qualitative Disclosures About Market Risk                           
|                              | Item 4. Controls and Procedures                                                              
|Part II. Other Information   
|                              | Item 6. Exhibits and Reports on Form 8-K                                                     
|Signatures                   
|Certifications               



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##### Table of Contents



Centex Corporation and Subsidiaries
3333 Holding Corporation and Subsidiary
Centex Development Company, L.P. and Subsidiaries

Form 10-Q Table of Contents

December 31, 2002

Centex Corporation and Subsidiaries

|               |  |                       |  |         |  |                                                                                       |  |                                                                  |    |      |   | 
|-------------- |  | --------------------- |  | ------- |  | ------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------- | -- | ---- | - | 
|               |  |                       |  |         |  |                                                                                       |  |                                                                  |    | Page |  
|Part I.        |  | Financial Information
|               |  |                      
|               |  |                       |  | Item 1. |  | Financial Statements                                                                  |  |                                                                  |    |     
|               |  |                       |  |         |  |                                                                                       |  | Statements of Consolidated Earnings                              |    |      | 1 | 
|               |  |                       |  |         |  |                                                                                       |  | Consolidated Balance Sheets with Consolidating Details           |    |      | 3 | 
|               |  |                       |  |         |  |                                                                                       |  | Statements of Consolidated Cash Flows with Consolidating Details |    |      | 5 | 
|               |  |                       |  |         |  |                                                                                       |  | Notes to Consolidated Financial Statements                       |    |      | 7 | 
|               |  |                       |  | Item 2. |  | Managements Discussion and Analysis of Financial Condition
and Results of Operations |  |                                                                  | 23 |     
|               |  |                       |  | Item 3. |  | Quantitative and Qualitative Disclosures about Market Risk                            |  |                                                                  | 41 |     
|               |  |                       |  | Item 4. |  | Controls and Procedures                                                               |  |                                                                  | 41 |     
|Part II.       |  | Other Information    
|               |  |                       |  | Item 6. |  | Exhibits and Reports on Form 8-K                                                      |  |                                                                  | 42 |     
|Signatures     |  |                       |  |         |  |                                                                                       |  |                                                                  | 43 |     
|Certifications |  |                       |  |         |  |                                                                                       |  |                                                                  | 44 |     

i





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##### Table of Contents



3333 Holding Corporation and Subsidiary
Centex Development Company, L.P. and Subsidiaries

|               |  |                       |  |         |  |                                                                                       |  |                                                   |    |      |    | 
|-------------- |  | --------------------- |  | ------- |  | ------------------------------------------------------------------------------------- |  | ------------------------------------------------- | -- | ---- | -- | 
|               |  |                       |  |         |  |                                                                                       |  |                                                   |    | Page |   
|Part I.        |  | Financial Information
|               |  |                       |  | Item 1. |  | Financial Statements                                                                  |  |                                                   |    |     
|               |  |                       |  |         |  |                                                                                       |  | Condensed Combining Statements of Operations      |    |      | 46 | 
|               |  |                       |  |         |  |                                                                                       |  | Condensed Combining Balance Sheets                |    |      | 48 | 
|               |  |                       |  |         |  |                                                                                       |  | Condensed Combining Statements of Cash Flows      |    |      | 49 | 
|               |  |                       |  |         |  |                                                                                       |  | Notes to Condensed Combining Financial Statements |    |      | 50
|               |  |                       |  | Item 2. |  | Managements Discussion and Analysis of Financial Condition
and Results of Operations |  |                                                   | 58 |     
|               |  |                       |  | Item 3. |  | Quantitative and Qualitative Disclosures about Market Risk                            |  |                                                   | 66 |     
|               |  |                       |  | Item 4. |  | Controls and Procedures                                                               |  |                                                   | 66 |     
|Part II.       |  | Other Information    
|               |  |                       |  | Item 6. |  | Exhibits and Reports on Form 8-K                                                      |  |                                                   | 67 |     
|Signatures     |  |                       |  |         |  |                                                                                       |  |                                                   | 68 |     
|Certifications |  |                       |  |         |  |                                                                                       |  |                                                   | 70 |     

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##### Table of Contents









Part I. Financial Information
Item 1. Financial Statements




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

|                             |                                      |                                            |           |                                         |           |   |           |            |           | 
|---------------------------- | ------------------------------------ | ------------------------------------------ | --------- | --------------------------------------- | --------- | - | --------- | ---------- | --------- | 
|                             |                                      |                                            |           |                                         |          
|                             |                                      |                                            |           | For the Three Months Ended December 31, |          
|                             |                                      |                                            |           |                                         |          
|                             |                                      |                                            |           | 2002                                    |           |   | 2001      |           
|                             |                                      |                                            |           |                                         |           |   |           |           
|Revenues                     |                                      |                                            |           |                                         |           |   |           |           
|                             | Home Building                        |                                            | $         | 1,468,459                               |           |   | $         | 1,210,759  |          
|                             | Financial Services                   |                                            |           | 223,078                                 |           |   |           | 182,800    |          
|                             | Construction Products                |                                            |           | 119,089                                 |           |   |           | 112,750    |          
|                             | Construction Services                |                                            |           | 411,132                                 |           |   |           | 321,357    |          
|                             | Investment Real Estate               |                                            |           | 25,785                                  |           |   |           | 9,730      |          
|                             | Other                                |                                            |           | 57,329                                  |           |   |           | 57,088     |          
|                             |                                      |                                            |           |                                         |           |  
|                             |                                      |                                            | 2,304,872 |                                         |           |   | 1,894,484 |           
|                             |                                      |                                            |           |                                         |           |  
|Costs and Expenses           |                                      |                                            |           |                                         |           |   |           |           
|                             | Home Building                        |                                            |           | 1,296,832                               |           |   |           | 1,076,248  |          
|                             | Financial Services                   |                                            |           | 172,893                                 |           |   |           | 149,446    |          
|                             | Construction Products                |                                            |           | 93,316                                  |           |   |           | 91,353     |          
|                             | Construction Services                |                                            |           | 401,782                                 |           |   |           | 312,254    |          
|                             | Investment Real Estate               |                                            |           | 5,705                                   |           |   |           | 5,137      |          
|                             | Other                                |                                            |           | 56,096                                  |           |   |           | 54,674     |          
|                             | Corporate General and Administrative |                                            |           | 13,755                                  |           |   |           | 13,326     |          
|                             | Interest Expense                     |                                            |           | 33,545                                  |           |   |           | 28,046     |          
|                             | Minority Interest                    |                                            |           | 8,065                                   |           |   |           | 6,065      |          
|                             |                                      |                                            |           |                                         |           |  
|                             |                                      |                                            | 2,081,989 |                                         |           |   | 1,736,549 |           
|                             |                                      |                                            |           |                                         |           |  
|Earnings Before Income Taxes |                                      |                                            | 222,883   |                                         |           |   | 157,935   |           
|                             | Income Taxes                         |                                            |           | 66,999                                  |           |   |           | 61,790     |          
|                             |                                      |                                            |           |                                         |           |  
|Net Earnings                 |                                      | $                                          | 155,884   |                                         |           | $ | 96,145    |           
|                             |                                      |                                            |           |                                         |           |  
|Earnings Per Share           |                                      |                                            |           |                                         |           |   |           |           
|                             | Basic                                |                                            | $         | 2.58                                    |           |   | $         | 1.59       |          
|                             |                                      |                                            |           |                                         |           |  
|                             | Diluted                              |                                            | $         | 2.50                                    |           |   | $         | 1.54       |          
|                             |                                      |                                            |           |                                         |           |  
|Average Shares Outstanding   |                                      |                                            |           |                                         |           |   |           |           
|                             | Basic                                |                                            |           | 60,447,468                              |           |   |           | 60,554,328 |          
|                             | Dilutive Securities:                 |                                            |           |                                         |           |   |           |            |          
|                             |                                      | Options                                    |           |                                         | 1,475,421 |   |           |            | 1,460,920 | 
|                             |                                      | Convertible Debenture and Restricted Stock |           |                                         | 544,776   |   |           |            | 414,324   | 
|                             |                                      |                                            |           |                                         |           |  
|                             | Diluted                              |                                            |           | 62,467,665                              |           |   |           | 62,429,572 |          
|                             |                                      |                                            |           |                                         |           |  
|Cash Dividends Per Share     |                                      | $                                          | 0.04      |                                         |           | $ | 0.04      |           
|                             |                                      |                                            |           |                                         |           |  

See Notes to Consolidated Financial Statements.

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##### Table of Contents






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

|                             |                                      |                                            |           |                                        |           |   |           |            |           | 
|---------------------------- | ------------------------------------ | ------------------------------------------ | --------- | -------------------------------------- | --------- | - | --------- | ---------- | --------- | 
|                             |                                      |                                            |           |                                        |          
|                             |                                      |                                            |           | For the Nine Months Ended December 31, |          
|                             |                                      |                                            |           |                                        |          
|                             |                                      |                                            |           | 2002                                   |           |   | 2001      |           
|                             |                                      |                                            |           |                                        |           |   |           |           
|Revenues                     |                                      |                                            |           |                                        |           |   |           |           
|                             | Home Building                        |                                            | $         | 3,855,692                              |           |   | $         | 3,420,641  |          
|                             | Financial Services                   |                                            |           | 608,437                                |           |   |           | 511,366    |          
|                             | Construction Products                |                                            |           | 383,857                                |           |   |           | 359,718    |          
|                             | Construction Services                |                                            |           | 1,163,593                              |           |   |           | 971,786    |          
|                             | Investment Real Estate               |                                            |           | 39,086                                 |           |   |           | 57,053     |          
|                             | Other                                |                                            |           | 181,831                                |           |   |           | 166,698    |          
|                             |                                      |                                            |           |                                        |           |  
|                             |                                      |                                            | 6,232,496 |                                        |           |   | 5,487,262 |           
|                             |                                      |                                            |           |                                        |           |  
|Costs and Expenses           |                                      |                                            |           |                                        |           |   |           |           
|                             | Home Building                        |                                            |           | 3,438,395                              |           |   |           | 3,065,032  |          
|                             | Financial Services                   |                                            |           | 497,371                                |           |   |           | 423,581    |          
|                             | Construction Products                |                                            |           | 303,609                                |           |   |           | 302,848    |          
|                             | Construction Services                |                                            |           | 1,136,962                              |           |   |           | 947,904    |          
|                             | Investment Real Estate               |                                            |           | 9,673                                  |           |   |           | 21,071     |          
|                             | Other                                |                                            |           | 182,270                                |           |   |           | 161,274    |          
|                             | Corporate General and Administrative |                                            |           | 40,836                                 |           |   |           | 37,552     |          
|                             | Interest Expense                     |                                            |           | 84,280                                 |           |   |           | 84,630     |          
|                             | Minority Interest                    |                                            |           | 25,448                                 |           |   |           | 15,135     |          
|                             |                                      |                                            |           |                                        |           |  
|                             |                                      |                                            | 5,718,844 |                                        |           |   | 5,059,027 |           
|                             |                                      |                                            |           |                                        |           |  
|Earnings Before Income Taxes |                                      |                                            | 513,652   |                                        |           |   | 428,235   |           
|                             | Income Taxes                         |                                            |           | 154,404                                |           |   |           | 163,485    |          
|                             |                                      |                                            |           |                                        |           |  
|Net Earnings                 |                                      | $                                          | 359,248   |                                        |           | $ | 264,750   |           
|                             |                                      |                                            |           |                                        |           |  
|Earnings Per Share           |                                      |                                            |           |                                        |           |   |           |           
|                             | Basic                                |                                            | $         | 5.91                                   |           |   | $         | 4.38       |          
|                             |                                      |                                            |           |                                        |           |  
|                             | Diluted                              |                                            | $         | 5.71                                   |           |   | $         | 4.26       |          
|                             |                                      |                                            |           |                                        |           |  
|Average Shares Outstanding   |                                      |                                            |           |                                        |           |   |           |           
|                             | Basic                                |                                            |           | 60,829,409                             |           |   |           | 60,433,456 |          
|                             | Dilutive Securities:                 |                                            |           |                                        |           |   |           |            |          
|                             |                                      | Options                                    |           |                                        | 1,697,600 |   |           |            | 1,369,122 | 
|                             |                                      | Convertible Debenture and Restricted Stock |           |                                        | 541,894   |   |           |            | 408,250   | 
|                             |                                      |                                            |           |                                        |           |  
|                             | Diluted                              |                                            |           | 63,068,903                             |           |   |           | 62,210,828 |          
|                             |                                      |                                            |           |                                        |           |  
|Cash Dividends Per Share     |                                      | $                                          | 0.12      |                                        |           | $ | 0.12      |           
|                             |                                      |                                            |           |                                        |           |  

See Notes to Consolidated Financial Statements.

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##### Table of Contents






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

|                                     |                                          |                                                                                                           |            |                                     |           |   |                |           |           |  
|------------------------------------ | ---------------------------------------- | --------------------------------------------------------------------------------------------------------- | ---------- | ----------------------------------- | --------- | - | -------------- | --------- | --------- | -
|                                     |                                          |                                                                                                           |            |                                     |          
|                                     |                                          |                                                                                                           |            | Centex Corporation and Subsidiaries |          
|                                     |                                          |                                                                                                           |            |                                     |          
|                                     |                                          |                                                                                                           |            | December 31, 2002*                  |           |   | March 31, 2002 |          
|                                     |                                          |                                                                                                           |            |                                     |           |   |                |          
|Assets                               |                                          |                                                                                                           |            |                                     |           |   |                |          
|                                     | Cash and Cash Equivalents                |                                                                                                           | $          | 56,717                              |           |   | $              | 219,716   |          
|                                     | Restricted Cash                          |                                                                                                           |            | 130,665                             |           |   |                | 106,270   |          
|                                     | Receivables -                            |                                                                                                           |            |                                     |           |   |                |           |          
|                                     |                                          | Residential Mortgage Loans Held for Investment, net                                                       |            |                                     | 4,220,812 |   |                |           | 3,279,450 |  
|                                     |                                          | Residential Mortgage Loans Held for Sale                                                                  |            |                                     | 211,729   |   |                |           | 241,793   |  
|                                     |                                          | Construction Contracts                                                                                    |            |                                     | 251,591   |   |                |           | 221,705   |  
|                                     |                                          | Trade, including Notes of $37,151 and $30,908                                                             |            |                                     | 394,176   |   |                |           | 345,311   |  
|                                     | Inventories -                            |                                                                                                           |            |                                     |           |   |                |           |          
|                                     |                                          | Housing Projects                                                                                          |            |                                     | 3,348,354 |   |                |           | 2,513,168 |  
|                                     |                                          | Land Held for Development and Sale                                                                        |            |                                     | 104,099   |   |                |           | 85,997    |  
|                                     |                                          | Construction Products                                                                                     |            |                                     | 53,333    |   |                |           | 54,220    |  
|                                     |                                          | Other                                                                                                     |            |                                     | 27,607    |   |                |           | 25,626    |  
|                                     | Investments -                            |                                                                                                           |            |                                     |           |   |                |           |          
|                                     |                                          | Centex Development Company, L.P.                                                                          |            |                                     | 299,475   |   |                |           | 269,178   |  
|                                     |                                          | Joint Ventures and Other                                                                                  |            |                                     | 94,437    |   |                |           | 94,609    |  
|                                     |                                          | Unconsolidated Subsidiaries                                                                               |            |                                     |          |   |                |           |          |  
|                                     | Property and Equipment, net              |                                                                                                           |            | 708,745                             |           |   |                | 720,285   |          
|                                     | Other Assets -                           |                                                                                                           |            |                                     |           |   |                |           |          
|                                     |                                          | Deferred Income Taxes                                                                                     |            |                                     | 39,032    |   |                |           | 76,167    |  
|                                     |                                          | Goodwill                                                                                                  |            |                                     | 334,357   |   |                |           | 349,712   |  
|                                     |                                          | Mortgage Securitization Residual Interest                                                                 |            |                                     | 111,132   |   |                |           | 125,272   |  
|                                     |                                          | Deferred Charges and Other, net                                                                           |            |                                     | 232,107   |   |                |           | 256,976   |  
|                                     |                                          |                                                                                                           |            |                                     |           |  
|                                     |                                          | $                                                                                                         | 10,618,368 |                                     |           | $ | 8,985,455      |          
|                                     |                                          |                                                                                                           |            |                                     |           |  
|Liabilities and Stockholders Equity |                                          |                                                                                                           |            |                                     |           |   |                |          
|                                     | Accounts Payable and Accrued Liabilities |                                                                                                           | $          | 1,510,488                           |           |   | $              | 1,438,613 |          
|                                     | Debt -                                   |                                                                                                           |            |                                     |           |   |                |           |          
|                                     |                                          | Non-Financial Services                                                                                    |            |                                     | 1,984,518 |   |                |           | 1,791,752 |  
|                                     |                                          | Financial Services                                                                                        |            |                                     | 4,499,303 |   |                |           | 3,485,027 |  
|                                     | Payables to Affiliates                   |                                                                                                           |            |                                    |           |   |                |          |          
|                                     | Minority Stockholders Interest          |                                                                                                           |            | 169,030                             |           |   |                | 153,290   |          
|                                     | Stockholders Equity -                   |                                                                                                           |            |                                     |           |   |                |           |          
|                                     |                                          | Preferred Stock, Authorized 5,000,000 Shares, None Issued                                                 |            |                                     |          |   |                |           |          |  
|                                     |                                          | Common Stock, $.25 Par Value; Authorized 100,000,000
Shares; Outstanding 60,567,004 and 61,171,149 Shares |            |                                     | 15,416    |   |                |           | 15,348    |  
|                                     |                                          | Capital in Excess of Par Value                                                                            |            |                                     | 88,562    |   |                |           | 72,446    |  
|                                     |                                          | Unamortized Value of Restricted Stock                                                                     |            |                                     | (2,641    | ) |                |           | (2,408    | )
|                                     |                                          | Retained Earnings                                                                                         |            |                                     | 2,402,841 |   |                |           | 2,050,902 |  
|                                     |                                          | Treasury Stock, at cost; 1,096,769 and 221,854 Shares                                                     |            |                                     | (45,040   | ) |                |           | (6,559    | )
|                                     |                                          | Accumulated Other Comprehensive Loss                                                                      |            |                                     | (4,109    | ) |                |           | (12,956   | )
|                                     |                                          |                                                                                                           |            |                                     |           |  
|                                     | Total Stockholders Equity               |                                                                                                           |            | 2,455,029                           |           |   |                | 2,116,773 |          
|                                     |                                          |                                                                                                           |            |                                     |           |  
|                                     |                                          | $                                                                                                         | 10,618,368 |                                     |           | $ | 8,985,455      |          
|                                     |                                          |                                                                                                           |            |                                     |           |  

See Notes to Consolidated Financial Statements.
*Unaudited

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##### Table of Contents



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

| |  |                       |           |   |                    |   |           |                    |  |   |                |   |  |   |           |   |  |  |  | 
| |  | --------------------- | --------- | - | ------------------ | - | --------- | ------------------ |  | - | -------------- | - |  | - | --------- | - |  |  |  | 
| |  |                       |           |   |                    |   |           |                    |  |  
| |  | Centex Corporation ** |           |   | Financial Services |   |           |                    |  |  
| |  |                       |           |   |                    |   |           |                    |  |  
| |  | December 31, 2002*    |           |   | March 31, 2002     |   |           | December 31, 2002* |  |   | March 31, 2002 |   |  |   |           |  
| |  |                       |           |   |                    |   |           |                    |  |   |                |   |  |   |           |  
| | 
| |  | $                     | 40,204    |   |                    | $ | 192,591   |                    |  | $ | 16,513         |   |  | $ | 27,125    |  
| |  |                       | 9,186     |   |                    |   | 4,760     |                    |  |   | 121,479        |   |  |   | 101,510   |  
| | 
| |  |                       |          |   |                    |   |          |                    |  |   | 4,220,812      |   |  |   | 3,279,450 |  
| |  |                       |          |   |                    |   |          |                    |  |   | 211,729        |   |  |   | 241,793   |  
| |  |                       | 251,591   |   |                    |   | 221,705   |                    |  |   |               |   |  |   |          |  
| |  |                       | 194,890   |   |                    |   | 197,613   |                    |  |   | 199,286        |   |  |   | 147,698   |  
| | 
| |  |                       | 3,348,354 |   |                    |   | 2,513,168 |                    |  |   |               |   |  |   |          |  
| |  |                       | 104,099   |   |                    |   | 85,997    |                    |  |   |               |   |  |   |          |  
| |  |                       | 53,333    |   |                    |   | 54,220    |                    |  |   |               |   |  |   |          |  
| |  |                       | 22,238    |   |                    |   | 22,186    |                    |  |   | 5,369          |   |  |   | 3,440     |  
| | 
| |  |                       | 299,475   |   |                    |   | 269,178   |                    |  |   |               |   |  |   |          |  
| |  |                       | 94,437    |   |                    |   | 94,609    |                    |  |   |               |   |  |   |          |  
| |  |                       | 364,317   |   |                    |   | 498,117   |                    |  |   |               |   |  |   |          |  
| |  |                       | 666,818   |   |                    |   | 672,165   |                    |  |   | 41,927         |   |  |   | 48,120    |  
| | 
| |  |                       | (41,592   | ) |                    |   | (3,456    | )                  |  |   | 80,624         |   |  |   | 79,623    |  
| |  |                       | 317,542   |   |                    |   | 332,897   |                    |  |   | 16,815         |   |  |   | 16,815    |  
| |  |                       |          |   |                    |   |          |                    |  |   | 111,132        |   |  |   | 125,272   |  
| |  |                       | 156,874   |   |                    |   | 179,810   |                    |  |   | 75,233         |   |  |   | 77,166    |  
| |  |                       |           |   |                    |   |           |                    |  |   |                |  
| |  | $                     | 5,881,766 |   |                    | $ | 5,335,560 |                    |  | $ | 5,100,919      |   |  | $ | 4,148,012 |  
| |  |                       |           |   |                    |   |           |                    |  |   |                |  
| | 
| |  | $                     | 1,275,182 |   |                    | $ | 1,275,720 |                    |  | $ | 235,306        |   |  | $ | 162,893   |  
| | 
| |  |                       | 1,984,518 |   |                    |   | 1,791,752 |                    |  |   |               |   |  |   |          |  
| |  |                       |          |   |                    |   |          |                    |  |   | 4,499,303      |   |  |   | 3,485,027 |  
| |  |                       |          |   |                    |   |          |                    |  |   | 2,765          |   |  |   | 187,764   |  
| |  |                       | 167,037   |   |                    |   | 151,315   |                    |  |   | 1,993          |   |  |   | 1,975     |  
| | 
| |  |                       |          |   |                    |   |          |                    |  |   |               |   |  |   |          |  
| | 
| |  |                       | 15,416    |   |                    |   | 15,348    |                    |  |   | 1              |   |  |   | 1         |  
| |  |                       | 88,562    |   |                    |   | 72,446    |                    |  |   | 200,467        |   |  |   | 202,671   |  
| |  |                       | (2,641    | ) |                    |   | (2,408    | )                  |  |   |               |   |  |   |          |  
| |  |                       | 2,402,841 |   |                    |   | 2,050,902 |                    |  |   | 182,380        |   |  |   | 116,748   |  
| |  |                       | (45,040   | ) |                    |   | (6,559    | )                  |  |   |               |   |  |   |          |  
| |  |                       | (4,109    | ) |                    |   | (12,956   | )                  |  |   | (21,296        | ) |  |   | (9,067    | )
| |  |                       |           |   |                    |   |           |                    |  |   |                |  
| |  |                       | 2,455,029 |   |                    |   | 2,116,773 |                    |  |   | 361,552        |   |  |   | 310,353   |  
| |  |                       |           |   |                    |   |           |                    |  |   |                |  
| |  | $                     | 5,881,766 |   |                    | $ | 5,335,560 |                    |  | $ | 5,100,919      |   |  | $ | 4,148,012 |  
| |  |                       |           |   |                    |   |           |                    |  |   |                |  



|** |  | In the supplemental data presented above, Centex Corporation represents
the consolidation of all subsidiaries other than those included in
Financial Services. Transactions between Centex Corporation and Financial
Services have been eliminated from the Centex Corporation and Subsidiaries
balance sheets.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-4-



---



##### Table of Contents






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

|                                                     |                                                                                                       |                                                                           |            |                                        |           |   |            |            |           |  
|---------------------------------------------------- | ----------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------- | ---------- | -------------------------------------- | --------- | - | ---------- | ---------- | --------- | -
|                                                     |                                                                                                       |                                                                           |            |                                        |          
|                                                     |                                                                                                       |                                                                           |            | Centex Corporation and Subsidiaries    |          
|                                                     |                                                                                                       |                                                                           |            |                                        |          
|                                                     |                                                                                                       |                                                                           |            | For the Nine Months Ended December 31, |          
|                                                     |                                                                                                       |                                                                           |            |                                        |          
|                                                     |                                                                                                       |                                                                           |            | 2002                                   |           |   | 2001       |           
|                                                     |                                                                                                       |                                                                           |            |                                        |           |   |            |           
|Cash Flows  Operating Activities                    |                                                                                                       |                                                                           |            |                                        |           |   |            |           
|                                                     | Net Earnings                                                                                          |                                                                           | $          | 359,248                                |           |   | $          | 264,750    |          
|                                                     | Adjustments                                                                                           |                                                                           |            |                                        |           |   |            |            |          
|                                                     |                                                                                                       | Depreciation, Depletion and Amortization                                  |            |                                        | 71,769    |   |            |            | 66,470    |  
|                                                     |                                                                                                       | Provision for Losses on Residential Mortgage Loans
Held for Investment    |            |                                        | 25,466    |   |            |            | 11,254    |  
|                                                     |                                                                                                       | Deferred Income Tax Provision (Benefit)                                   |            |                                        | 35,388    |   |            |            | (923      | )
|                                                     |                                                                                                       | Equity in Earnings of Centex Development Company,
L.P. and Joint Ventures |            |                                        | (28,319   | ) |            |            | (25,816   | )
|                                                     |                                                                                                       | Minority Interest, Net of Taxes                                           |            |                                        | 16,925    |   |            |            | 10,066    |  
|                                                     | (Increase) Decrease in Restricted Cash                                                                |                                                                           |            | (24,395                                | )         |   |            | (21,313    | )        
|                                                     | (Increase) Decrease in Receivables                                                                    |                                                                           |            | (72,503                                | )         |   |            | 57,266     |          
|                                                     | Decrease (Increase) in Residential Mortgage Loans Held for
Sale                                       |                                                                           |            | 30,064                                 |           |   |            | (8,956     | )        
|                                                     | Increase in Housing Projects and Land Held for
Development and Sale Inventories                       |                                                                           |            | (860,172                               | )         |   |            | (610,671   | )        
|                                                     | Decrease (Increase) in Construction Products and
Other Inventories                                    |                                                                           |            | 29,920                                 |           |   |            | (7,322     | )        
|                                                     | Increase (Decrease) in Accounts Payable and
Accrued Liabilities                                       |                                                                           |            | 56,570                                 |           |   |            | 31,890     |          
|                                                     | Decrease (Increase) in Other Assets, net                                                              |                                                                           |            | 37,151                                 |           |   |            | (103,100   | )        
|                                                     | Increase (Decrease) in Payables to Affiliates                                                         |                                                                           |            |                                       |           |   |            |           |          
|                                                     | Other, net                                                                                            |                                                                           |            | (1,185                                 | )         |   |            | 329        |          
|                                                     |                                                                                                       |                                                                           |            |                                        |           |  
|                                                     |                                                                                                       |                                                                           | (324,073   | )                                      |           |   | (336,076   | )         
|                                                     |                                                                                                       |                                                                           |            |                                        |           |  
|Cash Flows  Investing Activities                    |                                                                                                       |                                                                           |            |                                        |           |   |            |           
|                                                     | Increase in Residential Mortgage Loans Held for Investment                                            |                                                                           |            | (992,261                               | )         |   |            | (1,226,767 | )        
|                                                     | Decrease (Increase) in Investment and Advances to Centex
Development Company, L.P. and Joint Ventures |                                                                           |            | 27,805                                 |           |   |            | (29,576    | )        
|                                                     | Purchases of Property and Equipment, net                                                              |                                                                           |            | (50,906                                | )         |   |            | (49,825    | )        
|                                                     |                                                                                                       |                                                                           |            |                                        |           |  
|                                                     |                                                                                                       |                                                                           | (1,015,362 | )                                      |           |   | (1,306,168 | )         
|                                                     |                                                                                                       |                                                                           |            |                                        |           |  
|Cash Flows  Financing Activities                    |                                                                                                       |                                                                           |            |                                        |           |   |            |           
|                                                     | Increase in Short-Term Debt, net                                                                      |                                                                           |            | 623,855                                |           |   |            | 886,824    |          
|                                                     | Non-Financial Services                                                                                |                                                                           |            |                                        |           |   |            |            |          
|                                                     |                                                                                                       | Issuance of Long-Term Debt                                                |            |                                        | 305,721   |   |            |            | 658,330   |  
|                                                     |                                                                                                       | Repayment of Long-Term Debt                                               |            |                                        | (261,686  | ) |            |            | (674,734  | )
|                                                     | Financial Services                                                                                    |                                                                           |            |                                        |           |   |            |            |          
|                                                     |                                                                                                       | Issuance of Long-Term Debt                                                |            |                                        | 1,262,654 |   |            |            | 1,055,525 |  
|                                                     |                                                                                                       | Repayment of Long-Term Debt                                               |            |                                        | (723,502  | ) |            |            | (315,191  | )
|                                                     | Proceeds from Stock Option Exercises and Other                                                        |                                                                           |            | 15,184                                 |           |   |            | 34,718     |          
|                                                     | Purchase of Treasury Stock                                                                            |                                                                           |            | (38,481                                | )         |   |            | (6,582     | )        
|                                                     | Dividends Paid                                                                                        |                                                                           |            | (7,309                                 | )         |   |            | (7,277     | )        
|                                                     | Dividends Received from (Paid to) Affiliate                                                           |                                                                           |            |                                       |           |   |            |           |          
|                                                     |                                                                                                       |                                                                           |            |                                        |           |  
|                                                     |                                                                                                       |                                                                           | 1,176,436  |                                        |           |   | 1,631,613  |           
|                                                     |                                                                                                       |                                                                           |            |                                        |           |  
|Net (Decrease) Increase in Cash and Cash Equivalents |                                                                                                       |                                                                           | (162,999   | )                                      |           |   | (10,631    | )         
|Cash and Cash Equivalents at Beginning of Period     |                                                                                                       |                                                                           | 219,716    |                                        |           |   | 57,752     |           
|                                                     |                                                                                                       |                                                                           |            |                                        |           |  
|Cash and Cash Equivalents at End of Period           |                                                                                                       | $                                                                         | 56,717     |                                        |           | $ | 47,121     |           
|                                                     |                                                                                                       |                                                                           |            |                                        |           |  

See Notes to Consolidated Financial Statements.

-5-



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##### Table of Contents



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

| |  |                                        |          |   |                                        |   |          |      |  |   |            |   |  |   |            |  
| |  | -------------------------------------- | -------- | - | -------------------------------------- | - | -------- | ---- |  | - | ---------- | - |  | - | ---------- | -
| |  |                                        |          |   |                                        |  
| |  | Centex
Corporation **                  |          |   | Financial Services                     |  
| |  |                                        |          |   |                                        |  
| |  | For the
Nine Months Ended December 31, |          |   | For the Nine Months Ended December 31, |  
| |  |                                        |          |   |                                        |  
| |  | 2002                                   |          |   | 2001                                   |   |          | 2002 |  |   | 2001       |  
| |  |                                        |          |   |                                        |   |          |      |  |   |            |  
|
| |  | $                                      | 258,616  |   |                                        | $ | 208,760  |      |  | $ | 100,632    |   |  | $ | 55,990     |  
|
| |  |                                        | 59,514   |   |                                        |   | 54,773   |      |  |   | 12,255     |   |  |   | 11,697     |  
| |  |                                        |         |   |                                        |   |         |      |  |   | 25,466     |   |  |   | 11,254     |  
| |  |                                        | 32,707   |   |                                        |   | 15,357   |      |  |   | 2,681      |   |  |   | (16,280    | )
|
| |  |                                        | (28,319  | ) |                                        |   | (25,816  | )    |  |   |           |   |  |   |           |  
| |  |                                        | 16,925   |   |                                        |   | 10,066   |      |  |   |           |   |  |   |           |  
| |  |                                        | (4,426   | ) |                                        |   | 1,010    |      |  |   | (19,969    | ) |  |   | (22,323    | )
| |  |                                        | (20,915  | ) |                                        |   | 97,976   |      |  |   | (51,588    | ) |  |   | (40,710    | )
| |  |                                        |         |   |                                        |   |         |      |  |   | 30,064     |   |  |   | (8,956     | )
|
| |  |                                        | (860,172 | ) |                                        |   | (610,671 | )    |  |   |           |   |  |   |           |  
| |  |                                        | 6,416    |   |                                        |   | 4,897    |      |  |   | 23,504     |   |  |   | (12,219    | )
| |  |                                        | (3,614   | ) |                                        |   | (1,024   | )    |  |   | 60,184     |   |  |   | 32,914     |  
| |  |                                        | 26,066   |   |                                        |   | (83,788  | )    |  |   | 11,085     |   |  |   | (19,312    | )
| |  |                                        | 178,884  |   |                                        |   | (42,923  | )    |  |   | (178,884   | ) |  |   | 42,923     |  
| |  |                                        | (1,203   | ) |                                        |   | 98       |      |  |   | 18         |   |  |   | 231        |  
| |  |                                        |          |   |                                        |   |          |      |  |   |            |  
| |  |                                        | (339,521 | ) |                                        |   | (371,285 | )    |  |   | 15,448     |   |  |   | 35,209     |  
| |  |                                        |          |   |                                        |   |          |      |  |   |            |  
|
| |  |                                        |         |   |                                        |   |         |      |  |   | (992,261   | ) |  |   | (1,226,767 | )
|
| |  |                                        | 27,805   |   |                                        |   | (29,576  | )    |  |   |           |   |  |   |           |  
| |  |                                        | (40,035  | ) |                                        |   | (45,152  | )    |  |   | (10,871    | ) |  |   | (4,673     | )
| |  |                                        |          |   |                                        |   |          |      |  |   |            |  
| |  |                                        | (12,230  | ) |                                        |   | (74,728  | )    |  |   | (1,003,132 | ) |  |   | (1,231,440 | )
| |  |                                        |          |   |                                        |   |          |      |  |   |            |  
|
| |  |                                        | 148,731  |   |                                        |   | 402,812  |      |  |   | 475,124    |   |  |   | 484,012    |  
|
| |  |                                        | 305,721  |   |                                        |   | 658,330  |      |  |   |           |   |  |   |           |  
| |  |                                        | (261,686 | ) |                                        |   | (674,734 | )    |  |   |           |   |  |   |           |  
|
| |  |                                        |         |   |                                        |   |         |      |  |   | 1,262,654  |   |  |   | 1,055,525  |  
| |  |                                        |         |   |                                        |   |         |      |  |   | (723,502   | ) |  |   | (315,191   | )
| |  |                                        | 17,388   |   |                                        |   | 32,638   |      |  |   | (2,204     | ) |  |   | 2,080      |  
| |  |                                        | (38,481  | ) |                                        |   | (6,582   | )    |  |   |           |   |  |   |           |  
| |  |                                        | (7,309   | ) |                                        |   | (7,277   | )    |  |   |           |   |  |   |           |  
| |  |                                        | 35,000   |   |                                        |   | 28,000   |      |  |   | (35,000    | ) |  |   | (28,000    | )
| |  |                                        |          |   |                                        |   |          |      |  |   |            |  
| |  |                                        | 199,364  |   |                                        |   | 433,187  |      |  |   | 977,072    |   |  |   | 1,198,426  |  
| |  |                                        |          |   |                                        |   |          |      |  |   |            |  
| |  |                                        | (152,387 | ) |                                        |   | (12,826  | )    |  |   | (10,612    | ) |  |   | 2,195      |  
| |  |                                        | 192,591  |   |                                        |   | 45,987   |      |  |   | 27,125     |   |  |   | 11,765     |  
| |  |                                        |          |   |                                        |   |          |      |  |   |            |  
| |  | $                                      | 40,204   |   |                                        | $ | 33,161   |      |  | $ | 16,513     |   |  | $ | 13,960     |  
| |  |                                        |          |   |                                        |   |          |      |  |   |            |  



|** |  | In the supplemental data presented above, Centex Corporation represents
the consolidation of all subsidiaries other than those included in
Financial Services. Transactions between Centex Corporation and Financial
Services have been eliminated from the Centex Corporation and Subsidiaries
statements of cash flows.
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-6-



---



##### Table of Contents






Centex Corporation and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2002
(Dollars and shares in thousands, except per share data)
(unaudited)

(A) BASIS OF PRESENTATION

The consolidated interim financial statements include the accounts of
Centex Corporation and subsidiaries (Centex or the Company) after
elimination of all significant intercompany balances and transactions. The
statements have been prepared, without audit, in accordance with accounting
principles generally accepted in the United States for interim financial
information and with the instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, certain information and footnote disclosures normally
included in financial statements prepared in accordance with accounting
principles generally accepted in the United States have been condensed or
omitted.

In the opinion of the Company, all adjustments (consisting of normal,
recurring accruals) necessary to present fairly the information in the
consolidated financial statements of the Company have been included. The
results of operations for such interim periods are not necessarily indicative
of results for the full year. The Company suggests that these consolidated
financial statements be read in conjunction with the consolidated financial
statements and the notes to consolidated financial statements included in the
Companys latest Annual Report on Form 10-K.

(B) STATEMENTS OF CONSOLIDATED CASH FLOWS  SUPPLEMENTAL DISCLOSURES

The following tables provide supplemental disclosures related to the
Statements of Consolidated Cash Flows:

|                        |  |                      |        |  |                     |   |        |      |  |   |         |  |  |   |         | 
|----------------------- |  | -------------------- | ------ |  | ------------------- | - | ------ | ---- |  | - | ------- |  |  | - | ------- | 
|                        |  |                      |        |  |                     |  
|                        |  | For the Three Months |        |  | For the Nine Months |  
|                        |  | Ended December 31,   |        |  | Ended December 31,  |  
|                        |  |                      |        |  |                     |  
|                        |  | 2002                 |        |  | 2001                |   |        | 2002 |  |   | 2001    | 
|                        |  |                      |        |  |                     |   |        |      |  |   |         | 
|Cash Paid for Interest  |  | $                    | 26,285 |  |                     | $ | 26,672 |      |  | $ | 92,281  |  |  | $ | 89,137  | 
|                        |  |                      |        |  |                     |   |        |      |  |   |         | 
|Net Cash Paid for Taxes |  | $                    | 61,314 |  |                     | $ | 79,738 |      |  | $ | 143,596 |  |  | $ | 135,650 | 
|                        |  |                      |        |  |                     |   |        |      |  |   |         | 

Interest expense relating to the Financial Services segment is included in
its costs and expenses. Interest expense related to segments other than
Financial Services is included as a separate line item on the Statements of
Consolidated Earnings.

|                                         |  |                      |         |   |                     |   |         |      |  |   |          |   |  |   |          |  
|---------------------------------------- |  | -------------------- | ------- | - | ------------------- | - | ------- | ---- |  | - | -------- | - |  | - | -------- | -
|                                         |  |                      |         |   |                     |  
|                                         |  | For the Three Months |         |   | For the Nine Months |  
|                                         |  | Ended December 31,   |         |   | Ended December 31,  |  
|                                         |  |                      |         |   |                     |  
|                                         |  | 2002                 |         |   | 2001                |   |         | 2002 |  |   | 2001     |  
|                                         |  |                      |         |   |                     |   |         |      |  |   |          |  
|Total Interest Incurred                  |  | $                    | 82,181  |   |                     | $ | 70,988  |      |  | $ | 241,443  |   |  | $ | 211,812  |  
|Interest Capitalized                     |  |                      | (15,160 | ) |                     |   | (12,214 | )    |  |   | (52,157  | ) |  |   | (36,012  | )
|Capitalized Interest
Relieved to Expense |  |                      | 12,537  |   |                     |   | 9,964   |      |  |   | 31,341   |   |  |   | 25,315   |  
|Less  Financial Services                |  |                      | (46,013 | ) |                     |   | (40,692 | )    |  |   | (136,347 | ) |  |   | (116,485 | )
|                                         |  |                      |         |   |                     |   |         |      |  |   |          |  
|Interest Expense, net                    |  | $                    | 33,545  |   |                     | $ | 28,046  |      |  | $ | 84,280   |   |  | $ | 84,630   |  
|                                         |  |                      |         |   |                     |   |         |      |  |   |          |  

-7-



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##### Table of Contents



(C) STOCKHOLDERS EQUITY

A summary of changes in stockholders equity is presented below:

|                           |                                          |  |              |      |   |            |        |    |            |   |        |          |  |   |             |          |   |               |           |         |               |   |         |         |   |             |         |         |   |   |           |         |  
|-------------------------- | ---------------------------------------- |  | ------------ | ---- | - | ---------- | ------ | -- | ---------- | - | ------ | -------- |  | - | ----------- | -------- | - | ------------- | --------- | ------- | ------------- | - | ------- | ------- | - | ----------- | ------- | ------- | - | - | --------- | ------- | -
|                           |                                          |  |              |     
|                           |                                          |  |              |      |   |            |        |    |            |   |        |          |  |   | Unamortized |          |   |               |           |         |               |   |         |         |   | Accumulated |         |         |   |   |          
|                           |                                          |  | Common Stock |      |   | Capital in |        |    | Value of   |   |        |          |  |   |             | Treasury |   |               | Other     |         |               |   |         |        
|                           |                                          |  |              |      |   | Excess of  |        |    | Restricted |   |        | Retained |  |   | Stock at    |          |   | Comprehensive |           |         |               |   |        
|                           |                                          |  | Shares       |      |   | Amount     |        |    | Par Value  |   |        | Stock    |  |   | Earnings    |          |   | Cost          |           |         | (Loss) Income |   |         | Total   |  
|                           |                                          |  |              |      |   |            |        |    |            |   |        |          |  |   |             |          |   |               |           |         |               |   |         |         |  
|Balance, March 31, 2002    |                                          |  | 61,171       |      |   | $          | 15,348 |    |            | $ | 72,446 |          |  | $ | (2,408      | )        |   | $             | 2,050,902 |         |               | $ | (6,559  | )       |   | $           | (12,956 | )       |   | $ | 2,116,773 |        
|                           | Issuance of Restricted Stock             |  |              | 20   |   |            |        | 5  |            |   |        | 995      |  |   |             | (1,000   | ) |               |           |        |               |   |         |        |   |             |         |        |   |   |           |        |  
|                           | Amortization of
Restricted Stock         |  |              |     |   |            |        |   |            |   |        |         |  |   |             | 767      |   |               |           |        |               |   |         |        |   |             |         |        |   |   |           | 767     |  
|                           | Exercise of Stock Options                |  |              | 251  |   |            |        | 63 |            |   |        | 9,597    |  |   |             |         |   |               |           |        |               |   |         |        |   |             |         |        |   |   |           | 9,660   |  
|                           | Cash Dividends                           |  |              |     |   |            |        |   |            |   |        |         |  |   |             |         |   |               |           | (7,309  | )             |   |         |        |   |             |         |        |   |   |           | (7,309  | )
|                           | Purchase of Common Stock
for Treasury    |  |              | (875 | ) |            |        |   |            |   |        |         |  |   |             |         |   |               |           |        |               |   |         | (38,481 | ) |             |         |        |   |   |           | (38,481 | )
|                           | Net Earnings                             |  |              |     |   |            |        |   |            |   |        |         |  |   |             |         |   |               |           | 359,248 |               |   |         |        |   |             |         |        |   |   |           | 359,248 |  
|                           | Unrealized Loss on
Hedging Instruments   |  |              |     |   |            |        |   |            |   |        |         |  |   |             |         |   |               |           |        |               |   |         |        |   |             |         | (13,509 | ) |   |           | (13,509 | )
|                           | Foreign Currency
Translation Adjustments |  |              |     |   |            |        |   |            |   |        |         |  |   |             |         |   |               |           |        |               |   |         |        |   |             |         | 23,517  |   |   |           | 23,517  |  
|                           | Other                                    |  |              |     |   |            |        |   |            |   |        | 5,524    |  |   |             |         |   |               |           |        |               |   |         |        |   |             |         | (1,161  | ) |   |           | 4,363   |  
|                           |                                          |  |              |      |   |            |        |    |            |   |        |          |  |   |             |          |   |               |           |         |               |   |         |        
|Balance, December 31, 2002 |                                          |  | 60,567       |      |   | $          | 15,416 |    |            | $ | 88,562 |          |  | $ | (2,641      | )        |   | $             | 2,402,841 |         |               | $ | (45,040 | )       |   | $           | (4,109  | )       |   | $ | 2,455,029 |        
|                           |                                          |  |              |      |   |            |        |    |            |   |        |          |  |   |             |          |   |               |           |         |               |   |         |        

(D) RESIDENTIAL MORTGAGE LOANS HELD FOR INVESTMENT

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

|                                                                            |  |                   |           |   |                |   |           |  
|--------------------------------------------------------------------------- |  | ----------------- | --------- | - | -------------- | - | --------- | -
|                                                                            |  |                   |           |   |                |  
|                                                                            |  | December 31, 2002 |           |   | March 31, 2002 |  
|                                                                            |  |                   |           |   |                |  
|Residential Mortgage Loans Held for Investment                              |  | $                 | 4,247,966 |   |                | $ | 3,293,556 |  
|Allowance for Losses on Residential Mortgage Loans
Held for Investment      |  |                   | (27,154   | ) |                |   | (14,106   | )
|                                                                            |  |                   |           |   |                |  
|Residential Mortgage Loans Held for Investment,
net of Allowance for Losses |  | $                 | 4,220,812 |   |                | $ | 3,279,450 |  
|                                                                            |  |                   |           |   |                |  

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

|                               |                                 |   |                      |        |   |                     |       |        |      |   |        |         |   |   |       |        |  
|------------------------------ | ------------------------------- | - | -------------------- | ------ | - | ------------------- | ----- | ------ | ---- | - | ------ | ------- | - | - | ----- | ------ | -
|                               |                                 |   |                      |        |   |                     |      
|                               |                                 |   | For the Three Months |        |   | For the Nine Months |      
|                               |                                 |   | Ended December 31,   |        |   | Ended December 31,  |      
|                               |                                 |   |                      |        |   |                     |      
|                               |                                 |   | 2002                 |        |   | 2001                |       |        | 2002 |   |        | 2001    |  
|                               |                                 |   |                      |        |   |                     |       |        |      |   |        |         |  
|Balance at Beginning of Period |                                 | $ | 21,143               |        |   | $                   | 6,314 |        |      | $ | 14,106 |         |   | $ | 2,814 |       
|                               | Provision for Losses            |   |                      | 11,910 |   |                     |       | 5,463  |      |   |        | 25,466  |   |   |       | 11,254 |  
|                               | Recoveries on Loans Charged Off |   |                      | 34     |   |                     |       | 34     |      |   |        | 85      |   |   |       | 40     |  
|                               | Losses Sustained                |   |                      | (5,933 | ) |                     |       | (1,992 | )    |   |        | (12,503 | ) |   |       | (4,289 | )
|                               |                                 |   |                      |        |   |                     |       |        |      |   |        |        
|Balance at End of Period       |                                 | $ | 27,154               |        |   | $                   | 9,819 |        |      | $ | 27,154 |         |   | $ | 9,819 |       
|                               |                                 |   |                      |        |   |                     |       |        |      |   |        |        

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(E) GOODWILL

A summary of changes in goodwill by segment for the nine months ended
December 31, 2002 is presented below:

|                                      |  |          |        |  |           |   |        |              |  |   |              |   |  |       |       |  |       |   |         |   |  |   |         |  
|------------------------------------- |  | -------- | ------ |  | --------- | - | ------ | ------------ |  | - | ------------ | - |  | ----- | ----- |  | ----- | - | ------- | - |  | - | ------- | -
|                                      |  |          |       
|                                      |  | Home     |        |  | Financial |   |        | Construction |  |   | Construction |   |  |       |       |  |       |   |         |  
|                                      |  | Building |        |  | Services  |   |        | Products     |  |   | Services     |   |  | Other |       |  | Total |  
|                                      |  |          |        |  |           |   |        |              |  |   |              |   |  |       |       |  |       |  
|Balance as of March 31, 2002          |  | $        | 84,151 |  |           | $ | 16,815 |              |  | $ | 41,088       |   |  | $     | 1,007 |  |       | $ | 206,651 |   |  | $ | 349,712 |  
|Goodwill Acquired                     |  |          |       |  |           |   |       |              |  |   |             |   |  |       |      |  |       |   | 3,591   |   |  |   | 3,591   |  
|Sale of Chemical Lawn Care
Operations |  |          |       |  |           |   |       |              |  |   |             |   |  |       |      |  |       |   | (17,393 | ) |  |   | (17,393 | )
|Other                                 |  |          |       |  |           |   |       |              |  |   | (891         | ) |  |       |      |  |       |   | (662    | ) |  |   | (1,553  | )
|                                      |  |          |        |  |           |   |        |              |  |   |              |   |  |       |       |  |       |  
|Balance as of December 31, 2002       |  | $        | 84,151 |  |           | $ | 16,815 |              |  | $ | 40,197       |   |  | $     | 1,007 |  |       | $ | 192,187 |   |  | $ | 334,357 |  
|                                      |  |          |        |  |           |   |        |              |  |   |              |   |  |       |       |  |       |  

Goodwill for the Other segment at December 31, 2002 includes $69.0 million
related to the Companys manufactured housing operations, $71.6 million related
to the Companys home services operations and $51.6 million related to the
Companys investment in Construction Products.

(F) INDEBTEDNESS

Short-term Debt

Balances of short-term debt were:

|                             |  |                   |         |   |                |   |         |          |           |   |             |        |  |   |        |   |          |   |           |  |  |   |         |   
|---------------------------- |  | ----------------- | ------- | - | -------------- | - | ------- | -------- | --------- | - | ----------- | ------ |  | - | ------ | - | -------- | - | --------- |  |  | - | ------- | --
|                             |  |                   |         |   |                |  
|                             |  | December 31, 2002 |         |   | March 31, 2002 |  
|                             |  |                   |         |   |                |  
|                             |  | Centex            |         |   |                |   |         |          | Financial |   |             | Centex |  |   |        |   |          |   | Financial | 
|                             |  | Corporation       |         |   |                |   |         | Services |           |   | Corporation |        |  |   |        |   | Services |  
|                             |  |                   |         |   |                |   |         |          |           |   |             |        |  |   |        |   |          |  
|Financial Institutions       |  | $                 | 23,456  | * |                |   |         |          |           | $ | 227,164     |        |  | $ | 18,630 | * |          |   |           |  |  | $ | 212,042 |   
|Commercial Paper             |  |                   | 143,905 |   |                |   |         |          |           |   |            |        |  |   |       |   |          |   |           |  |  |   |        |   
|Secured Liquidity Notes      |  |                   |        |   |                |   |         |          |           |   | 562,585     | **     |  |   |       |   |          |   |           |  |  |   | 102,583 | **
|                             |  |                   |         |   |                |   |         |          |           |   |             |        |  |   |        |   |          |   |           | 
|                             |  | $                 | 167,361 |   |                |   |         |          |           | $ | 789,749     |        |  | $ | 18,630 |   |          |   |           |  |  | $ | 314,625 |   
|                             |  |                   |         |   |                |   |         |          |           |   |             |        |  |   |        |   |          |   |           | 
|Consolidated Short-term Debt |  |                   |         |   |                | $ | 957,110 |          |           |   |             |        |  |   |        |   |          | $ | 333,255   |  |  |   |         |   
|                             |  |                   |         |   |                |   |         |          |           |   |             |        |  |   |        |   |          |   |           |  |  |  

* Debt relates entirely to Construction Products.** Debt relates entirely to Harwood Street Funding II, L.L.C.

The Company borrows on a short-term basis from banks under uncommitted
lines that bear interest at prevailing market rates. The weighted-average
interest rates of balances outstanding at December 31, 2002 and March 31, 2002
were 1.7% and 2.4%, respectively.

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Long-term Debt

Balances of long-term debt were:

|                        |                                                                                      |                                             |           |              |        |   |           |           |        | 
|----------------------- | ------------------------------------------------------------------------------------ | ------------------------------------------- | --------- | ------------ | ------ | - | --------- | --------- | ------ | 
|                        |                                                                                      |                                             |           |              |        |   |           |          
|                        |                                                                                      |                                             |           | December 31, |        |   | March 31, |          
|                        |                                                                                      |                                             |           | 2002         |        |   | 2002      |          
|                        |                                                                                      |                                             |           |              |        |   |           |          
|Non-Financial Services: |                                                                                      |                                             |           |              |        |   |           |          
|                        | Medium-Term Note Programs, 2.10% to 7.95%, due through 2007                          |                                             | $         | 286,000      |        |   | $         | 418,000   |       
|                        | Long-Term Notes, 5.46% to 9.75%, due through 2012                                    |                                             |           | 1,208,063    |        |   |           | 962,892   |       
|                        | Other Indebtedness, 1.38% to 10.00%, due through 2027                                |                                             |           | 123,534      |        |   |           | 192,753   |       
|                        | Subordinated Debt:                                                                   |                                             |           |              |        |   |           |           |       
|                        |                                                                                      | Subordinated Debentures, 7.38%, due in 2006 |           |              | 99,882 |   |           |           | 99,845 | 
|                        |                                                                                      | Subordinated Debentures, 8.75%, due in 2007 |           |              | 99,678 |   |           |           | 99,632 | 
|                        |                                                                                      |                                             |           |              |        |  
|                        |                                                                                      |                                             | 1,817,157 |              |        |   | 1,773,122 |          
|                        |                                                                                      |                                             |           |              |        |  
|Financial Services:     |                                                                                      |                                             |           |              |        |   |           |          
|                        | Home Equity Loans Asset-Backed Certificates, 2.39% to 8.48%,
due through 2032        |                                             |           | 3,659,554    |        |   |           | 3,120,402 |       
|                        | Harwood Street Funding II, L.L.C. Variable Rate Subordinated
Notes, due through 2007 |                                             |           | 50,000       |        |   |           | 50,000    |       
|                        |                                                                                      |                                             |           |              |        |  
|                        |                                                                                      |                                             | 3,709,554 |              |        |   | 3,170,402 |          
|                        |                                                                                      |                                             |           |              |        |  
|Total                   |                                                                                      | $                                           | 5,526,711 |              |        | $ | 4,943,524 |          
|                        |                                                                                      |                                             |           |              |        |  

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

|           |      |   |               |         |  |           |           |         |       |   |           |           | 
|---------- | ---- | - | ------------- | ------- |  | --------- | --------- | ------- | ----- | - | --------- | --------- | 
|           |      |   |               |        
|           |      |   | Non-Financial |         |  | Financial |           |         |       |   |          
|           |      |   | Services      |         |  | Services  |           |         | Total |  
|           |      |   |               |         |  |           |           |         |       |  
|           | 2003 |   | $             | 10,218  |  |           | $         | 264,795 |       |   | $         | 275,013   | 
|           | 2004 |   |               | 102,582 |  |           |           | 931,570 |       |   |           | 1,034,152 | 
|           | 2005 |   |               | 35,170  |  |           |           | 717,490 |       |   |           | 752,660   | 
|           | 2006 |   |               | 340,404 |  |           |           | 545,268 |       |   |           | 885,672   | 
|           | 2007 |   |               | 290,590 |  |           |           | 548,328 |       |   |           | 838,918   | 
|Thereafter |      |   | 1,038,193     |         |  |           | 702,103   |         |       |   | 1,740,296 |          
|           |      |   |               |         |  |           |           |         |      
|           |      | $ | 1,817,157     |         |  | $         | 3,709,554 |         |       | $ | 5,526,711 |          
|           |      |   |               |         |  |           |           |         |      

Financial Services debt related to securitized residential mortgage loans
structured as collateralized borrowings (Home Equity Loans Asset-Backed
Certificates) was $3.7 billion at December 31, 2002 and has no recourse to
Home Equity or Centex Corporation. The principal and interest on these notes are paid using
the cash flow from the underlying residential mortgage loans, which serve as
collateral for the debt. Accordingly, the timing of the principal payments on
these notes is dependent upon the payment 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
repayments and prepayments of principal. As is common in these structures, Home Equity remains liable for customary loan representations.

Included in other indebtedness is a $2.1 million convertible subordinated
debenture sold at par in 1985 to a corporate officer. The indebtedness, which
matures in 2010, bears interest at LIBOR plus 1.5% and is

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convertible into
400,000 shares of the Companys common stock. In connection with this
transaction, the Company has guaranteed the payment of a $2.1 million note
payable to a bank by the officer.

Under the Companys debt covenants, Centex is required to maintain certain
leverage and interest coverage ratios and a minimum tangible net worth. At
December 31, 2002, the Company was in compliance with all of these covenants.

Credit Facilities

The Companys existing credit facilities and available capacity as of
December 31, 2002 are summarized below:

|                       |                                             |   |                 |           |  |           |           |         |    
|---------------------- | ------------------------------------------- | - | --------------- | --------- |  | --------- | --------- | ------- | ---
|                       |                                             |   |                
|                       |                                             |   | Existing Credit |           |  | Available |          
|                       |                                             |   | Facilities      |           |  | Capacity  |          
|                       |                                             |   |                 |           |  |           |          
|Non-Financial Services |                                             |   |                 |           |  |           |           |        
|                       | Centex Corporation                          |   |                 |           |  |           |           |         |    
|                       | Multi-Bank Revolving Credit Facility        |   | $               | 700,000   |  |           | $         | 700,000 | (1)
|                       | Uncommitted Bank Lines                      |   |                 | 60,000    |  |           |           | 60,000  |    
|                      
|                       | Construction Products                       |   |                 |           |  |           |           |         |    
|                       | Senior Revolving Credit Facility            |   |                 | 175,000   |  |           |           | 91,409  | (2)
|                       | Annually Renewable Commercial Paper Conduit |   |                 | 50,000    |  |           |           | 26,544  | (2)
|                       |                                             |   |                 |           |  |          
|                       |                                             |   | 985,000         |           |  |           | 877,953   |        
|                       |                                             |   |                 |           |  |          
|Financial Services     |                                             |   |                 |           |  |           |           |        
|                       | Unsecured Credit Facilities                 |   |                 | 125,000   |  |           |           | 40,000  | (3)
|                       | Secured Credit Facilities                   |   |                 | 405,000   |  |           |           | 262,835 | (4)
|                       | Harwood Street Funding II, L.L.C. Facility  |   |                 | 1,000,000 |  |           |           | 387,415 |    
|                       |                                             |   |                 |           |  |          
|                       |                                             |   | 1,530,000       |           |  |           | 690,250   |        
|                       |                                             |   |                 |           |  |          
|                       |                                             | $ | 2,515,000       |           |  | $         | 1,568,203 | (5)    
|                       |                                             |   |                 |           |  |          



|(1) |  | This is a committed, multi-bank revolving credit facility, maturing in
August 2005, which serves as backup for commercial paper borrowings. As
of December 31, 2002, there were no borrowings under this backup facility,
and the Companys $600 million commercial paper program had $144 million
outstanding. There have been no borrowings under this facility since
inception.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | These committed facilities were entered into by Construction Products and
have no recourse to Centex Corporation. The Senior Revolving Credit
Facility matures in November 2003 and the Annually Renewable Commercial
Paper Conduit matures in June 2003.                                                                                                                         
|   
|(3) |  | Centex Corporation, CTX Mortgage Company, L.L.C. (CTX Mortgage) and
Centex Home Equity Company L.L.C. (Home Equity), on a joint and several
basis, share in a $125 million uncommitted, unsecured credit facility.                                                                                                                                                            
|   
|(4) |  | CTX Mortgage and Home Equity share in $250 million of committed secured
credit facilities to finance mortgage inventory. CTX Mortgage also
maintains $155 million of committed secured mortgage warehouse facilities
to finance mortgages not sold to HSF-I.                                                                                                                      
|   
|(5) |  | The amount of available capacity includes $100 million of uncommitted
borrowings as of December 31, 2002. Although the Company believes that
this capacity is currently available, there can be no assurance that the
lenders under the applicable facilities would elect to make advances to
the Company or its subsidiaries if and when requested to do so.                     

Home Equity finances its inventory of mortgage loans held for investment
through Harwood Street Funding II, L.L.C. (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

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HSF-II has committed to finance all eligible loans, gives
Home Equity daily access to HSF-IIs capacity of
$1.0 billion.

HSF-II obtains
funds through the sale of five year subordinated notes that are rated
BBB by Standard & Poors (S&P), Baa2 by Moodys Investors Service (Moodys),
and BBB by Fitch Ratings (Fitch) and short-term secured liquidity notes that
are rated A1+ by S&P, P1 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.

Harwood Street Funding I, L.L.C.

CTX Mortgage finances its inventory of mortgage loans held for sale
principally through sales of Jumbo A and conforming loans to Harwood Street
Funding I, L.L.C. (HSF-I), an unaffiliated entity established in 1999 that is
not consolidated with Financial Services or Centex, pursuant to a mortgage loan
purchase agreement (the HSF-I Purchase Agreement). Since 1999, CTX Mortgage
has sold substantially all of the Jumbo A and conforming 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 averaging
between 45 and 60 days and then resells them into the secondary market. HSF-I
obtains the funds needed to purchase eligible mortgage loans from CTX Mortgage
by issuing (1) securitized medium-term debt that is currently rated AAA by S&P
and Aaa by Moodys, (2) short-term secured liquidity notes that are currently
rated A1+ by S&P and P1 by Moodys and (3) subordinated certificates maturing
in September 2004 and November 2005, extendable for up to five years, that are
rated BBB by S&P and Baa2 by Moodys. This arrangement provides CTX Mortgage
with reduced financing cost for eligible mortgage loans it originates and
improves its liquidity.

Under the terms of the HSF-I Purchase Agreement, CTX Mortgage may elect to
sell to HSF-I, and HSF-I is obligated to purchase from CTX Mortgage, mortgage
loans that satisfy certain eligibility criteria and portfolio requirements.
The maximum amount of mortgage loans that HSF-I is allowed to carry in its
inventory under the HSF-I Purchase Agreement is limited to $2.5 billion.

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. These termination events primarily relate to events of
default under, or other failure to comply with, the provisions, including loan
portfolio limitations, of the agreements that govern the mortgage loan
warehouse program but also include a downgrade in Centex Corporations credit
ratings below BB+ by S&P or Ba1 by Moodys. In the event CTX Mortgage was
unable to sell loans to HSF-I, it would draw on existing credit facilities
currently held in addition to HSF-I. In addition, it might need to make other
customary financing arrangements to fund its mortgage loan origination
activities. Although the Company believes that CTX Mortgage 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 CTX Mortgage.

In accordance with the HSF-I Purchase Agreement, CTX Mortgage acts as
servicer of the loans owned by HSF-I and arranges for the sale of the eligible
mortgage loans into the secondary market. In its capacity as servicer, CTX
Mortgage must act in the best interest of HSF-I so as to maximize the proceeds
of sales of eligible mortgage loans. The performance of obligations of CTX
Mortgage, in its capacity as servicer, is guaranteed by Centex. These servicer
obligations include the obligation of the servicer to repurchase a mortgage
loan from HSF-I in the event of a breach of the servicers representations and
warranties, which materially and adversely affects the value of the mortgage
loan and is not cured within 60 days.

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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 and non-credit related market 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 P1 from Moodys.
Additionally, 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, and the
bank is required to pay to Centex all amounts that the bank receives from HSF-I
pursuant to the Harwood Swap. Accordingly, Centex effectively bears all
interest rate risks and non-credit related market risks that are the subject of
the Harwood Swap. Centex is also required to reimburse the bank for certain
expenses, costs and damages that it may incur.

As of December 31, 2002, HSF-I owned $2.1 billion in securitized
residential mortgage loans sold to it by CTX Mortgage and had $2.0 billion of
outstanding securitized term debt and $114.0 million of outstanding
subordinated certificates. Centex does not guarantee the payment of any debt
or subordinated certificates of HSF-I and is not liable for credit losses
relating to securitized residential mortgage loans sold to HSF-I. However,
Centex retains certain risks related to the portfolio of mortgage loans held by
HSF-I. In particular, CTX Mortgage 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
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, as seller or
servicer. CTX Mortgages obligation to repurchase such loans is guaranteed by
Centex Corporation. During the nine months ended December 31, 2002, CTX Mortgage sold $7.5
billion of mortgage loans to HSF-I.

(G) CENTEX DEVELOPMENT COMPANY, L.P.

Centex Development Company, L.P. (the Partnership) is a master limited
partnership formed by Centex in March 1987 to broaden the range of business
activities that may be conducted for the benefit of Centexs stockholders to
include general real estate development. Centex believed that this expansion
would improve stockholder value through longer-term real estate investments,
real estate developments and the benefits of the partnership form of business.
Because the real estate development business generally requires a longer time
horizon to maximize value than Centexs core homebuilding operations and
typically involves substantial acquisition and development indebtedness, Centex
concluded that this new line of business could best be conducted through the
Partnership, an independent, publicly-traded entity that is not consolidated
with Centex for financial reporting purposes.

The Partnership is authorized to issue three classes of limited
partnership interest. Centex Corporation indirectly holds 100% of the
Partnerships Class A and Class C limited partnership units (Class A Units
and Class C Units, respectively), which are collectively convertible into 20%
of the Partnerships Class B limited partnership units (Class B Units). The
Partnership may issue additional Class C Units in connection with the
acquisition of real property and other assets. No Class B Units have been
issued. However, the stockholders of Centex hold warrants to purchase
approximately 80% of the Class B Units. The warrants are held through a
nominee arrangement and trade in tandem with the common stock of Centex.

As holder of the Class A and Class C Units, Centex is entitled to a
cumulative preferred return of 9% per annum on the average outstanding balance
of its capital contributions to the Partnership, adjusted for cash and other
distributions representing return of capital. As of December 31, 2002, these
adjusted capital

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contributions, or Unrecovered Capital, were $241.1 million and
preference payments in arrears totaled $57.7 million. The Partnership has made
no preference payments since fiscal 1998.

The Partnership is managed by its general partner, 3333 Development
Corporation, a wholly-owned subsidiary of 3333 Holding Corporation (Holding).
The common stock of Holding is held by the stockholders of Centex through a
nominee arrangement and trades in tandem with the common stock of Centex. The
stockholders of Centex elect the four-person board of directors of Holding,
three of whom are independent outside directors who are not directors,
affiliates or employees of Centex. Thus, through Holding, the stockholders of
Centex control the general partner of the Partnership. The general partner,
through its independent board and the independent board of Holding, including
its non-executive Chairman, oversees the Partnerships activities, including
the acquisition, development, maintenance, operation and sale of properties.
Consent of the limited partners for the activities of the Partnership is not
required, and the limited partners cannot remove the general partner. As a
result, Centex accounts for its limited partnership interest in the Partnership
using the equity method of accounting for investments.

Supplementary condensed combined financial statements for Centex and
subsidiaries, Holding and subsidiary and the Partnership and subsidiaries are
set forth below. For additional information on Holding and subsidiary and the
Partnership and subsidiaries, see their separate financial statements and
related footnotes included elsewhere in this Report.

Supplementary Condensed Combined Balance Sheets of Centex and Subsidiaries,
Holding and Subsidiary and Partnership and Subsidiaries

|                                     |                                          |   |              |           |  |           |           |           | 
|------------------------------------ | ---------------------------------------- | - | ------------ | --------- |  | --------- | --------- | --------- | 
|                                     |                                          |   |              |           |  |           |          
|                                     |                                          |   | December 31, |           |  | March 31, |          
|                                     |                                          |   | 2002         |           |  | 2002      |          
|                                     |                                          |   |              |           |  |           |          
|Assets                               |                                          |   |              |           |  |           |           |          
|                                     | Cash and Cash Equivalents                |   | $            | 88,567    |  |           | $         | 242,254   | 
|                                     | Restricted Cash                          |   |              | 130,665   |  |           |           | 106,270   | 
|                                     | Receivables                              |   |              | 5,087,512 |  |           |           | 4,066,401 | 
|                                     | Inventories                              |   |              | 4,147,327 |  |           |           | 3,283,719 | 
|                                     | Investments in Joint Ventures and Other  |   |              | 98,479    |  |           |           | 99,962    | 
|                                     | Property and Equipment, net              |   |              | 712,164   |  |           |           | 723,497   | 
|                                     | Other Assets                             |   |              | 773,493   |  |           |           | 862,580   | 
|                                     |                                          |   |              |           |  |          
|                                     |                                          | $ | 11,038,207   |           |  | $         | 9,384,683 |          
|                                     |                                          |   |              |           |  |          
|Liabilities and Stockholders Equity |                                          |   |              |           |  |           |           |          
|                                     | Accounts Payable and Accrued Liabilities |   | $            | 1,632,300 |  |           | $         | 1,546,334 | 
|                                     | Short-term Debt                          |   |              | 1,202,684 |  |           |           | 545,789   | 
|                                     | Long-term Debt                           |   |              | 5,577,949 |  |           |           | 5,020,116 | 
|                                     | Minority Stockholders Interest          |   |              | 170,245   |  |           |           | 155,671   | 
|                                     | Stockholders Equity                     |   |              | 2,455,029 |  |           |           | 2,116,773 | 
|                                     |                                          |   |              |           |  |          
|                                     |                                          | $ | 11,038,207   |           |  | $         | 9,384,683 |          
|                                     |                                          |   |              |           |  |          

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Supplementary Condensed Combined Statements of Earnings of Centex and
Subsidiaries, Holding and Subsidiary and Partnership and Subsidiaries

|                                  |  |                     |           |  |      |   |           |  
|--------------------------------- |  | ------------------- | --------- |  | ---- | - | --------- | -
|                                  |  |                     |          
|                                  |  | For the Nine Months |          
|                                  |  | Ended December 31,  |          
|                                  |  |                     |          
|                                  |  | 2002                |           |  | 2001 |  
|                                  |  |                     |           |  |      |  
|Revenues                          |  | $                   | 6,546,023 |  |      | $ | 5,740,840 |  
|Costs and Expenses                |  |                     | 6,030,875 |  |      |   | 5,311,660 |  
|                                  |  |                     |           |  |      |  
|Earnings Before Income Taxes      |  |                     | 515,148   |  |      |   | 429,180   |  
|Income Taxes                      |  |                     | 155,900   |  |      |   | 164,430   |  
|                                  |  |                     |           |  |      |  
|Net Earnings                      |  |                     | 359,248   |  |      |   | 264,750   |  
|Other Comprehensive Income (Loss) |  |                     | 8,847     |  |      |   | (6,266    | )
|                                  |  |                     |           |  |      |  
|Comprehensive Income              |  | $                   | 368,095   |  |      | $ | 258,484   |  
|                                  |  |                     |           |  |      |  

(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. The Companys investment in these
non-consolidated joint ventures was $94.4 million and $94.6 million at December
31, 2002 and March 31, 2002, respectively. These joint ventures had total
outstanding secured construction debt of approximately $213.3 million at
December 31, 2002 and $144.6 million at March 31, 2002. The Companys
liability with respect to this debt, based on its ownership percentage of the
related joint ventures, is limited to approximately $35.4 million and $27.9
million at December 31, 2002 and March 31, 2002, 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 December 31, 2002 and March 31, 2002, the Company was not
liable for any of this debt.

In order to ensure the future availability of land for homebuilding, the
Company has deposited or invested with third parties $85.7 million, as of
December 31, 2002, as options toward the purchase of undeveloped land and
developed lots having a total purchase price of approximately $1.8 billion.
These options include amounts related to agreements with the Partnership, as
discussed in Note (M), Related Party Transactions, below. These options,
which do not contain performance requirements from the Company, expire at
various dates through the year 2007.

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
that may be affected by the Financial Accounting Standards Boards recent
issuance of Interpretation No. 45. Based on historical evidence, the Company
does not believe that any of these representations, warranties or guarantees
would result in a material effect on our consolidated financial condition or
operations. See further discussion on our warranty liability below. See
further discussion of Interpretation No. 45 in Note (N), Recent
Accounting Pronouncements.

Centex Homes offers a ten-year limited warranty for most homes constructed
and sold in the United States. The warranty covers 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.
In California, effective January 1, 2003, Centex Homes will follow the
statutory provisions of Senate Bill 800 rather than issue a specific warranty.
Centex Homes estimates the costs that may be incurred under its warranty
program



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for which it will be responsible and records a liability at the time
each home is closed. Factors that affect Centex Homes warranty liability
include the number of homes closed, historical and anticipated rates of
warranty claims and cost per claim. Centex Homes periodically assesses the
adequacy of its recorded warranty liability and adjusts the amounts as
necessary.

Changes in Centex Homes contractual warranty liability during the period
are as follows:

|                                                                       |  |   |         |  
|---------------------------------------------------------------------- |  | - | ------- | -
|Balance as of March 31, 2002                                           |  | $ | 15,097  |  
|Warranties Issued                                                      |  |   | 12,790  |  
|Settlements Made                                                       |  |   | (14,184 | )
|Changes in Liability of Pre-Existing
Warranties, Including Expirations |  |   | (487    | )
|                                                                       |  |   |        
|Balance as of December 31, 2002                                        |  | $ | 13,216  |  
|                                                                       |  |   |        

(I) COMPREHENSIVE INCOME

A summary of comprehensive income for the three and nine months ended
December 31, 2002 and 2001 is presented below:

|                                   |                                          |   |                      |        |   |                     |        |        |      |   |         |         |   |   |         |         |  
|---------------------------------- | ---------------------------------------- | - | -------------------- | ------ | - | ------------------- | ------ | ------ | ---- | - | ------- | ------- | - | - | ------- | ------- | -
|                                   |                                          |   |                      |        |   |                     |       
|                                   |                                          |   | For the Three Months |        |   | For the Nine Months |       
|                                   |                                          |   | Ended December 31,   |        |   | Ended December 31,  |       
|                                   |                                          |   |                      |        |   |                     |       
|                                   |                                          |   | 2002                 |        |   | 2001                |        |        | 2002 |   |         | 2001    |  
|                                   |                                          |   |                      |        |   |                     |        |        |      |   |         |         |  
|Net Earnings                       |                                          | $ | 155,884              |        |   | $                   | 96,145 |        |      | $ | 359,248 |         |   | $ | 264,750 |        
|Other Comprehensive Income (Loss): |                                          |   |                      |        |   |                     |        |        |      |   |         |         |   |   |         |        
|                                   | Foreign Currency Translation
Adjustments |   |                      | 5,909  |   |                     |        | (3,006 | )    |   |         | 23,517  |   |   |         | 5,828   |  
|                                   | Unrealized Loss on Hedging
Instruments   |   |                      | (1,567 | ) |                     |        | (3,148 | )    |   |         | (13,509 | ) |   |         | (12,361 | )
|                                   | Other                                    |   |                      | 277    |   |                     |        | 171    |      |   |         | (1,161  | ) |   |         | 267     |  
|                                   |                                          |   |                      |        |   |                     |        |        |      |   |         |        
|Comprehensive Income               |                                          | $ | 160,503              |        |   | $                   | 90,162 |        |      | $ | 368,095 |         |   | $ | 258,484 |        
|                                   |                                          |   |                      |        |   |                     |        |        |      |   |         |        

The Foreign Currency Translation Adjustments are primarily the result of
Centexs investment in the Partnership. For additional information on the
Partnership and subsidiaries, see their separate financial statements included
elsewhere in the Report. The Unrealized Loss on Hedging Instruments represents
the deferral in Other Comprehensive Income of the unrealized 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 (L), Derivatives and Hedging.

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(J)  BUSINESS SEGMENTS

The Company operates in five principal business segments: Home Building,
Financial Services, Construction Products, 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. The investment in the Partnership
(approximately $299.5 million as of December 31, 2002) is included in the
Investment Real Estate segment.

Home Building

Home Buildings operations involve the purchase and development of land or
lots and the construction and sale of single-family and multi-family homes.

Financial Services

Financial Services 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 Centex subsidiaries and others.
Financial Services revenues include interest income of $90.7 million and $73.9
million for the three months and $257.1 million and $188.1 million for the nine
months ended December 31, 2002 and 2001, respectively.

Substantially all of Centexs interest income in each year is earned by the
Financial Services segment. Financial Services cost of sales is primarily
comprised of interest expense related to debt issued to fund its home financing
and sub-prime home equity lending activities.

Construction Products

Construction Products operations involve the manufacture, production,
distribution and sale of cement, gypsum wallboard, recycled paperboard,
aggregates and readymix concrete. The Company owned 65.1% of Centex
Construction Products, Inc. at December 31, 2002 and 65.2% at December 31,
2001. Construction Products results are shown before minority interest in the
table presented below.

Construction Services

Construction Services operations involve the construction of buildings
for both private and government interests including office, commercial and
industrial buildings, hospitals, hotels, correctional facilities, educational
institutions, museums, libraries, airport facilities and sports facilities. As
this segment generates positive cash flow, intercompany interest income
(credited at the prime rate in effect) of $1.4 million and $1.8 million for the
three months and $4.2 million and $5.6 million for the nine months ended
December 31, 2002 and 2001, respectively, is included in managements
evaluation of this segment. However, the intercompany interest income is
eliminated in consolidation and excluded from the table presented below.

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Investment Real Estate

Investment Real Estates operations involve the acquisition, development
and sale of land, primarily for industrial, office, multi-family, retail,
residential and mixed-use projects. Under the equity method of accounting for
investments, Investment Real Estate also records as revenues income or loss
from its investment in the Partnership.

Other

The Companys manufactured housing and home services operations are not
material for purposes of segment reporting and have therefore been included in
Other for reporting purposes.

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

|                                                    |  |                      |       |   |                     |   |       |      |  |   |        |   |  |   |        |  
|--------------------------------------------------- |  | -------------------- | ----- | - | ------------------- | - | ----- | ---- |  | - | ------ | - |  | - | ------ | -
|                                                    |  |                      |       |   |                     |  
|                                                    |  | For the Three Months |       |   | For the Nine Months |  
|                                                    |  | Ended December 31,   |       |   | Ended December 31,  |  
|                                                    |  |                      |       |   |                     |  
|                                                    |  | 2002                 |       |   | 2001                |   |       | 2002 |  |   | 2001   |  
|                                                    |  |                      |       |   |                     |   |       |      |  |   |        |  
|Operating Earnings (Loss) from
Manufactured
Housing |  | $                    | 1.2   |   |                     | $ | 0.7   |      |  | $ | 2.1    |   |  | $ | (0.8   | )
|Operating (Loss) Earnings from Home
Services        |  |                      |      |   |                     |   | 1.7   |      |  |   | (2.5   | ) |  |   | 6.2    |  
|Corporate General & Administrative Expense          |  |                      | (13.8 | ) |                     |   | (13.3 | )    |  |   | (40.8  | ) |  |   | (37.7  | )
|Interest Expense                                    |  |                      | (33.5 | ) |                     |   | (28.0 | )    |  |   | (84.3  | ) |  |   | (84.6  | )
|Minority Interest                                   |  |                      | (8.1  | ) |                     |   | (6.1  | )    |  |   | (25.4  | ) |  |   | (15.1  | )
|                                                    |  |                      |       |   |                     |   |       |      |  |   |        |  
|                                                    |  | $                    | (54.2 | ) |                     | $ | (45.0 | )    |  | $ | (150.9 | ) |  | $ | (132.0 | )
|                                                    |  |                      |       |   |                     |   |       |      |  |   |        |  

|                                           |  |   |                                              |   |  |           |        |   |              |   |       |              |  |   |             |   |  |       |      |   |       |   |       |   |  |   |          |   | 
|------------------------------------------ |  | - | -------------------------------------------- | - |  | --------- | ------ | - | ------------ | - | ----- | ------------ |  | - | ----------- | - |  | ----- | ---- | - | ----- | - | ----- | - |  | - | -------- | - | 
|                                           |  |   |                                              |  
|                                           |  |   | For the Three Months Ended December 31, 2002 |  
|                                           |  |   | (Dollars in millions)                        |  
|                                           |  |   |                                              |  
|                                           |  |   | Home                                         |   |  | Financial |        |   | Construction |   |       | Construction |  |   | Investment  |   |  |       |      |   |       |   |       |  
|                                           |  |   | Building                                     |   |  | Services  |        |   | Products     |   |       | Services     |  |   | Real Estate |   |  | Other |      |   | Total |  
|                                           |  |   |                                              |   |  |           |        |   |              |   |       |              |  |   |             |   |  |       |      |   |       |  
|Revenues                                   |  | $ | 1,468.5                                      |   |  | $         | 223.1  |   |              | $ | 119.1 |              |  | $ | 411.1       |   |  | $     | 25.8 |   |       | $ | 57.3  |   |  | $ | 2,304.9  |  
|Cost of Sales                              |  |   | (1,083.9                                     | ) |  |           | (46.0  | ) |              |   | (91.9 | )            |  |   | (385.0      | ) |  |       | (3.8 | ) |       |   | (37.2 | ) |  |   | (1,647.8 | )
|Selling,
General &
Administrative Expenses |  |   | (213.0                                       | ) |  |           | (126.9 | ) |              |   | (1.4  | )            |  |   | (16.7       | ) |  |       | (1.9 | ) |       |   | (74.3 | ) |  |   | (434.2   | )
|                                           |  |   |                                              |   |  |           |        |   |              |   |       |              |  |   |             |   |  |       |      |   |      
|Earnings (Loss) Before
Income Tax          |  | $ | 171.6                                        |   |  | $         | 50.2   |   |              | $ | 25.8  | *            |  | $ | 9.4         |   |  | $     | 20.1 |   |       | $ | (54.2 | ) |  | $ | 222.9    |  
|                                           |  |   |                                              |   |  |           |        |   |              |   |       |              |  |   |             |   |  |       |      |   |      

|                                           |  |   |                                              |   |  |           |        |   |              |   |       |              |  |   |             |   |  |       |      |   |       |   |       |   |  |   |          |   | 
|------------------------------------------ |  | - | -------------------------------------------- | - |  | --------- | ------ | - | ------------ | - | ----- | ------------ |  | - | ----------- | - |  | ----- | ---- | - | ----- | - | ----- | - |  | - | -------- | - | 
|                                           |  |   |                                              |  
|                                           |  |   | For the Three Months Ended December 31, 2001 |  
|                                           |  |   | (Dollars in millions)                        |  
|                                           |  |   |                                              |  
|                                           |  |   | Home                                         |   |  | Financial |        |   | Construction |   |       | Construction |  |   | Investment  |   |  |       |      |   |       |   |       |  
|                                           |  |   | Building                                     |   |  | Services  |        |   | Products     |   |       | Services     |  |   | Real Estate |   |  | Other |      |   | Total |  
|                                           |  |   |                                              |   |  |           |        |   |              |   |       |              |  |   |             |   |  |       |      |   |       |  
|Revenues                                   |  | $ | 1,210.8                                      |   |  | $         | 182.8  |   |              | $ | 112.7 |              |  | $ | 321.4       |   |  | $     | 9.7  |   |       | $ | 57.1  |   |  | $ | 1,894.5  |  
|Cost of Sales                              |  |   | (898.3                                       | ) |  |           | (40.7  | ) |              |   | (90.0 | )            |  |   | (296.8      | ) |  |       | (1.3 | ) |       |   | (35.3 | ) |  |   | (1,362.4 | )
|Selling,
General &
Administrative Expenses |  |   | (178.0                                       | ) |  |           | (108.7 | ) |              |   | (1.3  | )            |  |   | (15.5       | ) |  |       | (3.8 | ) |       |   | (66.8 | ) |  |   | (374.1   | )
|                                           |  |   |                                              |   |  |           |        |   |              |   |       |              |  |   |             |   |  |       |      |   |      
|Earnings (Loss) Before
Income Tax          |  | $ | 134.5                                        |   |  | $         | 33.4   |   |              | $ | 21.4  | *            |  | $ | 9.1         |   |  | $     | 4.6  |   |       | $ | (45.0 | ) |  | $ | 158.0    |  
|                                           |  |   |                                              |   |  |           |        |   |              |   |       |              |  |   |             |   |  |       |      |   |      

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|                                           |  |   |                                             |   |  |           |        |   |              |   |        |              |  |   |             |   |  |       |      |   |       |   |        |   |  |   |          |   | 
|------------------------------------------ |  | - | ------------------------------------------- | - |  | --------- | ------ | - | ------------ | - | ------ | ------------ |  | - | ----------- | - |  | ----- | ---- | - | ----- | - | ------ | - |  | - | -------- | - | 
|                                           |  |   |                                             |  
|                                           |  |   | For the Nine Months Ended December 31, 2002 |  
|                                           |  |   | (Dollars in millions)                       |  
|                                           |  |   |                                             |  
|                                           |  |   | Home                                        |   |  | Financial |        |   | Construction |   |        | Construction |  |   | Investment  |   |  |       |      |   |       |   |        |  
|                                           |  |   | Building                                    |   |  | Services  |        |   | Products     |   |        | Services     |  |   | Real Estate |   |  | Other |      |   | Total |  
|                                           |  |   |                                             |   |  |           |        |   |              |   |        |              |  |   |             |   |  |       |      |   |       |  
|Revenues                                   |  | $ | 3,855.7                                     |   |  | $         | 608.4  |   |              | $ | 383.9  |              |  | $ | 1,163.6     |   |  | $     | 39.1 |   |       | $ | 181.8  |   |  | $ | 6,232.5  |  
|Cost of Sales                              |  |   | (2,843.5                                    | ) |  |           | (136.3 | ) |              |   | (299.5 | )            |  |   | (1,086.7    | ) |  |       | (3.8 | ) |       |   | (116.2 | ) |  |   | (4,486.0 | )
|Selling,
General &
Administrative Expenses |  |   | (594.9                                      | ) |  |           | (361.0 | ) |              |   | (4.2   | )            |  |   | (50.3       | ) |  |       | (5.9 | ) |       |   | (216.5 | ) |  |   | (1,232.8 | )
|                                           |  |   |                                             |   |  |           |        |   |              |   |        |              |  |   |             |   |  |       |      |   |      
|Earnings (Loss) Before
Income Tax          |  | $ | 417.3                                       |   |  | $         | 111.1  |   |              | $ | 80.2   | *            |  | $ | 26.6        |   |  | $     | 29.4 |   |       | $ | (150.9 | ) |  | $ | 513.7    |  
|                                           |  |   |                                             |   |  |           |        |   |              |   |        |              |  |   |             |   |  |       |      |   |      

|                                           |  |   |                                             |   |  |           |        |   |              |   |        |              |  |   |             |   |  |       |       |   |       |   |        |   |  |   |          |   | 
|------------------------------------------ |  | - | ------------------------------------------- | - |  | --------- | ------ | - | ------------ | - | ------ | ------------ |  | - | ----------- | - |  | ----- | ----- | - | ----- | - | ------ | - |  | - | -------- | - | 
|                                           |  |   |                                             |  
|                                           |  |   | For the Nine Months Ended December 31, 2001 |  
|                                           |  |   | (Dollars in millions)                       |  
|                                           |  |   |                                             |  
|                                           |  |   | Home                                        |   |  | Financial |        |   | Construction |   |        | Construction |  |   | Investment  |   |  |       |       |   |       |   |        |  
|                                           |  |   | Building                                    |   |  | Services  |        |   | Products     |   |        | Services     |  |   | Real Estate |   |  | Other |       |   | Total |  
|                                           |  |   |                                             |   |  |           |        |   |              |   |        |              |  |   |             |   |  |       |       |   |       |  
|Revenues                                   |  | $ | 3,420.6                                     |   |  | $         | 511.4  |   |              | $ | 359.7  |              |  | $ | 971.8       |   |  | $     | 57.1  |   |       | $ | 166.7  |   |  | $ | 5,487.3  |  
|Cost of Sales                              |  |   | (2,539.3                                    | ) |  |           | (116.5 | ) |              |   | (299.0 | )            |  |   | (904.1      | ) |  |       | (11.2 | ) |       |   | (104.6 | ) |  |   | (3,974.7 | )
|Selling,
General &
Administrative Expenses |  |   | (525.7                                      | ) |  |           | (307.1 | ) |              |   | (3.8   | )            |  |   | (43.8       | ) |  |       | (9.9  | ) |       |   | (194.1 | ) |  |   | (1,084.4 | )
|                                           |  |   |                                             |   |  |           |        |   |              |   |        |              |  |   |             |   |  |       |       |   |      
|Earnings (Loss) Before
Income Tax          |  | $ | 355.6                                       |   |  | $         | 87.8   |   |              | $ | 56.9   | *            |  | $ | 23.9        |   |  | $     | 36.0  |   |       | $ | (132.0 | ) |  | $ | 428.2    |  
|                                           |  |   |                                             |   |  |           |        |   |              |   |        |              |  |   |             |   |  |       |       |   |      

* Before Minority Interest

(K) INCOME TAXES

Income tax expense for the Company increased from $61.8 million to $67.0
million and the effective tax rate decreased from 39.1% to 30.1% for the three
months ended December 31, 2001 and 2002, respectively. Income tax expense also
decreased from $163.5 million to $154.4 million and the effective tax rate
decreased from 38.2% to 30.1% for the nine months ended December 31, 2001 and
2002, respectively. The decrease in the effective tax rate is primarily the
result of the expected utilization of net operating loss carryforwards during
fiscal 2003.

(L) 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 this risk, 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 condensed 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 would be
reflected in the current period earnings.

Centex Corporation and Construction Products each have interest rate swap
agreements that, in effect, fix the variable interest rate on a portion of
their outstanding debt at December 31, 2002. During the three and nine months
ended December 31, 2002, there was no hedge ineffectiveness related to these
derivatives. These swaps expire at varying times through October 2005.
Amounts to be received or paid under the swap agreements are recognized as a
change in interest incurred on the related debt instrument. Based on the
balance in Accumulated Other Comprehensive Loss at December 31, 2002 related to
these derivatives, the Company would estimate increases in interest incurred
over the next 12 months to be approximately $2

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million. As of December 31,
2002, the balance in Accumulated Other Comprehensive Loss related to these
derivatives was $4.5 million ($2.9 million 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. Changes in fair value
of these derivatives are deferred in Accumulated Other Comprehensive Loss 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.
During the three and nine months ended December 31, 2002, there was no hedge
ineffectiveness related to these interest rate swaps. These swaps expire at
varying times through October 2005. Based on the balance in Accumulated Other
Comprehensive Loss at December 31, 2002 related to these derivatives, the
Company estimates increases in interest incurred over the next 12 months to be
approximately $9 million. As of December 31, 2002, the balance in Accumulated
Other Comprehensive Loss related to these derivatives was $10.5 million ($6.8
million net of tax).

Financial Services, through CTX Mortgage, enters into interest rate lock
commitments (IRLCs) with its customers under which CTX Mortgage agrees to
make mortgage loans at agreed upon rates within a period of time, generally
from 1 to 30 days, if certain conditions are met within the terms of the IRLCs.
In order to hedge the risk of fluctuations in the value of these IRLCs and
mortgage loans held by it, CTX Mortgage executes mandatory forward trades of
mortgage loans and mortgage-backed securities. CTX Mortgage also uses
mandatory forward trades to hedge the Companys obligation, created through the
Harwood Swap, to protect against certain interest rate risk and non-credit related market risk
related to mortgage loans held by HSF-I, an unaffiliated entity that is not
consolidated with Financial Services or the Company. The Company has elected
not to utilize hedge accounting treatment under SFAS 133 for these derivatives.
Initially, the fair value of the IRLCs is recorded on the balance sheet as a
deferred item. Subsequent changes in the fair value of the IRLCs, mandatory
forward trades and swaps are recorded as an adjustment to earnings. The net
change in the estimated fair value of these derivative positions resulted in a
loss of $4.0 million and $14.9 million, respectively, for the three and nine
months ended December 31, 2002.

(M) RELATED PARTY TRANSACTIONS

At December 31, 2002 and March 31, 2002, Centex Homes had $11.4 million
and $9.1 million deposited with the Partnership as option deposits for the
purchase of land. 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 nine months ended
December 31, 2002, Centex Homes paid $2.6 million to the Partnership in fees
and reimbursements pursuant to these agreements and $27.4 million for the
purchase of residential lots. Centex Homes expects to pay an additional $32.9
million to the Partnership to complete the purchase of these tracts of land
over the next three years.

In the last two years, Construction Services has executed contracts with
the Partnership for the construction of two industrial facilities. At December
31, 2002, all contracts were completed. At March 31, 2002, the total value of
such contracts was $15.0 million, of which $5.3 million was unpaid. During the
nine months ended December 31, 2002 and 2001, the Partnership paid $5.3 million
and $3.3 million, respectively, to Construction Services pursuant to these
contracts.

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(N) RECENT ACCOUNTING PRONOUNCEMENTS

In August 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets (SFAS No. 144). The statement
is effective for financial statements issued for fiscal years beginning after
December 15, 2001, and interim periods within those fiscal years. The
implementation of SFAS No. 144 on April 1, 2002 did not have a material impact
on the Companys results of operations or financial position.

In November 2002, the FASB issued Interpretation No. 45, Guarantors
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others (FIN 45), which requires certain
guarantees to be recorded at fair value. FIN 45 also requires a guarantor to
make certain disclosures about guarantees, including product warranties, even
when the likelihood of making any payments under the guarantee is remote. The
disclosure requirements of FIN 45 are effective for financial statements of
interim or annual periods ending after December 15, 2002. The initial
recognition and measurement provisions are applicable only for guarantees
issued or modified after December 31, 2002. The Company does not expect the
implementation of FIN 45 to have a material impact on the Companys results of
operations or financial position.

In January 2003, the FASB issued Interpretation No. 46, Consolidation of
Variable Interest Entities (FIN 46), which clarifies the application of
Accounting Research Bulletin No. 51, Consolidated Financial Statements, to
certain entities in which equity investors do not have the characteristics of a
controlling financial interest or do not have sufficient equity at risk for the
entity to finance its activities without additional subordinated financial
support from other parties. Certain disclosure requirements of FIN 46 are effective for financial statements of interim or annual periods issued after
January 31, 2003. FIN 46 applies immediately to variable interest entities
created, or in which an enterprise obtains an interest, after January 31, 2003.
For variable interest entities in which an enterprise holds a variable
interest that it acquired before February 1, 2003, FIN 46 applies to interim or
annual periods beginning after June 15, 2003. The Company has interests in the
Partnership, HSF-I and certain joint ventures that may be affected by this
interpretation. The nature of these entities operations and the Companys
potential maximum exposure related to these entities are discussed in the
financial statements of the Partnership, filed in tandem with this Report, and
above in Note (F), Indebtedness, Note (G), Centex Development Company,
L.P., and Note (H), Commitments and Contingencies. The Company is in the
process of assessing the impact, if any, FIN 46 will have on its financial
statements.

The Company has historically accounted for stock-based compensation in
accordance with Accounting Principles Board Opinion No. 25, Accounting for
Stock Issued to Employees (APB No. 25), and related interpretations, as
permitted by Statement of Financial Accounting Standards No. 123, Accounting
for Stock-Based Compensation (SFAS No. 123). On April 1, 2003, the Company
will adopt the fair value measurement provisions of SFAS No. 123 under which
the Company will recognize compensation expense of a stock-based award to an
employee over the vesting period based on the fair value of the award on the
grant date. In accordance with SFAS No. 123, the fair value method will be
applied only to awards granted or modified after April 1, 2003, whereas awards
granted prior to such date will continue to be accounted for under APB No. 25.

In December 2002, the FASB issued Statement of Financial Accounting
Standards No. 148, Accounting for Stock Based Compensation-Transition and
Disclosure (SFAS No. 148), which provides for expanded disclosure concerning
stock-based compensation, including disclosures in interim financial
statements, and amends SFAS No. 123. SFAS No. 148s transition guidance and
provisions for annual disclosures are effective for fiscal years ending after
December 15, 2002. As noted above, the Company will

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adopt the fair value
measurement provisions of SFAS No. 123 effective April 1, 2003. SFAS No. 148
will become effective for the Company for its first interim period ending June
30, 2003.

(O) 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, 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 (F), Indebtedness, Note (G), Centex Development Company,
L.P., Note (H), Commitments and Contingencies and Note (L), Derivatives and
Hedging.

(P) SUBSEQUENT EVENTS

On January 2, 2003, Centex Homes completed the previously announced
acquisition of substantially all of the St. Louis and Indianapolis home
building operations of The Jones Company, including approximately 5,000
controlled lots. For the twelve months ended December 31, 2002, The Jones
Company delivered 733 homes at an average sales price of $260,000.

On January 28, 2003, the Company issued $300.0 million of medium-term
notes at 4.75%. The notes will mature on January 15, 2008. The proceeds from
these notes were used to repay certain short-term borrowings and for general
corporate purposes.

(Q) RECLASSIFICATIONS

Certain prior year balances have been reclassified to be consistent with
the December 31, 2002 presentation.

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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations

For the three months ended December 31, 2002, our consolidated revenues
were $2.3 billion, a 21% increase over $1.9 billion for the same period last
year, and earnings before income taxes were $222.9 million, 41% higher than
$157.9 million for the same period last year. For the nine months ended
December 31, 2002, our consolidated revenues were $6.2 billion, a 13% increase
over $5.5 billion for the same period last year, and earnings before income
taxes were $513.7 million, 20% higher than $428.2 million for the same period
last year. The fluctuations in our revenues and earnings before income taxes
are explained below by segment. These fluctuations were largely driven by the
growth of our Home Building operations.

Net earnings for the three months ended December 31, 2002 were $155.9
million, 62% higher than $96.1 million for the same period last year. Net
earnings for the nine months ended December 31, 2002 were $359.2 million, 36%
higher than $264.8 million for the same period last year. The increase in net
earnings is significantly higher than the increase in earnings before income
taxes due to a reduction in our effective tax rate. Our effective tax rate
decreased to 30.1% for the three months ended December 31, 2002 from 39.1% for
the three months ended December 31, 2001. Our effective tax rate decreased to
30.1% for the nine months ended December 31, 2002 from 38.2% for the nine
months ended December 31, 2002. The decrease in the effective tax rate is
primarily the result of the expected utilization of net operating loss
carryforwards during fiscal 2003.

Any reference herein to we, us or our includes Centex Corporation and its
subsidiary companies.

HOME BUILDING

The following summarizes results of our Home Building operations for the
three and nine months ended December 31, 2002 compared to the same periods last
year (dollars in millions, except per unit data):

|                                           |  |                                         |          |   |      |          |       |    |  |   |         |          |  |  |       |   
|------------------------------------------ |  | --------------------------------------- | -------- | - | ---- | -------- | ----- | -- |  | - | ------- | -------- |  |  | ----- | --
|                                           |  |                                         |         
|                                           |  | For the Three Months Ended December 31, |         
|                                           |  |                                         |         
|                                           |  | 2002                                    |          |   | 2001 |         
|                                           |  |                                         |          |   |      |         
|Revenues                                   |  | $                                       | 1,468.5  |   |      |          | 100.0 | %  |  | $ | 1,210.8 |          |  |  | 100.0 | % 
|Cost of Sales                              |  |                                         | (1,083.9 | ) |      |          | (73.8 | %) |  |   | (898.3  | )        |  |  | (74.2 | %)
|Selling, General &
Administrative Expenses |  |                                         | (213.0   | ) |      |          | (14.5 | %) |  |   | (178.0  | )        |  |  | (14.7 | %)
|                                           |  |                                         |          |   |      |          |       |    |  |   |         |         
|Operating Earnings                         |  | $                                       | 171.6    |   |      |          | 11.7  | %  |  | $ | 134.5   |          |  |  | 11.1  | % 
|                                           |  |                                         |          |   |      |          |       |    |  |   |         |         
|                                           |  |                                         |          |   |      | % Change |       |    |  |   |         | % Change
|Units Closed                               |  |                                         | 6,509    |   |      |          | 16.9  | %  |  |   | 5,567   |          |  |  | 13.8  | % 
|Unit Sales Price                           |  | $                                       | 219,909  |   |      |          | 3.5   | %  |  | $ | 212,400 |          |  |  | 2.0   | % 
|Operating Earnings Per Unit                |  | $                                       | 26,368   |   |      |          | 9.1   | %  |  | $ | 24,162  |          |  |  | 17.5  | % 
|Backlog Units                              |  |                                         | 12,527   |   |      |          | 32.2  | %  |  |   | 9,476   |          |  |  | 10.1  | % 

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|                                           |  |                                        |          |   |      |          |       |    |  |  |  |  |  |   |          |          |  |  |       |   
|------------------------------------------ |  | -------------------------------------- | -------- | - | ---- | -------- | ----- | -- |  |  |  |  |  | - | -------- | -------- |  |  | ----- | --
|                                           |  |                                        |         
|                                           |  | For the Nine Months Ended December 31, |         
|                                           |  |                                        |         
|                                           |  | 2002                                   |          |   | 2001 |         
|                                           |  |                                        |          |   |      |          |       |    |  | 
|Revenues                                   |  | $                                      | 3,855.7  |   |      |          | 100.0 | %  |  |  |  |  |  | $ | 3,420.6  |          |  |  | 100.0 | % 
|Cost of Sales                              |  |                                        | (2,843.5 | ) |      |          | (73.7 | %) |  |  |  |  |  |   | (2,539.3 | )        |  |  | (74.2 | %)
|Selling, General &
Administrative Expenses |  |                                        | (594.9   | ) |      |          | (15.5 | %) |  |  |  |  |  |   | (525.7   | )        |  |  | (15.4 | %)
|                                           |  |                                        |          |   |      |          |       |    |  |  |  |  |  |   |          |         
|Operating Earnings                         |  | $                                      | 417.3    |   |      |          | 10.8  | %  |  |  |  |  |  | $ | 355.6    |          |  |  | 10.4  | % 
|                                           |  |                                        |          |   |      |          |       |    |  |  |  |  |  |   |          |         
|                                           |  |                                        |          |   |      | % Change |       |    |  |  |  |  |  |   |          | % Change
|Units Closed                               |  |                                        | 17,292   |   |      |          | 9.2   | %  |  |  |  |  |  |   | 15,835   |          |  |  | 11.5  | % 
|Unit Sales Price                           |  | $                                      | 217,568  |   |      |          | 2.4   | %  |  |  |  |  |  | $ | 212,445  |          |  |  | 4.6   | % 
|Operating Earnings Per Unit                |  | $                                      | 24,132   |   |      |          | 7.5   | %  |  |  |  |  |  | $ | 22,457   |          |  |  | 21.4  | % 
|Backlog Units                              |  |                                        | 12,527   |   |      |          | 32.2  | %  |  |  |  |  |  |   | 9,476    |          |  |  | 10.1  | % 

Revenues for the three and nine months ended December 31, 2002 increased
21.3% and 12.7%, respectively, versus the same periods last year primarily due
to an increase in units closed and higher unit sales prices. Units closed
during the three months ended December 31, 2002 increased 16.9% from 5,567
units to 6,509 units, and the average unit sales price increased 3.5% from
$212,400 to $219,909. Units closed during the nine months ended December 31,
2002 increased 9.2% from 15,835 units to 17,292 units, and the average unit
sales price increased 2.4% from $212,445 to $217,568. The increase in units
closed was the result of a higher number of operating neighborhoods in the
current year versus last year. The increase in the unit sales price was
largely driven by selling more homes in higher priced markets and higher
selling prices in the Washington, D.C., Nevada and California markets.

Cost of sales was 73.8% and 73.7% of revenues for the three and nine
months ended December 31, 2002 compared to 74.2% of revenues for the same
periods last year. The decrease in cost of sales as a percentage of revenue
primarily resulted from lower lumber prices, purchasing efficiencies realized
through regional and national programs, more efficient house designs and higher
sales prices.

Selling, general and administrative expenses remained relatively
consistent with the prior year, at 14.5% and 15.5% of revenues for the three
and nine months ended December 31, 2002 compared to 14.7% and 15.4% for the
same periods last year.

Operating earnings for the three and nine months ended December 31, 2002
were 11.7% and 10.8% as a percentage of revenues and approximately $26,368 and
$24,132 on a per-unit basis, compared to operating earnings of 11.1% and 10.4%
of revenues and approximately $24,162 and $22,457 on a per-unit basis for the
same periods last year.

Units in backlog increased 32.2% to 12,527 units at December 31, 2002,
compared to 9,476 units at December 31, 2001. The increase in backlog resulted
from an 11.7% increase in neighborhoods and a 26.7% increase in sales versus
the prior year for the three months ended December 31, 2002. We define backlog
units as units that have been sold, as indicated by a signed contract, but not
closed.

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FINANCIAL SERVICES

The following summarizes Financial Services results for the three and
nine months ended December 31, 2002 compared to the same periods last year
(dollars in millions):

|                           |                                    |                                   |        |                      |        |   |                     |       |        |      |        |        |        |   |        |        |        | 
|-------------------------- | ---------------------------------- | --------------------------------- | ------ | -------------------- | ------ | - | ------------------- | ----- | ------ | ---- | ------ | ------ | ------ | - | ------ | ------ | ------ | 
|                           |                                    |                                   |        |                      |        |   |                     |      
|                           |                                    |                                   |        | For the Three Months |        |   | For the Nine Months |      
|                           |                                    |                                   |        | Ended December 31,   |        |   | Ended December 31,  |      
|                           |                                    |                                   |        |                      |        |   |                     |      
|                           |                                    |                                   |        | 2002                 |        |   | 2001                |       |        | 2002 |        |        | 2001   |  
|                           |                                    |                                   |        |                      |        |   |                     |       |        |      |        |        |        |  
|Revenues                   |                                    | $                                 | 223.1  |                      |        | $ | 182.8               |       |        | $    | 608.4  |        |        | $ | 511.4  |       
|                           |                                    |                                   |        |                      |        |   |                     |       |        |      |        |       
|Interest Margin            |                                    | $                                 | 44.7   |                      |        | $ | 33.2                |       |        | $    | 120.7  |        |        | $ | 71.6   |       
|                           |                                    |                                   |        |                      |        |   |                     |       |        |      |        |       
|Operating Earnings         |                                    | $                                 | 50.2   |                      |        | $ | 33.4                |       |        | $    | 111.1  |        |        | $ | 87.8   |       
|                           |                                    |                                   |        |                      |        |   |                     |       |        |      |        |       
|Origination Volume         |                                    | $                                 | 4,852  |                      |        | $ | 4,096               |       |        | $    | 11,773 |        |        | $ | 11,232 |       
|                           |                                    |                                   |        |                      |        |   |                     |       |        |      |        |       
|Number of Loans Originated |                                    |                                   |        |                      |        |   |                     |       |        |      |        |        |        |   |        |       
|                           | CTX Mortgage Company, L.L.C.       |                                   |        |                      |        |   |                     |       |        |      |        |        |        |   |        |        |       
|                           |                                    | Centex-built Homes (Builder)    |        |                      | 4,380  |   |                     |       | 3,797  |      |        |        | 11,717 |   |        |        | 10,612 | 
|                           |                                    | Non-Centex-built Homes
(Retail) |        |                      | 20,607 |   |                     |       | 18,763 |      |        |        | 49,089 |   |        |        | 51,847 | 
|                           |                                    |                                   |        |                      |        |   |                     |       |        |      |        |       
|                           |                                    |                                   | 24,987 |                      |        |   | 22,560              |       |        |      | 60,806 |        |        |   | 62,459 |       
|                           | Centex Home Equity Company, L.L.C. |                                   |        | 8,049                |        |   |                     | 7,136 |        |      |        | 21,781 |        |   |        | 21,201 |       
|                           |                                    |                                   |        |                      |        |   |                     |       |        |      |        |       
|                           |                                    |                                   | 33,036 |                      |        |   | 29,696              |       |        |      | 82,587 |        |        |   | 83,660 |       
|                           |                                    |                                   |        |                      |        |   |                     |       |        |      |        |       

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

Conforming Mortgage Banking

The revenues and operating earnings of CTX Mortgage Company, L.L.C. and
related entities, or CTX Mortgage, are derived primarily from the sale of
mortgage loans, inclusive of all service rights and, to a lesser extent,
interest income and other fees. CTX Mortgage originates mortgage loans, holds
them for a short period and sells them to investors and Harwood Street Funding
I, L.L.C., or HSF-I. HSF-I is an unaffiliated entity that is not consolidated
with Financial Services or Centex Corporation. HSF-I purchases mortgage
loans, at closing, from CTX Mortgage with the proceeds from the issuance of
securitized term debt, secured liquidity notes and subordinated certificates
that are extendable for up to five years. The debt, interest income and
interest expense of HSF-I are not reflected in the financial statements of
Financial Services or Centex Corporation. For additional information regarding
HSF-I, see Certain Off-Balance-Sheet and Other Obligations.

Revenues increased 17.6% to $120.5 million and 7.9% to $318.1 million for
the three and nine months ended December 31, 2002, respectively, as compared to
the same periods last year. The increase in revenues for the three months
ended December 31, 2002 is primarily related to an increase in originations and
higher revenues from CTX Mortgages Title and Insurance operations. The
increase in revenues for the nine month period ended December 31, 2002, is
primarily due to an increase in revenues from CTX Mortgages Title and
Insurance operations. The Title and Insurance revenues for the three and nine
months ended December 31, 2002 increased due in large part to a significant
increase in its refinancing business.

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CTX Mortgages operating earnings were $38.2 million and $78.3 million,
respectively, for the three and nine months ended December 31, 2002, resulting
in a 50.3% and a 4.9% increase as compared to the same periods last year. The
50.3% increase in operating earnings for the three months ended December 31,
2002 is due primarily to increased originations and increased profit per loan.
During the nine months ended December 31, 2002, although originations
decreased, the profit per loan increased, which is the primary reason for the
4.9% increase in operating earnings.

For the three months ended December 31, 2002, originations totaled 24,987
compared to 22,560 originations in the same period last year; origination
volume was $4.2 billion compared to $3.5 billion for the same period last year;
the per-loan profit was $1,529, an increase of 35.7% compared to $1,127 for the
same period last year and total mortgage applications increased 25.6% to 23,292
from 18,545 applications for the same period last year. For the nine months
ended December 31, 2002, originations totaled 60,806 compared to 62,459
originations in the same period last year; origination volume was $10.0 billion
compared to $9.6 billion for the same period last year; the per-loan profit was
$1,287, an increase of 7.8% compared to $1,194 for the same period last year
and total mortgage applications increased 5.7% to 63,161 from 59,766
applications for the same period last year. For the nine months ended December
31, 2002, originations decreased due to slow refinance activity during the
initial quarter of the fiscal year as compared to the same period last year.
During the three months ended December 31, 2002, originations increased due to
low interest rate levels, resulting in continued refinance activity.

Sub-Prime Home Equity Lending

The revenues of Centex Home Equity Company, L.L.C., or Home Equity,
increased 27.7% to $102.6 million and 34.0% to $290.3 million for the three and
nine months ended December 31, 2002, respectively, as a result of continued
growth in 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 to $43.3 million and $115.3 million for the three and
nine months ended December 31, 2002 as compared to $28.9 million and $66.7
million for the same periods last year. The increase in interest margin is
primarily 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. Home Equity reported operating earnings of $12.0 million and $34.4
million for the three and nine months ended December 31, 2002, as compared to
operating earnings of $8.3 million and $14.7 million for the same periods last
year. The increase in Home Equitys operating earnings is primarily the result
of the increase in interest margin, as noted above. This was partially offset
by an increase in general and administrative costs, mostly attributable to an
increase in servicing and production to support our volume and loan servicing
growth, and an increase in the provision for losses on residential mortgage
loans held for investment.

From October 1997 through March 2000, a majority of Home Equitys 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 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. 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

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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 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. For the three and nine months ended December 31, 2002,
respectively, originations totaled 8,049 and 21,781 compared to 7,136 and
21,201 originations for the same periods last year; origination volume was
$703.9 million and $1.8 billion compared to $584.6 million and $1.6 billion for
the same periods last year and total applications increased 44.4% and 35.7% to
65,534 and 173,315 from 45,391 and 127,759 applications for the same periods
last year. For the nine months ended December 31, 2002, originations increased
2.7% while origination volume increased 9.7% 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.

At December 31, 2002, Home Equitys total servicing portfolio consisted of
70,850 loans totaling $5.1 billion compared to 60,811 loans totaling $4.2
billion at December 31, 2001. For the three and nine months ended December 31,
2002, service fee income related to this long-term servicing, which is not
included in interest income, was $13.2 million and $37.6 million, respectively,
compared to $10.1 million and $27.9 million, respectively, for the same periods
last year.

Allowance for Losses

Home Equity establishes an allowance for losses by charging the provision
for losses in the statement of consolidated earnings when it believes the event
causing the loss has occurred. When Home Equity determines that a residential
mortgage loan held for investment is uncollectible, the 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.

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
adequate over time to cover ultimate losses. This allowance may prove to be
inadequate due to unanticipated adverse changes in the economy or discrete
events adversely affecting specific customers or industries.

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

|                               |                                 |   |                      |        |   |                     |       |        |      |   |        |         |   |   |       |        |  
|------------------------------ | ------------------------------- | - | -------------------- | ------ | - | ------------------- | ----- | ------ | ---- | - | ------ | ------- | - | - | ----- | ------ | -
|                               |                                 |   |                      |        |   |                     |      
|                               |                                 |   | For the Three Months |        |   | For the Nine Months |      
|                               |                                 |   | Ended December 31,   |        |   | Ended December 31,  |      
|                               |                                 |   |                      |        |   |                     |      
|                               |                                 |   | 2002                 |        |   | 2001                |       |        | 2002 |   |        | 2001    |  
|                               |                                 |   |                      |        |   |                     |       |        |      |   |        |         |  
|Balance at Beginning of Period |                                 | $ | 21,143               |        |   | $                   | 6,314 |        |      | $ | 14,106 |         |   | $ | 2,814 |       
|                               | Provision for Losses            |   |                      | 11,910 |   |                     |       | 5,463  |      |   |        | 25,466  |   |   |       | 11,254 |  
|                               | Recoveries on Loans Charged Off |   |                      | 34     |   |                     |       | 34     |      |   |        | 85      |   |   |       | 40     |  
|                               | Losses Sustained                |   |                      | (5,933 | ) |                     |       | (1,992 | )    |   |        | (12,503 | ) |   |       | (4,289 | )
|                               |                                 |   |                      |        |   |                     |       |        |      |   |        |        
|Balance at End of Period       |                                 | $ | 27,154               |        |   | $                   | 9,819 |        |      | $ | 27,154 |         |   | $ | 9,819 |       
|                               |                                 |   |                      |        |   |                     |       |        |      |   |        |        

|                                                                       |                          |  |                   |         |   |                |     |        |  
|---------------------------------------------------------------------- | ------------------------ |  | ----------------- | ------- | - | -------------- | --- | ------ | -
|                                                                       |                          |  |                   |         |   |                |    
|                                                                       |                          |  | December 31, 2002 |         |   | March 31, 2002 |    
|                                                                       |                          |  |                   |         |   |                |    
|Allowance for Losses to Residential Mortgage Loans
Held for Investment |                          |  | 0.6               | %       |   |                | 0.4 | %     
|90+ Days Contractual Delinquency                                       |                          |  |                   |         |   |                |     |       
|                                                                       | Total Dollars Delinquent |  | $                 | 119,231 |   |                | $   | 83,490 |  
|                                                                       | % Delinquent             |  |                   | 2.8     | % |                |     | 2.6    | %

The allowance for losses on residential mortgage loans held for investment
has increased to $27.2 million at December 31, 2002 from $9.8 million at
December 31, 2001. In addition, the ratio of allowance for losses to
residential mortgage loans held for investment, or the allowance ratio,
increased to 0.6% at December 31, 2002 from 0.4% at March 31, 2002. Prior to
April 2000, the residential mortgage loans were recorded as sales and
anticipated future credit losses were considered in valuing the MSRI. As a
result, no allowance for losses was necessary. Beginning in April 2000, we
began recording residential mortgage loans held for investment on the balance
sheet, as previously discussed, and, accordingly, began recording an allowance
for losses based on managements judgment of loss exposure. The increase in
the allowance 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
balance in the allowance for losses, the loans charged off and the allowance
ratio to continue to increase. The increase in 90+ days contractual
delinquency occurred primarily because the residential mortgage loan portfolio
continued to mature.

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CONSTRUCTION PRODUCTS

The following summarizes Construction Products results for the three and
nine months ended December 31, 2002 compared to the same periods last year
(dollars in millions):

|                                           |  |                      |       |   |                     |   |       |      |  |   |        |   |  |   |        |  
|------------------------------------------ |  | -------------------- | ----- | - | ------------------- | - | ----- | ---- |  | - | ------ | - |  | - | ------ | -
|                                           |  |                      |       |   |                     |  
|                                           |  | For the Three Months |       |   | For the Nine Months |  
|                                           |  | Ended December 31,   |       |   | Ended December 31,  |  
|                                           |  |                      |       |   |                     |  
|                                           |  | 2002                 |       |   | 2001                |   |       | 2002 |  |   | 2001   |  
|                                           |  |                      |       |   |                     |   |       |      |  |   |        |  
|Revenues                                   |  | $                    | 119.1 |   |                     | $ | 112.7 |      |  | $ | 383.9  |   |  | $ | 359.7  |  
|Interest Income                            |  |                      |      |   |                     |   | 0.5   |      |  |   |       |   |  |   | 2.6    |  
|Cost of Sales                              |  |                      | (91.9 | ) |                     |   | (90.5 | )    |  |   | (299.5 | ) |  |   | (301.6 | )
|Selling, General & Administrative Expenses |  |                      | (1.4  | ) |                     |   | (1.3  | )    |  |   | (4.2   | ) |  |   | (3.8   | )
|                                           |  |                      |       |   |                     |   |       |      |  |   |        |  
|Operating Earnings*                        |  | $                    | 25.8  |   |                     | $ | 21.4  |      |  | $ | 80.2   |   |  | $ | 56.9   |  
|                                           |  |                      |       |   |                     |   |       |      |  |   |        |  

|  |  |                                                                                                                                                                                                                                                              
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* |  | Before Minority Interest of $8.1 million and $6.1 million, respectively, for
the three months ended December 31, 2002 and 2001, and Minority Interest of
$25.4 million and $15.1 million, respectively, for the nine months ended
December 31, 2002 and 2001.

Construction Products revenues for the three and nine months ended
December 31, 2002 were 5.7% and 6.7% higher than the same periods last year.
These increases were primarily the result of a $4.3 million and a $26.7 million
increase in gypsum wallboard revenues for the three and nine months ended
December 31, 2002, respectively, and a $3.2 million and a $6.6 million increase
in paperboard revenues for the three and nine months ended December 31, 2002,
respectively. The increase in gypsum wallboard and paperboard revenues was
primarily caused by a higher average net sales price when compared to the same
periods last year.

Construction Products cost of sales remained relatively consistent with
the prior year. For the three and nine months ended December 31, 2002, cost of
sales was 1.5% higher and 0.7% lower, respectively, than the same periods last
year.

Construction Products selling, general and administrative expenses for
the three and nine months ended December 31, 2002 were 7.7% and 10.5% higher
than the same periods last year. This increase was primarily the result of
increased personnel and higher office expenses.

For the three and nine months ended December 31, 2002, Construction
Products operating earnings, net of minority interest, increased 20.6% and
40.9%, respectively, from results for the same periods a year ago. Operating
earnings increased primarily due to the increase in gypsum wallboard and
paperboard pricing noted above.

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CONSTRUCTION SERVICES

The following summarizes Construction Services results for the three and
nine months ended December 31, 2002 compared to the same periods last year
(dollars in millions):

|                                 |  |                      |       |  |                     |   |       |      |  |   |         |  |  |   |       | 
|-------------------------------- |  | -------------------- | ----- |  | ------------------- | - | ----- | ---- |  | - | ------- |  |  | - | ----- | 
|                                 |  |                      |       |  |                     |  
|                                 |  | For the Three Months |       |  | For the Nine Months |  
|                                 |  | Ended December 31,   |       |  | Ended December 31,  |  
|                                 |  |                      |       |  |                     |  
|                                 |  | 2002                 |       |  | 2001                |   |       | 2002 |  |   | 2001    | 
|                                 |  |                      |       |  |                     |   |       |      |  |   |         | 
|Revenues                         |  | $                    | 411.1 |  |                     | $ | 321.4 |      |  | $ | 1,163.6 |  |  | $ | 971.8 | 
|                                 |  |                      |       |  |                     |   |       |      |  |   |         | 
|Operating Earnings               |  | $                    | 9.4   |  |                     | $ | 9.1   |      |  | $ | 26.6    |  |  | $ | 23.9  | 
|                                 |  |                      |       |  |                     |   |       |      |  |   |         | 
|New Contracts Executed           |  | $                    | 125   |  |                     | $ | 434   |      |  | $ | 554     |  |  | $ | 1,212 | 
|                                 |  |                      |       |  |                     |   |       |      |  |   |         | 
|Backlog of Uncompleted Contracts |  | $                    | 1,571 |  |                     | $ | 2,262 |      |  | $ | 1,571   |  |  | $ | 2,262 | 
|                                 |  |                      |       |  |                     |   |       |      |  |   |         | 

Construction Services revenues for the three and nine months ended
December 31, 2002 were 27.9% and 19.7% higher, respectively, than revenues for
the same periods last year. The increase in revenues was primarily the result
of an increase in the volume of shorter-term contracts, as well as the stage of
execution of certain longer-term contracts. Operating earnings for the group
improved in the three and nine months ended December 31, 2002 compared to the
same periods last year as a result of the higher revenue base. For the three
and nine months ended December 31, 2002, new contracts executed decreased 71.1%
and 54.3% from the same periods last year, and backlog of uncompleted contracts
decreased 30.5% from December 31, 2001, due to timing differences experienced
with contract awards and executions and reduced activity in the commercial
construction industry. Future operating margins and earnings are
likely to be impacted by this reduced activity and our lower backlog.

The Construction Services segment provided a positive average net cash
flow in excess of our investment in the segment of $125.6 million and $119.3
million for the three and nine months ended December 31, 2002 compared to
$132.6 million and $116.3 million for the same periods last year.

INVESTMENT REAL ESTATE

The following summarizes Investment Real Estates results for the three
and nine months ended December 31, 2002 compared to the same periods last year
(dollars in millions):

|                   |  |                      |      |  |                     |   |     |      |  |   |      |  |  |   |      | 
|------------------ |  | -------------------- | ---- |  | ------------------- | - | --- | ---- |  | - | ---- |  |  | - | ---- | 
|                   |  |                      |      |  |                     |  
|                   |  | For the Three Months |      |  | For the Nine Months |  
|                   |  | Ended December 31,   |      |  | Ended December 31,  |  
|                   |  |                      |      |  |                     |  
|                   |  | 2002                 |      |  | 2001                |   |     | 2002 |  |   | 2001 | 
|                   |  |                      |      |  |                     |   |     |      |  |   |      | 
|Revenues           |  | $                    | 25.8 |  |                     | $ | 9.7 |      |  | $ | 39.1 |  |  | $ | 57.1 | 
|                   |  |                      |      |  |                     |   |     |      |  |   |      | 
|Operating Earnings |  | $                    | 20.1 |  |                     | $ | 4.6 |      |  | $ | 29.4 |  |  | $ | 36.0 | 
|                   |  |                      |      |  |                     |   |     |      |  |   |      | 

Investment Real Estates revenues for the three and nine months ended
December 31, 2002 were 166.0% higher and 31.5% lower than revenues for the same
periods last year. Operating earnings from Investment Real Estate for the
three and nine months ended December 31, 2002 totaled $20.1 million and $29.4
million, respectively, compared to $4.6 million and $36.0 million in the same
period last year. The

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fluctuations in revenues and operating earnings were
primarily related to the timing of property sales of nominally-valued assets.

Property sales related to Investment Real Estates nominally-valued assets
contributed operating earnings of $5.5 million for the three months ended
December 31, 2002 and $1.3 million for the same period last year. Property
sales related to Investment Real Estates nominally-valued assets contributed
operating earnings of $7.3 million for the nine months ended December 31, 2002
and $28.4 million for the same period last year. These nominally-valued assets
resulted from the fiscal 1996 acquisition of Vista Properties, Inc., or Vista,
and its subsequent combination with Centex Real Estate Corporation. The Vista
portfolio of properties was reduced to a nominal book basis after recording
certain deferred tax benefits related to the combination. The timing of land
sales is uncertain and can vary significantly from period to period.

Included in Investment Real Estates operating earnings for the three and
nine months ended December 31, 2002 were earnings of $14.3 million and $18.0
million, respectively, derived from its investment in the Partnership compared
to earnings of $5.8 million and $12.9 million for the same periods last year.
As noted in Note (G) of the Notes to Consolidated Financial Statements of
Centex, the investment in the Partnership is not consolidated and is accounted
for on the equity method of accounting because we do not control the
Partnership.

The largest component of the Partnership is its International Home
Building segment, based in London, England. Included in Investment Real
Estates operating earnings were earnings of $5.6 million and $2.4 million for
the three months ended December 31, 2002 and 2001, respectively, and earnings
of $9.4 million and $8.0 million for the nine months ended December 31, 2002
and 2001, respectively, derived from International Home Building. The increase
in earnings for the three and nine months ended December 31, 2002 was primarily
due to an increase in profits from sales of certain land holdings, offset by a
decline in homebuilding operating margins and an increase in general and
administrative expenses resulting primarily from personnel additions. For the
three months ended December 31, 2002 and 2001, this segment closed 324 units at
an average sales price per unit of $239,148 and 317 units at an average sales
price per unit of $193,915, respectively. For the nine months ended December
31, 2002 and 2001, this segment closed 976 units at an average sales price per
unit of $234,673 and 931 units at an average sales price per unit of $195,716,
respectively. Operating earnings per unit, before interest, were $19,099 and
$9,006 for the three months ended December 31, 2002 and 2001, respectively.
Operating earnings per unit, before interest, were $11,442 and $10,107 for the
nine months ended December 31, 2002 and 2001, respectively.

OTHER

Our manufactured housing operations and our home services operations are
not material for purposes of segment reporting and have therefore been included
in Other for reporting purposes.

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Other consisted of the following (dollars in millions):

|                                                    |  |                      |      |  |                     |   |      |      |  |   |      |   |  |   |      |  
|--------------------------------------------------- |  | -------------------- | ---- |  | ------------------- | - | ---- | ---- |  | - | ---- | - |  | - | ---- | -
|                                                    |  |                      |      |  |                     |  
|                                                    |  | For the Three Months |      |  | For the Nine Months |  
|                                                    |  | Ended December 31,   |      |  | Ended December 31,  |  
|                                                    |  |                      |      |  |                     |  
|                                                    |  | 2002                 |      |  | 2001                |   |      | 2002 |  |   | 2001 |  
|                                                    |  |                      |      |  |                     |   |      |      |  |   |      |  
|Operating Earnings (Loss) from
Manufactured Housing |  | $                    | 1.2  |  |                     | $ | 0.7  |      |  | $ | 2.1  |   |  | $ | (0.8 | )
|Operating (Loss) Earnings from
Home Services        |  |                      |     |  |                     |   | 1.7  |      |  |   | (2.5 | ) |  |   | 6.2  |  
|                                                    |  |                      |      |  |                     |   |      |      |  |   |      |  
|                                                    |  | $                    | 1.2  |  |                     | $ | 2.4  |      |  | $ | (0.4 | ) |  | $ | 5.4  |  
|                                                    |  |                      |      |  |                     |   |      |      |  |   |      |  
|Corporate General & Administrative Expense          |  | $                    | 13.8 |  |                     | $ | 13.3 |      |  | $ | 40.8 |   |  | $ | 37.7 |  
|                                                    |  |                      |      |  |                     |   |      |      |  |   |      |  
|Interest Expense                                    |  | $                    | 33.5 |  |                     | $ | 28.0 |      |  | $ | 84.3 |   |  | $ | 84.6 |  
|                                                    |  |                      |      |  |                     |   |      |      |  |   |      |  
|Minority Interest                                   |  | $                    | 8.1  |  |                     | $ | 6.1  |      |  | $ | 25.4 |   |  | $ | 15.1 |  
|                                                    |  |                      |      |  |                     |   |      |      |  |   |      |  

The improvement in our manufactured housing divisions operating earnings
in the current year is the result of higher production, improved efficiency in
manufacturing and lower general and administrative expenses. The decrease in
our home services divisions operating earnings in the current year is
primarily due to higher general and administrative expenses.

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 growth in our profitability.

The change in interest expense is primarily related to an increase in
average debt outstanding for the three and nine months ended December 31, 2002,
as compared to the same periods last year. This increase is offset by an
increase in net interest capitalized and lower borrowing costs during the three
and nine months ended December 31, 2002, as compared to the same periods last
year.

The increase in minority interest is primarily related to an increase in
the earnings of Centex Construction Products, Inc.

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FINANCIAL CONDITION AND LIQUIDITY

At December 31, 2002, we had cash and cash equivalents of $56.7 million,
including $16.5 million in Financial Services and $19.0 million belonging to
our 65.1%-owned Construction Products subsidiary. The net cash used in or
provided by the operating, investing and financing activities for the nine
months ended December 31, 2002 and 2001 is summarized below (dollars in
thousands):

|                                |                          |                      |          |                           |            |   |         |   |            |  
|------------------------------- | ------------------------ | -------------------- | -------- | ------------------------- | ---------- | - | ------- | - | ---------- | -
|                                |                          |                      |          |                           |           
|                                |                          |                      |          | For the Nine Months Ended |           
|                                |                          |                      |          | December 31,              |           
|                                |                          |                      |          |                           |           
|                                |                          |                      |          | 2002                      |            |   | 2001    |  
|                                |                          |                      |          |                           |            |   |         |  
|Net cash (used in) provided by  |                          |                      |          |                           |            |   |         |  
|                                | Non-Financial Services * |                      |          |                           |            |   |         |   |           
|                                |                          | Operating Activities |          | $                         | (339,521   | ) |         | $ | (371,285   | )
|                                |                          | Investing Activities |          |                           | (12,230    | ) |         |   | (74,728    | )
|                                |                          | Financing Activities |          |                           | 199,364    |   |         |   | 433,187    |  
|                                |                          |                      |          |                           |            |  
|                                |                          |                      | (152,387 | )                         |            |   | (12,826 | )
|                                |                          |                      |          |                           |            |  
|                                | Financial Services       |                      |          |                           |            |   |         |   |           
|                                |                          | Operating Activities |          |                           | 15,448     |   |         |   | 35,209     |  
|                                |                          | Investing Activities |          |                           | (1,003,132 | ) |         |   | (1,231,440 | )
|                                |                          | Financing Activities |          |                           | 977,072    |   |         |   | 1,198,426  |  
|                                |                          |                      |          |                           |            |  
|                                |                          |                      | (10,612  | )                         |            |   | 2,195   |  
|                                |                          |                      |          |                           |            |  
|Net (decrease) increase in cash |                          | $                    | (162,999 | )                         |            | $ | (10,631 | )
|                                |                          |                      |          |                           |            |  



|* |  | Non-Financial Services represents the consolidation of all subsidiaries
other than those included in the Financial Services business segment.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------

We generally fund our Non-Financial Services operating and other
short-term needs through cash from operations, borrowings from commercial paper
and other short-term credit arrangements and the issuance of medium-term notes
and other debt securities. During the nine months ended December 31, 2002, cash
was primarily used in Non-Financial Services-Operating Activities to finance
increases in housing inventories relating to the increased level of sales and
resulting units under construction during the year and for the acquisition of
land for development. The funds provided by Non-Financial Services-Financing
Activities were primarily from new debt used to fund the increased homebuilding
activity.

We generally fund our Financial Services operating and other short-term
needs through cash flows from operations, credit facilities, securitizations
and proceeds from the sale of mortgage loans to HSF-I, as described below.
During the nine months ended December 31, 2002, cash was primarily used in
Financial Services-Investing Activities to finance increases in residential
mortgage loans held for investment. The funds provided by Financial
Services-Financing Activities were primarily from new debt used to fund the
increased residential mortgage loan activity.

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 December 31,
2002 are summarized below (dollars in thousands):

|                       |                                             |   |                 |           |  |           |           |         |    
|---------------------- | ------------------------------------------- | - | --------------- | --------- |  | --------- | --------- | ------- | ---
|                       |                                             |   |                 |          
|                       |                                             |   | Existing Credit |           |  | Available |          
|                       |                                             |   | Facilities      |           |  | Capacity  |          
|                       |                                             |   |                 |           |  |           |          
|Non-Financial Services |                                             |   |                 |           |  |           |           |        
|                       | Centex Corporation                          |   |                 |           |  |           |           |         |    
|                       | Multi-Bank Revolving Credit Facility        |   | $               | 700,000   |  |           | $         | 700,000 | (1)
|                       | Uncommitted Bank Lines                      |   |                 | 60,000    |  |           |           | 60,000  |    
|                      
|                       | Construction Products                       |   |                 |           |  |           |           |         |    
|                       | Senior Revolving Credit Facility            |   |                 | 175,000   |  |           |           | 91,409  | (2)
|                       | Annually Renewable Commercial Paper Conduit |   |                 | 50,000    |  |           |           | 26,544  | (2)
|                       |                                             |   |                 |           |  |          
|                       |                                             |   | 985,000         |           |  |           | 877,953   |        
|                       |                                             |   |                 |           |  |          
|Financial Services     |                                             |   |                 |           |  |           |           |        
|                       | Unsecured Credit Facilities                 |   |                 | 125,000   |  |           |           | 40,000  | (3)
|                       | Secured Credit Facilities                   |   |                 | 405,000   |  |           |           | 262,835 | (4)
|                       | Harwood Street Funding II, L.L.C. Facility  |   |                 | 1,000,000 |  |           |           | 387,415 |    
|                       |                                             |   |                 |           |  |          
|                       |                                             |   | 1,530,000       |           |  |           | 690,250   |        
|                       |                                             |   |                 |           |  |          
|                       |                                             | $ | 2,515,000       |           |  | $         | 1,568,203 | (5)    
|                       |                                             |   |                 |           |  |          



|(1) |  | This is a committed, multi-bank revolving credit facility, maturing in
August 2005, which serves as backup for commercial paper borrowings. As
of December 31, 2002, there were no borrowings under this backup facility,
and our $600 million commercial paper program had $144 million
outstanding. We have not borrowed under this facility since its
inception.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | These committed facilities were entered into by Construction Products and
have no recourse to Centex Corporation. The Senior Revolving Credit
Facility matures in November 2003 and the Annually Renewable Commercial
Paper Conduit matures in June 2003.                                                                                                          
|   
|(3) |  | Centex Corporation, CTX Mortgage and Home Equity, on a joint and several
basis, share in a $125 million uncommitted, unsecured credit facility.                                                                                                                                                                                                                    
|   
|(4) |  | CTX Mortgage and Home Equity share in $250 million of committed secured
credit facilities to finance mortgage inventory. CTX Mortgage also
maintains $155 million of committed secured mortgage warehouse facilities
to finance mortgages not sold to HSF-I.                                                                                                       
|   
|(5) |  | The amount of available capacity includes $100 million of uncommitted
borrowings as of December 31, 2002. Although we believe that this
capacity is currently available, there can be no assurance that the
lenders under the applicable facilities would elect to make advances to
Centex Corporation or its subsidiaries if and when requested to do so.         

CTX Mortgage finances its inventory of mortgage loans principally through
sales of Jumbo A and conforming loans to HSF-I. HSF-I acquires mortgage
loans from CTX Mortgage, holds them for a period averaging between 45 and 60
days and then resells them into the secondary market. HSF-I obtains the funds
needed to purchase eligible mortgage loans from CTX Mortgage by issuing
investment grade senior debt obligations and subordinated certificates. The
purpose of this arrangement is to allow CTX Mortgage to reduce the cost of
financing the mortgage loans originated by it and to improve its liquidity.
For additional information regarding HSF-I, see Certain Off-Balance-Sheet and
Other Obligations.

Home Equity finances its inventory of mortgage loans 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 $1.0 billion.
HSF-II obtains funds through the sale of five-year

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subordinated notes that are rated BBB by Standard & Poors, or S&P, Baa2 by
Moodys Investors Service, or Moodys, and BBB by Fitch Ratings, or Fitch, and
short-term secured liquidity notes that are rated A1+ by S&P, P1 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 December 31,
2002, we were in compliance with all of these covenants.

As of December 31, 2002, our short-term debt was $957.1 million,
approximately $789.7 million of which was applicable to Financial Services and
$23.5 million of which was applicable to Construction Products. Excluding
Financial Services and Construction Products, our short-term borrowings are
generally financed at prevailing market interest rates from our commercial
paper programs and from uncommitted bank facilities.

Our outstanding debt as of December 31, 2002 was as follows (dollars in
thousands)(1):

|                        |                                                                                      |                                                             |           |           |           | 
|----------------------- | ------------------------------------------------------------------------------------ | ----------------------------------------------------------- | --------- | --------- | --------- | 
|Non-Financial Services: |                                                                                      |                                                             |           |          
|                        | Short-Term Notes Payable                                                             |                                                             | $         | 167,361   |          
|                        | Senior Debt:                                                                         |                                                             |           |           |          
|                        |                                                                                      | Medium-Term Note Programs, 2.10% to 7.95%, due through 2007 |           |           | 286,000   | 
|                        |                                                                                      | Long-Term Notes, 5.46% to 9.75%, due through 2012           |           |           | 1,208,063 | 
|                        |                                                                                      | Other Indebtedness, 1.38% to 10.00%, due through 2027       |           |           | 123,534   | 
|                        | Subordinated Debt:                                                                   |                                                             |           |           |          
|                        |                                                                                      | Subordinated Debentures, 7.38%, due in 2006                 |           |           | 99,882    | 
|                        |                                                                                      | Subordinated Debentures, 8.75%, due in 2007                 |           |           | 99,678    | 
|                        |                                                                                      |                                                             |          
|                        |                                                                                      |                                                             | 1,984,518 |          
|                        |                                                                                      |                                                             |          
|Financial Services:     |                                                                                      |                                                             |           |          
|                        | Short-Term Debt:                                                                     |                                                             |           |           |          
|                        |                                                                                      | Short-Term Notes Payable                                    |           |           | 227,164   | 
|                        |                                                                                      | Harwood Street Funding II, L.L.C. Secured Liquidity Notes   |           |           | 562,585   | 
|                        | Home Equity Loans Asset-Backed Certificates, 2.39% to 8.48%, due
through 2032        |                                                             |           | 3,659,554 |          
|                        | Harwood Street Funding II, L.L.C. Variable Rate Subordinated Notes, due
through 2007 |                                                             |           | 50,000    |          
|                        |                                                                                      |                                                             |          
|                        |                                                                                      |                                                             | 4,499,303 |          
|                        |                                                                                      |                                                             |          
|Total                   |                                                                                      | $                                                           | 6,483,821 |          
|                        |                                                                                      |                                                             |          



|(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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Maturities of Non-Financial Services and Financial Services long-term debt
(in thousands) during the next five years ending March 31 are:

|           |      |   |               |         |  |           |           |         |       |   |           |           | 
|---------- | ---- | - | ------------- | ------- |  | --------- | --------- | ------- | ----- | - | --------- | --------- | 
|           |      |   |               |        
|           |      |   | Non-Financial |         |  | Financial |           |         |       |   |          
|           |      |   | Services      |         |  | Services  |           |         | Total |  
|           |      |   |               |         |  |           |           |         |       |  
|           | 2003 |   | $             | 10,218  |  |           | $         | 264,795 |       |   | $         | 275,013   | 
|           | 2004 |   |               | 102,582 |  |           |           | 931,570 |       |   |           | 1,034,152 | 
|           | 2005 |   |               | 35,170  |  |           |           | 717,490 |       |   |           | 752,660   | 
|           | 2006 |   |               | 340,404 |  |           |           | 545,268 |       |   |           | 885,672   | 
|           | 2007 |   |               | 290,590 |  |           |           | 548,328 |       |   |           | 838,918   | 
|Thereafter |      |   | 1,038,193     |         |  |           | 702,103   |         |       |   | 1,740,296 |          
|           |      |   |               |         |  |           |           |         |      
|           |      | $ | 1,817,157     |         |  | $         | 3,709,554 |         |       | $ | 5,526,711 |          
|           |      |   |               |         |  |           |           |         |      

Financial Services debt related to securitized residential mortgage loans
structured as collateralized borrowings (Home Equity Loans Asset-Backed
Certificates) was $3.7 billion at December 31, 2002 and has no recourse to
Home Equity or Centex Corporation. The principal and interest on these notes are paid using
the cash flow from the underlying residential mortgage loans, which serve as
collateral for the debt. Accordingly, the timing of the principal payments on
these notes is dependent upon the payment 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
repayments and prepayments of principal. As is common in these structures,
Home Equity remains liable for customary loan representations.

CERTAIN OFF-BALANCE-SHEET AND OTHER 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.

Harwood Street Funding I, L.L.C.

HSF-I is an unaffiliated entity established in July 1999 that is not
consolidated with Financial Services or Centex Corporation. Since December
1999, CTX Mortgage has sold substantially all of the Jumbo A and conforming
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 averaging between 45 and 60 days and then resells them into the
secondary market. HSF-I obtains the funds needed to purchase eligible mortgage
loans from CTX Mortgage by issuing (1) securitized medium-term debt that is
currently rated AAA by S&P and Aaa by Moodys, (2) short-term secured liquidity
notes that are currently rated A1+ by S&P and P1 by Moodys and (3)
subordinated certificates maturing in September 2004 and November 2005,
extendable for up to five years, that are rated BBB by S&P and Baa2 by Moodys.
This arrangement provides CTX Mortgage with reduced financing cost for
eligible mortgage loans it originates and improves its liquidity.

Under the terms of the HSF-I Purchase Agreement, CTX Mortgage may elect to
sell to HSF-I, and HSF-I is obligated to purchase from CTX Mortgage, mortgage
loans that satisfy certain eligibility criteria and portfolio requirements.
The maximum amount of mortgage loans that HSF-I is allowed to carry in its
inventory under the HSF-I Purchase Agreement is limited to $2.5 billion.

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. These termination events primarily

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relate to events of default under, or other failure to comply with, the provisions, including loan
portfolio limitations, of the agreements that govern the mortgage loan warehouse program
but also include a downgrade in Centex Corporations credit ratings below BB+
by S&P or Ba1 by Moodys. In the event CTX Mortgage was unable to sell loans
to HSF-I, it would draw on existing credit facilities currently held in
addition to HSF-I. In addition, it might need to make other customary
financing arrangements to fund its mortgage loan origination activities.
Although we believe that CTX Mortgage 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 CTX Mortgage.

In accordance with the HSF-I Purchase Agreement, CTX Mortgage acts as
servicer of the loans owned by HSF-I and arranges for the sale of the eligible
mortgage loans into the secondary market. In its capacity as servicer, CTX
Mortgage must act in the best interests of HSF-I so as to maximize the proceeds
of sales of eligible mortgage loans. The performance of obligations of CTX
Mortgage, solely in its capacity as servicer, is guaranteed by Centex
Corporation. These servicer obligations include the obligation of the servicer
to repurchase a mortgage loan from HSF-I in the event of a breach of the
servicers representations and warranties, which materially and adversely
affects the value of the mortgage loan and is not cured within 60 days.

HSF-I has entered into a swap arrangement with a bank, that we refer to as
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
and non-credit related market 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 P1 from Moodys. Additionally, we
have entered into a separate swap arrangement with the bank pursuant to which
we have 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, and the bank is required to pay to
us all amounts that the bank receives from HSF-I pursuant to the Harwood Swap.
Accordingly, we effectively bear all interest rate risks and non-credit related
market risks that are the subject of the Harwood Swap. We are also required to
reimburse the bank for certain expenses, costs and damages that it may incur.

As of December 31, 2002, HSF-I owned $2.1 billion in securitized
residential mortgage loans sold to it by CTX Mortgage and had $2.0 billion of
outstanding securitized term debt and $114.0 million of outstanding
subordinated certificates. We do not guarantee the payment of any debt or
subordinated certificates of HSF-I, and we are not liable for credit losses
relating to securitized residential mortgage loans sold to HSF-I. However, we
do retain certain risks related to the portfolio of mortgage loans held by
HSF-I. In particular, CTX Mortgage 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
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, as seller or
servicer. Centex Corporation guarantees CTX Mortgages obligation to repurchase such loans.
During the nine months ended December 31, 2002, CTX Mortgage sold $7.5 billion
of mortgage loans to HSF-I.

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3333 Holding Corporation, 3333 Development Corporation and Centex Development
Company, L.P.

3333 Holding Corporation, 3333 Development Corporation and the Partnership
are entities that are neither affiliates of, nor consolidated with Centex
Corporation. These entities were established in 1987 to broaden the range of
business activities that may be conducted for the benefit of our stockholders
to include general real estate development. We determined that this expansion
would improve stockholder value through longer-term real estate investments,
real estate developments and the benefits of the partnership form of business.
Because the real estate development business generally requires a longer time
horizon to maximize value than our core homebuilding operations and typically
involves substantial acquisition and development indebtedness, we concluded
that this new line of business could best be conducted through the Partnership,
an independent, publicly-traded entity that is not consolidated with us. The
Partnership is managed by its general partner, 3333 Development Corporation, a
wholly-owned subsidiary of 3333 Holding Corporation. We generally are not
liable for the obligations of 3333 Holding Corporation, 3333 Development
Corporation or the Partnership. However, as of December 31, 2002, we
guaranteed approximately $2.6 million of indebtedness of the Partnership. In
addition, we enter into certain land purchase and other transactions with the
Partnership. For additional information regarding these entities, see the financial statements of the Partnership, filed in tandem with
this Report. In addition, for information regarding these entities and
Centex Corporation, on an aggregate basis, see Note (G) of the Notes to
Consolidated Financial Statements of Centex Corporation.

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. Our investment in these non-consolidated joint
ventures was $94.4 million and $94.6 million at December 31, 2002 and March 31,
2002, respectively. These joint ventures had total outstanding secured
construction debt of approximately $213.3 million at December 31, 2002 and
$144.6 million at March 31, 2002. Our liability with respect to this debt,
based on our ownership percentage of the related joint ventures, is limited to
approximately $35.4 million and $27.9 million at December 31, 2002 and March
31, 2002, 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 December 31, 2002 and March
31, 2002, we were not liable for any of this debt.

Letters of Credit and Guarantees

At December 31, 2002, we had outstanding letters of credit of $103.0
million that primarily relate to projects undertaken by Construction Services
and development obligations of Home Building. We expect that the obligations
secured by these letters of credit will generally be performed by our
subsidiaries in the ordinary course of business and in accordance with the
applicable contractual terms. To the extent that the underlying commercial
obligations are performed by our subsidiaries, the related letters of credit
will be released and we will not have any continuing obligations. We have no
material third-party guarantees.

RECENT ACCOUNTING PRONOUNCEMENTS

In August 2001, the Financial Accounting Standards Board, or FASB, issued
Statement of Financial Accounting Standards No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets, or SFAS No. 144. The statement
is effective for financial statements issued for fiscal years beginning after
December 15, 2001, and interim periods within those fiscal years. The
implementation of SFAS No. 144 on April 1, 2002 did not have a material impact
on our results of operations or financial position.

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In November 2002, the FASB issued Interpretation No. 45, Guarantors
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others, or FIN 45, which requires certain
guarantees to be recorded at fair value. FIN 45 also requires a guarantor to
make certain disclosures about guarantees, including product warranties, even
when the likelihood of making any payments under the guarantee is remote. The
disclosure requirements of FIN 45 are effective for financial statements of
interim or annual periods ending after December 15, 2002. The initial
recognition and measurement provisions are applicable only for guarantees
issued or modified after December 31, 2002. We do not expect the
implementation of FIN 45 to have a material impact on our results of operations
or financial position.

In January 2003, the FASB issued Interpretation No. 46, Consolidation of
Variable Interest Entities, or FIN 46, which clarifies the application of
Accounting Research Bulletin No. 51, Consolidated Financial Statements, to
certain entities in which equity investors do not have the characteristics of a
controlling financial interest or do not have sufficient equity at risk for the
entity to finance its activities without additional subordinated financial
support from other parties. Certain disclosure requirements of FIN 46 are
effective for financial statements of interim or annual periods issued after
January 31, 2003. FIN 46 applies immediately to variable interest entities
created, or in which an enterprise obtains an interest, after January 31, 2003.
FIN 46 applies to interim or annual periods beginning after June 15, 2003, for
variable interest entities in which an enterprise holds a variable interest
that it acquired before February 1, 2003. We have interests in the
Partnership, HSF-I and certain joint ventures that may be affected by this
interpretation. The nature of these entities operations and our potential
maximum exposure related to these entities are discussed in the financial
statements of the Partnership, filed in tandem with this Report, and in Note
(F), Note (G) and Note (H) of the Notes to Consolidated Financial Statements of
Centex Corporation. We are in the process of assessing the impact, if any, FIN
46 will have on our financial statements.

We have historically accounted for stock-based compensation in accordance
with Accounting Principles Board Opinion No. 25, Accounting for Stock Issued
to Employees, or APB No. 25, and related interpretations, as permitted by
Statement of Financial Accounting Standards No. 123, Accounting for
Stock-Based Compensation, or SFAS No. 123. On April 1, 2003, we will adopt
the fair value measurement provisions of SFAS No. 123 under which we will
recognize compensation expense of a stock-based award to an employee over the
vesting period based on the fair value of the award on the grant date. In
accordance with SFAS No. 123, the fair value method will be applied only to
awards granted or modified after April 1, 2003, whereas awards granted prior to
such date will continue to be accounted for under APB No. 25.

In December 2002, the FASB issued Statement of Financial Accounting
Standards No. 148, Accounting for Stock Based Compensation-Transition and
Disclosure (SFAS No. 148), which provides for expanded disclosure concerning
stock-based compensation, including disclosures in interim financial
statements, and amends SFAS No. 123. SFAS No. 148s transition guidance and
provisions for annual disclosures are effective for fiscal years ending after
December 15, 2002. As noted above, the Company will adopt the fair value
measurement provisions of SFAS No. 123 effective April 1, 2003. SFAS No. 148
will become effective for the Company for its first interim period ending June
30, 2003.

OTHER DEVELOPMENTS

On January 2, 2003, Centex Homes completed the previously announced
acquisition of substantially all of the St. Louis and Indianapolis home
building operations of The Jones Company, including approximately 5,000
controlled lots. For the twelve months ended December 31, 2002, The Jones
Company delivered 733 homes at an average sales price of $260,000.

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On January 28, 2003, the Company issued $300.0 million of medium-term
notes at 4.75%. The notes will mature on January 15, 2008. The proceeds from
these notes were used to repay certain short-term borrowings and for general
corporate purposes.



---

Various sections of this Report, including Managements Discussion and
Analysis of Financial Condition and Results of Operations, 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
guarantees of future performance and involve a number of risks and
uncertainties. Actual results and outcomes may differ materially from what we
express or forecast in these forward-looking statements. In addition to the
specific uncertainties discussed elsewhere in this Report, the following risks
and uncertainties may affect our actual performance and results of operations:



| |  | Our residential Home Building operations are somewhat cyclical and sensitive to
changes in 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 residential Home Building operations are also subject to other risks and
uncertainties, including seasonal variations, adverse weather conditions, the
availability of adequate land in desirable locations, the cost and availability of
labor and construction materials, labor disputes, the general demand for housing
and new construction and the resale market for existing homes.                                                                                                                   
| 
| |  | Our Construction Services operations are also somewhat cyclical and sensitive to
changes in economic conditions, including overall capital spending trends in the
economy, changes in federal and state appropriations for construction projects 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 cost and availability of labor and construction materials; labor
disputes; the ability to meet performance or schedule guarantees and cost overruns.                                                                                               
| 
| |  | Virtually all of our homebuyers finance their home acquisitions through our
Financial Services operations or third party lenders. In general, our Home
Building operations can be adversely affected by increases in interest rates.                                                                                                                                                                                                                                                                            
| 
| |  | The results of operations of CTX Mortgage depend to a significant extent on the
level of interest rates. Any significant increases in mortgage rates above
currently prevailing levels could adversely affect the volume of loan originations.
There can be no assurance that mortgage rates will remain at the current level in
the future. Our mortgage loan operations are also dependent upon the
securitization market for mortgage-backed securities and the availability of
mortgage warehouse financing.

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| |  | Demand for the products that our Construction Products operations produce is
directly related to activity in the homebuilding and construction industries and to
general economic conditions. Our Construction Products operations are also
concentrated in particular regional and local markets that may experience cyclical
downturns at different times than the national economy. The price at which we
sell our construction products, particularly gypsum wallboard, is highly sensitive
to changes in supply and demand for such products, energy costs, raw material
prices and competition from other domestic and foreign producers.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | All of our businesses operate in very competitive environments, which are
characterized by competition from a number of other homebuilders, mortgage lenders,
construction products producers and contractors in each of the markets in which we
operate.                                                                                                                                                                                                                                                                                                                                                                                      
| 
| |  | 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 by other changes in regulation or policy.                                                                                                                                                                                                                                                     




Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risks related to fluctuations in interest rates
on our direct debt obligations, on mortgage loans receivable, residual interest
in mortgage securitizations and securitizations classified as debt. We utilize
derivative instruments, including interest rate swaps, in conjunction with our
overall strategy to manage the debt outstanding that is subject to changes in
interest rates. We utilize forward sale commitments to mitigate the risk
associated with the majority of our mortgage loan portfolio. Other than the
forward commitments and interest rate swaps discussed earlier, we do not
utilize forward or option contracts on foreign currencies or commodities, or
other types of derivative financial instruments.

There have been no material changes in our market risk from March 31,
2002. For further information regarding our market risk, refer to our Annual
Report on Form 10-K for the fiscal year ended March 31, 2002.




Item 4. 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 December 31, 2002. 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 December 31, 2002, for the purpose of ensuring that information
required to be disclosed in this Report has been processed, summarized and
reported in a timely manner. There have been no significant changes in our
internal controls or in other factors that could significantly affect internal
controls subsequent to December 31, 2002.

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Part II. Other Information

Item 6. Exhibits and Reports on Form 8-K



| | (1) |  | Exhibits                                                                                                                                                                                                                                                                                                                                                                  
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |     |  | None                                                                                                                                                                                                                                                                                                                                                                      
|
| | (2) |  | Reports on Form 8-K                                                                                                                                                                                                                                                                                                                                                       
|
| |     |  | Current Report on Form 8-K of Centex Corporation dated October
22, 2002, announcing the Companys financial results for the
quarter ended September 30, 2002.                                                                                                                                                                                                             
|
| |     |  | Current Joint Report on Form 8-K of Centex Corporation, 3333
Holding Corporation and Centex Development Company, L.P. dated
November 12, 2002, furnishing the certification of the Chief
Executive Officer and the Chief Financial Officer of Centex
Corporation pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
| |     |  | Current Report on Form 8-K of Centex Corporation dated November
18, 2002, announcing that Centex Corporation was raising its
earnings expectations for fiscal 2003 (its current fiscal year)
and fiscal 2004.                                                                                                                                                             
|
| |     |  | Current Report on Form 8-K of Centex Corporation dated November
19, 2002, announcing certain increases over prior periods
during portions of the quarter ending December 31, 2002 in homebuilding unit sales.                                                                                                                                                             
|
| |     |  | Current Report on Form 8-K of Centex Corporation dated November
20, 2002, filing certain exhibits in connection with the public
offering of $35,000,000 aggregate principal amount of the
Companys 5.461% Senior Notes due 2007.                                                                                                                                         

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Signatures

Pursuant to the requirements 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                                                                                         
|                  |  |                                                                                                    
|February 14, 2003 |  | /s/ Leldon E. Echols                                                                               
|                  |  |                                                                                                    
|                  |  | Leldon E. Echols
Executive Vice President and
Chief Financial Officer
(principal financial officer)

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Certifications

I, Laurence E. Hirsch, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of Centex Corporation;

2.     Based on my knowledge, this quarterly 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 quarterly
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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 quarterly 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-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures 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 quarterly report is being prepared;

b) evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and

c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5.     The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrants ability to record, process,
summarize and report financial data and have identified for the registrants
auditors any material weaknesses in internal controls; 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;
and

6.     The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: February 14, 2003

|                                                                 
|-----------------------------------------------------------------
|/s/ Laurence E. Hirsch
Laurence E. Hirsch
Chief Executive Officer

-44-



---



##### Table of Contents



Certifications

I, Leldon E. Echols, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of Centex Corporation;

2.     Based on my knowledge, this quarterly 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 quarterly
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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 quarterly 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-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures 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 quarterly report is being prepared;

b) evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and

c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5.     The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrants ability to record, process,
summarize and report financial data and have identified for the registrants
auditors any material weaknesses in internal controls; 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;
and

6.     The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: February 14, 2003

|                                                             
|-------------------------------------------------------------
|/s/ Leldon E. Echols
Leldon E. Echols
Chief Financial Officer

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##### Table of Contents









Part I. Financial Information

Item 1. Financial Statements




3333 Holding Corporation and Subsidiary
and Centex Development Company, L.P. and Subsidiaries
Condensed Combining Statements of Operations
(Dollars in thousands, except per unit/share data)
(unaudited)

|                                                        |                                                                                                                       |   |                                         |       |  |              |               |       |                |              |       |          |  |   |              |     |               |                |         |              |  |   |       |   | 
|------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------- | - | --------------------------------------- | ----- |  | ------------ | ------------- | ----- | -------------- | ------------ | ----- | -------- |  | - | ------------ | --- | ------------- | -------------- | ------- | ------------ |  | - | ----- | - | 
|                                                        |                                                                                                                       |   |                                         |      
|                                                        |                                                                                                                       |   | For the Three Months Ended December 31, |      
|                                                        |                                                                                                                       |   |                                         |      
|                                                        |                                                                                                                       |   | 2002                                    |       |  | 2001         |              
|                                                        |                                                                                                                       |   |                                         |       |  |              |              
|                                                        |                                                                                                                       |   |                                         |       |  |              | Centex        |       |                |              |       |          |  |   |              |     |               | Centex         |         |              |  |   |      
|                                                        |                                                                                                                       |   |                                         |       |  |              | Development   |       |                |              |       |          |  |   |              |     |               | Development    |         |              |  |   |      
|                                                        |                                                                                                                       |   |                                         |       |  |              | Company, L.P. |       |                | 3333 Holding |       |          |  |   |              |     | Company, L.P. |                |         | 3333 Holding | 
|                                                        |                                                                                                                       |   |                                         |       |  |              | and           |       |                | Corporation  |       |          |  |   |              |     | and           |                |         | Corporation  | 
|                                                        |                                                                                                                       |   | Combined                                |       |  | Subsidiaries |               |       | and Subsidiary |              |       | Combined |  |   | Subsidiaries |     |               | and Subsidiary |        
|                                                        |                                                                                                                       |   |                                         |       |  |              |               |       |                |              |       |          |  |   |              |     |               |                |        
|Revenues                                                |                                                                                                                       | $ | 106,212                                 |       |  | $            | 106,162       |       |                | $            | 87    |          |  | $ | 95,038       |     |               | $              | 94,213  |              |  | $ | 838   |  
|Costs and Expenses                                      |                                                                                                                       |   | 100,680                                 |       |  |              | 100,645       |       |                |              | 72    |          |  |   | 89,425       |     |               |                | 89,386  |              |  |   | 52    |  
|                                                        |                                                                                                                       |   |                                         |       |  |              |               |       |                |              |       |          |  |   |              |     |               |               
|Earnings from Continuing Operations Before
Income Taxes |                                                                                                                       |   | 5,532                                   |       |  |              | 5,517         |       |                |              | 15    |          |  |   | 5,613        |     |               |                | 4,827   |              |  |   | 786   |  
|Income Taxes                                            |                                                                                                                       |   | 1,187                                   |       |  |              | 1,187         |       |                |              |      |          |  |   | 236          |     |               |                | 210     |              |  |   | 26    |  
|                                                        |                                                                                                                       |   |                                         |       |  |              |               |       |                |              |       |          |  |   |              |     |               |               
|Net Earnings from Continuing Operations                 |                                                                                                                       |   | 4,345                                   |       |  |              | 4,330         |       |                |              | 15    |          |  |   | 5,377        |     |               |                | 4,617   |              |  |   | 760   |  
|Discontinued Operations:                                |                                                                                                                       |   |                                         |       |  |              |               |       |                |              |       |          |  |   |              |     |               |                |         |              |  |   |       |  
|                                                        | Earnings from Discontinued Operations
(Including Gain on Sale of $9,315 for
the Three
Months Ended December 31, 2002) |   |                                         | 8,771 |  |              |               | 8,771 |                |              |       |         |  |   |              | 161 |               |                |         | 161          |  |   |       |  | 
|                                                        |                                                                                                                       |   |                                         |       |  |              |               |       |                |              |       |          |  |   |              |     |               |               
|Net Earnings                                            |                                                                                                                       | $ | 13,116                                  |       |  | $            | 13,101        |       |                | $            | 15    |          |  | $ | 5,538        |     |               | $              | 4,778   |              |  | $ | 760   |  
|                                                        |                                                                                                                       |   |                                         |       |  |              |               |       |                |              |       |          |  |   |              |     |               |               
|Net Earnings Allocable to Limited Partners              |                                                                                                                       |   |                                         |       |  | $            | 13,101        |       |                |              |       |          |  |   |              |     |               | $              | 4,778   |              |  |   |       |  
|                                                        |                                                                                                                       |   |                                         |       |  |              |               |       |                |              |       |          |  |   |              |     |               |                |         |              | 
|Earnings Per Unit/Share                                 |                                                                                                                       |   |                                         |       |  | $            | 54.45         |       |                | $            | 15    |          |  |   |              |     |               | $              | 20.84   |              |  | $ | 760   |  
|                                                        |                                                                                                                       |   |                                         |       |  |              |               |       |                |              |       |          |  |   |              |     |               |                |         |             
|Weighted-Average Units/Shares Outstanding               |                                                                                                                       |   |                                         |       |  |              | 240,591       |       |                |              | 1,000 |          |  |   |              |     |               |                | 229,277 |              |  |   | 1,000 |  

See Notes to Condensed Combining Financial Statements.

Transactions between Centex Development Company, L.P. and Subsidiaries and
3333 Holding Corporation and Subsidiary have been eliminated.

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---



##### Table of Contents



3333 Holding Corporation and Subsidiary
and Centex Development Company, L.P. and Subsidiaries
Condensed Combining Statements of Operations
(Dollars in thousands, except per unit/share data)
(unaudited)

|                                                        |                                                                                                                      |   |                                        |       |  |              |               |       |                |              |       |          |  |   |              |     |               |                |         |              |  |   |       |   | 
|------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------- | - | -------------------------------------- | ----- |  | ------------ | ------------- | ----- | -------------- | ------------ | ----- | -------- |  | - | ------------ | --- | ------------- | -------------- | ------- | ------------ |  | - | ----- | - | 
|                                                        |                                                                                                                      |   |                                        |      
|                                                        |                                                                                                                      |   | For the Nine Months Ended December 31, |      
|                                                        |                                                                                                                      |   |                                        |      
|                                                        |                                                                                                                      |   | 2002                                   |       |  | 2001         |              
|                                                        |                                                                                                                      |   |                                        |       |  |              |              
|                                                        |                                                                                                                      |   |                                        |       |  |              | Centex        |       |                |              |       |          |  |   |              |     |               | Centex         |         |              |  |   |      
|                                                        |                                                                                                                      |   |                                        |       |  |              | Development   |       |                |              |       |          |  |   |              |     |               | Development    |         |              |  |   |      
|                                                        |                                                                                                                      |   |                                        |       |  |              | Company, L.P. |       |                | 3333 Holding |       |          |  |   |              |     | Company, L.P. |                |         | 3333 Holding | 
|                                                        |                                                                                                                      |   |                                        |       |  |              | and           |       |                | Corporation  |       |          |  |   |              |     | and           |                |         | Corporation  | 
|                                                        |                                                                                                                      |   | Combined                               |       |  | Subsidiaries |               |       | and Subsidiary |              |       | Combined |  |   | Subsidiaries |     |               | and Subsidiary |        
|                                                        |                                                                                                                      |   |                                        |       |  |              |               |       |                |              |       |          |  |   |              |     |               |                |        
|Revenues                                                |                                                                                                                      | $ | 299,346                                |       |  | $            | 299,271       |       |                | $            | 187   |          |  | $ | 263,694      |     |               | $              | 262,259 |              |  | $ | 1,548 |  
|Costs and Expenses                                      |                                                                                                                      |   | 290,634                                |       |  |              | 290,618       |       |                |              | 128   |          |  |   | 251,086      |     |               |                | 250,976 |              |  |   | 223   |  
|                                                        |                                                                                                                      |   |                                        |       |  |              |               |       |                |              |       |          |  |   |              |     |               |               
|Earnings from Continuing Operations
Before Income Taxes |                                                                                                                      |   | 8,712                                  |       |  |              | 8,653         |       |                |              | 59    |          |  |   | 12,608       |     |               |                | 11,283  |              |  |   | 1,325 |  
|Income Taxes                                            |                                                                                                                      |   | 1,496                                  |       |  |              | 1,496         |       |                |              |      |          |  |   | 945          |     |               |                | 919     |              |  |   | 26    |  
|                                                        |                                                                                                                      |   |                                        |       |  |              |               |       |                |              |       |          |  |   |              |     |               |               
|Net Earnings from Continuing Operations                 |                                                                                                                      |   | 7,216                                  |       |  |              | 7,157         |       |                |              | 59    |          |  |   | 11,663       |     |               |                | 10,364  |              |  |   | 1,299 |  
|Discontinued Operations:                                |                                                                                                                      |   |                                        |       |  |              |               |       |                |              |       |          |  |   |              |     |               |                |         |              |  |   |       |  
|                                                        | Earnings from Discontinued Operations
(Including Gain on Sale of $9,596 for the
Nine Months Ended December 31, 2002) |   |                                        | 9,204 |  |              |               | 9,204 |                |              |       |         |  |   |              | 332 |               |                |         | 332          |  |   |       |  | 
|                                                        |                                                                                                                      |   |                                        |       |  |              |               |       |                |              |       |          |  |   |              |     |               |               
|Net Earnings                                            |                                                                                                                      | $ | 16,420                                 |       |  | $            | 16,361        |       |                | $            | 59    |          |  | $ | 11,995       |     |               | $              | 10,696  |              |  | $ | 1,299 |  
|                                                        |                                                                                                                      |   |                                        |       |  |              |               |       |                |              |       |          |  |   |              |     |               |               
|Net Earnings Allocable to Limited Partners              |                                                                                                                      |   |                                        |       |  | $            | 16,361        |       |                |              |       |          |  |   |              |     |               | $              | 10,696  |              |  |   |       |  
|                                                        |                                                                                                                      |   |                                        |       |  |              |               |       |                |              |       |          |  |   |              |     |               |                |         |              |  |  
|Earnings Per Unit/Share                                 |                                                                                                                      |   |                                        |       |  | $            | 68.00         |       |                | $            | 59    |          |  |   |              |     |               | $              | 48.50   |              |  | $ | 1,299 |  
|                                                        |                                                                                                                      |   |                                        |       |  |              |               |       |                |              |       |          |  |   |              |     |               |                |         |             
|Weighted-Average Units/Shares Outstanding               |                                                                                                                      |   |                                        |       |  |              | 240,591       |       |                |              | 1,000 |          |  |   |              |     |               |                | 220,547 |              |  |   | 1,000 |  

See Notes to Condensed Combining Financial Statements.

Transactions between Centex Development Company, L.P. and Subsidiaries and
3333 Holding Corporation and Subsidiary have been eliminated.

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##### Table of Contents






3333 Holding Corporation and Subsidiary
and Centex Development Company, L.P. and Subsidiaries
Condensed Combining Balance Sheets
(Dollars in thousands)

|                                                        |                            |                   |         |                    |         |   |                  |             |         |            |             |       |          |   |         |              |         |             |            |        |             |   |        |       |       | 
|------------------------------------------------------- | -------------------------- | ----------------- | ------- | ------------------ | ------- | - | ---------------- | ----------- | ------- | ---------- | ----------- | ----- | -------- | - | ------- | ------------ | ------- | ----------- | ---------- | ------ | ----------- | - | ------ | ----- | ----- | 
|                                                        |                            |                   |         |                    |         |   |                  |            
|                                                        |                            |                   |         | December 31, 2002* |         |   | March 31, 2002** |            
|                                                        |                            |                   |         |                    |         |   |                  |            
|                                                        |                            |                   |         |                    |         |   |                  | Centex      |         |            |             |       |          |   |         |              |         |             | Centex     |        |             |   |        |      
|                                                        |                            |                   |         |                    |         |   |                  | Development |         |            | 3333        |       |          |   |         |              |         | Development |            |        | 3333        |  
|                                                        |                            |                   |         |                    |         |   |                  | Company,    |         |            | Holding     |       |          |   |         |              |         | Company,    |            |        | Holding     |  
|                                                        |                            |                   |         |                    |         |   |                  | L.P.        |         |            | Corporation |       |          |   |         |              |         | L.P.        |            |        | Corporation |  
|                                                        |                            |                   |         |                    |         |   |                  | and         |         |            | and         |       |          |   |         |              |         | and         |            |        | and         |  
|                                                        |                            |                   |         | Combined           |         |   | Subsidiaries     |             |         | Subsidiary |             |       | Combined |   |         | Subsidiaries |         |             | Subsidiary |       
|                                                        |                            |                   |         |                    |         |   |                  |             |         |            |             |       |          |   |         |              |         |             |            |       
|Assets                                                  |                            |                   |         |                    |         |   |                  |             |         |            |             |       |          |   |         |              |         |             |            |        |             |   |        |      
|Cash and Cash Equivalents                               |                            | $                 | 31,850  |                    |         | $ | 31,824           |             |         | $          | 26          |       |          | $ | 22,538  |              |         | $           | 22,529     |        |             | $ | 9      |      
|Accounts Receivable                                     |                            |                   | 9,204   |                    |         |   | 13,318           |             |         |            | 185         |       |          |   | 7,232   |              |         |             | 11,529     |        |             |   | 71     |      
|Inventories                                             |                            |                   | 502,517 |                    |         |   | 502,517          |             |         |            |            |       |          |   | 440,825 |              |         |             | 440,825    |        |             |   |       |      
|Investments-                                            |                            |                   |         |                    |         |   |                  |             |         |            |             |       |          |   |         |              |         |             |            |        |             |   |        |      
|                                                        | Commercial Properties, net |                   |         | 111,395            |         |   |                  | 111,395     |         |            |             |      |          |   |         | 96,772       |         |             |            | 96,772 |             |   |        |      |      
|                                                        | Real Estate Joint Ventures |                   |         | 4,042              |         |   |                  | 4,042       |         |            |             |      |          |   |         | 5,353        |         |             |            | 5,353  |             |   |        |      |      
|                                                        | Affiliate                  |                   |         |                   |         |   |                  |            |         |            |             | 1,191 |          |   |         |             |         |             |            |       |             |   |        | 1,191 |      
|Assets Held for Sale                                    |                            |                   |        |                    |         |   |                 |             |         |            |            |       |          |   | 43,907  |              |         |             | 43,907     |        |             |   |       |      
|Property and Equipment, net                             |                            |                   | 3,419   |                    |         |   | 3,419            |             |         |            |            |       |          |   | 3,212   |              |         |             | 3,212      |        |             |   |       |      
|Other Assets-                                           |                            |                   |         |                    |         |   |                  |             |         |            |             |       |          |   |         |              |         |             |            |        |             |   |        |      
|                                                        | Goodwill, net              |                   |         | 31,273             |         |   |                  | 31,273      |         |            |             |      |          |   |         | 27,799       |         |             |            | 27,799 |             |   |        |      |      
|                                                        | Deferred Charges and Other |                   |         | 25,592             |         |   |                  | 23,821      |         |            |             | 1,771 |          |   |         | 20,798       |         |             |            | 19,027 |             |   |        | 1,771 |      
|                                                        |                            |                   |         |                    |         |   |                  |             |         |            |             |       |          |   |         |              |         |            
|                                                        |                            | $                 | 719,292 |                    |         | $ | 721,609          |             |         | $          | 3,173       |       |          | $ | 668,436 |              |         | $           | 670,953    |        |             | $ | 3,042  |      
|                                                        |                            |                   |         |                    |         |   |                  |             |         |            |             |       |          |   |         |              |         |            
|Liabilities, Stockholders Equity
And Partners Capital |                            |                   |         |                    |         |   |                  |             |         |            |             |       |          |   |         |              |         |             |            |        |             |   |        |      
|Accounts Payable and Accrued
Liabilities                |                            | $                 | 121,186 |                    |         | $ | 121,052          |             |         | $          | 4,482       |       |          | $ | 118,127 |              |         | $           | 118,134    |        |             | $ | 4,410  |      
|Liabilities Related to Assets Held
for Sale             |                            |                   |        |                    |         |   |                 |             |         |            |            |       |          |   | 35,397  |              |         |             | 35,397     |        |             |   |       |      
|Notes Payable                                           |                            |                   | 296,812 |                    |         |   | 296,812          |             |         |            |            |       |          |   | 252,765 |              |         |             | 252,765    |        |             |   |       |      
|                                                        |                            |                   |         |                    |         |   |                  |             |         |            |             |       |          |   |         |              |         |            
|                                                        |                            | Total Liabilities |         |                    | 417,998 |   |                  |             | 417,864 |            |             |       | 4,482    |   |         |              | 406,289 |             |            |        | 406,296     |   |        |       | 4,410 | 
|                                                        |                            |                   |         |                    |         |   |                  |             |         |            |             |       |          |   |         |              |         |            
|Stockholders Equity and
Partners Capital              |                            |                   | 301,294 |                    |         |   | 303,745          |             |         |            | (1,309      | )     |          |   | 262,147 |              |         |             | 264,657    |        |             |   | (1,368 | )    
|                                                        |                            |                   |         |                    |         |   |                  |             |         |            |             |       |          |   |         |              |         |            
|                                                        |                            | $                 | 719,292 |                    |         | $ | 721,609          |             |         | $          | 3,173       |       |          | $ | 668,436 |              |         | $           | 670,953    |        |             | $ | 3,042  |      
|                                                        |                            |                   |         |                    |         |   |                  |             |         |            |             |       |          |   |         |              |         |            

* Unaudited
** Condensed from audited financial statements.See Notes to Condensed Combining Financial Statements.

Transactions between Centex Development Company, L.P. and Subsidiaries and
3333 Holding Corporation and Subsidiary have been eliminated.

-48-



---



##### Table of Contents






3333 Holding Corporation and Subsidiary
and Centex Development Company, L.P. and Subsidiaries
Condensed Combining Statements of Cash Flows
(Dollars in thousands)
(unaudited)

|                                                                              |                                        |   |                                        |       |   |              |             |       |            |             |      |          |  |   |              |       |             |            |          |             |   |   |        |   | 
|----------------------------------------------------------------------------- | -------------------------------------- | - | -------------------------------------- | ----- | - | ------------ | ----------- | ----- | ---------- | ----------- | ---- | -------- |  | - | ------------ | ----- | ----------- | ---------- | -------- | ----------- | - | - | ------ | - | 
|                                                                              |                                        |   |                                        |      
|                                                                              |                                        |   | For the Nine Months Ended December 31, |      
|                                                                              |                                        |   |                                        |      
|                                                                              |                                        |   | 2002                                   |       |   | 2001         |            
|                                                                              |                                        |   |                                        |       |   |              |            
|                                                                              |                                        |   |                                        |       |   |              | Centex      |       |            |             |      |          |  |   |              |       |             | Centex     |          |             |   |   |       
|                                                                              |                                        |   |                                        |       |   |              | Development |       |            | 3333        |      |          |  |   |              |       | Development |            |          | 3333        |  
|                                                                              |                                        |   |                                        |       |   |              | Company,    |       |            | Holding     |      |          |  |   |              |       | Company,    |            |          | Holding     |  
|                                                                              |                                        |   |                                        |       |   |              | L.P.        |       |            | Corporation |      |          |  |   |              |       | L.P.        |            |          | Corporation |  
|                                                                              |                                        |   |                                        |       |   |              | and         |       |            | and         |      |          |  |   |              |       | and         |            |          | and         |  
|                                                                              |                                        |   | Combined                               |       |   | Subsidiaries |             |       | Subsidiary |             |      | Combined |  |   | Subsidiaries |       |             | Subsidiary |         
|                                                                              |                                        |   |                                        |       |   |              |             |       |            |             |      |          |  |   |              |       |             |            |         
|Cash Flows  Operating Activities                                             |                                        |   |                                        |       |   |              |             |       |            |             |      |          |  |   |              |       |             |            |          |             |   |   |        |  
|Net Earnings                                                                  |                                        | $ | 16,420                                 |       |   | $            | 16,361      |       |            | $           | 59   |          |  | $ | 11,995       |       |             | $          | 10,696   |             |   | $ | 1,299  |  
|Adjustments:                                                                  |                                        |   |                                        |       |   |              |             |       |            |             |      |          |  |   |              |       |             |            |          |             |   |   |        |  
|                                                                              | Depreciation and Amortization          |   |                                        | 4,321 |   |              |             | 4,321 |            |             |      |         |  |   |              | 2,957 |             |            |          | 2,957       |   |   |        |  | 
|                                                                              | Equity in Earnings from Joint
Ventures |   |                                        | (600  | ) |              |             | (600  | )          |             |      |         |  |   |              | (145  | )           |            |          | (145        | ) |   |        |  | 
|Decrease (Increase) in Receivables                                            |                                        |   | 803                                    |       |   |              | 917         |       |            |             | (114 | )        |  |   | 4,812        |       |             |            | 4,962    |             |   |   | (150   | )
|Increase in Restricted Cash                                                   |                                        |   |                                       |       |   |              |            |       |            |             |     |          |  |   | (5,000       | )     |             |            | (5,000   | )           |   |   |       |  
|Decrease in Notes Receivable                                                  |                                        |   |                                       |       |   |              |            |       |            |             |     |          |  |   | 14           |       |             |            | 14       |             |   |   |       |  
|(Increase) Decrease in Inventories                                            |                                        |   | (15,504                                | )     |   |              | (15,504     | )     |            |             |     |          |  |   | (103,342     | )     |             |            | (104,565 | )           |   |   | 1,223  |  
|Decrease (Increase) in Commercial
Properties                                  |                                        |   | 17,766                                 |       |   |              | 17,766      |       |            |             |     |          |  |   | (22,884      | )     |             |            | (22,884  | )           |   |   |       |  
|Increase in Other Assets                                                      |                                        |   | (3,058                                 | )     |   |              | (3,058      | )     |            |             |     |          |  |   | (8,282       | )     |             |            | (6,611   | )           |   |   | (1,671 | )
|(Decrease) Increase in Payables
and Accruals                                  |                                        |   | (10,178                                | )     |   |              | (10,250     | )     |            |             | 72   |          |  |   | 25,236       |       |             |            | 25,995   |             |   |   | (759   | )
|                                                                              |                                        |   |                                        |       |   |              |             |       |            |             |      |          |  |   |              |       |             |           
|                                                                              |                                        |   | 9,970                                  |       |   |              | 9,953       |       |            |             | 17   |          |  |   | (94,639      | )     |             |            | (94,581  | )           |   |   | (58    | )
|                                                                              |                                        |   |                                        |       |   |              |             |       |            |             |      |          |  |   |              |       |             |           
|Cash Flows  Investing Activities                                             |                                        |   |                                        |       |   |              |             |       |            |             |      |          |  |   |              |       |             |            |          |             |   |   |        |  
|Decrease (Increase) in Advances to
Joint Ventures and Investment in
Affiliate |                                        |   | 1,911                                  |       |   |              | 1,911       |       |            |             |     |          |  |   | (3,569       | )     |             |            | (3,569   | )           |   |   |       |  
|(Additions) Disposals of Property
and Equipment, net                          |                                        |   | (211                                   | )     |   |              | (211        | )     |            |             |     |          |  |   | (83          | )     |             |            | (144     | )           |   |   | 61     |  
|                                                                              |                                        |   |                                        |       |   |              |             |       |            |             |      |          |  |   |              |       |             |           
|                                                                              |                                        |   | 1,700                                  |       |   |              | 1,700       |       |            |             |     |          |  |   | (3,652       | )     |             |            | (3,713   | )           |   |   | 61     |  
|                                                                              |                                        |   |                                        |       |   |              |             |       |            |             |      |          |  |   |              |       |             |           
|Cash Flows  Financing Activities                                             |                                        |   |                                        |       |   |              |             |       |            |             |      |          |  |   |              |       |             |            |          |             |   |   |        |  
|(Decrease) Increase in Notes
Payable                                          |                                        |   | (4,682                                 | )     |   |              | (4,682      | )     |            |             |     |          |  |   | 76,446       |       |             |            | 76,446   |             |   |   |       |  
|Issuance of Class C Units                                                     |                                        |   |                                       |       |   |              |            |       |            |             |     |          |  |   | 19,400       |       |             |            | 19,400   |             |   |   |       |  
|                                                                              |                                        |   |                                        |       |   |              |             |       |            |             |      |          |  |   |              |       |             |           
|                                                                              |                                        |   | (4,682                                 | )     |   |              | (4,682      | )     |            |             |     |          |  |   | 95,846       |       |             |            | 95,846   |             |   |   |       |  
|                                                                              |                                        |   |                                        |       |   |              |             |       |            |             |      |          |  |   |              |       |             |           
|Effect of Exchange Rate Changes
on Cash                                       |                                        |   | 2,324                                  |       |   |              | 2,324       |       |            |             |     |          |  |   | (346         | )     |             |            | (346     | )           |   |   |       |  
|                                                                              |                                        |   |                                        |       |   |              |             |       |            |             |      |          |  |   |              |       |             |           
|Net Increase (Decrease) in Cash                                               |                                        |   | 9,312                                  |       |   |              | 9,295       |       |            |             | 17   |          |  |   | (2,791       | )     |             |            | (2,794   | )           |   |   | 3      |  
|Cash at Beginning of Period                                                   |                                        |   | 22,538                                 |       |   |              | 22,529      |       |            |             | 9    |          |  |   | 3,034        |       |             |            | 3,029    |             |   |   | 5      |  
|                                                                              |                                        |   |                                        |       |   |              |             |       |            |             |      |          |  |   |              |       |             |           
|Cash at End of Period                                                         |                                        | $ | 31,850                                 |       |   | $            | 31,824      |       |            | $           | 26   |          |  | $ | 243          |       |             | $          | 235      |             |   | $ | 8      |  
|                                                                              |                                        |   |                                        |       |   |              |             |       |            |             |      |          |  |   |              |       |             |           

See Notes to Condensed Combining Financial Statements.

Transactions between Centex Development Company, L.P. and Subsidiaries and
3333 Holding Corporation and Subsidiary have been eliminated.

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3333 Holding Corporation and Subsidiary
and Centex Development Company, L.P. and Subsidiaries
Notes to Condensed Combining Financial Statements
December 31, 2002
(Dollars in thousands, except per share data)
(unaudited)

(A)  BASIS OF PRESENTATION

The condensed combining interim financial statements include the accounts
of 3333 Holding Corporation (Holding) and subsidiary and Centex Development
Company, L.P. (the Partnership) and subsidiaries (collectively, the
Companies) after elimination of all significant intercompany balances and
transactions. These statements have been prepared, without audit, in
accordance with accounting principles generally accepted in the United States
for interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, certain information and footnote
disclosures normally included in financial statements prepared in accordance
with accounting principles generally accepted in the United States have been
condensed or omitted.

In the opinion of the Companies, all adjustments (consisting of normal,
recurring accruals) necessary to present fairly the information in the
condensed combining financial statements of the Companies have been included.
The results of operations for such interim periods are not necessarily
indicative of the results for the full year. The Companies suggest that these
condensed combining financial statements be read in conjunction with the
financial statements and the notes thereto included in the Companies latest
Annual Report on Form 10-K.

(B) ORGANIZATION

The Partnership is a master limited partnership formed by Centex
Corporation and subsidiaries (Centex) in March 1987 to broaden the range of
business activities that may be conducted for the benefit of Centexs
stockholders to include general real estate development. Centex believed that
this expansion would improve stockholder value through longer-term real estate
investments, real estate developments and the benefits of the partnership form
of business. Because the real estate development business generally requires a
longer time horizon to maximize value than Centexs core homebuilding
operations and typically involves substantial acquisition and development
indebtedness, Centex concluded that this new line of business could best be
conducted through the Partnership, an independent, publicly-traded entity that
is not consolidated with Centex for financial reporting purposes.

The Partnership is authorized to issue three classes of limited
partnership interest. Centex Corporation indirectly holds 100% of the
Partnerships Class A and Class C limited partnership units (Class A Units
and Class C Units, respectively), which are collectively convertible into 20%
of the Partnerships Class B limited partnership units (Class B Units). The
Partnership may issue additional Class C Units in connection with the
acquisition of real property and other assets. No Class B Units have been
issued. However, the stockholders of Centex hold warrants to purchase
approximately 80% of the Class B Units. The warrants are held through a
nominee arrangement and trade in tandem with the common stock of Centex.

As holder of the Class A and Class C Units, Centex is entitled to a
cumulative preferred return of 9% per annum on the average outstanding balance
of its capital contributions to the Partnership, adjusted for cash and other
distributions representing return of capital. As of December 31, 2002, these
adjusted capital

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contributions, or Unrecovered Capital, were $241.1 million and preference
payments in arrears totaled $57.7 million. The Partnership has made no
preference payments since fiscal 1998.

The Partnership is managed by its general partner, 3333 Development
Corporation, a wholly-owned subsidiary of Holding. The common stock of Holding
is held by the stockholders of Centex through a nominee arrangement and trades
in tandem with the common stock of Centex. The stockholders of Centex elect
the four-person board of directors of Holding, three of whom are independent
outside directors who are not directors, affiliates or employees of Centex.
Thus, through Holding, the stockholders of Centex control the general partner
of the Partnership. The general partner, through its independent board and the
independent board of Holding, including its non-executive Chairman, oversees
the Partnerships activities, including the acquisition, development,
maintenance, operation and sale of properties. Consent of the limited partners
for the activities of the Partnership is not required, and the limited partners
cannot remove the general partner. As a result, Centex accounts for its
limited partnership interest in the Partnership using the equity method of
accounting for investments.

See Note (G) to the consolidated financial statements of Centex included
elsewhere in this Report for supplementary condensed combined financial
statements for Centex and subsidiaries, Holding and subsidiary, and the
Partnership and subsidiaries.

(C) STATEMENTS OF COMBINING CASH FLOWS  SUPPLEMENTAL DISCLOSURES

|                                                 |  |                      |       |  |                     |   |       |      |  |   |        |  |  |   |        | 
|------------------------------------------------ |  | -------------------- | ----- |  | ------------------- | - | ----- | ---- |  | - | ------ |  |  | - | ------ | 
|                                                 |  |                      |       |  |                     |  
|                                                 |  | For the Three Months |       |  | For the Nine Months |  
|                                                 |  | Ended December 31,   |       |  | Ended December 31,  |  
|                                                 |  |                      |       |  |                     |  
|                                                 |  | 2002                 |       |  | 2001                |   |       | 2002 |  |   | 2001   | 
|                                                 |  |                      |       |  |                     |   |       |      |  |   |        | 
|Cash Paid for Interest                           |  | $                    | 4,550 |  |                     | $ | 3,611 |      |  | $ | 13,673 |  |  | $ | 10,740 | 
|                                                 |  |                      |       |  |                     |   |       |      |  |   |        | 
|Net Cash Paid for Taxes                          |  | $                    | 692   |  |                     | $ | 1,570 |      |  | $ | 1,740  |  |  | $ | 2,137  | 
|                                                 |  |                      |       |  |                     |   |       |      |  |   |        | 
|Issuance of Class C Units
in Exchange for Assets |  | $                    |      |  |                     | $ |      |      |  | $ |       |  |  | $ | 757    | 
|                                                 |  |                      |       |  |                     |   |       |      |  |   |        | 

|                        |  |                      |        |   |                     |   |        |      |  |   |        |   |  |   |        |  
|----------------------- |  | -------------------- | ------ | - | ------------------- | - | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                        |  |                      |        |   |                     |  
|                        |  | For the Three Months |        |   | For the Nine Months |  
|                        |  | Ended December 31,   |        |   | Ended December 31,  |  
|                        |  |                      |        |   |                     |  
|                        |  | 2002                 |        |   | 2001                |   |        | 2002 |  |   | 2001   |  
|                        |  |                      |        |   |                     |   |        |      |  |   |        |  
|Total Interest Incurred |  | $                    | 5,103  |   |                     | $ | 3,785  |      |  | $ | 13,933 |   |  | $ | 10,865 |  
|Interest Capitalized    |  |                      | (1,791 | ) |                     |   | (1,406 | )    |  |   | (4,406 | ) |  |   | (4,252 | )
|                        |  |                      |        |   |                     |   |        |      |  |   |        |  
|Interest Expense        |  | $                    | 3,312  |   |                     | $ | 2,379  |      |  | $ | 9,527  |   |  | $ | 6,613  |  
|                        |  |                      |        |   |                     |   |        |      |  |   |        |  

(D) RELATED PARTY TRANSACTIONS

At December 31, 2002 and March 31, 2002, Centex Homes had $11.4 million
and $9.1 million deposited with the Partnership as option deposits for the
purchase of land. 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 nine months ended
December 31, 2002, Centex Homes paid

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$2.6 million to the Partnership in fees and reimbursements pursuant to
these agreements and $27.4 million for the purchase of residential lots.
Centex Homes expects to pay an additional $32.9 million to the Partnership to
complete the purchase of these tracts of land over the next three years.

In the last two years, Construction Services has executed contracts with
the Partnership for the construction of two industrial facilities. At December
31, 2002, all contracts were completed. At March 31, 2002, the total value of
such contracts was $15.0 million, of which $5.3 million was unpaid. During the
nine months ended December 31, 2002 and 2001, the Partnership paid $5.3 million
and $3.3 million, respectively, to Construction Services pursuant to these
contracts.

(E) COMPREHENSIVE INCOME

A summary of comprehensive income for the three and nine months ended
December 31, 2002 and 2001 is presented below:

|                                   |                                               |   |                      |       |  |                     |       |        |      |   |        |        |   |   |        |       | 
|---------------------------------- | --------------------------------------------- | - | -------------------- | ----- |  | ------------------- | ----- | ------ | ---- | - | ------ | ------ | - | - | ------ | ----- | 
|                                   |                                               |   |                      |       |  |                    
|                                   |                                               |   | For the Three Months |       |  | For the Nine Months |      
|                                   |                                               |   | Ended December 31,   |       |  | Ended December 31,  |      
|                                   |                                               |   |                      |       |  |                     |      
|                                   |                                               |   | 2002                 |       |  | 2001                |       |        | 2002 |   |        | 2001   |  
|                                   |                                               |   |                      |       |  |                     |       |        |      |   |        |        |  
|Net Earnings                       |                                               | $ | 13,116               |       |  | $                   | 5,538 |        |      | $ | 16,420 |        |   | $ | 11,995 |      
|Other Comprehensive Income (Loss): |                                               |   |                      |       |  |                     |       |        |      |   |        |        |   |   |        |      
|                                   | Foreign Currency Translation Adjustments      |   |                      | 5,829 |  |                     |       | (2,973 | )    |   |        | 23,462 |   |   |        | 5,031 | 
|                                   | Unrealized Gain (Loss) on Hedging
Instruments |   |                      | 91    |  |                     |       | 378    |      |   |        | (735   | ) |   |        | 378   | 
|                                   |                                               |   |                      |       |  |                     |       |        |      |   |        |       
|Comprehensive Income               |                                               | $ | 19,036               |       |  | $                   | 2,943 |        |      | $ | 39,147 |        |   | $ | 17,404 |      
|                                   |                                               |   |                      |       |  |                     |       |        |      |   |        |       

(F) STOCKHOLDERS EQUITY

A summary of changes in stockholders equity is presented below:

|                                        |                                          |   |          |        |   |          |                            |   |         |                          |       |         |           |   |          |        |   |           |           |            |           |          |          |   |  |   |        |   | 
|--------------------------------------- | ---------------------------------------- | - | -------- | ------ | - | -------- | -------------------------- | - | ------- | ------------------------ | ----- | ------- | --------- | - | -------- | ------ | - | --------- | --------- | ---------- | --------- | -------- | -------- | - |  | - | ------ | - | 
|                                        |                                          |   |          |       
|                                        |                                          |   |          |        |   |          | Centex Development Company |   |         | 3333 Holding Corporation |      
|                                        |                                          |   |          |        |   |          | L.P. and Subsidiaries      |   |         | and Subsidiary           |      
|                                        |                                          |   |          |        |   |          |                            |   |         |                          |      
|                                        |                                          |   |          |        |   |          | Class B                    |   |         | General                  |       |         | Limited   |   |          |        |   |           |           | Capital in |           |          | Retained |  
|                                        |                                          |   |          |        |   |          | Unit                       |   |         | Partner's                |       |         | Partner's |   |          | Stock  |   |           | Excess of |            |           | Earnings |         
|                                        |                                          |   | Combined |        |   | Warrants |                            |   | Capital |                          |       | Capital |           |   | Warrants |        |   | Par Value |           |            | (Deficit) |         
|                                        |                                          |   |          |        |   |          |                            |   |         |                          |       |         |           |   |          |        |   |           |           |            |           |         
|Balance at March 31, 2002               |                                          | $ | 262,147  |        |   | $        | 500                        |   |         | $                        | 1,142 |         |           | $ | 263,015  |        |   | $         | 1         |            |           | $        | 800      |   |  | $ | (2,169 | )
|Net Earnings                            |                                          |   | 16,420   |        |   |          |                           |   |         |                          |      |         |           |   | 16,361   |        |   |           |          |            |           |          |         |   |  |   | 59     |  
|Accumulated Other
Comprehensive Income: |                                          |   |          |        |   |          |                            |   |         |                          |       |         |           |   |          |        |   |           |           |            |           |          |          |   |  |   |        |  
|                                        | Foreign Currency
Translation Adjustments |   |          | 23,462 |   |          |                            |  |         |                          |       |        |           |   |          | 23,462 |   |           |           |           |           |          |          |  |  |   |        |  | 
|                                        | Unrealized Loss on
Hedging Instruments   |   |          | (735   | ) |          |                            |  |         |                          |       |        |           |   |          | (735   | ) |           |           |           |           |          |          |  |  |   |        |  | 
|                                        |                                          |   |          |        |   |          |                            |   |         |                          |       |         |           |   |          |        |   |           |           |            |          
|Balance at December 31, 2002            |                                          | $ | 301,294  |        |   | $        | 500                        |   |         | $                        | 1,142 |         |           | $ | 302,103  |        |   | $         | 1         |            |           | $        | 800      |   |  | $ | (2,110 | )
|                                        |                                          |   |          |        |   |          |                            |   |         |                          |       |         |           |   |          |        |   |           |           |            |          

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(G) BUSINESS SEGMENTS

The Companies operate in four principal business segments: International
Home Building, Commercial Development, Multi-Family Communities and
Corporate-Other. All of the segments, except for International Home Building,
operate in the United States. International Home Buildings accounting
policies are the same as those described in the summary of significant
accounting policies in the Companies latest Annual Report on Form 10-K.

International Home Building acquires and develops residential properties
and constructs single and multi-family housing units in the United Kingdom.
Commercial Development develops office, industrial, retail and mixed-use
projects, for sale and for investment. Multi-Family Communities develops
multi-family projects, which it markets for sale during the development period.
Corporate-Other is involved in the acquisition and disposition of land and
other assets of the Partnership not identified with another specific business
segment.

|                                                               |  |                                              |         |   |             |   |        |              |  |   |            |   |  |       |        |   |  |   |         |  
|-------------------------------------------------------------- |  | -------------------------------------------- | ------- | - | ----------- | - | ------ | ------------ |  | - | ---------- | - |  | ----- | ------ | - |  | - | ------- | -
|                                                               |  |                                              |        
|                                                               |  | For the Three Months Ended December 31, 2002 |        
|                                                               |  |                                              |        
|                                                               |  | Int'l Home                                   |         |   | Commercial  |   |        | Multi-Family |  |   | Corporate- |   |  |       |        |  
|                                                               |  | Building                                     |         |   | Development |   |        | Communities  |  |   | Other      |   |  | Total |       
|                                                               |  |                                              |         |   |             |   |        |              |  |   |            |   |  |       |       
|Revenues                                                       |  | $                                            | 95,348  |   |             | $ | 5,743  |              |  | $ | 796        |   |  | $     | 4,325  |   |  | $ | 106,212 |  
|Cost of Sales                                                  |  |                                              | (80,526 | ) |             |   | (879   | )            |  |   |           |   |  |       | (3,298 | ) |  |   | (84,703 | )
|Selling, General & Administrative Expenses                     |  |                                              | (8,634  | ) |             |   | (2,990 | )            |  |   | (624       | ) |  |       | (952   | ) |  |   | (13,200 | )
|Interest Expense                                               |  |                                              | (631    | ) |             |   | (1,509 | )            |  |   |           |   |  |       | (637   | ) |  |   | (2,777  | )
|                                                               |  |                                              |         |   |             |   |        |              |  |   |            |   |  |       |       
|Earnings (Loss) from Continuing Operations Before Income Taxes |  |                                              | 5,557   |   |             |   | 365    |              |  |   | 172        |   |  |       | (562   | ) |  |   | 5,532   |  
|Earnings
from Discontinued Operations Before Income Taxes      |  |                                              |        |   |             |   | 8,771  |              |  |   |           |   |  |       |       |   |  |   | 8,771   |  
|                                                               |  |                                              |         |   |             |   |        |              |  |   |            |   |  |       |       
|Earnings (Loss) Before Income Taxes                            |  | $                                            | 5,557   |   |             | $ | 9,136  |              |  | $ | 172        |   |  | $     | (562   | ) |  | $ | 14,303  |  
|                                                               |  |                                              |         |   |             |   |        |              |  |   |            |   |  |       |       
|

|                                                               |  |   |                                              |   |  |             |        |   |              |   |         |            |  |   |       |   |  |   |         |  
|-------------------------------------------------------------- |  | - | -------------------------------------------- | - |  | ----------- | ------ | - | ------------ | - | ------- | ---------- |  | - | ----- | - |  | - | ------- | -
|                                                               |  |   |                                              |  
|                                                               |  |   | For
the Three Months Ended December 31, 2001 |  
|                                                               |  |   |                                              |  
|                                                               |  |   | Int'l Home                                   |   |  | Commercial  |        |   | Multi-Family |   |         | Corporate- |  |   |       |   | 
|                                                               |  |   | Building                                     |   |  | Development |        |   | Communities  |   |         | Other      |  |   | Total |  
|                                                               |  |   |                                              |   |  |             |        |   |              |   |         |            |  |   |       |  
|Revenues                                                       |  | $ | 61,591                                       |   |  | $           | 4,237  |   |              | $ | 28,957  |            |  | $ | 253   |   |  | $ | 95,038  |  
|Cost of Sales                                                  |  |   | (52,659                                      | ) |  |             | (13    | ) |              |   | (25,150 | )          |  |   |      |   |  |   | (77,822 | )
|Selling, General & Administrative Expenses                     |  |   | (6,077                                       | ) |  |             | (2,142 | ) |              |   | (785    | )          |  |   | (698  | ) |  |   | (9,702  | )
|Interest Expense                                               |  |   | (489                                         | ) |  |             | (1,412 | ) |              |   |        |            |  |   |      |   |  |   | (1,901  | )
|                                                               |  |   |                                              |   |  |             |        |   |              |   |         |            |  |   |      
|Earnings (Loss) from Continuing Operations
Before Income Taxes |  |   | 2,366                                        |   |  |             | 670    |   |              |   | 3,022   |            |  |   | (445  | ) |  |   | 5,613   |  
|Earnings from Discontinued Operations
Before Income Taxes      |  |   |                                             |   |  |             | 161    |   |              |   |        |            |  |   |      |   |  |   | 161     |  
|                                                               |  |   |                                              |   |  |             |        |   |              |   |         |            |  |   |      
|Earnings (Loss) Before Income Taxes                            |  | $ | 2,366                                        |   |  | $           | 831    |   |              | $ | 3,022   |            |  | $ | (445  | ) |  | $ | 5,774   |  
|                                                               |  |   |                                              |   |  |             |        |   |              |   |         |            |  |   |      

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|                                                               |  |                                             |          |   |             |   |        |              |  |   |            |   |  |       |         |   |  |   |          |  
|-------------------------------------------------------------- |  | ------------------------------------------- | -------- | - | ----------- | - | ------ | ------------ |  | - | ---------- | - |  | ----- | ------- | - |  | - | -------- | -
|                                                               |  |                                             |         
|                                                               |  | For
the Nine Months Ended December 31, 2002 |         
|                                                               |  |                                             |         
|                                                               |  | Int'l Home                                  |          |   | Commercial  |   |        | Multi-Family |  |   | Corporate- |   |  |       |         |  
|                                                               |  | Building                                    |          |   | Development |   |        | Communities  |  |   | Other      |   |  | Total |        
|                                                               |  |                                             |          |   |             |   |        |              |  |   |            |   |  |       |        
|Revenues                                                       |  | $                                           | 250,774  |   |             | $ | 17,211 |              |  | $ | 1,254      |   |  | $     | 30,107  |   |  | $ | 299,346  |  
|Cost of Sales                                                  |  |                                             | (216,270 | ) |             |   | (2,012 | )            |  |   | (78        | ) |  |       | (27,398 | ) |  |   | (245,758 | )
|Selling, General & Administrative Expenses                     |  |                                             | (23,337  | ) |             |   | (8,899 | )            |  |   | (1,915     | ) |  |       | (2,863  | ) |  |   | (37,014  | )
|Interest Expense                                               |  |                                             | (1,808   | ) |             |   | (4,465 | )            |  |   |           |   |  |       | (1,589  | ) |  |   | (7,862   | )
|                                                               |  |                                             |          |   |             |   |        |              |  |   |            |   |  |       |        
|Earnings (Loss) from Continuing Operations
Before Income Taxes |  |                                             | 9,359    |   |             |   | 1,835  |              |  |   | (739)      |   |  |       | (1,743  | ) |  |   | 8,712    |  
|Earnings from Discontinued Operations
Before Income Taxes      |  |                                             |         |   |             |   | 9,204  |              |  |   |           |   |  |       |        |   |  |   | 9,204    |  
|                                                               |  |                                             |          |   |             |   |        |              |  |   |            |   |  |       |        
|Earnings (Loss) Before Income Taxes                            |  | $                                           | 9,359    |   |             | $ | 11,039 |              |  | $ | (739       | ) |  | $     | (1,743  | ) |  | $ | 17,916   |  
|                                                               |  |                                             |          |   |             |   |        |              |  |   |            |   |  |       |        

|                                                               |  |                                             |          |   |             |   |         |              |  |   |            |   |  |       |        |   |  |   |          |  
|-------------------------------------------------------------- |  | ------------------------------------------- | -------- | - | ----------- | - | ------- | ------------ |  | - | ---------- | - |  | ----- | ------ | - |  | - | -------- | -
|                                                               |  |                                             |         
|                                                               |  | For
the Nine Months Ended December 31, 2001 |         
|                                                               |  |                                             |         
|                                                               |  | Int'l Home                                  |          |   | Commercial  |   |         | Multi-Family |  |   | Corporate- |   |  |       |        |  
|                                                               |  | Building                                    |          |   | Development |   |         | Communities  |  |   | Other      |   |  | Total |       
|                                                               |  |                                             |          |   |             |   |         |              |  |   |            |   |  |       |       
|Revenues                                                       |  | $                                           | 186,130  |   |             | $ | 23,962  |              |  | $ | 52,578     |   |  | $     | 1,024  |   |  | $ | 263,694  |  
|Cost of Sales                                                  |  |                                             | (159,238 | ) |             |   | (11,190 | )            |  |   | (46,832    | ) |  |       | (707   | ) |  |   | (217,967 | )
|Selling, General & Administrative Expenses                     |  |                                             | (17,482  | ) |             |   | (6,398  | )            |  |   | (1,989     | ) |  |       | (1,700 | ) |  |   | (27,569  | )
|Interest Expense                                               |  |                                             | (1,460   | ) |             |   | (4,090  | )            |  |   |           |   |  |       |       |   |  |   | (5,550   | )
|                                                               |  |                                             |          |   |             |   |         |              |  |   |            |   |  |       |       
|Earnings (Loss) from Continuing
Operations Before Income Taxes |  |                                             | 7,950    |   |             |   | 2,284   |              |  |   | 3,757      |   |  |       | (1,383 | ) |  |   | 12,608   |  
|Earnings from Discontinued Operations
Before Income Taxes      |  |                                             |         |   |             |   | 332     |              |  |   |           |   |  |       |       |   |  |   | 332      |  
|                                                               |  |                                             |          |   |             |   |         |              |  |   |            |   |  |       |       
|Earnings (Loss) Before Income Taxes                            |  | $                                           | 7,950    |   |             | $ | 2,616   |              |  | $ | 3,757      |   |  | $     | (1,383 | ) |  | $ | 12,940   |  
|                                                               |  |                                             |          |   |             |   |         |              |  |   |            |   |  |       |       

(H) GOODWILL

The Partnerships International Home Building segment carries all of the
Partnerships goodwill, which arose from the April 15, 1999 acquisition of all
of the voting shares of Fairclough Homes Group Limited, a British homebuilder
(Fairclough). The carrying amount of goodwill was $31.3 million and $27.8
million at December 31, 2002 and March 31, 2002, respectively. The increase
during the nine months ended December 31, 2002 reflects the impact of foreign
currency translation adjustments.

(I) DERIVATIVES AND HEDGING

The Partnership is exposed to the risk of interest rate fluctuations on
its debt obligations. As part of its strategy to manage the obligations that
are subject to changes in interest rates, the Partnership has entered into an
interest rate swap agreement, designated as a cash flow hedge, on a portion of
its debt. The swap agreement is recorded at its fair value in Other Assets or
Accrued Liabilities in the condensed combining balance sheets. To the extent
the hedging relationship is effective, fluctuations in the fair value of the
derivative are deferred as a component of Accumulated Other Comprehensive
Income. Fluctuations in the fair value of the ineffective portion of the
derivative would be reflected in the current period earnings. During the three
and nine months ended December 31, 2002 there was no hedge ineffectiveness
related to this derivative.

This swap expires in March 2004. Amounts to be received or paid as a
result of the swap agreement are recognized as adjustments to interest incurred
on the related debt instrument. As of December 31, 2002, the Accumulated Other
Comprehensive Loss was $496 thousand ($347 thousand net of tax).

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(J) RECENT ACCOUNTING PRONOUNCEMENTS

In August 2001, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 144 (SFAS 144), Accounting for the
Impairment or Disposal of Long-Lived Assets, which addresses financial
accounting and reporting for the impairment or disposal of long-lived assets.
The statement was effective for the Companies beginning April 1, 2002.

Due to the adoption of SFAS 144, the Companies now report assets
identified subsequent to March 31, 2002 as held for sale (as defined by SFAS
144), if any, and any such assets sold in the current period, as discontinued
operations. All results of these discontinued operations, less applicable
income taxes, are included as discontinued operations in the statements of
operations. Land assets are reported in
continuing operations.

In November 2002, the Financial Accounting Standards Board issued
Interpretation No. 45, Guarantors Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of Others (FIN
45), which requires certain guarantees to be recorded at fair value. FIN 45
also requires a guarantor to make certain disclosures about guarantees,
including product warranties, even when the likelihood of making any payments
under the guarantee is remote. The disclosure requirements of FIN 45 are
effective for financial statements of interim or annual periods ending after
December 15, 2002. The initial recognition and measurement provisions are
applicable only for guarantees issued or modified after December 31, 2002. The
Companies do not expect the implementation of FIN 45 to have a material impact
on their financial statements.

In January 2003, the Financial Accounting Standards Board issued
Interpretation No. 46, Consolidation of Variable Interest Entities (FIN
46), which clarifies the application of Accounting Research Bulletin No. 51,
Consolidated Financial Statements, to certain entities in which equity
investors do not have the characteristics of a controlling financial interest
or do not have sufficient equity at risk for the entity to finance its
activities without additional subordinated financial support from other
parties. Certain disclosure requirements of FIN 46 are effective for financial
statements of interim or annual periods issued after January 31, 2003. FIN 46
applies immediately to variable interest entities created, or in which an
enterprise obtains an interest, after January 31, 2003. For variable interest
entities in which an enterprise holds a variable interest that it acquired
before February 1, 2003, FIN 46 applies to interim or annual periods beginning
after June 15, 2003. As discussed above in Note (B), Centex indirectly holds
100% of the Partnerships Class A and Class C Units. The manner in which
Centex reports its interest in the Partnership may be affected by this
interpretation. As discussed in Note (K) below, the Partnership also
has interests in certain joint ventures that may be affected by this interpretation.
Centex and the Companies are in the process of assessing the
impact FIN 46 will have on their respective financial statements. See Note (N)
to the consolidated financial statements of Centex included elsewhere in this
Report for further discussion regarding this interpretation.

(K) INVESTMENTS IN CERTAIN JOINT VENTURES

The Partnership conducts certain operations through its participation in
joint ventures in which the Partnership holds less than a majority interest.
These non-consolidated joint ventures had total debt outstanding of
approximately $31.7 million as of December 31, 2002 and $16.1 million as of
March 31, 2002.
The Partnerships liability for the obligations of these non-consolidated joint
ventures is limited to approximately $6.1 million as of December 31, 2002.

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(L) COMMITMENTS AND CONTINGENCIES

As of December 31, 2002, the Partnership had remaining commitments of
approximately $11.6 million on construction contracts.

To obtain construction financing for projects being developed by its
subsidiaries, the Partnership is often required to guarantee, for the benefit
of the construction lender, the completion of the project. To further
guarantee the completion of the project and the payment of the construction
loan obligations, the Partnership, in some instances, also has issued demand
notes made payable to its subsidiaries of up to 20% of the construction loan
commitment amount. The subsidiaries then pledge the demand notes to the
lenders as a form of additional collateral on the construction loans. The
demand notes are payable only in the event of default on the construction
loans. As of December 31, 2002, the Partnership had issued demand notes
totaling $1.6 million. In some instances, the Partnership has also executed
partial recourse payment guarantees. At December 31, 2002, our subsidiaries
had outstanding letters of credit of $0.5 million that primarily relate to
development obligations of Multi-Family Communities.

Subsidiaries of the Partnership have also obtained demand notes or letters
of credit from Centex for up to 10% of the construction loan commitment amount.
These demand notes or letters of credit have been pledged or endorsed to the
lenders as additional collateral on the construction loans, and may be called
only in the event of an uncured default by the Partnership. This additional
collateral totals approximately $2.6 million as of December 31, 2002.

In the normal course of its business, the Partnership issues certain
representations, warranties and guarantees related to its home sales, land
sales and building sales that may be affected by the Financial Accounting
Standards Boards recent issuance of FIN 45. Based on historical evidence, the
Company does not believe that any of these representations, warranties or
guarantees would result in a material effect on our consolidated financial
condition or operations. See further discussion on our warranty liability
below. See further discussion of FIN 45 in Note (J), Recent Accounting
Pronouncements.

International Home Building offers a ten-year limited warranty for most
homes constructed and sold in the United Kingdom. The warranty covers 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. International 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 International
Home Buildings warranty liability include the number of homes closed,
historical and anticipated rates of warranty claims and cost per claim.
International Home Building periodically assesses the adequacy of its recorded
warranty liability and adjusts the amounts as necessary.

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Changes in International Home Buildings contractual warranty liability
during the period are as follows:

|                                |  |   |        |  
|------------------------------- |  | - | ------ | -
|Balance as of March 31, 2002    |  | $ | 2,279  |  
|Warranties Issued               |  |   | 4,259  |  
|Settlements Made                |  |   | (2,894 | )
|                                |  |   |       
|Balance as of December 31, 2002 |  | $ | 3,644  |  

(M) RECLASSIFICATIONS

Certain prior year balances have been reclassified to be consistent with
the December 31, 2002 presentation.

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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations

On a combined basis, our revenues were $106.2 million for the three months
ended December 31, 2002, an 11.8% increase over our revenues of $95.0 million
for the same period last year. On a combined basis, our revenues were $299.3
million for the nine months ended December 31, 2002, a 13.5% increase over our
revenues of $263.7 million for the same period last year. The revenue increase
is primarily related to Corporate-Others sale of residential lots to Centex
Homes and an increase in International Home Buildings unit closings, average
unit sales price and revenues from the sale of certain land positions.
However, the revenue increase was offset by a decline in Commercial
Developments and Multi-Family Communities sales revenues. Revenues from
residential lot sales, multi-family project sales and commercial project and
land sales can vary significantly from period to period.

Our operating earnings from continuing operations for the three months
ended December 31, 2002 were $5.5 million compared to operating earnings from
continuing operations of $5.6 million for the same period last year. Our net
earnings from continuing operations for the three months ended December 31,
2002 were $4.3 million compared to net earnings from continuing operations of
$5.4 million for the same period last year. Our operating earnings from
continuing operations for the nine months ended December 31, 2002 were $8.7
million compared to operating earnings from continuing operations of $12.6
million for the same period last year. Our net earnings from continuing
operations for the nine months ended December 31, 2002 were $7.2 million
compared to net earnings from continuing operations of $11.7 million for the
same period last year. The decrease in operating earnings and net earnings
from continuing operations for the three and nine months ended December 31,
2002 is primarily related to a decline in Multi-Family Communities earnings
from property sales, offset by increased earnings from International Home
Buildings sale of certain land positions.

Our net earnings from discontinued operations for the three and nine
months ended December 31, 2002 were $8.8 million and $9.2 million,
respectively. In accordance with Statement of Financial Accounting Standards No. 144, or SFAS 144, Accounting for the Impairment or
Disposal of Long-Lived Assets, effective for us beginning April 1, 2002, we
now report assets as discontinued operations if such assets are held for sale
(as defined by SFAS 144), or if such assets are sold in the current period. We
sold five of these properties during the three months ended December 31, 2002,
and sold one property during the prior three months. Land assets are reported in continuing operations.

Any reference herein to we, us or our includes 3333 Holding Corporation
and subsidiary and Centex Development Company, L.P. and subsidiaries.

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INTERNATIONAL HOME BUILDING

The following summarizes International Home Buildings results for the
three and nine months ended December 31, 2002 compared to the same periods last
year (dollars in thousands, except per unit data):

|                                    |  |                                         |         |   |      |          |       |    |  |          |         |   |  |  |       |    | 
|----------------------------------- |  | --------------------------------------- | ------- | - | ---- | -------- | ----- | -- |  | -------- | ------- | - |  |  | ----- | -- | 
|                                    |  |                                         |        
|                                    |  | For the Three Months Ended December 31, |        
|                                    |  |                                         |        
|                                    |  | 2002                                    |         |   | 2001 |         
|                                    |  |                                         |         |   |      |         
|Revenues  Home Building            |  | $                                       | 77,484  |   |      |          | 81.3  | %  |  | $        | 61,471  |   |  |  | 99.8  | % 
|Revenues  Land Sales & Other       |  |                                         | 17,864  |   |      |          | 18.7  | %  |  |          | 120     |   |  |  | 0.2   | % 
|Cost of Sales  Home Building       |  |                                         | (68,109 | ) |      |          | (71.4 | %) |  |          | (52,549 | ) |  |  | (85.3 | %)
|Cost of Sales  Land Sales          |  |                                         | (12,417 | ) |      |          | (13.0 | %) |  |          | (110    | ) |  |  | (0.2  | %)
|General and Administrative Expenses |  |                                         | (8,634  | ) |      |          | (9.1  | %) |  |          | (6,077  | ) |  |  | (9.9  | %)
|                                    |  |                                         |         |   |      |          |       |    |  |          |         |  
|Operating Earnings                  |  |                                         | 6,188   |   |      |          | 6.5   | %  |  |          | 2,855   |   |  |  | 4.6   | % 
|Interest                            |  |                                         | (631    | ) |      |          | (0.7  | %) |  |          | (489    | ) |  |  | (0.8  | %)
|                                    |  |                                         |         |   |      |          |       |    |  |          |         |  
|Earnings Before Income Taxes        |  | $                                       | 5,557   |   |      |          | 5.8   | %  |  | $        | 2,366   |   |  |  | 3.8   | % 
|                                    |  |                                         |         |   |      |          |       |    |  |          |         |  
|                                    |  |                                         |         |   |      | % Change |       |    |  | % Change
|Units Closed                        |  |                                         | 324     |   |      |          | 2.2   | %  |  |          | 317     |   |  |  | 30.5  | % 
|Unit Sales Price                    |  | $                                       | 239,148 |   |      |          | 23.3  | %  |  | $        | 193,915 |   |  |  | (5.4  | %)
|Operating Earnings Per Unit         |  | $                                       | 19,099  |   |      |          | 112.1 | %  |  | $        | 9,006   |   |  |  | 329.9 | % 
|Backlog Units                       |  |                                         | 475     |   |      |          | 105.6 | %  |  |          | 231     |   |  |  | 24.9  | % 

|                                    |  |                                        |          |   |      |          |       |    |  |   |          |          |  |  |       |    | 
|----------------------------------- |  | -------------------------------------- | -------- | - | ---- | -------- | ----- | -- |  | - | -------- | -------- |  |  | ----- | -- | 
|                                    |  |                                        |         
|                                    |  | For the
Nine Months Ended December 31, |         
|                                    |  |                                        |         
|                                    |  | 2002                                   |          |   | 2001 |         
|                                    |  |                                        |          |   |      |         
|Revenues  Home Building            |  | $                                      | 229,041  |   |      |          | 91.3  | %  |  | $ | 182,212  |          |  |  | 97.9  | % 
|Revenues  Land Sales & Other       |  |                                        | 21,733   |   |      |          | 8.7   | %  |  |   | 3,918    |          |  |  | 2.1   | % 
|Cost of Sales  Home Building       |  |                                        | (200,033 | ) |      |          | (79.8 | %) |  |   | (156,108 | )        |  |  | (83.9 | %)
|Cost of Sales  Land Sales          |  |                                        | (16,237  | ) |      |          | (6.5  | %) |  |   | (3,130   | )        |  |  | (1.7  | %)
|General and Administrative Expenses |  |                                        | (23,337  | ) |      |          | (9.3  | %) |  |   | (17,482  | )        |  |  | (9.4  | %)
|                                    |  |                                        |          |   |      |          |       |    |  |   |          |         
|Operating Earnings                  |  |                                        | 11,167   |   |      |          | 4.4   | %  |  |   | 9,410    |          |  |  | 5.0   | % 
|Interest                            |  |                                        | (1,808   | ) |      |          | (0.7  | %) |  |   | (1,460   | )        |  |  | (0.8  | %)
|                                    |  |                                        |          |   |      |          |       |    |  |   |          |         
|Earnings Before Income Taxes        |  | $                                      | 9,359    |   |      |          | 3.7   | %  |  | $ | 7,950    |          |  |  | 4.2   | % 
|                                    |  |                                        |          |   |      |          |       |    |  |   |          |         
|                                    |  |                                        |          |   |      | % Change |       |    |  |   |          | % Change
|Units Closed                        |  |                                        | 976      |   |      |          | 4.8   | %  |  |   | 931      |          |  |  | 10.7  | % 
|Unit Sales Price                    |  | $                                      | 234,673  |   |      |          | 19.9  | %  |  | $ | 195,716  |          |  |  | (5.2  | %)
|Operating Earnings Per Unit         |  | $                                      | 11,442   |   |      |          | 13.2  | %  |  | $ | 10,107   |          |  |  | 170.1 | % 
|Backlog Units                       |  |                                        | 475      |   |      |          | 105.6 | %  |  |   | 231      |          |  |  | 24.9  | % 

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International Home Buildings revenues for the three months ended December
31, 2002 increased by $33.8 million from revenues for the same period last
year. This increase is comprised of $14.4 million from an increase in the
average unit sales price, $1.7 million from an increase in the number of units
closed and $17.7 million from increased sales of certain land positions. Home
sales totaled 324 units during the three months ended December 31, 2002,
compared to 317 units during the same period in the preceding year,
representing a 2.2% increase. International Home Buildings revenues for the
nine months ended December 31, 2002 increased by $64.6 million from revenues
for the same period last year. This increase is comprised of $36.3 million
from an increase in the average unit sales price, $10.6 million from an
increase in the number of units closed and $17.7 million from increased sales
of certain land positions. Home sales totaled 976 units during the nine months
ended December 31, 2002, compared to 931 units during the same period in the
preceding year, representing a 4.8% increase.

International Home Buildings gross homebuilding margins decreased for the
three months ended December 31, 2002 to 12.1% from 14.5% in the same period
last year, and decreased for the nine months ended December 31, 2002 to 12.7%
from 14.3% in the same period last year. These declines in gross margins were
primarily due to liquidation of remaining units in completed neighborhoods at
discounted prices, which resulted in lower margins, and increases in labor
costs caused by a shortage of skilled labor.

International Home Buildings general and administrative expenses, as a
percentage of revenues, decreased 0.8% and 0.1%, respectively, for the three
and nine months ended December 31, 2002 compared to the same periods last year,
primarily due to increased revenues, offset by the addition of personnel.

International Home Buildings financial statements are affected by
fluctuations in exchange rates. International Home Building, whose functional
currency is the British pound sterling, translates its financial statements
into U.S. dollars. Income statement accounts are translated using the average
exchange rate for the period, except for significant, non-recurring
transactions that are translated at the rate in effect as of the date of the
transaction. For the three months ended December 31, 2002 and 2001,
respectively, the average exchange rate used for translation was 1.57 and 1.44,
representing an increase of 8.9%. For the nine months ended December 31, 2002
and 2001, respectively, the average exchange rate used for translation was 1.53
and 1.44, representing an increase of 6.5% over the prior year.

The backlog of homes sold but not closed at December 31, 2002 was 475
units, 105.6% more than the 231 units at the same point in the preceding year.

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COMMERCIAL DEVELOPMENT

The following summarizes Commercial Developments results for the three
and nine months ended December 31, 2002, compared to the same periods last year
(dollars and square feet in thousands):

|                                            |  |                      |        |   |                     |   |        |      |  |   |        |   |  |   |         |  
|------------------------------------------- |  | -------------------- | ------ | - | ------------------- | - | ------ | ---- |  | - | ------ | - |  | - | ------- | -
|                                            |  |                      |        |   |                     |  
|                                            |  | For the Three Months |        |   | For the Nine Months |  
|                                            |  | Ended December 31,   |        |   | Ended December 31,  |  
|                                            |  |                      |        |   |                     |  
|                                            |  | 2002                 |        |   | 2001                |   |        | 2002 |  |   | 2001   |  
|                                            |  |                      |        |   |                     |   |        |      |  |   |        |  
|Sales Revenues                              |  | $                    | 1,900  |   |                     | $ | 95     |      |  | $ | 4,235  |   |  | $ | 12,597  |  
|Rental Income and Other Revenues            |  |                      | 3,843  |   |                     |   | 4,142  |      |  |   | 12,976 |   |  |   | 11,365  |  
|Cost of Sales                               |  |                      | (879   | ) |                     |   | (13    | )    |  |   | (2,012 | ) |  |   | (11,190 | )
|Selling, General and Administrative Expense |  |                      | (2,175 | ) |                     |   | (1,418 | )    |  |   | (6,099 | ) |  |   | (4,336  | )
|Interest                                    |  |                      | (1,509 | ) |                     |   | (1,412 | )    |  |   | (4,465 | ) |  |   | (4,090  | )
|                                            |  |                      |        |   |                     |   |        |      |  |   |        |  
|Operating Earnings Before Depreciation      |  |                      | 1,180  |   |                     |   | 1,394  |      |  |   | 4,635  |   |  |   | 4,346   |  
|Depreciation                                |  |                      | (815   | ) |                     |   | (724   | )    |  |   | (2,800 | ) |  |   | (2,062  | )
|                                            |  |                      |        |   |                     |   |        |      |  |   |        |  
|Operating Earnings                          |  |                      | 365    |   |                     |   | 670    |      |  |   | 1,835  |   |  |   | 2,284   |  
|Earnings from Discontinued Operations       |  |                      | 8,771  |   |                     |   | 161    |      |  |   | 9,204  |   |  |   | 332     |  
|                                            |  |                      |        |   |                     |   |        |      |  |   |        |  
|Earnings Before Income Taxes                |  | $                    | 9,136  |   |                     | $ | 831    |      |  | $ | 11,039 |   |  | $ | 2,616   |  
|                                            |  |                      |        |   |                     |   |        |      |  |   |        |  
|Operating Square Footage at December 31     |  |                      | 2,370  |   |                     |   | 1,933  |      |  |   | 2,370  |   |  |   | 1,933   |  

Commercial Developments operations during the nine months ended December 31, 2002 included:



| |  |  | sale of five pad sites at the Vista Ridge retail project in
Lewisville, Texas;                         
| | - |  | -------------------------------------------------------------------------------------------------------
|
| |  |  | completion of shell construction for a 228,000 square foot industrial
building in Grand Prairie, Texas;
|
| |  |  | completion of shell construction for a 58,000 square foot retail center in Lewisville, Texas;          
|
| |  |  | completion of a 40,000 square foot office project in Lewisville, Texas; and                            
|
| |  |  | completion of a 45,000 square foot industrial project in Oxnard, California.                           

Commercial Developments discontinued operations during the nine months ended
December 31, 2002 included:



| |  |  | sale of a 40,000 square foot industrial building in Oxnard,
California, which was sold during the three months ended September 30,
2002;              
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | sale of a 40,000 square foot office project in Lewisville, Texas,
which was sold during the three months ended December 31, 2002;                     
|
| |  |  | sale of a 283,000 square foot industrial project in Tolleson,
Arizona, which was sold during the three months ended December 31, 2002;                
|
| |  |  | sale of two office buildings totaling 219,000 square feet in
Plantation, Florida, which were sold during the three months ended
December 31, 2002; and
|
| |  |  | sale of a 45,000 square foot industrial project in Oxnard,
California, which was sold during the three months ended December 31,
2002.                

Sales revenues and cost of sales for fiscal 2003 reflect the sale of the
pad sites referred to above. Sales revenues and cost of sales for fiscal 2002
reflect the sale of two industrial projects and approximately two acres of
land. Rental income and other revenues; selling, general and administrative
expenses; interest

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expense and depreciation increased for the three and nine months ended December
31, 2002 compared to the same periods in the preceding year as a result of the
increase in the square footage of our operating properties since December 31,
2001.

|                     |  |                   |       |  |                   |  |      |          |  |  |           |  |  |  |      |  
|-------------------- |  | ----------------- | ----- |  | ----------------- |  | ---- | -------- |  |  | --------- |  |  |  | ---- | -
|                     |  |                   |       |  |                   | 
|                     |  | December 31, 2002 |       |  | December 31, 2001 | 
|                     |  |                   |       |  |                   | 
|                     |  | (000's)           |       |  | Weighted          |  |      | (000's)  |  |  | Weighted  | 
|                     |  | Rentable          |       |  | Average           |  |      | Rentable |  |  | Average   | 
|                     |  | Sq. Ft.           |       |  | Occupancy         |  |      | Sq. Ft.  |  |  | Occupancy | 
|                     |  |                   |       |  |                   |  |      |          |  |  |           | 
|Operating Properties |  |                   |       |  |                   |  |      |          |  |  |           |  |  |  |      |  
|Industrial           |  |                   | 1,969 |  |                   |  | 79.7 | %        |  |  | 1,394     |  |  |  | 88.6 | %
|Office/Medical       |  |                   | 343   |  |                   |  | 71.6 | %        |  |  | 539       |  |  |  | 83.2 | %
|Retail               |  |                   | 58    |  |                   |  | 74.8 | %        |  |  |          |  |  |  |     |  
|                     |  |                   |       |  |                   |  |      |          |  |  |           |  |  | 
|                     |  |                   | 2,370 |  |                   |  | 78.3 | %        |  |  | 1,933     |  |  |  | 87.1 | %
|                     |  |                   |       |  |                   |  |      |          |  |  |           |  |  | 

|                            |  |          |     |  |  |  |  |  |          |  |       |  |  |  |  | 
|--------------------------- |  | -------- | --- |  |  |  |  |  | -------- |  | ----- |  |  |  |  | 
|                            |  | (000's)  |     |  |  |  |  |  | (000's)  |  |       |  |  | 
|                            |  | Rentable |     |  |  |  |  |  | Rentable |  |       |  |  | 
|                            |  | Sq. Ft.  |     |  |  |  |  |  | Sq. Ft.  |  |       |  |  | 
|                            |  |          |     |  |  |  |  |  |          |  |       |  |  | 
|Projects Under Construction |  |          |     |  |  |  |  |  |          |  |       | 
|Industrial                  |  |          | 155 |  |  |  |  |  |          |  | 969   | 
|Office/Medical              |  |          |    |  |  |  |  |  |          |  | 62    | 
|Retail                      |  |          | 136 |  |  |  |  |  |          |  | 194   | 
|                            |  |          |     |  |  |  |  |  |          | 
|                            |  |          | 291 |  |  |  |  |  |          |  | 1,225 | 
|                            |  |          |     |  |  |  |  |  |          | 

MULTI-FAMILY COMMUNITIES

The following summarizes the results of Multi-Family Communities for the
three and nine months ended December 31, 2002, compared to the same periods
last year (dollars in thousands):

|                                             |  |                      |      |   |                     |   |         |      |  |   |        |   |  |   |         |  
|-------------------------------------------- |  | -------------------- | ---- | - | ------------------- | - | ------- | ---- |  | - | ------ | - |  | - | ------- | -
|                                             |  |                      |      |   |                     |  
|                                             |  | For the Three Months |      |   | For the Nine Months |  
|                                             |  | Ended December 31,   |      |   | Ended December 31,  |  
|                                             |  |                      |      |   |                     |  
|                                             |  | 2002                 |      |   | 2001                |   |         | 2002 |  |   | 2001   |  
|                                             |  |                      |      |   |                     |   |         |      |  |   |        |  
|Revenues                                     |  | $                    | 796  |   |                     | $ | 28,957  |      |  | $ | 1,254  |   |  | $ | 52,578  |  
|Cost of Sales                                |  |                      |     |   |                     |   | (25,150 | )    |  |   | (78    | ) |  |   | (46,832 | )
|Selling, General and
Administrative Expenses |  |                      | (624 | ) |                     |   | (785    | )    |  |   | (1,915 | ) |  |   | (1,989  | )
|                                             |  |                      |      |   |                     |   |         |      |  |   |        |  
|Operating Earnings (Loss)                    |  | $                    | 172  |   |                     | $ | 3,022   |      |  | $ | (739   | ) |  | $ | 3,757   |  
|                                             |  |                      |      |   |                     |   |         |      |  |   |        |  

During the nine months ended December 31, 2002, Multi-Family Communities
revenues consisted of development and related fees on various development
projects and an earn-out payment related to the prior sale of a 382-unit rental
apartment complex in St. Petersburg, Florida. During the nine months ended
December 31, 2001, Multi-Family Communities closed on the sale of a 400-unit
apartment complex in Grand Prairie, Texas and a 382-unit apartment complex in
St. Petersburg, Florida.

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As of December 31, 2002, Multi-Family Communities owns 984 rental
apartment units under construction in Florida and Texas and is developing an
additional 336 rental apartment units in Texas for unaffiliated owners.
Multi-Family Communities is also redeveloping a 21-acre site in downtown Saint
Paul, Minnesota, into a mixed-use project containing for sale and for rent
housing units and related retail.

CORPORATE-OTHER

The following summarizes the results of Corporate-Other for the three and
nine months ended December 31, 2002, compared to the same periods last year
(dollars in thousands):

|                                             |  |                      |        |   |                     |   |      |      |  |   |         |   |  |   |        |  
|-------------------------------------------- |  | -------------------- | ------ | - | ------------------- | - | ---- | ---- |  | - | ------- | - |  | - | ------ | -
|                                             |  |                      |        |   |                     |  
|                                             |  | For the Three Months |        |   | For the Nine Months |  
|                                             |  | Ended December 31,   |        |   | Ended December 31,  |  
|                                             |  |                      |        |   |                     |  
|                                             |  | 2002                 |        |   | 2001                |   |      | 2002 |  |   | 2001    |  
|                                             |  |                      |        |   |                     |   |      |      |  |   |         |  
|Revenues                                     |  | $                    | 4,325  |   |                     | $ | 253  |      |  | $ | 30,107  |   |  | $ | 1,024  |  
|Cost of Sales                                |  |                      | (3,298 | ) |                     |   |     |      |  |   | (27,398 | ) |  |   | (707   | )
|Selling, General
and Administrative
Expenses |  |                      | (952   | ) |                     |   | (698 | )    |  |   | (2,863  | ) |  |   | (1,700 | )
|Interest Expense                             |  |                      | (637   | ) |                     |   |     |      |  |   | (1,589  | ) |  |   |       |  
|                                             |  |                      |        |   |                     |   |      |      |  |   |         |  
|Operating Loss                               |  | $                    | (562   | ) |                     | $ | (445 | )    |  | $ | (1,743  | ) |  | $ | (1,383 | )
|                                             |  |                      |        |   |                     |   |      |      |  |   |         |  

Our Corporate-Other segment acquires and disposes of land and other assets
that are not identified with another specific business segment. Revenues and
cost of sales for the three and nine months ended December 31, 2002 relate
primarily to the sale of residential lots to Centex Homes. Revenues and cost of
sales for the three and nine months ended December 31, 2001 also relate
primarily to sales of residential lots to Centex Homes and an unaffiliated
third party.

Selling, general and administrative expenses increased 36.4% and 68.4% for
the three and nine months ended December 31, 2002 compared to the same periods
last year, primarily due to the addition of internal legal and marketing
personnel and increased real estate taxes related to Corporate-Others real
estate holdings. Interest expense for the three and nine months ended December
31, 2002 relates primarily to debt incurred to finance the purchase of these
residential lots.

LIQUIDITY AND CAPITAL RESOURCES

We finance land acquisition and development activities primarily from
financial institution borrowings, equity contributions from third-party
investors in project-specific joint ventures, seller financing, issuance of
Class C limited partnership units to Centex affiliates and cash flow from
operations, which is comprised largely of proceeds from the sale of real estate
and operating projects.

We typically finance properties under development through short-term
variable and fixed-rate secured construction loans, and to a limited extent
depending on the timing of the project construction, cash flow from operations.
Construction loans totaled $93.5 million at December 31, 2002. As properties
are completed, we either sell the properties or refinance the properties with
long-term fixed-rate debt. The proceeds from a sale or refinancing are used to
repay the construction financing. Under the terms of various construction loan
agreements, we are required to maintain certain minimum liquidity and net worth
levels. At December 31, 2002, we were in compliance with these covenants.

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Permanent commercial project loans outstanding at December 31, 2002
totaled $51.2 million compared to $74.4 million at December 31, 2001. The
project loans are collateralized by completed commercial properties and have
original terms ranging from ten to twenty-two years with fixed interest rates
ranging from 7.20% to 8.72%.

No new seller-financed land loans were obtained during the quarters ended
December 31, 2002 and 2001. Outstanding balances on seller-financed loans at
December 31, 2002 totaled $33.3 million, with terms of up to three years and
fixed interest rates ranging from 8.00% to 9.50%.

The International Home Building segment has secured a revolving bank
credit facility of 100 million in British pounds sterling. This facility
expires in March 2004. Advances under this facility totaled £74.0 million, or
$118.7 million, at December 31, 2002. Under the terms of this facility, the
International Home Building segment is required to maintain certain leverage
and interest coverage ratios and a minimum tangible net worth. At December 31,
2002 the International Home Building segment was in compliance with all of
these covenants.

No new Class C units were issued during the quarter ended December 31,
2002.

We believe that the revenues, earnings, and liquidity from the sale of
single-family homes, land sales, the sale and permanent financing of
development projects and issuance of Class C units will be sufficient to
provide the necessary funding for our current and future needs.

CERTAIN OFF-BALANCE-SHEET AND OTHER 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 certain operations through our participation in joint ventures
in which we hold less than a majority interest. These non-consolidated joint
ventures had total debt outstanding of approximately $31.7 million as of
December 31, 2002 and $16.1 million as of March 31, 2002. Our liability for
the obligations of these non-consolidated joint ventures is limited to
approximately $6.1 million as of December 31, 2002.

Letters of Credit, Guarantees and Leases

At December 31, 2002, we had outstanding performance bonds and bank
guarantees of $32.1 million that relate to projects undertaken by International
Home Building and development obligations of International Home Building.

To obtain construction financing for commercial and multi-family projects
being developed by our subsidiaries, we are often required to guarantee, for
the benefit of the construction lender, the completion of the project. To
further guarantee the completion of the project and the payment of the
construction loan obligations, we, in some instances, also have issued demand
notes made payable to our subsidiaries of up to 20% of the construction loan
commitment amount. Our subsidiaries then pledge the demand notes to the
lenders as a form of additional collateral on the construction loans. The
demand notes are payable only in the event of default on the construction
loans. As of December 31, 2002, we had issued demand notes totaling

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$1.6 million. In some instances, we have also executed partial recourse
payment guarantees. At December 31, 2002, our subsidiaries had outstanding
letters of credit of $0.5 million that primarily relate to development
obligations of Multi-Family Communities.

We expect that our subsidiaries will satisfy their loan and other
contractual obligations in the ordinary course of business and in accordance
with applicable contractual terms. As that occurs, our liability exposure will
be decreased and, eventually, we will not have any continuing obligations with
respect to these projects.

We have no material capital or operating leases.

RECENT ACCOUNTING PRONOUNCEMENTS

In August 2001, the Financial Accounting Standards Board issued SFAS 144, Accounting for the
Impairment or Disposal of Long-Lived Assets, which addresses financial
accounting and reporting for the impairment or disposal of long-lived assets.
The statement was effective for us beginning April 1, 2002.

Due to the adoption of SFAS 144, we now report assets identified
subsequent to March 31, 2002 as held for sale (as defined by SFAS 144), if any,
and any such assets sold in the current period, as discontinued operations.
All results of these discontinued operations, less applicable income taxes, are
included as discontinued operations in the statements of operations. Land
assets are reported in continuing operations.

In November 2002, the Financial Accounting Standards Board issued
Interpretation No. 45, Guarantors Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of Others, or FIN
45, which requires certain guarantees to be recorded at fair value. FIN 45
also requires a guarantor to make certain disclosures about guarantees,
including product warranties, even when the likelihood of making any payments
under the guarantee is remote. The disclosure requirements of FIN 45 are
effective for financial statements of interim or annual periods ending after
December 15, 2002. The initial recognition and measurement provisions are
applicable only for guarantees issued or modified after December 31, 2002. We do not
expect the implementation of FIN 45 to have a material impact on our results of operations or financial position.

In January 2003, the Financial Accounting Standards Board issued
Interpretation No. 46, Consolidation of Variable Interest Entities, or FIN
46, which clarifies the application of Accounting Research Bulletin No. 51,
Consolidated Financial Statements, to certain entities in which equity
investors do not have the characteristics of a controlling financial interest
or do not have sufficient equity at risk for the entity to finance its
activities without additional subordinated financial support from other
parties. Certain disclosure requirements of FIN 46 are effective for financial
statements of interim or annual periods issued after January 31, 2003. FIN 46
applies immediately to variable interest entities created, or in which an
enterprise obtains an interest, after January 31, 2003. For variable interest
entities in which an enterprise holds a variable interest that it acquired
before February 1, 2003, FIN 46 applies to interim or annual periods beginning
after June 15, 2003. As discussed in Note (B) of our Notes to Condensed
Combining Financial Statements, Centex indirectly holds 100% of the
Partnerships Class A and Class C Units. The manner in which Centex reports
its interest in the Partnership may be affected by this interpretation. As discussed in Note (K) of our Notes to Condensed Combining Financial Statements,
we have interests in certain joint ventures that may be affected by this interpretation. Centex
and the Companies are in the process of assessing the impact FIN 46 will have
on their respective financial statements. See Note (N) to the consolidated
financial statements of Centex included elsewhere in this Report for further
discussion regarding this interpretation.

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---

Various sections of this Report, including Managements Discussion and Analysis
of Financial Condition and Results of Operations, contain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933,
Section 21E of the Securities Exchange Act of 1934, and the Private Securities
Litigation Reform Act of 1995. Forward-looking statements may be identified by
the context of the statement and generally arise when we are discussing our
beliefs, estimates or expectations. These statements are not guarantees of
future performance and involve a number of risks and uncertainties. Actual
results and outcomes may differ materially from what is expressed or forecasted
in these forward-looking statements. In addition to the specific uncertainties
discussed elsewhere in this Report, the following risks and uncertainties may
affect the actual performance and results of operations of the Companies:



| |  |  | Our homebuilding, commercial, multi-family and land sales operations
are somewhat cyclical and sensitive to changes in 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 homebuilding, commercial, multi-family and land sales operations
are also subject to other risks and uncertainties, including seasonal
variations, adverse weather conditions, the availability of adequate
land in desirable locations, the cost and availability of labor and
construction materials, labor disputes, the general demand for housing
and new construction and the resale market for existing homes.
|
| |  |  | All of our businesses operate in very competitive environments, which
are characterized by competition from a number of other homebuilders,
developers and landowners in each of the markets in which we operate.                                                                                                                                                                                                        
|
| |  |  | 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 by other
changes in regulation or policy.                               




Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in the Companies market risk from
March 31, 2002. For further information regarding the Companies market risk,
refer to the Companies Annual Report on Form 10-K for the fiscal year ended
March 31, 2002.




Item 4. Controls and Procedures

An evaluation has been performed under the supervision and with the
participation of the management of 3333 Holding Corporation and of Centex
Development Company, L.P. (through its general partner, 3333 Holding
Corporation), including the Chief Executive Officer and Chief Financial Officer
of both 3333 Holding Corporation and 3333 Development Corporation, of the
effectiveness of the design and operation of our disclosure controls and
procedures as of December 31, 2002. Based on that evaluation, the management
of 3333 Holding Corporation and of Centex Development Company, L.P. (through
its general partner, 3333 Holding Corporation), including the Chief Executive
Officer and Chief Financial Officer of both 3333 Holding Corporation and 3333
Development Corporation, concluded that our disclosure controls and

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procedures were effective as of December 31, 2002. There have been no
significant changes in our internal controls or in other factors that could
significantly affect internal controls subsequent to December 31, 2002.







Part II. Other Information

Item 6. Exhibits and Reports on Form 8-K



| | (3) |  | Exhibits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |     |  | None                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| | (4) |  | Reports on Form 8-K                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|
| |     |  | Current Joint Report on Form 8-K of Centex Corporation, 3333
Holding Corporation and Centex Development Company, L.P. dated
November 12, 2002, furnishing the certification of the Chief
Executive Officer and the Chief Financial Officer of 3333
Holding Corporation and the certification of the Chief
Executive Officer and the Chief Financial Officer of 3333
Development Corporation, as the general partner of Centex
Development Company, L.P., pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.

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Signatures

Pursuant to the requirements 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.

|                  |  |                                                                                                                                                             
|----------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------
|                  |  | 3333 HOLDING CORPORATIONRegistrant                                                                                                                          
|                 
|                  |  |                                                                                                                                                             
|                 
|February 14, 2003 |  | /s/ Todd D. NewmanTodd D. Newman
Senior Vice President, Chief Financial
Officer and Treasurer
(principal financial officer and
principal accounting officer)

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, 3333
Development Corporation, as general partner of, and on behalf of the
registrant, has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

|                  |  |                                                                                                                                                             
|----------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------
|                  |  | CENTEX DEVELOPMENT COMPANY, L.P.Registrant
By 3333 Development Corporation
General Partner                                                                  
|                 
|                  |  |                                                                                                                                                             
|                 
|February 14, 2003 |  | /s/ Todd D. NewmanTodd D. Newman
Senior Vice President, Chief Financial
Officer and Treasurer
(principal financial officer and
principal accounting officer)

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Certifications

I, Stephen M. Weinberg, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of 3333 Holding
Corporation;

2.     Based on my knowledge, this quarterly 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 quarterly
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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 quarterly 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-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures 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 quarterly report is being prepared;

b) evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and

c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5.     The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrants ability to record, process,
summarize and report financial data and have identified for the registrants
auditors any material weaknesses in internal controls; 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;
and

6.     The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: February 14, 2003

|                                                                   
|-------------------------------------------------------------------
|/s/ Stephen M. Weinberg
Stephen M. Weinberg
Chief Executive Officer

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Certifications

I, Todd D. Newman, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of 3333 Holding
Corporation;

2.     Based on my knowledge, this quarterly 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 quarterly
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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 quarterly 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-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures 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 quarterly report is being prepared;

b) evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and

c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5.     The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrants ability to record, process,
summarize and report financial data and have identified for the registrants
auditors any material weaknesses in internal controls; 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;
and

6.     The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: February 14, 2003

|                                                         
|---------------------------------------------------------
|/s/ Todd D. Newman
Todd D. Newman
Chief Financial Officer

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##### Table of Contents



Certifications

I, Stephen M. Weinberg, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of Centex Development
Company, L.P.;

2.     Based on my knowledge, this quarterly 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 quarterly
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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 quarterly 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-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures 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 quarterly report is being prepared;

b) evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and

c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5.     The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrants ability to record, process,
summarize and report financial data and have identified for the registrants
auditors any material weaknesses in internal controls; 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;
and

6.     The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: February 14, 2003

|                                                                                                                                                        
|--------------------------------------------------------------------------------------------------------------------------------------------------------
|/s/ Stephen M. Weinberg
Stephen M. Weinberg
Chief Executive Officer of 3333 Development Corporation,
General Partner of Centex Development Company, L.P.

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##### Table of Contents



Certifications

I, Todd D. Newman, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of Centex Development
Company, L.P.;

2.     Based on my knowledge, this quarterly 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 quarterly
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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 quarterly 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-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures 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 quarterly report is being prepared;

b) evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and

c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5.     The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrants ability to record, process,
summarize and report financial data and have identified for the registrants
auditors any material weaknesses in internal controls; 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;
and

6.     The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: February 14, 2003

|                                                                                                                                              
|----------------------------------------------------------------------------------------------------------------------------------------------
|/s/ Todd D. Newman
Todd D. Newman
Chief Financial Officer of 3333 Development Corporation,
General Partner of Centex Development Company, L.P.

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