##### 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, 2001

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, 2001:

|                                 |  |                                               |  |                  
|-------------------------------- |  | --------------------------------------------- |  | -----------------
|Centex Corporation               |  | Common Stock                                  |  | 61,211,372 shares
|3333 Holding Corporation         |  | Common Stock                                  |  | 1,000 shares     
|Centex Development Company, L.P. |  | Class A Units of Limited Partnership Interest |  | 32,260 units     
|Centex Development Company, L.P. |  | Class C Units of Limited Partnership Interest |  | 201,351 units    





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TABLE OF CONTENTS



|                                                 |                                                                                               |                                                      |  |  |  |  |  | 
|------------------------------------------------ | --------------------------------------------------------------------------------------------- | ---------------------------------------------------- |  |  |  |  |  | 
|Part I  Financial Information                  
|                                                 | Item 1. Financial Statements                                                                 
|                                                 |                                                                                               | Condensed Consolidated Statements of Earnings       
|                                                 |                                                                                               | Condensed Consolidated Balance Sheets               
|                                                 |                                                                                               | Condensed Consolidated Statements of Cash Flows     
|                                                 |                                                                                               | Notes to Condensed 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                           
|Part II. Other Information                      
|                                                 | ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                  
|                                                 | ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                                     
|Signatures                                      
|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                           
|Part II. Other Information                      
|                                                 | ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                  
|                                                 | ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                                     
|Signatures                                      
|EX-3.1 - Bylaws of 3333 Holdings Corp as Amended



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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, 2001

Centex Corporation and Subsidiaries

|           |                       |                                                                                             |  |    | 
|---------- | --------------------- | ------------------------------------------------------------------------------------------- |  | -- | 
|           |                       | Page                                                                                        | 
|          
|          
|          
|          
|Part I.    | Financial Information
|          
|          
|          
|          
|          
|          
|          
|          
|          
|           | Item 1.               | Financial Statements                                                                        | 
|          
|          
|          
|          
|           |                       | Condensed Consolidated Statements of Earnings for the Three Months Ended December 31, 2001  |  | 1  | 
|          
|          
|          
|          
|           |                       | Condensed Consolidated Statements of Earnings
for the Nine Months Ended December 31,  2001  |  | 2  | 
|          
|          
|          
|          
|           |                       | Condensed Consolidated Balance Sheets                                                       |  | 3  | 
|          
|          
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|          
|           |                       | Condensed Consolidated Statements of Cash Flows
for the Nine Months Ended December 31, 2001 |  | 5  | 
|          
|          
|          
|          
|           |                       | Notes to Condensed Consolidated Financial Statements                                        |  | 6  | 
|          
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|           | Item 2.               | Managements Discussion and
Analysis of Financial Condition and Results of Operations       |  | 17 | 
|          
|          
|          
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|           | Item 3.               | Quantitative and Qualitative Disclosures about Market Risk                                  |  | 29 | 
|          
|          
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|          
|Part II.   | Other Information    
|          
|          
|          
|          
|           | Item 4.               | Submission of Matters to a Vote of Security Holders                                         |  | 30 | 
|          
|          
|          
|          
|           | Item 6.               | Exhibits and Reports on Form 8-K                                                            |  | 30 | 
|          
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|          
|Signatures |                       | 31                                                                                          | 

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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 for the Three Months Ended December 31, 2001 |  | 32 | 
|          
|          
|          
|          
|           |                       | Condensed Combining Statements of Operations
for the Nine Months Ended December 31,  2001 |  | 33 | 
|          
|          
|          
|          
|           |                       | Condensed Combining Balance Sheets                                                        |  | 34 | 
|          
|          
|          
|          
|           |                       | Condensed Combining Statements of Cash Flows
for the Nine Months Ended December 31, 2001  |  | 35 | 
|          
|          
|          
|          
|           |                       | Notes to Condensed Combining Financial Statements                                         |  | 36 | 
|          
|          
|          
|          
|           | Item 2.               | Managements Discussion and
Analysis of Financial Condition and Results of Operations     |  | 43 | 
|          
|          
|          
|          
|           | Item 3.               | Quantitative and Qualitative Disclosures about Market Risk                                |  | 49 | 
|          
|          
|          
|          
|Part II.   | Other Information    
|          
|          
|          
|          
|           | Item 4.               | Submission of Matters to a Vote of Security Holders                                       |  | 49 | 
|          
|          
|          
|          
|           | Item 6.               | Exhibits and Reports on Form 8-K                                                          |  | 49 | 
|          
|          
|          
|          
|Signatures |                       | 50                                                                                        | 

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##### Table of Contents












Part I  Financial
InformationItem 1. Financial Statements

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

|                             |                                       |                                        |           |                                         |           |   |           |            |           | 
|---------------------------- | ------------------------------------- | -------------------------------------- | --------- | --------------------------------------- | --------- | - | --------- | ---------- | --------- | 
|                             |                                       |                                        |           |                                         |          
|                             |                                       |                                        |           | For the Three Months Ended December 31, |          
|                             |                                       |                                        |           |                                         |          
|                             |                                       |                                        |           | 2001                                    |           |   | 2000      |           
|                             |                                       |                                        |           |                                         |           |   |           |           
|Revenues                     |                                       |                                        |           |                                         |           |   |           |           
|                             | Home Building                         |                                        |           |                                         |           |   |           |            |          
|                             |                                       | Conventional Homes                     |           | $                                       | 1,210,759 |   |           | $          | 1,038,810 | 
|                             |                                       | Manufactured Homes                     |           |                                         | 31,907    |   |           |            | 29,494    | 
|                             | Financial Services                    |                                        |           | 182,800                                 |           |   |           | 121,308    |          
|                             | Construction Products                 |                                        |           | 112,750                                 |           |   |           | 105,295    |          
|                             | Contracting and Construction Services |                                        |           | 321,357                                 |           |   |           | 345,568    |          
|                             | Investment Real Estate                |                                        |           | 9,730                                   |           |   |           | 13,023     |          
|                             | Home Services                         |                                        |           | 25,181                                  |           |   |           |           |          
|                             |                                       |                                        |           |                                         |           |  
|                             |                                       |                                        | 1,894,484 |                                         |           |   | 1,653,498 |           
|                             |                                       |                                        |           |                                         |           |  
|Costs and Expenses           |                                       |                                        |           |                                         |           |   |           |           
|                             | Home Building                         |                                        |           |                                         |           |   |           |            |          
|                             |                                       | Conventional Homes                     |           |                                         | 1,076,248 |   |           |            | 938,170   | 
|                             |                                       | Manufactured Homes                     |           |                                         | 31,226    |   |           |            | 32,031    | 
|                             | Financial Services                    |                                        |           | 149,446                                 |           |   |           | 118,932    |          
|                             | Construction Products                 |                                        |           | 91,353                                  |           |   |           | 84,282     |          
|                             | Contracting and Construction Services |                                        |           | 312,254                                 |           |   |           | 337,412    |          
|                             | Investment Real Estate                |                                        |           | 5,137                                   |           |   |           | (528       | )        
|                             | Home Services and Other               |                                        |           | 23,448                                  |           |   |           | (3,123     | )        
|                             | Corporate General and Administrative  |                                        |           | 13,326                                  |           |   |           | 8,458      |          
|                             | Interest Expense                      |                                        |           | 28,046                                  |           |   |           | 21,076     |          
|                             | Minority Interest                     |                                        |           | 6,065                                   |           |   |           | 6,294      |          
|                             |                                       |                                        |           |                                         |           |  
|                             |                                       |                                        | 1,736,549 |                                         |           |   | 1,543,004 |           
|                             |                                       |                                        |           |                                         |           |  
|Earnings Before Income Taxes |                                       |                                        | 157,935   |                                         |           |   | 110,494   |           
|                             | Income Taxes                          |                                        |           | 61,790                                  |           |   |           | 42,027     |          
|                             |                                       |                                        |           |                                         |           |  
|Net Earnings                 |                                       | $                                      | 96,145    |                                         |           | $ | 68,467    |           
|                             |                                       |                                        |           |                                         |           |  
|Earnings Per Share           |                                       |                                        |           |                                         |           |   |           |           
|                             | Basic                                 |                                        | $         | 1.59                                    |           |   | $         | 1.16       |          
|                             |                                       |                                        |           |                                         |           |  
|                             | Diluted                               |                                        | $         | 1.54                                    |           |   | $         | 1.12       |          
|                             |                                       |                                        |           |                                         |           |  
|Average Shares Outstanding   |                                       |                                        |           |                                         |           |   |           |           
|                             | Basic                                 |                                        |           | 60,554,328                              |           |   |           | 59,080,788 |          
|                             | Common Share Equivalents              |                                        |           |                                         |           |   |           |            |          
|                             |                                       | Options                                |           |                                         | 1,460,920 |   |           |            | 1,448,887 | 
|                             |                                       | Convertible Debenture/Restricted Stock |           |                                         | 414,324   |   |           |            | 400,000   | 
|                             |                                       |                                        |           |                                         |           |  
|                             | Diluted                               |                                        |           | 62,429,572                              |           |   |           | 60,929,675 |          
|                             |                                       |                                        |           |                                         |           |  
|Cash Dividends Per Share     |                                       | $                                      | 0.04      |                                         |           | $ | 0.04      |           
|                             |                                       |                                        |           |                                         |           |  

See notes to condensed consolidated financial statements.

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##### Table of Contents



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

|                             |                                       |                                        |           |                                        |           |   |           |            |           | 
|---------------------------- | ------------------------------------- | -------------------------------------- | --------- | -------------------------------------- | --------- | - | --------- | ---------- | --------- | 
|                             |                                       |                                        |           |                                        |          
|                             |                                       |                                        |           | For the Nine Months Ended December 31, |          
|                             |                                       |                                        |           |                                        |          
|                             |                                       |                                        |           | 2001                                   |           |   | 2000      |           
|                             |                                       |                                        |           |                                        |           |   |           |           
|Revenues                     |                                       |                                        |           |                                        |           |   |           |           
|                             | Home Building                         |                                        |           |                                        |           |   |           |            |          
|                             |                                       | Conventional Homes                     |           | $                                      | 3,420,641 |   |           | $          | 2,952,835 | 
|                             |                                       | Manufactured Homes                     |           |                                        | 90,934    |   |           |            | 99,777    | 
|                             | Financial Services                    |                                        |           | 511,366                                |           |   |           | 323,717    |          
|                             | Construction Products                 |                                        |           | 359,718                                |           |   |           | 335,236    |          
|                             | Contracting and Construction Services |                                        |           | 971,786                                |           |   |           | 974,672    |          
|                             | Investment Real Estate                |                                        |           | 57,053                                 |           |   |           | 19,667     |          
|                             | Home Services                         |                                        |           | 75,764                                 |           |   |           |           |          
|                             |                                       |                                        |           |                                        |           |  
|                             |                                       |                                        | 5,487,262 |                                        |           |   | 4,705,904 |           
|                             |                                       |                                        |           |                                        |           |  
|Costs and Expenses           |                                       |                                        |           |                                        |           |   |           |           
|                             | Home Building                         |                                        |           |                                        |           |   |           |            |          
|                             |                                       | Conventional Homes                     |           |                                        | 3,065,032 |   |           |            | 2,690,086 | 
|                             |                                       | Manufactured Homes                     |           |                                        | 91,744    |   |           |            | 103,504   | 
|                             | Financial Services                    |                                        |           | 423,581                                |           |   |           | 319,068    |          
|                             | Construction Products                 |                                        |           | 302,848                                |           |   |           | 245,481    |          
|                             | Contracting and Construction Services |                                        |           | 947,904                                |           |   |           | 953,446    |          
|                             | Investment Real Estate                |                                        |           | 21,071                                 |           |   |           | (7,059     | )        
|                             | Home Services and Other               |                                        |           | 69,530                                 |           |   |           | (5,040     | )        
|                             | Corporate General and Administrative  |                                        |           | 37,552                                 |           |   |           | 25,963     |          
|                             | Interest Expense                      |                                        |           | 84,630                                 |           |   |           | 65,140     |          
|                             | Minority Interest                     |                                        |           | 15,135                                 |           |   |           | 30,827     |          
|                             |                                       |                                        |           |                                        |           |  
|                             |                                       |                                        | 5,059,027 |                                        |           |   | 4,421,416 |           
|                             |                                       |                                        |           |                                        |           |  
|Earnings Before Income Taxes |                                       |                                        | 428,235   |                                        |           |   | 284,488   |           
|                             | Income Taxes                          |                                        |           | 163,485                                |           |   |           | 108,722    |          
|                             |                                       |                                        |           |                                        |           |  
|Net Earnings                 |                                       | $                                      | 264,750   |                                        |           | $ | 175,766   |           
|                             |                                       |                                        |           |                                        |           |  
|Earnings Per Share           |                                       |                                        |           |                                        |           |   |           |           
|                             | Basic                                 |                                        | $         | 4.38                                   |           |   | $         | 2.98       |          
|                             |                                       |                                        |           |                                        |           |  
|                             | Diluted                               |                                        | $         | 4.26                                   |           |   | $         | 2.91       |          
|                             |                                       |                                        |           |                                        |           |  
|Average Shares Outstanding   |                                       |                                        |           |                                        |           |   |           |           
|                             | Basic                                 |                                        |           | 60,433,456                             |           |   |           | 58,946,795 |          
|                             | Common Share Equivalents              |                                        |           |                                        |           |   |           |            |          
|                             |                                       | Options                                |           |                                        | 1,369,122 |   |           |            | 1,016,430 | 
|                             |                                       | Convertible Debenture/Restricted Stock |           |                                        | 408,250   |   |           |            | 400,000   | 
|                             |                                       |                                        |           |                                        |           |  
|                             | Diluted                               |                                        |           | 62,210,828                             |           |   |           | 60,363,225 |          
|                             |                                       |                                        |           |                                        |           |  
|Cash Dividends Per Share     |                                       | $                                      | 0.12      |                                        |           | $ | 0.12      |           
|                             |                                       |                                        |           |                                        |           |  

See notes to condensed consolidated financial statements.

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##### Table of Contents






Centex Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(Dollars in thousands)

|                                         |                                           |                                            |           |                                    |        |   |           |           |        | 
|---------------------------------------- | ----------------------------------------- | ------------------------------------------ | --------- | ---------------------------------- | ------ | - | --------- | --------- | ------ | 
|                                         |                                           |                                            |           |                                    |       
|                                         |                                           |                                            |           | Centex
Corporationand Subsidiaries |       
|                                         |                                           |                                            |           |                                    |       
|                                         |                                           |                                            |           | December
31,                       |        |   | March 31, |          
|                                         |                                           |                                            |           | 2001*                              |        |   | 2001**    |          
|                                         |                                           |                                            |           |                                    |        |   |           |          
|Assets                                   |                                           |                                            |           |                                    |        |   |           |          
|Cash and Cash Equivalents                |                                           | $                                          | 47,121    |                                    |        | $ | 57,752    |          
|Restricted Cash                          |                                           |                                            | 82,965    |                                    |        |   | 57,428    |          
|Receivables -                            |                                           |                                            |           |                                    |        |   |           |          
|                                        
|                                        
|                                        
|                                        
|                                         | Residential Mortgage Loans                |                                            |           | 3,278,290                          |        |   |           | 1,996,746 |       
|                                         | Other                                     |                                            |           | 549,311                            |        |   |           | 606,069   |       
|Inventories                              |                                           |                                            | 2,814,722 |                                    |        |   | 2,202,295 |          
|Investments -                            |                                           |                                            |           |                                    |        |   |           |          
|                                         | Centex Development Company, L.P.          |                                            |           | 262,459                            |        |   |           | 210,807   |       
|                                         | Joint Ventures and Other                  |                                            |           | 87,738                             |        |   |           | 72,035    |       
|                                         | Unconsolidated Subsidiaries               |                                            |           |                                   |        |   |           |          |       
|Property and Equipment, net              |                                           |                                            | 727,634   |                                    |        |   | 729,099   |          
|Other Assets -                           |                                           |                                            |           |                                    |        |   |           |          
|                                         | Deferred Income Taxes                     |                                            |           | 39,300                             |        |   |           | 43,116    |       
|                                         | Goodwill                                  |                                            |           | 369,709                            |        |   |           | 323,971   |       
|                                         | Mortgage Securitization Residual Interest |                                            |           | 132,600                            |        |   |           | 146,394   |       
|                                         | Deferred Charges and Other                |                                            |           | 269,051                            |        |   |           | 203,331   |       
|                                         |                                           |                                            |           |                                    |        |  
|                                         |                                           | $                                          | 8,660,900 |                                    |        | $ | 6,649,043 |          
|                                         |                                           |                                            |           |                                    |        |  
|Liabilities and Stockholders Equity     |                                           |                                            |           |                                    |        |   |           |          
|                                        
|                                        
|                                        
|                                        
|                                        
|                                        
|                                        
|                                        
|Accounts Payable and Accrued Liabilities |                                           | $                                          | 1,315,296 |                                    |        | $ | 1,271,464 |          
|Debt -                                   |                                           |                                            |           |                                    |        |   |           |          
|                                         | Non-Financial Services                    |                                            |           | 1,851,401                          |        |   |           | 1,464,993 |       
|                                         | Financial Services                        |                                            |           | 3,346,777                          |        |   |           | 2,054,898 |       
|Payables to Affiliates                   |                                           |                                            |          |                                    |        |   |          |          
|Minority Stockholders Interest          |                                           |                                            | 154,019   |                                    |        |   | 143,624   |          
|Stockholders Equity -                   |                                           |                                            |           |                                    |        |   |           |          
|                                         | Preferred Stock, Authorized 5,000,000     |                                            |           |                                    |        |   |           |           |       
|                                         |                                           | Shares, None Issued                        |           |                                    |       |   |           |           |       | 
|                                         | Common Stock, $.25 Par Value; Authorized  |                                            |           |                                    |        |   |           |           |       
|                                         |                                           | 100,000,000 Shares; Issued and Outstanding |           |                                    |        |   |           |           |        | 
|                                         |                                           | 60,907,968
and 59,929,344 Shares           |           |                                    | 15,283 |   |           |           | 14,982 | 
|                                         | Capital in Excess of Par Value            |                                            |           | 62,801                             |        |   |           | 25,779    |       
|                                         | Unamortized Value of Restricted Stock     |                                            |           | (2,605                             | )      |   |           |          |       
|                                         | Retained Earnings                         |                                            |           | 1,935,873                          |        |   |           | 1,678,400 |       
|                                         | Treasury Stock, at cost; 222,505 Shares   |                                            |           |                                    |        |   |           |           |       
|                                         |                                           | and 0 Shares                               |           |                                    | (6,582 | ) |           |           |       | 
|                                         | Accumulated Other Comprehensive Loss      |                                            |           | (11,363                            | )      |   |           | (5,097    | )     
|                                         |                                           |                                            |           |                                    |        |  
|Total Stockholders Equity               |                                           |                                            | 1,993,407 |                                    |        |   | 1,714,064 |          
|                                         |                                           |                                            |           |                                    |        |  
|                                         |                                           | $                                          | 8,660,900 |                                    |        | $ | 6,649,043 |          
|                                         |                                           |                                            |           |                                    |        |  

See notes to condensed consolidated financial statements.
*Unaudited
**Condensed from audited financial statements.

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##### Table of Contents



Centex Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(Dollars in thousands)

|                                                                                                                                                                                                                                                                                                                    |           |   |                    |   |           |              |  |   |           |   |  |   |           | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------- | - | ------------------ | - | --------- | ------------ |  | - | --------- | - |  | - | --------- | 
|                                                                                                                                                                                                                                                                                                                    |          
|Centex Corporation                                                                                                                                                                                                                                                                                                  |           |   | Financial Services |  
|                                                                                                                                                                                                                                                                                                                    |           |   |                    |  
|December 31,                                                                                                                                                                                                                                                                                                        |           |   | March 31,          |   |           | December 31, |  |   | March 31, |  
|2001*                                                                                                                                                                                                                                                                                                               |           |   | 2001**             |   |           | 2001*        |  |   | 2001**    |  
|                                                                                                                                                                                                                                                                                                                    |           |   |                    |   |           |              |  |   |           |  
|                                                                                                                                                                                                                                                                                                                    |          
|$                                                                                                                                                                                                                                                                                                                   | 33,161    |   |                    | $ | 45,987    |              |  | $ | 13,960    |   |  | $ | 11,765    | 
|                                                                                                                                                                                                                                                                                                                    | 4,432     |   |                    |   | 5,442     |              |  |   | 78,533    |   |  |   | 51,986    | 
|                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                    |          |   |                    |   |          |              |  |   | 3,278,290 |   |  |   | 1,996,746 | 
|                                                                                                                                                                                                                                                                                                                    | 388,824   |   |                    |   | 486,816   |              |  |   | 160,487   |   |  |   | 119,253   | 
|                                                                                                                                                                                                                                                                                                                    | 2,794,046 |   |                    |   | 2,193,838 |              |  |   | 20,676    |   |  |   | 8,457     | 
|                                                                                                                                                                                                                                                                                                                    |          
|                                                                                                                                                                                                                                                                                                                    | 262,459   |   |                    |   | 210,807   |              |  |   |          |   |  |   |          | 
|                                                                                                                                                                                                                                                                                                                    | 87,738    |   |                    |   | 72,035    |              |  |   |          |   |  |   |          | 
|                                                                                                                                                                                                                                                                                                                    | 380,329   |   |                    |   | 314,868   |              |  |   |          |   |  |   |          | 
|                                                                                                                                                                                                                                                                                                                    | 678,069   |   |                    |   | 673,846   |              |  |   | 49,565    |   |  |   | 55,253    | 
|                                                                                                                                                                                                                                                                                                                    |          
|                                                                                                                                                                                                                                                                                                                    | (7,180    | ) |                    |   | 12,838    |              |  |   | 46,480    |   |  |   | 30,278    | 
|                                                                                                                                                                                                                                                                                                                    | 343,687   |   |                    |   | 307,369   |              |  |   | 26,022    |   |  |   | 16,602    | 
|                                                                                                                                                                                                                                                                                                                    |          |   |                    |   |          |              |  |   | 132,600   |   |  |   | 146,394   | 
|                                                                                                                                                                                                                                                                                                                    | 182,947   |   |                    |   | 149,917   |              |  |   | 86,104    |   |  |   | 53,414    | 
|                                                                                                                                                                                                                                                                                                                    |           |   |                    |   |           |              |  |   |           |  
|$                                                                                                                                                                                                                                                                                                                   | 5,148,512 |   |                    | $ | 4,473,763 |              |  | $ | 3,892,717 |   |  | $ | 2,490,148 | 
|                                                                                                                                                                                                                                                                                                                    |           |   |                    |   |           |              |  |   |           |  
|                                                                                                                                                                                                                                                                                                                    |          
|$                                                                                                                                                                                                                                                                                                                   | 1,152,049 |   |                    | $ | 1,153,215 |              |  | $ | 163,247   |   |  | $ | 118,249   | 
|                                                                                                                                                                                                                                                                                                                    |          
|                                                                                                                                                                                                                                                                                                                    | 1,851,401 |   |                    |   | 1,464,993 |              |  |   |          |   |  |   |          | 
|                                                                                                                                                                                                                                                                                                                    |          |   |                    |   |          |              |  |   | 3,346,777 |   |  |   | 2,054,898 | 
|                                                                                                                                                                                                                                                                                                                    |          |   |                    |   |          |              |  |   | 94,995    |   |  |   | 50,072    | 
|                                                                                                                                                                                                                                                                                                                    | 151,655   |   |                    |   | 141,491   |              |  |   | 2,364     |   |  |   | 2,133     | 
|                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                    |          |   |                    |   |          |              |  |   |          |   |  |   |          | 
|                                                                                                                                                                                                                                                                                                                    |          
|                                                                                                                                                                                                                                                                                                                    |          
|                                                                                                                                                                                                                                                                                                                    | 15,283    |   |                    |   | 14,982    |              |  |   | 1         |   |  |   | 1         | 
|                                                                                                                                                                                                                                                                                                                    | 62,801    |   |                    |   | 25,779    |              |  |   | 202,671   |   |  |   | 200,467   | 
|                                                                                                                                                                                                                                                                                                                    | (2,605    | ) |                    |   |          |              |  |   |          |   |  |   |          | 
|                                                                                                                                                                                                                                                                                                                    | 1,935,873 |   |                    |   | 1,678,400 |              |  |   | 92,226    |   |  |   | 64,328    | 
|                                                                                                                                                                                                                                                                                                                    |          
|                                                                                                                                                                                                                                                                                                                    | (6,582    | ) |                    |   |          |              |  |   |          |   |  |   |          | 
|                                                                                                                                                                                                                                                                                                                    | (11,363   | ) |                    |   | (5,097    | )            |  |   | (9,564    | ) |  |   |          | 
|                                                                                                                                                                                                                                                                                                                    |           |   |                    |   |           |              |  |   |           |  
|                                                                                                                                                                                                                                                                                                                    | 1,993,407 |   |                    |   | 1,714,064 |              |  |   | 285,334   |   |  |   | 264,796   | 
|                                                                                                                                                                                                                                                                                                                    |           |   |                    |   |           |              |  |   |           |  
|$                                                                                                                                                                                                                                                                                                                   | 5,148,512 |   |                    | $ | 4,473,763 |              |  | $ | 3,892,717 |   |  | $ | 2,490,148 | 
|                                                                                                                                                                                                                                                                                                                    |           |   |                    |   |           |              |  |   |           |  
|                                                                                                                                                                                                                                                                                                                   
|In the
supplemental data presented above, Centex Corporation represents
the adding together 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.

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##### Table of Contents






Centex Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
(unaudited)

|                                                 |                                                 |                                          |                                  |            |                                        |         |            |            |           |        |  
|------------------------------------------------ | ----------------------------------------------- | ---------------------------------------- | -------------------------------- | ---------- | -------------------------------------- | ------- | ---------- | ---------- | --------- | ------ | -
|                                                 |                                                 |                                          |                                  |            |                                        |        
|                                                 |                                                 |                                          |                                  |            | For the Nine Months Ended December 31, |        
|                                                 |                                                 |                                          |                                  |            |                                        |        
|                                                 |                                                 |                                          |                                  |            | 2001                                   |         |            | 2000       |          
|                                                 |                                                 |                                          |                                  |            |                                        |         |            |            |          
|Cash Flows  Operating Activities                |                                                 |                                          |                                  |            |                                        |         |            |           
|                                                 | Net Earnings                                    |                                          | $                                | 264,750    |                                        |         | $          | 175,766    |          
|                                                 | Adjustments -                                   |                                          |                                  |            |                                        |         |            |            |          
|                                                 |                                                 | Depreciation and Amortization            |                                  |            | 66,470                                 |         |            |            | 44,717    |       
|                                                 |                                                 | Deferred Income Taxes                    |                                  |            | (923                                   | )       |            |            | (6,440    | )     
|                                                 |                                                 | Equity in Earnings of Centex Development |                                  |            |                                        |         |            |            |           |       
|                                                 |                                                 |                                          | Company, L.P. and Joint Ventures |            |                                        | (25,816 | )          |            |           | (4,421 | )
|                                                 |                                                 | Minority Interest, net of taxes          |                                  |            | 10,066                                 |         |            |            | 19,605    |       
|                                                 | Increase in Restricted Cash                     |                                          |                                  | (21,313    | )                                      |         |            | (28,883    | )        
|                                                 | Decrease (Increase) in Receivables              |                                          |                                  | 57,266     |                                        |         |            | (31,824    | )        
|                                                 | Increase in Residential Mortgage Loans          |                                          |                                  | (1,224,469 | )                                      |         |            | (1,162,093 | )        
|                                                 | Increase in Inventories                         |                                          |                                  | (617,993   | )                                      |         |            | (310,971   | )        
|                                                 | Increase (Decrease) in Payables and Accruals    |                                          |                                  | 31,890     |                                        |         |            | (15,311    | )        
|                                                 | Increase in Other Assets                        |                                          |                                  | (103,100   | )                                      |         |            | (72,693    | )        
|                                                 | Other, net                                      |                                          |                                  | 329        |                                        |         |            | (6,752     | )        
|                                                 |                                                 |                                          |                                  |            |                                        |        
|                                                 |                                                 |                                          | (1,562,843                       | )          |                                        |         | (1,399,300 | )         
|                                                 |                                                 |                                          |                                  |            |                                        |        
|Cash Flows  Investing Activities                |                                                 |                                          |                                  |            |                                        |         |            |           
|                                                 | Increase in Advances to Centex Development      |                                          |                                  |            |                                        |         |            |            |          
|                                                 |                                                 | Company, L.P. and Joint Ventures         |                                  |            | (29,576                                | )       |            |            | (30,845   | )     
|                                                 | Acquisition of Construction Products Operations |                                          |                                  |           |                                        |         |            | (442,200   | )        
|                                                 | Increase in Property and Equipment, net         |                                          |                                  | (49,825    | )                                      |         |            | (46,286    | )        
|                                                 |                                                 |                                          |                                  |            |                                        |        
|                                                 |                                                 |                                          | (79,401                          | )          |                                        |         | (519,331   | )         
|                                                 |                                                 |                                          |                                  |            |                                        |        
|Cash Flows  Financing Activities                |                                                 |                                          |                                  |            |                                        |         |            |           
|                                                 | Increase in Short-Term Debt, net                |                                          |                                  | 886,824    |                                        |         |            | 255,545    |          
|                                                 | Non-Financial Services                          |                                          |                                  |            |                                        |         |            |            |          
|                                                 |                                                 | Issuance of Long-Term Debt               |                                  |            | 658,330                                |         |            |            | 794,364   |       
|                                                 |                                                 | Repayment of Long-Term Debt              |                                  |            | (674,734                               | )       |            |            | (339,447  | )     
|                                                 | Financial Services                              |                                          |                                  |            |                                        |         |            |            |          
|                                                 |                                                 | Issuance of Long-Term Debt               |                                  |            | 1,055,525                              |         |            |            | 1,140,008 |       
|                                                 |                                                 | Repayment of Long-Term Debt              |                                  |            | (315,191                               | )       |            |            | (22,482   | )     
|                                                 | Retirement of Common Stock                      |                                          |                                  |           |                                        |         |            | (784       | )        
|                                                 | Proceeds from Stock Option Exercises            |                                          |                                  |            |                                        |         |            |            |          
|                                                 |                                                 | and Restricted Stock Activity            |                                  |            | 34,718                                 |         |            |            | 7,005     |       
|                                                 | Purchase of Treasury Stock                      |                                          |                                  | (6,582     | )                                      |         |            |           |          
|                                                 | Dividends Paid                                  |                                          |                                  | (7,277     | )                                      |         |            | (7,079     | )        
|                                                 |                                                 |                                          |                                  |            |                                        |        
|                                                 |                                                 |                                          | 1,631,613                        |            |                                        |         | 1,827,130  |           
|                                                 |                                                 |                                          |                                  |            |                                        |        
|Net Decrease in Cash and Cash Equivalents        |                                                 |                                          | (10,631                          | )          |                                        |         | (91,501    | )         
|                                                 |                                                 |                                          |                                  |            |                                        |        
|Cash and Cash Equivalents at Beginning of Period |                                                 |                                          | 57,752                           |            |                                        |         | 135,853    |           
|                                                 |                                                 |                                          |                                  |            |                                        |        
|Cash and Cash Equivalents at End of Period       |                                                 | $                                        | 47,121                           |            |                                        | $       | 44,352     |           
|                                                 |                                                 |                                          |                                  |            |                                        |        

See notes to condensed consolidated financial statements.

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Centex Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements
December 31, 2001
(Dollars in thousands)
(unaudited)

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

(B)  A summary of comprehensive income for the three and nine months ended
December 31, 2001 and 2000 is presented below:

|                                               |                                          |   |                      |        |   |                     |        |      |      |   |         |         |   |   |         |       |  
|---------------------------------------------- | ---------------------------------------- | - | -------------------- | ------ | - | ------------------- | ------ | ---- | ---- | - | ------- | ------- | - | - | ------- | ----- | -
|                                               |                                          |   |                      |        |   |                     |       
|                                               |                                          |   | For the Three Months |        |   | For the Nine Months |       
|                                               |                                          |   | Ended December 31,   |        |   | Ended December 31,  |       
|                                               |                                          |   |                      |        |   |                     |       
|                                               |                                          |   | 2001                 |        |   | 2000                |        |      | 2001 |   |         | 2000    |  
|                                               |                                          |   |                      |        |   |                     |        |      |      |   |         |         |  
|Net Earnings                                   |                                          | $ | 96,145               |        |   | $                   | 68,467 |      |      | $ | 264,750 |         |   | $ | 175,766 |      
|Other Comprehensive (Loss) Income, net of tax: |                                          |   |                      |        |   |                     |        |      |      |   |         |         |   |   |         |      
|                                               | Foreign Currency Translation Adjustments |   |                      | (3,006 | ) |                     |        | 73   |      |   |         | 5,828   |   |   |         | (394  | )
|                                               | Unrealized Loss on Hedging Instruments   |   |                      | (3,148 | ) |                     |        |     |      |   |         | (12,361 | ) |   |         |      |  
|                                               | Unrealized Gain (Loss) on Investments    |   |                      | 171    |   |                     |        | (586 | )    |   |         | 267     |   |   |         | 1,152 |  
|                                               |                                          |   |                      |        |   |                     |        |      |      |   |         |        
|Comprehensive Income                           |                                          | $ | 90,162               |        |   | $                   | 67,954 |      |      | $ | 258,484 |         |   | $ | 176,524 |      
|                                               |                                          |   |                      |        |   |                     |        |      |      |   |         |        

The Foreign Currency Translation Adjustments are primarily the result of
Centexs investment in Centex Development Company, L.P. and its subsidiaries,
which have separate financial statements included elsewhere in this report.
The Unrealized Loss on Hedging Instruments represents the unrealized loss on
swap agreements designated as cash flow hedges. The accounting for these
derivative financial instruments is discussed in detail in Note (H) of this
report. The Unrealized Gain (Loss) on Investments represents mark to market
adjustments to securities available for sale by the Company.

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

|                           |                                          |   |           |   |  |        |        |    |               |   |            |            |  |          |             |        |   |             |           |          |               |   |        |        |             |   |         |         |   |   |           |         |  
|-------------------------- | ---------------------------------------- | - | --------- | - |  | ------ | ------ | -- | ------------- | - | ---------- | ---------- |  | -------- | ----------- | ------ | - | ----------- | --------- | -------- | ------------- | - | ------ | ------ | ----------- | - | ------- | ------- | - | - | --------- | ------- | -
|                           |                                          |   |           |   |  |        |        |    |               |   |            |            |  |          | Unamortized |        |   |             |           |          |               |   |        |        | Accumulated |   |         |         |   |  
|                           |                                          |   |           |   |  |        |        |    |               |   | Capital in |            |  | Value of |             |        |   |             |           | Treasury |               |   | Other  |        |             |   |         |        
|                           |                                          |   | Preferred |   |  | Common |        |    | Excess of Par |   |            | Restricted |  |          | Retained    |        |   | Shares - at |           |          | Comprehensive |   |        |        |             |  
|                           |                                          |   | Stock     |   |  | Stock  |        |    | Value         |   |            | Stock      |  |          | Earnings    |        |   | Cost        |           |          | Loss          |   |        | Total  |            
|                           |                                          |   |           |   |  |        |        |    |               |   |            |            |  |          |             |        |   |             |           |          |               |   |        |        |            
|Balance, March 31, 2001    |                                          | $ |          |   |  | $      | 14,982 |    |               | $ | 25,779     |            |  | $        |            |        |   | $           | 1,678,400 |          |               | $ |       |        |             | $ | (5,097  | )       |   | $ | 1,714,064 |        
|                           | Net Earnings                             |   |          |   |  |        |       |    |               |   |           |            |  |          |            |        |   |             | 264,750   |          |               |   |       |        |             |   |        |         |   |   | 264,750   |        
|                           | Issuance of Restricted
Stock             |   |           |  |  |        |        | 19 |               |   |            | 3,133      |  |          |             | (3,152 | ) |             |           |         |               |   |        |       |             |   |         |        |   |   |           |        |  
|                           | Amortization of
Restricted Stock         |   |           |  |  |        |        |   |               |   |            |           |  |          |             | 547    |   |             |           |         |               |   |        |       |             |   |         |        |   |   |           | 547     |  
|                           | Exercise of Stock Options                |   |          |   |  |        | 282    |    |               |   | 33,889     |            |  |          |            |        |   |             |          |          |               |   |       |        |             |   |        |         |   |   | 34,171    |        
|                           | Cash Dividends                           |   |          |   |  |        |       |    |               |   |           |            |  |          |            |        |   |             | (7,277    | )        |               |   |       |        |             |   |        |         |   |   | (7,277    | )      
|                           | Purchases of Common Stock
for Treasury   |   |           |  |  |        |        |   |               |   |            |           |  |          |             |       |   |             |           |         |               |   |        | (6,658 | )           |   |         |        |   |   |           | (6,658  | )
|                           | Treasury Stock Issued for
Service Awards |   |           |  |  |        |        |   |               |   |            |           |  |          |             |       |   |             |           |         |               |   |        | 76     |             |   |         |        |   |   |           | 76      |  
|                           | Unrealized Loss on
Hedging Instruments   |   |           |  |  |        |        |   |               |   |            |           |  |          |             |       |   |             |           |         |               |   |        |       |             |   |         | (12,361 | ) |   |           | (12,361 | )
|                           | Foreign Currency
Translation
Adjustments |   |           |  |  |        |        |   |               |   |            |           |  |          |             |       |   |             |           |         |               |   |        |       |             |   |         | 5,828   |   |   |           | 5,828   |  
|                           | Unrealized Gain on
Investments           |   |           |  |  |        |        |   |               |   |            |           |  |          |             |       |   |             |           |         |               |   |        |       |             |   |         | 267     |   |   |           | 267     |  
|                           |                                          |   |           |   |  |        |        |    |               |   |            |            |  |          |             |        |   |             |           |          |               |   |        |        |            
|Balance, December 31, 2001 |                                          | $ |          |   |  | $      | 15,283 |    |               | $ | 62,801     |            |  | $        | (2,605      | )      |   | $           | 1,935,873 |          |               | $ | (6,582 | )      |             | $ | (11,363 | )       |   | $ | 1,993,407 |        
|                           |                                          |   |           |   |  |        |        |    |               |   |            |            |  |          |             |        |   |             |           |          |               |   |        |       

(D)  Centex Development Company, L.P. (the Partnership) is a master limited
partnership formed by Centex in 1987 to broaden Centexs business 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 home building 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 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 Partnership is authorized to issue three classes of limited
partnership interest. Centex indirectly holds 100% of the Partnerships Class
A and Class C limited partnership units, which are collectively convertible
into 20% of the Partnerships Class B limited partnership 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, warrants to purchase approximately 80% of the Class B units
are also held by the stockholders of Centex through a nominee arrangement and
trade in tandem with the common stock of Centex.

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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, 2001, these
adjusted capital contributions were $234.1 million and preference payments in
arrears totaled $36.1 million. No preference payments have been made since
fiscal 1998.

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 and the independent board of Holding, including its
non-executive Chairman, manage how the Partnership conducts its activities,
including the acquisition, development, maintenance, operation and sale of
properties, without the consent of the limited partners. The limited partners
cannot remove the general partner. As a result, the Company accounts for its
limited partners 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,
     Holding and Subsidiary and Partnership and Subsidiaries

|                                     |                                          |   |              |           |  |           |           |           | 
|------------------------------------ | ---------------------------------------- | - | ------------ | --------- |  | --------- | --------- | --------- | 
|                                     |                                          |   |              |           |  |           |          
|                                     |                                          |   | December 31, |           |  | March 31, |          
|                                     |                                          |   | 2001         |           |  | 2001*     |          
|                                     |                                          |   |              |           |  |           |          
|Assets                               |                                          |   |              |           |  |           |           |          
|                                     | Cash and Cash Equivalents                |   | $            | 47,364    |  |           | $         | 60,786    | 
|                                     | Restricted Cash                          |   |              | 87,965    |  |           |           | 57,428    | 
|                                     | Receivables                              |   |              | 3,833,047 |  |           |           | 2,613,035 | 
|                                     | Inventories                              |   |              | 3,379,753 |  |           |           | 2,629,733 | 
|                                     | Investments in Joint Ventures and Other  |   |              | 92,735    |  |           |           | 72,679    | 
|                                     | Property and Equipment, net              |   |              | 730,880   |  |           |           | 732,490   | 
|                                     | Other Assets                             |   |              | 861,460   |  |           |           | 757,882   | 
|                                     |                                          |   |              |           |  |          
|                                     |                                          | $ | 9,033,204    |           |  | $         | 6,924,033 |          
|                                     |                                          |   |              |           |  |          
|Liabilities and Stockholders Equity |                                          |   |              |           |  |           |           |          
|                                     | Accounts Payable and Accrued Liabilities |   | $            | 1,412,865 |  |           | $         | 1,352,467 | 
|                                     | Non-Financial Services Debt              |   |              | 2,124,861 |  |           |           | 1,658,894 | 
|                                     | Financial Services Debt                  |   |              | 3,346,777 |  |           |           | 2,054,898 | 
|                                     | Minority Stockholders Interest          |   |              | 155,294   |  |           |           | 143,710   | 
|                                     | Stockholders Equity                     |   |              | 1,993,407 |  |           |           | 1,714,064 | 
|                                     |                                          |   |              |           |  |          
|                                     |                                          | $ | 9,033,204    |           |  | $         | 6,924,033 |          
|                                     |                                          |   |              |           |  |          

*     Condensed from audited financial statements.

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

|                                    |  |                           |           |   |      |   |           | 
|----------------------------------- |  | ------------------------- | --------- | - | ---- | - | --------- | 
|                                    |  |                           |          
|                                    |  | For the Nine Months Ended |          
|                                    |  | December 31,              |          
|                                    |  |                           |          
|                                    |  | 2001                      |           |   | 2000 |  
|                                    |  |                           |           |   |      |  
|Revenues                            |  | $                         | 5,740,840 |   |      | $ | 4,882,572 | 
|Costs and Expenses                  |  |                           | 5,311,660 |   |      |   | 4,598,955 | 
|                                    |  |                           |           |   |      |  
|Earnings Before Income Taxes        |  |                           | 429,180   |   |      |   | 283,617   | 
|Income Taxes                        |  |                           | 164,430   |   |      |   | 107,851   | 
|                                    |  |                           |           |   |      |  
|Net Earnings                        |  |                           | 264,750   |   |      |   | 175,766   | 
|Other Comprehensive (Loss) Earnings |  |                           | (6,266    | ) |      |   | 758       | 
|                                    |  |                           |           |   |      |  
|Comprehensive Income                |  | $                         | 258,484   |   |      | $ | 176,524   | 
|                                    |  |                           |           |   |      |  

(E)  The Company conducts its land acquisition and development activities
directly and through its participation in joint ventures in which the Company
holds less than a majority interest. The Companys investment in these joint
ventures was $87.7 million and $72.0 million at December 31, 2001 and March 31,
2001, respectively. These non-consolidated joint ventures had total debt
outstanding of approximately $168 million as of December 31, 2001 and $137
million as of March 31, 2001. The Companys liability is limited to
approximately $32 million and $46 million, respectively.

The Company has paid $66 million for options, which expire at various
dates through 2007, toward the purchase of undeveloped land and developed lots
having a total purchase price of approximately $1.4 billion in order to ensure
the future availability of land for home building. The Company has committed
to purchase land and developed lots totaling approximately $2.5 million.

(F)  Interest expenses relating to the Financial Services segments are included
in its costs and expenses. Interest expense related to segments other than
Financial Services is included as a separate line on the Condensed Consolidated
Statement of Earnings. For the three and nine month periods ending December
31, 2001, $12.2 million and $36.0 million, respectively, of interest incurred
was capitalized to qualifying assets, principally within the Home Building
segment compared to $10.7 million and $35.5 million for the three and nine months ended
December 31, 2000, respectively. For the three and nine months ended December
31, 2001, $9.9 million and $25.3 million, respectively, of previously
capitalized interest was charged to interest expense compared to $5.1 million
and $27.1 million for the three and nine months ended December 31, 2000,
respectively.

|                          |  |                            |         |   |      |   |         |  
|------------------------- |  | -------------------------- | ------- | - | ---- | - | ------- | -
|                          |  |                            |        
|                          |  | For the Three Months Ended |        
|                          |  | December 31,               |        
|                          |  |                            |        
|                          |  | 2001                       |         |   | 2000 |  
|                          |  |                            |         |   |      |  
|Total Interest Incurred   |  | $                          | 70,988  |   |      | $ | 54,108  |  
|Capitalized Interest, net |  |                            | (2,250  | ) |      |   | (5,600  | )
|Less  Financial Services |  |                            | (40,692 | ) |      |   | (27,432 | )
|                          |  |                            |         |   |      |  
|Interest Expense, net     |  | $                          | 28,046  |   |      | $ | 21,076  |  
|                          |  |                            |         |   |      |  

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|                          |  |                           |          |   |      |   |         |  
|------------------------- |  | ------------------------- | -------- | - | ---- | - | ------- | -
|                          |  |                           |         
|                          |  | For the Nine Months Ended |         
|                          |  | December 31,              |         
|                          |  |                           |         
|                          |  | 2001                      |          |   | 2000 |  
|                          |  |                           |          |   |      |  
|Total Interest Incurred   |  | $                         | 211,812  |   |      | $ | 133,900 |  
|Capitalized Interest, net |  |                           | (10,697  | ) |      |   | (8,350  | )
|Less  Financial Services |  |                           | (116,485 | ) |      |   | (60,410 | )
|                          |  |                           |          |   |      |  
|Interest Expense, net     |  | $                         | 84,630   |   |      | $ | 65,140  |  
|                          |  |                           |          |   |      |  

(G)  The Company operates in six principal business segments: Home Building,
Financial Services, Construction Products, Contracting and Construction
Services, Investment Real Estate, and Home Services. 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 $262 million) is included in the Investment Real Estate segment.

The following tables set forth financial information relating to the
business segments.

HOME BUILDING

Conventional Homes

Conventional Homes operations involve the purchase and development of land
or lots as well as the construction and sale of single-family homes.

|                                           |  |                            |         |   |      |   |         |  
|------------------------------------------ |  | -------------------------- | ------- | - | ---- | - | ------- | -
|                                           |  |                            |        
|                                           |  | For the Three Months Ended |        
|                                           |  | December 31,               |        
|                                           |  |                            |        
|                                           |  | 2001                       |         |   | 2000 |  
|                                           |  |                            |         |   |      |  
|                                           |  | (Dollars in millions)      |        
|Revenues                                   |  | $                          | 1,210.8 |   |      | $ | 1,038.8 |  
|Cost of Sales                              |  |                            | (898.3  | ) |      |   | (782.4  | )
|Selling, General & Administrative Expenses |  |                            | (178.0  | ) |      |   | (155.8  | )
|                                           |  |                            |         |   |      |  
|Operating Earnings                         |  | $                          | 134.5   |   |      | $ | 100.6   |  
|                                           |  |                            |         |   |      |  

|                                           |  |                           |          |   |      |   |          |  
|------------------------------------------ |  | ------------------------- | -------- | - | ---- | - | -------- | -
|                                           |  |                           |         
|                                           |  | For the Nine Months Ended |         
|                                           |  | December 31,              |         
|                                           |  |                           |         
|                                           |  | 2001                      |          |   | 2000 |  
|                                           |  |                           |          |   |      |  
|                                           |  | (Dollars in millions)     |         
|Revenues                                   |  | $                         | 3,420.6  |   |      | $ | 2,952.8  |  
|Cost of Sales                              |  |                           | (2,539.3 | ) |      |   | (2,251.2 | )
|Selling, General & Administrative Expenses |  |                           | (525.7   | ) |      |   | (438.9   | )
|                                           |  |                           |          |   |      |  
|Operating Earnings                         |  | $                         | 355.6    |   |      | $ | 262.7    |  
|                                           |  |                           |          |   |      |  

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Manufactured Homes

Manufactured Homes operations involve the construction in factories of
single-family homes and, to a lesser degree, commercial structures and the
sale of these products through a network of company-owned and independent
dealers.

|                                           |  |                            |       |   |      |   |       |  
|------------------------------------------ |  | -------------------------- | ----- | - | ---- | - | ----- | -
|                                           |  |                            |      
|                                           |  | For the Three Months Ended |      
|                                           |  | December 31,               |      
|                                           |  |                            |      
|                                           |  | 2001                       |       |   | 2000 |  
|                                           |  |                            |       |   |      |  
|                                           |  | (Dollars in millions)      |      
|Revenues                                   |  | $                          | 31.9  |   |      | $ | 29.5  |  
|Cost of Sales                              |  |                            | (26.1 | ) |      |   | (24.4 | )
|Selling, General & Administrative Expenses |  |                            | (5.1  | ) |      |   | (7.6  | )
|                                           |  |                            |       |   |      |  
|Operating Earnings (Loss)                  |  | $                          | 0.7   |   |      | $ | (2.5  | )
|                                           |  |                            |       |   |      |  

|                                           |  |                           |       |   |      |   |       |  
|------------------------------------------ |  | ------------------------- | ----- | - | ---- | - | ----- | -
|                                           |  |                           |      
|                                           |  | For the Nine Months Ended |      
|                                           |  | December 31,              |      
|                                           |  |                           |      
|                                           |  | 2001                      |       |   | 2000 |  
|                                           |  |                           |       |   |      |  
|                                           |  | (Dollars in millions)     |      
|Revenues                                   |  | $                         | 90.9  |   |      | $ | 99.8  |  
|Cost of Sales                              |  |                           | (76.0 | ) |      |   | (82.0 | )
|Selling, General & Administrative Expenses |  |                           | (15.7 | ) |      |   | (21.5 | )
|                                           |  |                           |       |   |      |  
|Operating Loss                             |  | $                         | (0.8  | ) |      | $ | (3.7  | )
|                                           |  |                           |       |   |      |  

FINANCIAL SERVICES

Financial Services operations consist primarily of home financing,
sub-prime home equity lending, and the sale of title and other insurance
coverages. These activities include mortgage origination and other related
services for homes sold by Centex subsidiaries and by others.

|                                           |  |                            |        |   |      |   |       |  
|------------------------------------------ |  | -------------------------- | ------ | - | ---- | - | ----- | -
|                                           |  |                            |       
|                                           |  | For the Three Months Ended |       
|                                           |  | December 31,               |       
|                                           |  |                            |       
|                                           |  | 2001                       |        |   | 2000 |  
|                                           |  |                            |        |   |      |  
|                                           |  | (Dollars in millions)      |       
|Revenues*                                  |  | $                          | 182.8  |   |      | $ | 121.3 |  
|Selling, General & Administrative Expenses |  |                            | (108.7 | ) |      |   | (91.5 | )
|Interest Expense                           |  |                            | (40.7  | ) |      |   | (27.4 | )
|                                           |  |                            |        |   |      |  
|Operating Earnings                         |  | $                          | 33.4   |   |      | $ | 2.4   |  
|                                           |  |                            |        |   |      |  

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|                                           |  |                           |        |   |      |   |        |  
|------------------------------------------ |  | ------------------------- | ------ | - | ---- | - | ------ | -
|                                           |  |                           |       
|                                           |  | For the Nine Months Ended |       
|                                           |  | December 31,              |       
|                                           |  |                           |       
|                                           |  | 2001                      |        |   | 2000 |  
|                                           |  |                           |        |   |      |  
|                                           |  | (Dollars in millions)     |       
|Revenues*                                  |  | $                         | 511.4  |   |      | $ | 323.7  |  
|Selling, General & Administrative Expenses |  |                           | (307.1 | ) |      |   | (258.6 | )
|Interest Expense                           |  |                           | (116.5 | ) |      |   | (60.4  | )
|                                           |  |                           |        |   |      |  
|Operating Earnings                         |  | $                         | 87.8   |   |      | $ | 4.7    |  
|                                           |  |                           |        |   |      |  



| |                                                                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | * Revenues include interest income of $73.9 million and $36.8
million for the three months and $188.1 million and
        $78.9 million for the
nine months ended December 31, 2001 and 2000, respectively.

CONSTRUCTION PRODUCTS

Construction Products' operations involve the manufacture, production,
distribution, and sale of cement, gypsum wallboard, recycled paperboard,
aggregates and readymix concrete. Centexs ownership interest in Construction
Products was 65.2% as of December 31, 2001 and 65.3% as of December 31, 2000.

|                                           |  |                            |       |   |      |   |       |  
|------------------------------------------ |  | -------------------------- | ----- | - | ---- | - | ----- | -
|                                           |  |                            |      
|                                           |  | For the Three Months Ended |      
|                                           |  | December 31,               |      
|                                           |  |                            |      
|                                           |  | 2001                       |       |   | 2000 |  
|                                           |  |                            |       |   |      |  
|                                           |  | (Dollars in millions)      |      
|Revenues                                   |  | $                          | 112.7 |   |      | $ | 105.3 |  
|Cost of Sales                              |  |                            | (90.0 | ) |      |   | (82.7 | )
|Selling, General & Administrative Expenses |  |                            | (1.3  | ) |      |   | (1.6  | )
|                                           |  |                            |       |   |      |  
|Operating Earnings                        |  | $                          | 21.4  |   |      | $ | 21.0  |  
|                                           |  |                            |       |   |      |  

|                                           |  |                           |        |   |      |   |        |  
|------------------------------------------ |  | ------------------------- | ------ | - | ---- | - | ------ | -
|                                           |  |                           |       
|                                           |  | For the Nine Months Ended |       
|                                           |  | December 31,              |       
|                                           |  |                           |       
|                                           |  | 2001                      |        |   | 2000 |  
|                                           |  |                           |        |   |      |  
|                                           |  | (Dollars in millions)     |       
|Revenues                                   |  | $                         | 359.7  |   |      | $ | 335.2  |  
|Cost of Sales                              |  |                           | (299.0 | ) |      |   | (240.6 | )
|Selling, General & Administrative Expenses |  |                           | (3.8   | ) |      |   | (4.9   | )
|                                           |  |                           |        |   |      |  
|Operating Earnings                        |  | $                         | 56.9   |   |      | $ | 89.7   |  
|                                           |  |                           |        |   |      |  

Operating earnings are shown before Minority Interest.

CONTRACTING AND CONSTRUCTION SERVICES

Contracting and
Construction Services operations involve the construction
of buildings for both private and government interests, including office, commercial and industrial buildings, hospitals, hotels,
correctional facilities, libraries, airport facilities and educational
institutions. As this segment generates significant positive cash flow
(payables and accruals consistently exceed identifiable assets), intercompany
interest income (credited at the prime rate in effect) is reflected in this
segment; however, this amount is eliminated in consolidation.

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|                                           |  |                            |        |   |      |   |        |  
|------------------------------------------ |  | -------------------------- | ------ | - | ---- | - | ------ | -
|                                           |  |                            |       
|                                           |  | For the Three Months Ended |       
|                                           |  | December 31,               |       
|                                           |  |                            |       
|                                           |  | 2001                       |        |   | 2000 |  
|                                           |  |                            |        |   |      |  
|                                           |  | (Dollars in millions)      |       
|Revenues                                   |  | $                          | 321.4  |   |      | $ | 345.6  |  
|Construction Contract Costs                |  |                            | (296.8 | ) |      |   | (322.8 | )
|Selling, General & Administrative Expenses |  |                            | (15.5  | ) |      |   | (14.6  | )
|                                           |  |                            |        |   |      |  
|Operating Earnings, as reported            |  |                            | 9.1    |   |      |   | 8.2    |  
|Intercompany Interest Income               |  |                            | 1.8    |   |      |   | 2.5    |  
|                                           |  |                            |        |   |      |  
|Total Economic Return                      |  | $                          | 10.9   |   |      | $ | 10.7   |  
|                                           |  |                            |        |   |      |  

|                                           |  |                           |        |   |      |   |        |  
|------------------------------------------ |  | ------------------------- | ------ | - | ---- | - | ------ | -
|                                           |  |                           |       
|                                           |  | For the Nine Months Ended |       
|                                           |  | December 31,              |       
|                                           |  |                           |       
|                                           |  | 2001                      |        |   | 2000 |  
|                                           |  |                           |        |   |      |  
|                                           |  | (Dollars in millions)     |       
|Revenues                                   |  | $                         | 971.8  |   |      | $ | 974.7  |  
|Construction Contract Costs                |  |                           | (904.1 | ) |      |   | (911.9 | )
|Selling, General & Administrative Expenses |  |                           | (43.8  | ) |      |   | (41.5  | )
|                                           |  |                           |        |   |      |  
|Operating Earnings, as reported            |  |                           | 23.9   |   |      |   | 21.3   |  
|Intercompany Interest Income               |  |                           | 5.6    |   |      |   | 6.9    |  
|                                           |  |                           |        |   |      |  
|Total Economic Return                      |  | $                         | 29.5   |   |      | $ | 28.2   |  
|                                           |  |                           |        |   |      |  

INVESTMENT REAL ESTATE

Investment Real
Estates operations involve the acquisition, development
and sale of land, primarily for industrial, office, multi-family, retail and
mixed-use projects and investments in other real estate operations.

|                                           |  |                            |      |   |      |   |      |  
|------------------------------------------ |  | -------------------------- | ---- | - | ---- | - | ---- | -
|                                           |  |                            |     
|                                           |  | For the Three Months Ended |     
|                                           |  | December 31,               |     
|                                           |  |                            |     
|                                           |  | 2001                       |      |   | 2000 |  
|                                           |  |                            |      |   |      |  
|                                           |  | (Dollars in millions)      |     
|Revenues                                   |  | $                          | 9.7  |   |      | $ | 13.0 |  
|Cost of Sales                              |  |                            | (1.3 | ) |      |   | (1.8 | )
|Selling, General & Administrative Expenses |  |                            | (3.8 | ) |      |   | (1.6 | )
|Negative Goodwill Amortization             |  |                            |     |   |      |   | 4.0  |  
|                                           |  |                            |      |   |      |  
|Operating Earnings                         |  | $                          | 4.6  |   |      | $ | 13.6 |  
|                                           |  |                            |      |   |      |  

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##### Table of Contents



|                                           |  |                           |       |   |      |   |      |  
|------------------------------------------ |  | ------------------------- | ----- | - | ---- | - | ---- | -
|                                           |  |                           |      
|                                           |  | For the Nine Months Ended |      
|                                           |  | December 31,              |      
|                                           |  |                           |      
|                                           |  | 2001                      |       |   | 2000 |  
|                                           |  |                           |       |   |      |  
|                                           |  | (Dollars in millions)     |      
|Revenues                                   |  | $                         | 57.1  |   |      | $ | 19.7 |  
|Cost of Sales                              |  |                           | (11.2 | ) |      |   | (2.2 | )
|Selling, General & Administrative Expenses |  |                           | (9.9  | ) |      |   | (2.8 | )
|Negative Goodwill Amortization             |  |                           |      |   |      |   | 12.0 |  
|                                           |  |                           |       |   |      |  
|Operating Earnings                         |  | $                         | 36.0  |   |      | $ | 26.7 |  
|                                           |  |                           |       |   |      |  

HOME SERVICES

Home Services operations include pest management, electronic security
monitoring and chemical lawn care.

|                                           |                            |              |       |  
|------------------------------------------ | -------------------------- | ------------ | ----- | -
|                                           |                           
|                                           | For the Three Months Ended
|                                           |                            | December 31, |      
|                                           |                           
|                                           |                            | 2001         |      
|                                           |                           
|                                           | (Dollars in millions)     
|Revenues                                   |                            | $            | 25.2  |  
|                                          
|                                          
|                                          
|                                          
|Cost of Sales                              |                            |              | (9.2  | )
|                                          
|                                          
|                                          
|                                          
|Selling, General & Administrative Expenses |                            |              | (14.3 | )
|                                           |                            |              |      
|Operating Earnings                         |                            | $            | 1.7   | *
|                                           |                            |              |      

|                                           |                           |              |       |  
|------------------------------------------ | ------------------------- | ------------ | ----- | -
|                                           |                          
|                                           | For the Nine Months Ended
|                                           |                           | December 31, |      
|                                           |                          
|                                           |                           | 2001         |      
|                                           |                          
|                                           | (Dollars in millions)    
|Revenues                                   |                           | $            | 75.8  |  
|                                          
|                                          
|                                          
|                                          
|Cost of Sales                              |                           |              | (28.6 | )
|                                          
|                                          
|                                          
|                                          
|Selling, General & Administrative Expenses |                           |              | (41.0 | )
|                                           |                           |              |      
|Operating Earnings                         |                           | $            | 6.2   | *
|                                           |                           |              |      



| | * | Before fiscal 2002, revenues and operating expenses of Home
Services were included in the Other, net segment and were reflected
on a net basis, as this segment was not considered material for
purposes of segment reporting.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(H)The Company adopted the provisions of Statement of Financial
Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging Activities (SFAS 133), on April 1, 2001. The effect of the adoption of
SFAS 133 on the Companys operating earnings was not significant.

The Company is exposed to the risk of interest rate fluctuations on its
debt and other obligations. As part of its strategy to manage the obligations
that are subject to changes in interest rates, the Company has entered into
various interest rate swap agreements, designated as cash flow hedges as
described below. The swap agreements are recorded at their fair value in Other
Assets 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

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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 Centex Construction Products, Inc. each have
interest rate swap agreements which, in effect, fix the variable interest rate
on a portion of their outstanding debt at December 31, 2001. During the three
and nine months ended December 31, 2001, 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,
2001 related to these derivatives, the Company would estimate increases in
interest incurred over the next 12 months to be approximately $3 million. As
of December 31, 2001, the liability and the balance in Accumulated Other
Comprehensive Loss related to these derivatives was $5.9 million ($3.8 million
net of tax).

Financial Services, through Centex Home Equity Company, LLC (CHEC), uses
interest rate swaps to hedge the market risk associated with the anticipated
issuance of fixed rate securitization debt used to finance subprime 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. CHEC also uses
interest rate swaps which, 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, 2001,
there was no hedge ineffectiveness related to these interest rate swaps. These
swaps expire at varying times through December 2007. Based on the balance in
Accumulated Other Comprehensive Loss at December 31, 2001 related to these
derivatives, the Company would estimate adjustments to interest incurred over
the next 12 months to be approximately $0.8 million. In accordance with SFAS 133,
the loss of $0.6 million ($0.4 million net of tax) on these interest rate swaps is recognized in Accumulated Other
Comprehensive Loss as of December 31, 2001.

Financial Services, through CTX Mortgage Company, LLC, enters into
interest rate lock commitments (IRLCs) with its customers under which CTX
Mortgage Company agrees to make mortgage loans at agreed upon rates within a
period of time, generally from 10 to 60 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 CTX Mortgage Company, CTX
Mortgage Company 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 a swap agreement, to protect
against certain interest rate risk, non-credit related market risk
and prepayment risk related to mortgage loans held by Harwood Street Funding I, LLC, an
unaffiliated entity which 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 gain resulting from the net change
in the estimated fair value of these derivative positions was $10.0 million for
the three months and $13.3 million for the nine months ended December 31, 2001.

(I)Statement of Financial Accounting Standards No. 140, Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities
(SFAS 140), was issued in September 2000 to replace Statement of Financial
Accounting Standards No. 125 (SFAS 125). SFAS 140 revises the standards for
accounting for securitizations and other transfers of financial assets and
collateral and requires certain disclosures, but carries most of SFAS 125s
provisions without reconsideration. The implementation of

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SFAS 140 on April 1,
2001 did not have a material impact on the Companys results of operations or
financial position.

(J)The Company has adopted, effective April 1, 2001, Statement of Financial
Accounting Standards No. 142, Goodwill and Other
Intangible Assets (SFAS 142), which provides that intangible assets, including goodwill, that are not
subject to amortization must be tested for impairment as of the beginning of
the fiscal year in which this statement is initially applied and annually
thereafter at the reporting unit level using a two-step impairment assessment.
Impairment testing must be performed more frequently if events or changes in
circumstances indicate that the asset might be impaired. The Company has
completed the assessment of impairment as of the beginning of the fiscal year,
and has determined that there is no impairment.

The pro forma adoption of SFAS 142 for the nine month period ended
December 31, 2000, which included amortization of goodwill and negative
goodwill, would have resulted in a decrease in net earnings of $2.7 million
and a decrease of $0.04 in both basic and diluted earnings per share. The pro
forma adoption of SFAS 142 for the three month period ended December 31, 2000
would not have been material. Goodwill was $369.7 million at December 31, 2001
and $324.0 million at March 31, 2001. The increase primarily relates to
acquisitions made in the first quarter of fiscal 2002.

(K)Certain prior year balances have been reclassified to be consistent with
the December 31, 2001 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, 2001, Centex Corporation and
Subsidiaries (Centex or the Company) consolidated revenues were $1.9
billion, a 15% increase over $1.7 billion for the same period last year;
earnings before income taxes were $157.9 million, a 43% increase over $110.5
million last year; and net earnings were $96.1 million, a 40% increase over
$68.5 million for the same period last year.

For the nine months ended December 31, 2001, consolidated revenues totaled
$5.5 billion, a 17% increase over $4.7 billion for the same period last year;
earnings before income taxes were $428.2 million, a 51% increase over $284.5
million for the same period last year; and net earnings were $264.8 million, a
51% increase over $175.8 million for the same period last year.

HOME BUILDING

Conventional Homes

The following summarizes Conventional Homes results for the three and
nine months ended December 31, 2001 compared to the same periods last year
(dollars in millions, except per unit data):

|                                           |          |   |                                        
|------------------------------------------ | -------- | - | ---------------------------------------
|                                           |          |   | For the Three Months Ended December 31,
|                                           |          |   |                                        
|                                           |          |   | 2001                                   
|                                           |          |   |                                        
|Revenues                                   |          | $ | 1,210.8                                
|Cost of Sales                              |          |   | (898.3                                 
|Selling, General & Administrative Expenses |          |   | (178.0                                 
|                                           |          |   |                                        
|Operating Earnings                         |          | $ | 134.5                                  
|                                           |          |   |                                        
|Units Closed                               |          |   | 5,567                                  
|                                           | % Change |   |                                        
|Unit Sales Price                           |          | $ | 212,400                                
|                                           | % Change |   |                                        
|Operating Earnings Per Unit                |          | $ | 24,162                                 
|                                           | % Change |   |                                        
|Backlog Units                              |          |   | 9,476                                  
|                                           | % Change |   |                                        

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|                                           |          |   |                                        |      |   |      |       |    |  |   |          |      |   |  |       |    | 
|------------------------------------------ | -------- | - | -------------------------------------- | ---- | - | ---- | ----- | -- |  | - | -------- | ---- | - |  | ----- | -- | 
|                                           |          |   |                                       
|                                           |          |   | For the Nine Months Ended December 31, |     
|                                           |          |   |                                       
|                                           |          |   | 2001                                   |      |   | 2000 |      
|                                           |          |   |                                        |      |   |     
|Revenues                                   |          | $ | 3,420.6                                |      |   |      | 100.0 | %  |  | $ | 2,952.8  |      |   |  | 100.0 | % 
|Cost of Sales                              |          |   | (2,539.3                               | )    |   |      | (74.2 | %) |  |   | (2,251.2 | )    |   |  | (76.2 | %)
|Selling, General & Administrative Expenses |          |   | (525.7                                 | )    |   |      | (15.4 | %) |  |   | (438.9   | )    |   |  | (14.9 | %)
|                                           |          |   |                                        |      |   |      |       |    |  |   |          |     
|Operating Earnings                         |          | $ | 355.6                                  |      |   |      | 10.4  | %  |  | $ | 262.7    |      |   |  | 8.9   | % 
|                                           |          |   |                                        |      |   |      |       |    |  |   |          |     
|Units Closed                               |          |   | 15,835                                 |      |   |      |       |    |  |   | 14,202   |      |   |  |       |   
|                                           | % Change |   |                                        | 11.5 | % |      |       |    |  |   |          | 10.5 | % |  |       |    | 
|Unit Sales Price                           |          | $ | 212,445                                |      |   |      |       |    |  | $ | 203,071  |      |   |  |       |   
|                                           | % Change |   |                                        | 4.6  | % |      |       |    |  |   |          | 7.7  | % |  |       |    | 
|Operating Earnings Per Unit                |          | $ | 22,457                                 |      |   |      |       |    |  | $ | 18,501   |      |   |  |       |   
|                                           | % Change |   |                                        | 21.4 | % |      |       |    |  |   |          | 17.3 | % |  |       |    | 
|Backlog Units                              |          |   | 9,476                                  |      |   |      |       |    |  |   | 8,603    |      |   |  |       |   
|                                           | % Change |   |                                        | 10.1 | % |      |       |    |  |   |          | 16.1 | % |  |       |    | 

Conventional Homes revenues for the three and nine months ended December
31, 2001 increased 16.6% and 15.8%, respectively, compared to revenues for the
same periods last year. These improvements resulted from an increased number
of operating neighborhoods along with an increase in units closed per
neighborhood, and a higher average unit selling price compared to fiscal 2001.

Operating earnings for the three and nine months ended December 31, 2001
were 11.1% and 10.4% as a percentage of revenue and approximately $24,162 and
$22,457 on a per-unit basis, compared to operating earnings of 9.7% and 8.9% of
revenue and approximately $20,568 and $18,501 on a per-unit basis for the same
periods last year. The operating earnings increase was primarily attributable
to a higher average unit selling price and continued cost reductions due to
increased productivity and process design improvements.

Home sales (orders) totaled 5,065 units during the three months ended
December 31, 2001 compared to 4,351 units during the same period last year, a
16.4% increase. Home sales (orders) totaled 15,967 units during the nine
months ended December 31, 2001 compared to 15,226 units for the same period
last year, a 4.9% increase. The backlog of homes sold but not closed at
December 31, 2001 was 9,476 units, compared to 8,603 units as of December 31,
2000, a 10.1% increase.

Manufactured Homes

The following summarizes Manufactured Homes results for the three and
nine months ended December 31, 2001 compared to the same periods last year
(dollars in millions):

|                                  |  |                                         |       |   |      |  |       |    |  |   |       |   |  |  |  |  |       |   
|--------------------------------- |  | --------------------------------------- | ----- | - | ---- |  | ----- | -- |  | - | ----- | - |  |  |  |  | ----- | --
|                                  |  |                                        
|                                  |  | For the Three Months Ended December 31,
|                                  |  |                                        
|                                  |  | 2001                                    |       |   | 2000
|                                  |  |                                         |       |  
|Revenues                          |  | $                                       | 31.9  |   |      |  | 100.0 | %  |  | $ | 29.5  |   |  |  |  |  | 100.0 | % 
|Cost of Sales                     |  |                                         | (26.1 | ) |      |  | (81.9 | %) |  |   | (24.4 | ) |  |  |  |  | (82.8 | %)
|Selling, General & Administrative |  |                                         | (5.1  | ) |      |  | (15.9 | %) |  |   | (7.6  | ) |  |  |  |  | (25.8 | %)
|                                  |  |                                         |       |   |      |  |       |    |  |   |       |   |  | 
|Operating Earnings (Loss)         |  | $                                       | 0.7   |   |      |  | 2.2   | %  |  | $ | (2.5  | ) |  |  |  |  | (8.6  | %)
|                                  |  |                                         |       |   |      |  |       |    |  |   |       |   |  | 
|Units Sold                        |  |                                         | 955   |   |      |  |       |    |  |   | 1,004 |   |  |  |  |  |       |   

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|                                  |  |                                        |       |      |  |  |       |    |  |   |       |   |  |  |       |   
|--------------------------------- |  | -------------------------------------- | ----- | ---- |  |  | ----- | -- |  | - | ----- | - |  |  | ----- | --
|                                  |  |                                       
|                                  |  | For the Nine Months Ended December 31,
|                                  |  |                                       
|                                  |  | 2001                                   |       | 2000
|                                  |  |                                        |       |     
|Revenues                          |  | $                                      | 90.9  |      |  |  | 100.0 | %  |  | $ | 99.8  |   |  |  | 100.0 | % 
|Cost of Sales                     |  |                                        | (76.0 | )    |  |  | (83.6 | %) |  |   | (82.0 | ) |  |  | (82.2 | %)
|Selling, General & Administrative |  |                                        | (15.7 | )    |  |  | (17.3 | %) |  |   | (21.5 | ) |  |  | (21.5 | %)
|                                  |  |                                        |       |      |  |  |       |    |  |   |       |  
|Operating Loss                    |  | $                                      | (0.8  | )    |  |  | (0.9  | %) |  | $ | (3.7  | ) |  |  | (3.7  | %)
|                                  |  |                                        |       |      |  |  |       |    |  |   |       |  
|Units Sold                        |  |                                        | 2,854 |      |  |  |       |    |  |   | 3,328 |   |  |  |       |   

For the three and nine months ended December 31, 2001, revenues increased
8.2% and decreased 8.9%, respectively, from the same periods last year; and
operating earnings increased $3.2 million and operating losses decreased $2.9
million, respectively, from the same periods last year.

Due to higher than normal retailer inventories and the reduced
availability and higher cost of financing for purchasers of manufactured homes,
Manufactured Homes revenues declined for the nine months ended December 31,
2001 compared to the same period last year. Revenues for the three months
ended December 31, 2001 increased compared to the same period in the prior
year due to the reduced inventory positions of independent dealers in the
manufactured housing markets. Production efficiencies and successful cost
reduction measures improved operating results for both the three and nine
months ended December 31, 2001.

FINANCIAL SERVICES

The following summarizes Financial Services results for the three and
nine months ended December 31, 2001 compared to the same periods last year
(dollars in millions):

|                           |                                 |                                   |        |                            |        |   |        |       |        | 
|-------------------------- | ------------------------------- | --------------------------------- | ------ | -------------------------- | ------ | - | ------ | ----- | ------ | 
|                           |                                 |                                   |        |                            |       
|                           |                                 |                                   |        | For the Three Months Ended |       
|                           |                                 |                                   |        | December 31,               |       
|                           |                                 |                                   |        |                            |       
|                           |                                 |                                   |        | 2001                       |        |   | 2000   |      
|                           |                                 |                                   |        |                            |        |   |        |      
|Revenues                   |                                 | $                                 | 182.8  |                            |        | $ | 121.3  |      
|                           |                                 |                                   |        |                            |        |  
|Operating Earnings         |                                 | $                                 | 33.4   |                            |        | $ | 2.4    |      
|                           |                                 |                                   |        |                            |        |  
|Origination Volume         |                                 | $                                 | 4,096  |                            |        | $ | 2,461  |      
|                           |                                 |                                   |        |                            |        |  
|Number of Loans Originated |                                 |                                   |        |                            |        |   |        |       |        | 
|                           | CTX Mortgage Company, LLC       |                                   |        |                            |        |   |        |       |        | 
|                           |                                 | Centex-built Homes (Builder)    |        |                            | 3,797  |   |        |       | 2,956  | 
|                           |                                 | Non-Centex-built Homes (Retail) |        |                            | 18,763 |   |        |       | 10,610 | 
|                           |                                 |                                   |        |                            |        |  
|                           |                                 |                                   | 22,560 |                            |        |   | 13,566 |      
|                           | Centex Home Equity Company, LLC |                                   |        | 7,136                      |        |   |        | 6,564 |       
|                           |                                 |                                   |        |                            |        |  
|                           |                                 |                                   | 29,696 |                            |        |   | 20,130 |      
|                           |                                 |                                   |        |                            |        |  

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|                           |                                     |                                   |        |                           |        |   |        |        |        | 
|-------------------------- | ----------------------------------- | --------------------------------- | ------ | ------------------------- | ------ | - | ------ | ------ | ------ | 
|                           |                                     |                                   |        |                           |       
|                           |                                     |                                   |        | For the Nine Months Ended |       
|                           |                                     |                                   |        | December 31,              |       
|                           |                                     |                                   |        |                           |       
|                           |                                     |                                   |        | 2001                      |        |   | 2000   |       
|                           |                                     |                                   |        |                           |        |   |        |       
|Revenues                   |                                     | $                                 | 511.4  |                           |        | $ | 323.7  |       
|                           |                                     |                                   |        |                           |        |  
|Operating Earnings         |                                     | $                                 | 87.8   |                           |        | $ | 4.7    |       
|                           |                                     |                                   |        |                           |        |  
|Origination Volume         |                                     | $                                 | 11,232 |                           |        | $ | 7,316  |       
|                           |                                     |                                   |        |                           |        |  
|Number of Loans Originated |                                     |                                   |        |                           |        |   |        |        |        | 
|                           | CTX Mortgage Company, LLC           |                                   |        |                           |        |   |        |        |        | 
|                           |                                     | Centex-built Homes (Builder)    |        |                           | 10,612 |   |        |        | 8,261  | 
|                           |                                     | Non-Centex-built Homes (Retail) |        |                           | 51,847 |   |        |        | 33,572 | 
|                           |                                     |                                   |        |                           |        |  
|                           |                                     |                                   | 62,459 |                           |        |   | 41,833 |       
|                           | Centex Home Equity Corporation, LLC |                                   |        | 21,201                    |        |   |        | 20,310 |       
|                           |                                     |                                   |        |                           |        |  
|                           |                                     |                                   | 83,660 |                           |        |   | 62,143 |       
|                           |                                     |                                   |        |                           |        |  

For the three and nine months ended December 31, 2001, Financial Services
revenues increased 50.7% and 58.0%, respectively, and operating earnings
increased significantly from the same periods last year. The increase in
revenues and operating earnings is due primarily to increased mortgage
refinancings at CTX Mortgage Company, LLC and related companies (CTX
Mortgage) as a result of lower mortgage rates and to the impact of the
portfolio method of accounting as described below.

The operating earnings of CTX Mortgage are derived primarily from gains on
the sale of mortgage loans to investors and Harwood Street Funding I, LLC
(HSF-I), an unaffiliated entity that is not consolidated with Financial
Services or the Company, and, to a lessor extent, net interest income and other
fees. HSF-I purchases mortgage loans from CTX Mortgage with the proceeds from
the issuance of certain debt securities, and then sells or securitizes the
mortgage loans. The debt, interest income and interest expense of HSF-I are
not reflected in the financial statements of Financial Services or the Company.
For additional information regarding HSF-I, see Financial Information and
Liquidity below.

CTX Mortgages operating earnings for the three and nine months ended
December 31, 2001 were $25.0 million and $73.1 million compared to $5.9 million
and $16.7 million for the same periods last year. The increase in CTX
Mortgages operating earnings is primarily due to a significant increase in
mortgage origination volume, including substantial mortgage refinancing
activity, that was the result of lower mortgage rates in the first, second and
third quarters of fiscal 2002 compared to the same periods last year. For the
three months ended December 31, 2001, originations totaled 22,560 compared to
13,566 for the same period last year; loan volume was $3.5 billion compared to
$2.0 billion for the same period last year; the per-loan profit was $1,127, an
increase of 159% compared to the same period last year; and total mortgage
applications increased 46% to 18,545 from 12,723 applications for the same
period last year. For the nine months ended December 31, 2001, originations
totaled 62,459 compared to 41,833 for the same period last year; loan volume
was $9.6 billion compared to $6.0 billion for the same period last year; the
per-loan profit was $1,194, an increase of 199% as compared to the same period
last year; and total mortgage applications increased 36% to 59,766 from 43,919
applications for the same period last year. The results of operations of CTX
Mortgage depend to a significant extent on mortgage rates, which are currently
at levels that approximate historic lows. Any significant increases in
mortgage rates above currently prevailing levels could significantly reduce
refinancings and adversely affect the volume of loan originations. There can
be no assurance that mortgage rates will remain at the current level in the
future.

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Centex Home Equity Company, LLC and related companies (CHEC) returned to
profitability after having begun to account for its securitizations completed
subsequent to March 31, 2000 as borrowings rather than as sales (as discussed
further below), reporting operating earnings for the three and nine months
ended December 31, 2001 of $8.3 million and $14.7 million compared to operating
losses of $3.5 million and $12.1 million for the same periods last year. The
increase in CHECs operating earnings is primarily the result of an increase in
volume of loans originated and the change in the method of accounting for
securitizations beginning in fiscal 2001. As a result of this change, no
securitization gains were recognized in fiscal 2001. Instead, interest income
and interest expense related to the securitizations accounted for as borrowings
began to be recognized. As the balance of securitizations accounted for as
borrowings increases, the operating earnings should continue to be positively
affected. For the three months ended December 31, 2001, originations totaled
7,136 compared to 6,564 for the same period last year; loan volume was $584.6
million compared to $442.8 million for the same period last year; and total
applications increased 29.3% to 45,391 from 35,105 applications for the same
period last year. For the nine months ended December 31, 2001, originations
totaled 21,201 compared to 20,310 for the same period last year; loan volume
was $1.6 billion compared to $1.3 billion for the same period last year; and
total applications increased 16.3% to 127,759 from 109,853 applications for the
same period last year.

Prior to fiscal 2001, CHECs securitizations were structured in a manner
that caused them to be accounted for as sales and the resulting gains were
reported as revenues during the month in which the securitizations closed. In
fiscal 2001, CHEC changed the transaction structure which resulted in the
securitizations being accounted for as borrowings, which requires that
residential mortgage loans and securitization debt be reflected on the
Companys balance sheet and the interest income and interest expense associated
with the securitized loan portfolio be reflected in the Companys income
statements. Net interest income, rather than gain on sale of loans, is now
CHECs primary source of operating income. For the three and nine months ended
December 31, 2001, CHECs interest income was $66.6 million and $172.2 million,
respectively, compared to $32.6 million and $65.5 million for the same periods
last year. CHECs interest expense was $37.8 million and $105.5 million,
respectively, compared to $22.9 million and $46.1 million for the same periods
last year. The increase in interest income and interest expense for the three
and nine months ended December 31, 2001 compared to the same periods in the
prior year is primarily a result of the change in the method of accounting for
securitizations.

At December 31, 2001, CHECs servicing portfolio, which includes
residential mortgage loan securitizations accounted for as sales and
borrowings, consisted of 60,811 loans totaling $4.2 billion, compared to 45,377
loans totaling $3.0 billion at December 31, 2000. For the three and nine
months ended December 31, 2001, service fee income related to this long-term
servicing, which is not included in interest income, was $10.1 million and
$27.9 million, respectively, compared to $6.8 million and $17.8 million,
respectively, for the same period a year ago.

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CONSTRUCTION PRODUCTS

The following summarizes Construction Products results for the three and
nine months ended December 31, 2001 compared to the same periods last year
(dollars in millions):

|                                           |  |                            |       |   |      |   |       |  
|------------------------------------------ |  | -------------------------- | ----- | - | ---- | - | ----- | -
|                                           |  |                            |      
|                                           |  | For the Three Months Ended |      
|                                           |  | December 31,               |      
|                                           |  |                            |      
|                                           |  | 2001                       |       |   | 2000 |  
|                                           |  |                            |       |   |      |  
|Revenues                                   |  | $                          | 112.7 |   |      | $ | 105.3 |  
|Interest Income                            |  |                            | 0.5   |   |      |   | 1.8   |  
|Cost of Sales                              |  |                            | (90.5 | ) |      |   | (84.5 | )
|Selling, General & Administrative Expenses |  |                            | (1.3  | ) |      |   | (1.6  | )
|                                           |  |                            |       |   |      |  
|Operating Earnings                        |  | $                          | 21.4  |   |      | $ | 21.0  |  
|                                           |  |                            |       |   |      |  

|                                           |  |                           |        |   |      |   |        |  
|------------------------------------------ |  | ------------------------- | ------ | - | ---- | - | ------ | -
|                                           |  |                           |       
|                                           |  | For the Nine Months Ended |       
|                                           |  | December 31,              |       
|                                           |  |                           |       
|                                           |  | 2001                      |        |   | 2000 |  
|                                           |  |                           |        |   |      |  
|Revenues                                   |  | $                         | 359.7  |   |      | $ | 335.2  |  
|Interest Income                            |  |                           | 2.6    |   |      |   | 5.6    |  
|Cost of Sales                              |  |                           | (301.6 | ) |      |   | (246.2 | )
|Selling, General & Administrative Expenses |  |                           | (3.8   | ) |      |   | (4.9   | )
|                                           |  |                           |        |   |      |  
|Operating Earnings                        |  | $                         | 56.9   |   |      | $ | 89.7   |  
|                                           |  |                           |        |   |      |  



| |  |  |  Operating Earnings are shown before Minority Interest.
| |  |  | --------------------------------------------------------

For the three months ended December 31, 2001, Construction Products
revenues increased 7.1% and operating earnings increased 1.8% from the same
period last year. For the nine months ended December 31, 2001, Construction
Products revenues increased 7.3% and operating earnings decreased 36.6% from
the same period last year. Construction Products revenues for the three and
nine month periods ending December 31, 2001 increased primarily due to the
November 2000 purchase of recycled paperboard operations and a wallboard plant.
Operating earnings for the nine months ended December 31, 2001 were
negatively impacted by lower gypsum wallboard prices. Gypsum wallboard prices
rebounded in the third quarter of fiscal 2002, resulting in a slight increase
in earnings from the same period last year.

CONTRACTING AND CONSTRUCTION SERVICES

The following summarizes Contracting and Construction Services results
for the three and nine months ended December 31, 2001 compared to the same
periods last year (dollars in millions):

|                                 |  |                            |       |  |      |   |       | 
|-------------------------------- |  | -------------------------- | ----- |  | ---- | - | ----- | 
|                                 |  |                            |      
|                                 |  | For the Three Months Ended |      
|                                 |  | December 31,               |      
|                                 |  |                            |      
|                                 |  | 2001                       |       |  | 2000 |  
|                                 |  |                            |       |  |      |  
|Revenues                         |  | $                          | 321.4 |  |      | $ | 345.6 | 
|                                 |  |                            |       |  |      |  
|Operating Earnings               |  | $                          | 9.1   |  |      | $ | 8.2   | 
|                                 |  |                            |       |  |      |  
|New Contracts Executed           |  | $                          | 433.6 |  |      | $ | 318.5 | 
|                                 |  |                            |       |  |      |  
|Backlog of Uncompleted Contracts |  | $                          | 2,262 |  |      | $ | 1,445 | 
|                                 |  |                            |       |  |      |  

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|                                 |  |                           |         |  |      |   |         | 
|-------------------------------- |  | ------------------------- | ------- |  | ---- | - | ------- | 
|                                 |  |                           |        
|                                 |  | For the Nine Months Ended |        
|                                 |  | December 31,              |        
|                                 |  |                           |        
|                                 |  | 2001                      |         |  | 2000 |  
|                                 |  |                           |         |  |      |  
|Revenues                         |  | $                         | 971.8   |  |      | $ | 974.7   | 
|                                 |  |                           |         |  |      |  
|Operating Earnings               |  | $                         | 23.9    |  |      | $ | 21.3    | 
|                                 |  |                           |         |  |      |  
|New Contracts Executed           |  | $                         | 1,211.6 |  |      | $ | 1,037.6 | 
|                                 |  |                           |         |  |      |  
|Backlog of Uncompleted Contracts |  | $                         | 2,262   |  |      | $ | 1,445   | 
|                                 |  |                           |         |  |      |  

For the three and nine months ended December 31, 2001, Contracting and
Construction Services revenue declined 7.0% and 0.3%, respectively, compared
to the same period last year. This decline was primarily the result of a short
delay in the timing of construction contracts in the hospitality industry due
to the events of September 11, 2001. For the three and nine months ended
December 31, 2001, Contracting and Construction Services operating earnings
increased 11.6% and 12.5%, respectively, from the same periods last year. This
increase was primarily the result of a continuing shift in recent years to
higher-margin private negotiated projects from lower-margin public bid work and
efficiency improvements. The increase in operating earnings was somewhat
offset by the previously mentioned decline in revenues. New Contracts Executed
increased 36.1% and 16.8% for the three and nine months ended December 31,
2001, as compared to the same period last year. Backlog of Uncompleted
Contracts increased 56.5% to $2.3 billion as of December 31, 2001, as compared
to $1.4 billion at December 31, 2000.

The Contracting and Construction Services operations provided a positive
average net cash flow in excess of Centexs investment in the group of $132.6
million and $116.3 million for the three and nine months ended December 31,
2001, compared to $99.3 million and $95.1 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, 2001 compared to the same periods last year
(dollars in millions):

|                   |  |                            |     |  |      |   |      | 
|------------------ |  | -------------------------- | --- |  | ---- | - | ---- | 
|                   |  |                            |    
|                   |  | For the Three Months Ended |    
|                   |  | December 31,               |    
|                   |  |                            |    
|                   |  | 2001                       |     |  | 2000 |  
|                   |  |                            |     |  |      |  
|Revenues           |  | $                          | 9.7 |  |      | $ | 13.0 | 
|                   |  |                            |     |  |      |  
|Operating Earnings |  | $                          | 4.6 |  |      | $ | 13.6 | 
|                   |  |                            |     |  |      |  

|                   |  |                           |      |  |      |   |      | 
|------------------ |  | ------------------------- | ---- |  | ---- | - | ---- | 
|                   |  |                           |     
|                   |  | For the Nine Months Ended |     
|                   |  | December 31,              |     
|                   |  |                           |     
|                   |  | 2001                      |      |  | 2000 |  
|                   |  |                           |      |  |      |  
|Revenues           |  | $                         | 57.1 |  |      | $ | 19.7 | 
|                   |  |                           |      |  |      |  
|Operating Earnings |  | $                         | 36.0 |  |      | $ | 26.7 | 
|                   |  |                           |      |  |      |  

For the three and nine months ended December 31, 2001, Investment Real
Estate operations had operating earnings of $4.6 million and $36.0 million,
respectively, a decrease of 66.1% and an increase of 34.6% compared to
operating earnings of $13.6 million and $26.7 million for the same periods a
year ago. Included in Investment Real Estates revenues and operating earnings
was $5.5 million and $12.0 million for the three and nine month periods ended
December 31, 2001 derived from
its investment in the Partnership, which is not consolidated and is
accounted for on the equity method of accounting. For the three and nine
months ended December 31, 2001, Investment Real Estate operations had revenues
of $9.7 million and $57.1

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##### Table of Contents



million, respectively, a decrease of 25.3% and an
increase of 190.1% compared to the same periods in the prior year. The
decrease in revenues and operating earnings for the three months ended December
31, 2001 and the increase in revenues and operating earnings for the nine
months ended December 31, 2001 is the result of the timing of land sales. The
timing of land sales is uncertain and can vary significantly from period to
period. Negative goodwill amortization was zero for the three and nine months
ended December 31, 2001, and was $4 million and $12 million for the three and
nine months ended December 31, 2000.

The largest component of the Partnership is its International Home
Building segment, which operates through Fairclough Homes Group Limited
(Fairclough), a London, England-based home builder. Investment Real Estates
investment in Fairclough, through the Partnership, resulted in operating
earnings of $2.4 million and $8.0 million for the three and nine months ended
December 31, 2001 as compared to a loss of $0.9 million and $1.1 million for
the same periods in the prior year. The increase in operating earnings
occurred primarily because the loss for the three and nine months ended
December 31, 2001 included a preferred distribution due to the seller of
Fairclough in connection with preference shares issued at acquisition. The
preferred distribution was not included in the operating earnings for the
current year periods. For the three months ended December 31, 2001 and 2000,
Fairclough closed 317 units at an average sales price per unit of $193,915 and
243 units at an average sales price per unit of $204,914, respectively.
Operating earnings (loss) per unit (before interest) were $9,006 and $(3,918)
for the three months ended December 31, 2001 and 2000, respectively. For the
nine months ended December 31, 2001 and 2000, Fairclough closed 931 units at an
average sales price per unit of $195,716 and 841 units at an average sales
price per unit of $206,502. Operating earnings per unit (before interest) were
$10,107 and $3,742 for the nine months ended December 31, 2001 and 2000,
respectively.

HOME SERVICES

The following summarizes Home Services results for the three and nine
months ended December 31, 2001 (dollars in millions):

|                   |                            |              |      | 
|------------------ | -------------------------- | ------------ | ---- | 
|                   |                           
|                   | For the Three Months Ended
|                   |                            | December 31, |     
|                   |                           
|                   |                            | 2001         |     
|                   |                           
|Revenues           |                            | $            | 25.2 | 
|                   |                            |              |     
|Operating
Earnings |                            | $            | 1.7  | 
|                   |                            |              |     

|                   |                           |              |      | 
|------------------ | ------------------------- | ------------ | ---- | 
|                   |                          
|                   | For the
Nine Months Ended
|                   |                           | December 31, |     
|                   |                          
|                   |                           | 2001         |     
|                   |                          
|Revenues           |                           | $            | 75.8 | 
|                   |                           |              |     
|Operating
Earnings |                           | $            | 6.2  | 
|                   |                           |              |     

Prior to fiscal 2002, revenues and operating expenses of Home Services
were included in the Other, net segment and were reflected on a net basis, as
this segment was not considered material for purposes of segment reporting.

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##### Table of Contents



FINANCIAL CONDITION AND LIQUIDITY

At December 31, 2001, the Company had cash and cash equivalents of $47.1
million including $11.6 million belonging to the Companys 65.2%-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, 2001 and 2000 is summarized below (dollars in thousands):

|                               |                         |                      |         |                           |            |   |         |   |            |  
|------------------------------ | ----------------------- | -------------------- | ------- | ------------------------- | ---------- | - | ------- | - | ---------- | -
|                               |                         |                      |         |                           |           
|                               |                         |                      |         | For the Nine Months Ended |           
|                               |                         |                      |         | December 31,              |           
|                               |                         |                      |         |                           |           
|                               |                         |                      |         | 2001                      |            |   | 2000    |  
|                               |                         |                      |         |                           |            |   |         |  
|Net cash provided by (used in) |                         |                      |         |                           |            |   |         |  
|                               | Non-Financial Services* |                      |         |                           |            |   |         |   |           
|                               |                         | Operating Activities |         | $                         | (328,362   | ) |         | $ | (146,667   | )
|                               |                         | Investing Activities |         |                           | (74,728    | ) |         |   | (514,282   | )
|                               |                         | Financing Activities |         |                           | 391,617    |   |         |   | 572,084    |  
|                               |                         |                      |         |                           |            |  
|                               |                         |                      | (11,473 | )                         |            |   | (88,865 | )
|                               |                         |                      |         |                           |            |  
|                               | Financial Services      |                      |         |                           |            |   |         |   |           
|                               |                         | Operating Activities |         |                           | (1,234,481 | ) |         |   | (1,252,633 | )
|                               |                         | Investing Activities |         |                           | (4,673     | ) |         |   | (5,049     | )
|                               |                         | Financing Activities |         |                           | 1,239,996  |   |         |   | 1,255,046  |  
|                               |                         |                      |         |                           |            |  
|                               |                         |                      | 842     |                           |            |   | (2,636  | )
|                               |                         |                      |         |                           |            |  
|Net decrease in cash           |                         | $                    | (10,631 | )                         |            | $ | (91,501 | )
|                               |                         |                      |         |                           |            |  



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

The Company generally funds its 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 issuances of medium-term
notes and other debt securities. During the nine months ended December 31,
2001, 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 included new debt used to fund the increased home
building activity.

The Company generally funds its 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 Harwood Street
Funding I, LLC (HSF-I) (described below). During the nine months ended
December 31, 2001, cash was used in Financial Services-Operating Activities to
finance increases in residential mortgage loans. The funds provided by
Financial Services-Financing Activities included new debt used to fund the
increased residential mortgage loan activity.

The Company currently
has an investment grade credit rating from
each of the principal credit rating agencies. The ability of the Company to
finance its activities on favorable terms is dependent to a significant extent
on whether it is able to maintain its investment-grade credit rating. The
Company attempts to manage its debt levels in order to maintain an
investment-grade rating. If,
however, the Companys debt rating were downgraded to below investment
grade, it would not have access to the commercial paper markets and would need
to make alternative financing arrangements.

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##### Table of Contents



The Companys existing credit facilities and available capacity as of
December 31, 2001 is summarized below (dollars in thousands):

|                       |                                             |   |           |            |  |   |           |         |     | 
|---------------------- | ------------------------------------------- | - | --------- | ---------- |  | - | --------- | ------- | --- | 
|                       |                                             |   |           | Existing   |  |   |           |         |    
|                       |                                             |   |           | Credit     |  |   | Available |        
|                       |                                             |   |           | Facilities |  |   | Capacity  |        
|                       |                                             |   |           |            |  |   |           |        
|Non-Financial Services |                                             |   |           |            |  |   |           |        
|                       | Centex Corporation                          |   |           |            |  |   |           |         |    
|                       | Multi-Bank Revolving Credit Facility        |   | $         | 600,000    |  |   | $         | 600,000 | (1)
|                       | Uncommitted Bank Lines                      |   |           | 60,000     |  |   |           | 40,000  |    
|                       | Construction
Products                       |   |           |            |  |   |           |         |    
|                       | Senior Revolving Credit Facility            |   |           | 275,000    |  |   |           | 92,300  | (2)
|                       | Annually Renewable Commercial Paper Conduit |   |           | 50,000     |  |   |           | 27,238  | (2)
|                       |                                             |   |           |            |  |  
|                       |                                             |   | 985,000   |            |  |   | 759,538   |        
|                       |                                             |   |           |            |  |  
|Financial Services     |                                             |   |           |            |  |   |           |        
|                       | Unsecured Credit Facilities                 |   |           | 170,000    |  |   |           |        | (3)
|                       | Secured Credit Facilities                   |   |           | 860,000    |  |   |           | 524,798 | (4)
|                       | Harwood Street Funding II, LLC Facility     |   |           | 550,000    |  |   |           | 5,683   |    
|                       | Line of Credit                              |   |           | 14,545     |  |   |           | 13,091  | (5)
|                       |                                             |   |           |            |  |  
|                       |                                             |   | 1,594,545 |            |  |   | 543,572   |        
|                       |                                             |   |           |            |  |  
|                       |                                             | $ | 2,579,545 |            |  | $ | 1,303,110 | (6)    
|                       |                                             |   |           |            |  |  



| | (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, 2001, there were no borrowings under this
facility, and the company had outstanding commercial paper of $360 million.                                                                                                                                                                                                                                                                                                                                                                         
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (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 2002.                                                                                                                                                                                                                                                                                                                                                                                                    
|
| | (3) |  | Financial Services maintains a $45 million uncommitted facility, which
is allocated evenly between CTX Mortgage and CHEC.
All borrowings under this facility are guaranteed by Centex Corporation.
Centex Corporation, CTX Mortgage and CHEC share
in a $125 million uncommitted, unsecured credit facility.                                                                                                                                                                                                                                                                                                                                                 
|
| | (4) |  | CTX Mortgage and CHEC share in $200 million committed and $175 million
uncommitted secured credit facilities to finance mortgage
inventory. CHEC has a $325 million committed secured mortgage warehouse
facility maturing in April 2002 to finance sub-prime
mortgages not financed through its other facilities. Financial Services
maintains a $55 million secured mortgage warehouse facility
which expires in February 2002. CTX Mortgage maintains $105 million of
committed secured mortgage warehouse facilities maturing
in October 2002 to finance mortgages not sold to HSF-I. Centex Corporation
has guaranteed $7.5 million of these facilities.
|
| | (5) |  | The United Kingdom mortgage operation maintains a £10 million
uncommitted unsecured line of credit guaranteed by Centex
Corporation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| | (6) |  | The amount of available capacity includes $178 million of uncommitted
borrowings. 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.                                                                                                                                                                                                                                                                                                                        

CTX Mortgage sells, at closing, substantially all of the Conforming, Jumbo
A, and GNMA eligible mortgages it originates (Eligible Mortgages) to HSF-I,
an unaffiliated entity which is not consolidated with Financial Services or the
Company. This arrangement allows the Company to
reduce its cost of financing mortgages and improves the Companys access
to liquidity. The Eligible Mortgages are sold under a revolving sales
agreement, which expires in November 2004 with certain renewal options. HSF-I
acquires the Eligible Mortgages, holds them for a period averaging 45 to 60
days and sells them into the secondary market. CTX Mortgage is the sole
manager of HSF-I and, in that capacity, acts as servicer of the loans owned by
HSF-I and arranges for the sale of the Eligible Mortgages into the secondary
market. HSF-I funds

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Eligible Mortgages with (i) securitized debt that is rated
AAA/A1+ by Standard & Poors (S&P) and Aaa/P1 by Moodys Investors Service
(Moodys) and (ii) subordinated certificates which are rated BBB by S&P and
Baa2 by Moodys. This arrangement, whereby HSF-I has committed to buy all
Eligible Mortgages from CTX Mortgage, gives CTX Mortgage daily access to
HSF-Is $2.0 billion of capacity. HSF-Is purchase commitment is subject to
termination upon the occurrence of certain events of default and other
termination events described in the revolving sales agreement, including a
downgrade in Centex Corporations credit ratings below BB+ by S&P and Ba1 by
Moodys. In the event CTX Mortgage were unable to sell loans to HSF-I, it
would be obliged to make other arrangements to finance its activities.
Although the Company believes that it could arrange for alternative financing,
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.

As of December 31, 2001, HSF-I owned $1.8 billion in securitized
residential mortgage loans sold to it by CTX Mortgage and had $1.7 billion of
outstanding debt and $0.1 billion of outstanding subordinated certificates.
The Company 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. Centex Corporation has
(i) an obligation, created through a swap agreement, to protect
against certain interest rate risk, non-credit related market risk
and prepayment risk related to mortgage loans held by HSF-I, and (ii) guaranteed the performance by
CTX Mortgage of its obligations as servicer of HSF-Is mortgage loans. 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. CTX Mortgage also has the obligation to repurchase
mortgage loans from HSF-I if it is determined that any mortgage loan sold by
CTX Mortgage to HSF-I did not comply with certain eligibility representations.

CHEC finances its inventory of mortgage loans through Harwood Street
Funding II, LLC (HSF-II), a wholly-owned, consolidated entity, under a
revolving sales agreement, which expires February 2006 with certain renewal
options. This arrangement, where HSF-II has committed to finance all eligible
loans, gives CHEC daily access to HSF-IIs capacity of $550 million. HSF-II
obtains funds through the sale of five-year subordinated notes and short-term
secured liquidity notes. Because HSF-II is a consolidated entity, the debt,
interest income and interest expense of HSF-II are reflected on the financial
statements of Financial Services and the Company.

Short-term debt as of
December 31, 2001 was $1.4 billion, which included
$1.0 billion of debt applicable to the Financial Services operation. Excluding
Financial Services and Construction Products, the Companys short-term
borrowings are generally financed at prevailing market interest rates from the
Companys commercial paper programs and from uncommitted bank facilities.

-27-



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##### Table of Contents



Debt outstanding as of December 31, 2001 was as follows (dollars in
thousands)(1):



|                        |                                                                               |                                                              |           |           |         |  | 
|----------------------- | ----------------------------------------------------------------------------- | ------------------------------------------------------------ | --------- | --------- | ------- |  | 
|Non-Financial Services: |                                                                               |                                                              |           |          
|                        | Short-Term Notes Payable                                                      |                                                              | $         | 402,812   |        
|                        | Senior Debt:                                                                  |                                                              |           |           |        
|                        |                                                                               | Medium-Term Note Programs, 2.72% to 7.95%, due through 2007  |           |           | 418,000 | 
|                        |                                                                               | Long-Term Notes, 6.40% to 9.75%, due through 2011            |           |           | 614,956 | 
|                        |                                                                               | Other Indebtedness, weighted-average 2.43%, due through 2027 |           |           | 216,183 | 
|                        | Subordinated Debt:                                                            |                                                              |           |           |        
|                        |                                                                               | Subordinated Debentures, 7.38%, due in 2006                  |           |           | 99,833  | 
|                        |                                                                               | Subordinated Debentures, 8.75%, due in 2007                  |           |           | 99,617  | 
|                        |                                                                               |                                                              |          
|                        |                                                                               |                                                              | 1,851,401 |          
|                        |                                                                               |                                                              |          
|Financial Services:     |                                                                               |                                                              |           |          
|                        | Short-Term Debt:                                                              |                                                              |           |           |        
|                        |                                                                               | Short-Term Bank Notes Payable                                |           |           | 356,817 | 
|                        |                                                                               | Harwood Street Funding II, LLC Secured Liquidity Notes       |           |           | 516,817 | 
|                        |                                                                               | Other Short-Term Debt                                        |           |           | 156,941 | 
|                        | Home Equity Loans Asset-Backed Certificates, 3.34% to 8.48%, due
through 2032 |                                                              |           | 2,288,702 |        
|                        | Harwood Street Funding II, LLC, Variable Rate, Subordinated
Notes, due 2006   |                                                              |           | 27,500    |        
|                        |                                                                               |                                                              |          
|                        |                                                                               |                                                              | 3,346,777 |          
|                        |                                                                               |                                                              |          
|Total                   |                                                                               | $                                                            | 5,198,178 |          
|                        |                                                                               |                                                              |          



|(1) |  | The Companys principal business segments, especially home building
operations, are cyclical and are particularly affected by changes in local
economic conditions and in long-term and short-term interest rates. As a
result, certain of the borrowings described in the table above vary on a
seasonal basis and depend on the working capital needs of the Companys
operations.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Financial Services debt related to securitized residential mortgage loans
structured as collateralized borrowings (Home Equity Loans Asset-Backed
Certificates) was $2.3 billion at December 31, 2001. 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 is based on contractual
maturities adjusted for projected repayments and prepayments of principal.
Maturities of Non-Financial Services and Financial Services long-term debt (in
thousands) during the next five fiscal years are:

|           |  |   |               |  |  |           |           |  |       |   |           |  | 
|---------- |  | - | ------------- |  |  | --------- | --------- |  | ----- | - | --------- |  | 
|           |  |   | Non-Financial |  |  | Financial |           |  | Total
|           |  |   |               |  |  |           |           |  |       |  
|2002       |  | $ | 7,069         |  |  | $         | 131,281   |  |       | $ | 138,350   | 
|2003       |  |   | 179,567       |  |  |           | 552,765   |  |       |   | 732,332   | 
|2004       |  |   | 210,629       |  |  |           | 415,576   |  |       |   | 626,205   | 
|2005       |  |   | 30,267        |  |  |           | 296,696   |  |       |   | 326,963   | 
|2006       |  |   | 325,032       |  |  |           | 242,607   |  |       |   | 567,639   | 
|Thereafter |  |   | 696,025       |  |  |           | 677,277   |  |       |   | 1,373,302 | 
|           |  |   |               |  |  |           |           |  |      
|           |  | $ | 1,448,589     |  |  | $         | 2,316,202 |  |       | $ | 3,764,791 | 
|           |  |   |               |  |  |           |           |  |      

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The Company conducts its land acquisition and development activities
directly and through its participation in joint ventures in which the Company
holds less than a majority interest. The Companys investment in Joint
Ventures and Other was $87.7 million and $72.0 million at December 31, 2001 and
March 31, 2001, respectively. These non-consolidated joint ventures had total
debt outstanding of approximately $168 million as of December 31, 2001 and $137
million as of March 31, 2001. The Companys liability is limited to
approximately $32 million and $46 million, respectively.

---

The Managements Discussion and Analysis of Financial Condition and
Results of Operations, the Other Developments and Outlook and other sections of
this report on Form 10-Q 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 the Company is discussing its 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 forecast in such forward-looking
statements. The principal risks and uncertainties that may affect the Companys
actual performance and results of operations include the following: general
economic conditions and interest rates; the cyclical and seasonal nature of the
Companys businesses; adverse weather; changes in property taxes and energy
costs; changes in federal income tax laws and federal mortgage financing
programs; governmental regulations; changes in governmental and public policy;
changes in economic conditions specific to any one or more of the Companys
markets and businesses; competition; availability of raw materials; and
unexpected operations difficulties. Other risks and uncertainties may also
affect the outcome of the Companys actual performance and results of
operations.




ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to market risks related to fluctuations in interest
rates on its direct debt obligations, on mortgage loans receivable, residual
interest in mortgage securitizations, and securitizations classified as debt.
The Company utilizes derivative instruments, including interest rate swaps, in
conjunction with its overall strategy to manage the debt outstanding that is
subject to changes in interest rates. The Company utilizes forward sale
commitments to mitigate the risk associated with the majority of its mortgage
loan portfolio. Other than the forward commitments and interest rate swaps
discussed earlier, the Company does 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 the Companys market risk from
March 31, 2001. For further information regarding the Companys market risk,
refer to the Companys Annual Report on Form 10-K for the fiscal year ended
March 31, 2001.

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##### Table of Contents












|         |  |                                                    
|-------- |  | ---------------------------------------------------
|Part II. |  | Other Information                                  
|        
|ITEM 4.  |  | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

| |  |      | 
| |  | ---- | 
| |  | None | 

|        |  |                                 
|------- |  | --------------------------------
|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
23, 2001 and filed with the SEC on that date, announcing
earnings for the quarter ended September 30, 2001.   
|
| |  | Current Report on Form 8-K of Centex Corporation dated December
5, 2001 and filed with the SEC on that date, providing earnings
guidance for fiscal year 2002, 2003 and 2004.

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---



##### Table of Contents






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 13, 2002 |  | /s/ Leldon E. Echols                                                                       
|                  |  | by Leldon E. Echols
Executive Vice President and
Chief Financial Officer                   
|                 
|February 13, 2002 |  | /s/ Mark A. Blinn                                                                          
|                  |  | Mark A. Blinn
Vice President  Controller and
Financial Strategy
(chief accounting officer)

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##### Table of Contents












Part I  Financial
InformationItem 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, |       
|                                           |  |                                         |       
|                                           |  | 2001                                    |        |  | 2000         |              
|                                           |  |                                         |        |  |              |              
|                                           |  |                                         |        |  |              | 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                                   |  | $                                       | 95,866 |  |              | $             | 95,041  |                |              | $ | 838      |  |  | $            | 80,752 |               |                | $ | 80,752       |   |  | $ |      |  
|Costs and Expenses                         |  |                                         | 90,092 |  |              |               | 90,053  |                |              |   | 52       |  |  |              | 78,031 |               |                |   | 77,894       |   |  |   | 137   |  
|                                           |  |                                         |        |  |              |               |         |                |              |   |          |  |  |              |        |               |                |  
|Earnings (Loss) Before Income Taxes        |  |                                         | 5,774  |  |              |               | 4,988   |                |              |   | 786      |  |  |              | 2,721  |               |                |   | 2,858        |   |  |   | (137  | )
|Income Taxes                               |  |                                         | 236    |  |              |               | 210     |                |              |   | 26       |  |  |              | (928   | )             |                |   | (928         | ) |  |   |      |  
|                                           |  |                                         |        |  |              |               |         |                |              |   |          |  |  |              |        |               |                |  
|Net Earnings (Loss)                        |  | $                                       | 5,538  |  |              | $             | 4,778   |                |              | $ | 760      |  |  | $            | 3,649  |               |                | $ | 3,786        |   |  | $ | (137  | )
|                                           |  |                                         |        |  |              |               |         |                |              |   |          |  |  |              |        |               |                |  
|Net Earnings Allocable to Limited Partners |  |                                         |        |  |              | $             | 4,778   |                |              |   |          |  |  |              |        |               |                | $ | 3,786        |   |  |   |       |  
|                                           |  |                                         |        |  |              |               |         |                |              |   |          |  |  |              |        |               |                |   |              |   |  |  
|Earnings (Loss) Per Unit/Share             |  |                                         |        |  |              | $             | 24.25   |                |              | $ | 760      |  |  |              |        |               |                | $ | 53.57        |   |  | $ | (137  | )
|                                           |  |                                         |        |  |              |               |         |                |              |   |          |  |  |              |        |               |                |   |              |  
|Weighted-Average Units/Shares Outstanding  |  |                                         |        |  |              |               | 197,016 |                |              |   | 1,000    |  |  |              |        |               |                |   | 70,669       |   |  |   | 1,000 |  

See notes to condensed combining financial statements.

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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, |        
|                                           |  |                                        |        
|                                           |  | 2001                                   |         |  | 2000         |              
|                                           |  |                                        |         |  |              |              
|                                           |  |                                        |         |  |              | 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                                   |  | $                                      | 266,108 |  |              | $             | 264,673 |                |              | $ | 1,548    |  |  | $            | 222,510 |               |                | $ | 222,509      |   |  | $ | 1     |  
|Costs and Expenses                         |  |                                        | 253,168 |  |              |               | 253,058 |                |              |   | 223      |  |  |              | 219,517 |               |                |   | 219,157      |   |  |   | 360   |  
|                                           |  |                                        |         |  |              |               |         |                |              |   |          |  |  |              |         |               |                |  
|Earnings (Loss) Before Income Taxes        |  |                                        | 12,940  |  |              |               | 11,615  |                |              |   | 1,325    |  |  |              | 2,993   |               |                |   | 3,352        |   |  |   | (359  | )
|Income Taxes                               |  |                                        | 945     |  |              |               | 919     |                |              |   | 26       |  |  |              | (871    | )             |                |   | (871         | ) |  |   |      |  
|                                           |  |                                        |         |  |              |               |         |                |              |   |          |  |  |              |         |               |                |  
|Net Earnings (Loss)                        |  | $                                      | 11,995  |  |              | $             | 10,696  |                |              | $ | 1,299    |  |  | $            | 3,864   |               |                | $ | 4,223        |   |  | $ | (359  | )
|                                           |  |                                        |         |  |              |               |         |                |              |   |          |  |  |              |         |               |                |  
|Net Earnings Allocable to Limited Partners |  |                                        |         |  |              | $             | 10,696  |                |              |   |          |  |  |              |         |               |                | $ | 4,223        |   |  |   |       |  
|                                           |  |                                        |         |  |              |               |         |                |              |   |          |  |  |              |         |               |                |   |              |   |  |  
|Earnings (Loss) Per Unit/Share             |  |                                        |         |  |              | $             | 56.81   |                |              | $ | 1,299    |  |  |              |         |               |                | $ | 60.70        |   |  | $ | (359  | )
|                                           |  |                                        |         |  |              |               |         |                |              |   |          |  |  |              |         |               |                |   |              |  
|Weighted-Average Units/Shares Outstanding  |  |                                        |         |  |              |               | 188,287 |                |              |   | 1,000    |  |  |              |         |               |                |   | 69,573       |   |  |   | 1,000 |  

See notes to condensed combining financial statements.

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

|                                                        |                            |                   |         |                    |         |                  |              |               |         |                |              |       |          |   |         |              |         |               |                |        |              |   |        |       |       | 
|------------------------------------------------------- | -------------------------- | ----------------- | ------- | ------------------ | ------- | ---------------- | ------------ | ------------- | ------- | -------------- | ------------ | ----- | -------- | - | ------- | ------------ | ------- | ------------- | -------------- | ------ | ------------ | - | ------ | ----- | ----- | 
|                                                        |                            |                   |         |                    |        
|                                                        |                            |                   |         | December 31, 2001* |         | March 31, 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 |       
|                                                        |                            |                   |         |                    |         |                  |              |               |         |                |              |       |          |   |         |              |         |               |                |       
|Assets                                                  |                            |                   |         |                    |         |                  |              |               |         |                |              |       |          |   |         |              |         |               |                |        |              |   |        |      
|Cash and Cash Equivalents                               |                            | $                 | 243     |                    |         | $                | 235          |               |         | $              | 8            |       |          | $ | 3,034   |              |         | $             | 3,029          |        |              | $ | 5      |      
|Restricted Cash                                         |                            |                   | 5,000   |                    |         |                  | 5,000        |               |         |                |             |       |          |   |        |              |         |               |               |        |              |   |       |      
|Accounts Receivable                                     |                            |                   | 5,438   |                    |         |                  | 10,462       |               |         |                | 150          |       |          |   | 10,185  |              |         |               | 15,353         |        |              |   |       |      
|Notes Receivable                                        |                            |                   |        |                    |         |                  |             |               |         |                |             |       |          |   | 14      |              |         |               | 14             |        |              |   |       |      
|Inventories                                             |                            |                   | 451,733 |                    |         |                  | 451,584      |               |         |                | 149          |       |          |   | 340,827 |              |         |               | 339,455        |        |              |   | 1,372  |      
|Investments -                                           |                            |                   |         |                    |         |                  |              |               |         |                |              |       |          |   |         |              |         |               |                |        |              |   |        |      
|                                                        | Commercial Properties, net |                   |         | 104,412            |         |                  |              | 104,412       |         |                |              |      |          |   |         | 83,649       |         |               |                | 83,649 |              |   |        |      |      
|                                                        | Real Estate Joint Ventures |                   |         | 6,413              |         |                  |              | 6,413         |         |                |              |      |          |   |         | 2,699        |         |               |                | 2,699  |              |   |        |      |      
|                                                        | Affiliate                  |                   |         |                   |         |                  |              |              |         |                |              | 1,716 |          |   |         |             |         |               |                |       |              |   |        | 1,716 |      
|Property and Equipment, net                             |                            |                   | 3,246   |                    |         |                  | 3,246        |               |         |                |             |       |          |   | 3,391   |              |         |               | 3,331          |        |              |   | 60     |      
|Other Assets -                                          |                            |                   |         |                    |         |                  |              |               |         |                |              |       |          |   |         |              |         |               |                |        |              |   |        |      
|                                                        | Goodwill                   |                   |         | 28,293             |         |                  |              | 28,293        |         |                |              |      |          |   |         | 27,616       |         |               |                | 27,616 |              |   |        |      |      
|                                                        | Deferred Charges and Other |                   |         | 21,959             |         |                  |              | 20,188        |         |                |              | 1,771 |          |   |         | 13,235       |         |               |                | 13,135 |              |   |        | 100   |      
|                                                        |                            |                   |         |                    |         |                  |              |               |         |                |              |       |          |   |         |              |         |              
|                                                        |                            | $                 | 626,737 |                    |         | $                | 629,833      |               |         | $              | 3,794        |       |          | $ | 484,650 |              |         | $             | 488,281        |        |              | $ | 3,253  |      
|                                                        |                            |                   |         |                    |         |                  |              |               |         |                |              |       |          |   |         |              |         |              
|Liabilities, Stockholders Equity and Partners Capital |                            |                   |         |                    |         |                  |              |               |         |                |              |       |          |   |         |              |         |               |                |        |              |   |        |      
|Accounts Payable and Accrued Liabilities                |                            | $                 | 107,903 |                    |         | $                | 108,451      |               |         | $              | 5,200        |       |          | $ | 81,536  |              |         | $             | 81,320         |        |              | $ | 5,958  |      
|Notes Payable                                           |                            |                   | 265,460 |                    |         |                  | 265,460      |               |         |                |             |       |          |   | 187,301 |              |         |               | 187,301        |        |              |   |       |      
|                                                        |                            |                   |         |                    |         |                  |              |               |         |                |              |       |          |   |         |              |         |              
|                                                        |                            | Total Liabilities |         |                    | 373,363 |                  |              |               | 373,911 |                |              |       | 5,200    |   |         |              | 268,837 |               |                |        | 268,621      |   |        |       | 5,958 | 
|                                                        |                            |                   |         |                    |         |                  |              |               |         |                |              |       |          |   |         |              |         |              
|Stockholders Equity and Partners Capital              |                            |                   | 253,374 |                    |         |                  | 255,922      |               |         |                | (1,406       | )     |          |   | 215,813 |              |         |               | 219,660        |        |              |   | (2,705 | )    
|                                                        |                            |                   |         |                    |         |                  |              |               |         |                |              |       |          |   |         |              |         |              
|                                                        |                            | $                 | 626,737 |                    |         | $                | 629,833      |               |         | $              | 3,794        |       |          | $ | 484,650 |              |         | $             | 488,281        |        |              | $ | 3,253  |      
|                                                        |                            |                   |         |                    |         |                  |              |               |         |                |              |       |          |   |         |              |         |              

*     Unaudited.

**   Condensed from audited financial statements.

See notes to condensed combining financial statements.

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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, |       
|                                      |                                        |   |                                        |       
|                                      |                                        |   | 2001                                   |       
|                                      |                                        |   |                                        |       
|                                      |                                        |   |                                        |       
|                                      |                                        |   |                                        |       
|                                      |                                        |   |                                        |       
|                                      |                                        |   |                                        |       
|                                      |                                        |   | Combined                               |       
|                                      |                                        |   |                                        |       
|Cash Flows  Operating Activities     |                                        |   |                                        |       
|Net Earnings (Loss)                   |                                        | $ | 11,995                                 |       
|Adjustments:                          |                                        |   |                                        |       
|                                      | Depreciation and Amortization          |   |                                        | 2,957 
|                                      | Equity in Earnings from Joint Ventures |   |                                        | (145  
|Decrease (Increase) in Receivables    |                                        |   | 4,812                                  |       
|Increase in Restricted Cash           |                                        |   | (5,000                                 | )     
|Decrease in Notes Receivable          |                                        |   | 14                                     |       
|(Increase) Decrease in Inventories    |                                        |   | (103,342                               | )     
|Increase in Commercial Properties     |                                        |   | (22,884                                | )     
|(Increase) Decrease in Other Assets   |                                        |   | (8,282                                 | )     
|Increase (Decrease) in Payables       |                                        |   |                                        |       
|                                      | and Accruals                           |   |                                        | 25,236
|                                      |                                        |   |                                        |       
|                                      |                                        |   | (94,639                                | )     
|                                      |                                        |   |                                        |       
|Cash Flows  Investing Activities     |                                        |   |                                        |       
|Increase in Advances to Joint Venture |                                        |   |                                        |       
|                                      | and Investment in Affiliate            |   |                                        | (3,569
|(Increase) Decrease in Property and   |                                        |   |                                        |       
|                                      | Equipment, net                         |   |                                        | (83   
|                                      |                                        |   |                                        |       
|                                      |                                        |   | (3,652                                 | )     
|                                      |                                        |   |                                        |       
|Cash Flows  Financing Activities     |                                        |   |                                        |       
|Increase in Notes Payable             |                                        |   | 76,446                                 |       
|Issuance of Class C Units             |                                        |   | 19,400                                 |       
|                                      |                                        |   |                                        |       
|                                      |                                        |   | 95,846                                 |       
|                                      |                                        |   |                                        |       
|Effect of Exchange Rate Changes       |                                        |   |                                        |       
|                                      | on Cash                                |   |                                        | (346  
|                                      |                                        |   |                                        |       
|Net (Decrease) Increase in Cash       |                                        |   | (2,791                                 | )     
|Cash at Beginning of Period           |                                        |   | 3,034                                  |       
|                                      |                                        |   |                                        |       
|Cash at End of Period                 |                                        | $ | 243                                    |       
|                                      |                                        |   |                                        |       
|Supplemental Disclosures:             |                                        |   |                                        |       
|Issuance of Class C Units in          |                                        |   |                                        |       
|                                      | Exchange for Assets                    |   | $                                      | 757   

See notes to condensed combining financial statements.

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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, 2001

(Dollars in thousands)
(unaudited)


(A)  The condensed combining interim financial statements include the accounts
of 3333 Holding Corporation (Holding) 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 necessary to present
fairly the information in the following condensed combined 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 combined 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)  The Partnership is a master limited partnership formed by Centex
Corporation (Centex) in 1987 to broaden Centexs business 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 home building 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 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 Partnership is authorized to issue three classes of limited
partnership interest. Centex indirectly holds 100% of the Partnerships Class
A and Class C limited partnership units, which are collectively convertible
into 20% of the Partnerships Class B limited partnership 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, warrants to purchase approximately 80% of the Class B units
are also held by the stockholders of Centex 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, 2001,
these adjusted capital

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contributions were $234.1 million and preference
payments in arrears totaled $36.1 million. No preference payments have been
made since fiscal 1998.

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 and
the independent board of Holding, including its non-executive Chairman, manage
how the Partnership conducts its activities, including the acquisition,
development, maintenance, operation and sale of properties, without the consent
of the limited partners. The limited partners cannot remove the general
partner.

(C) During the quarter ended December 31, 2001, the Partnership issued 4,383
Class C Units to Centex Homes in exchange for assets with a fair market value
of $4.4 million.

During the quarter ended December 31, 2001, the Partnership purchased a
total of approximately 300 acres in Palm Coast, Florida and Myrtle Beach, South
Carolina from unaffiliated third parties. The aggregate total consideration of
$32.5 million consisted of $20.4 million in non-recourse purchase money
mortgage notes, $4.7 million in limited recourse purchase money mortgage notes
and $7.4 million in cash payments. Concurrently, Centex Homes has entered into
option agreements with the Partnership for the purchase of these properties.
During the quarter, the Partnership received $7.4 million in option deposits
and $173 thousand from Centex Homes as reimbursement for interest expense and
other costs incurred by the Partnership in connection with land holdings
subject to these option agreements.

In addition to the current quarter purchases, the Companies own 49 acres
of land in Las Vegas, Nevada and Waikoloa, Hawaii. The aggregate consideration
was $39 million consisting of $37.5 million in non-recourse purchase money
mortgage notes and $1.5 million in cash payments. Centex Homes has entered
into option agreements for the purchase of these properties and has made option
deposits of $1.5 million.

(D) A summary of comprehensive income for the three and nine months ended
December 31, 2001 and 2000 is presented below:

|                                               |                                          |   |                      |        |   |                     |       |    |      |   |        |       |  |   |       |     
|---------------------------------------------- | ---------------------------------------- | - | -------------------- | ------ | - | ------------------- | ----- | -- | ---- | - | ------ | ----- |  | - | ----- | ----
|                                               |                                          |   |                      |        |   |                    
|                                               |                                          |   | For the Three Months |        |   | For the Nine Months
|                                               |                                          |   | Ended December 31,   |        |   | Ended December 31, 
|                                               |                                          |   |                      |        |   |                    
|                                               |                                          |   | 2001                 |        |   | 2000                |       |    | 2001 |   |        | 2000  | 
|                                               |                                          |   |                      |        |   |                     |       |    |      |   |        |       | 
|Net Earnings                                   |                                          | $ | 5,538                |        |   | $                   | 3,649 |    |      | $ | 11,995 |       |  | $ | 3,864 |     
|Other Comprehensive (Loss) Income, net of tax: |                                          |   |                      |        |   |                     |       |    |      |   |        |       |  |   |       |     
|                                               | Foreign Currency Translation Adjustments |   |                      | (2,973 | ) |                     |       | 73 |      |   |        | 5,031 |  |   |       | (394
|                                               | Unrealized Gain on Hedging Instruments   |   |                      | 378    |   |                     |       |   |      |   |        | 378   |  |   |       |    
|                                               |                                          |   |                      |        |   |                     |       |    |      |   |        |      
|Comprehensive Income                           |                                          | $ | 2,943                |        |   | $                   | 3,722 |    |      | $ | 17,404 |       |  | $ | 3,470 |     
|                                               |                                          |   |                      |        |   |                     |       |    |      |   |        |      

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(E)      A summary of changes in stockholders equity and partners capital 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, 2001    |                                                 | $                                        | 215,813 |          |       | $ | 500      |                             |   | $       | 1,142                    |   |         | $         | 218,018 |          |       | $ | 1         |           |            | $         | 800      |          |   | $ | (3,506 | )    
|                             | Partnership Units Issued in
Exchange for Assets |                                          |         | 20,157   |       |   |          |                            |   |         |                          |  |         |           |         | 20,157   |       |   |           |          |            |           |          |         |   |   |        |      |  
|                             | Net Earnings                                    |                                          |         | 11,995   |       |   |          |                            |   |         |                          |  |         |           |         | 10,696   |       |   |           |          |            |           |          |         |   |   |        | 1,299 |  
|                             | Accumulated Other
Comprehensive Income:         |                                          |         |          |       |   |          |                             |   |         |                          |   |         |           |         |          |       |   |           |           |            |           |          |          |   |   |        |       |  
|                             |                                                 | Foreign Currency
Translation
Adjustments |         |          | 5,031 |   |          |                             |  |         |                          |   |        |           |         |          | 5,031 |   |           |           |           |           |          |          |  |   |        |       |  | 
|                             |                                                 | Unrealized Gain on
Hedging Instruments   |         |          | 378   |   |          |                             |  |         |                          |   |        |           |         |          | 378   |   |           |           |           |           |          |          |  |   |        |       |  | 
|                             |                                                 |                                          |         |          |       |   |          |                             |   |         |                          |   |         |           |         |          |       |   |           |           |           
|Balance at December 31, 2001 |                                                 | $                                        | 253,374 |          |       | $ | 500      |                             |   | $       | 1,142                    |   |         | $         | 254,280 |          |       | $ | 1         |           |            | $         | 800      |          |   | $ | (2,207 | )    
|                             |                                                 |                                          |         |          |       |   |          |                             |   |         |                          |   |         |           |         |          |       |   |           |           |           

(F)      In April 1999, Centex Development Company UK Limited (CDCUK), a United
Kingdom company and a wholly-owned subsidiary, acquired all of the voting
shares of Fairclough Homes Group Limited, a British home builder
(Fairclough), with the purchase price paid by the delivery of
non-interest-bearing promissory notes. On March 31, 2001, CDCUK repaid in full
(less the holdback described below) the promissory notes from a combination of
bank borrowings, equity contributions to CDCUK from the Partnership, and a loan
to CDCUK from the Partnership. CDCUK has retained a $7.0 million holdback
relative to CDCUK exercising its right of offset for asserted breaches of
representations and warranties by the seller under the share purchase
agreement.

(G)      The Companies operate in four principal business segments: International
Home Building, Commercial Development, Multi-Family Communities (formerly known
as Multi-Family Development), and Corporate-Other (formerly known as Land Sales
and Other). All of the segments operate in the United States, except for
International Home Building, which acquires and develops residential properties
and constructs single and multi-family housing units in the United Kingdom.

In prior years, the Companies operated a Domestic Home Building segment
which was sold in fiscal year 2001 to Centex Homes. The Domestic Home Building
segment had revenues of $9.8 million and $21.5 million, respectively, and
operating earnings of $1.1 million and $1.7 million, respectively, for the
three and nine months ended December 31, 2000.

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The following tables set forth financial information relating to the business
segments for the three and nine months ended December 31, 2001 and 2000.

INTERNATIONAL HOME BUILDING

|                                           |  |                            |         |   |      |   |         |  
|------------------------------------------ |  | -------------------------- | ------- | - | ---- | - | ------- | -
|                                           |  |                            |        
|                                           |  | For the
Three Months Ended |        
|                                           |  | December 31,               |        
|                                           |  |                            |        
|                                           |  | 2001                       |         |   | 2000 |  
|                                           |  |                            |         |   |      |  
|Revenues                                   |  | $                          | 61,591  |   |      | $ | 49,939  |  
|Cost of Sales                              |  |                            | (52,659 | ) |      |   | (45,301 | )
|Selling, General & Administrative Expenses |  |                            | (6,077  | ) |      |   | (5,590  | )
|Interest                                   |  |                            | (489    | ) |      |   | 62      |  
|                                           |  |                            |         |   |      |  
|Operating Earnings (Loss)                  |  | $                          | 2,366   |   |      | $ | (890    | )
|                                           |  |                            |         |   |      |  

|                                           |  |                           |          |   |      |   |          |  
|------------------------------------------ |  | ------------------------- | -------- | - | ---- | - | -------- | -
|                                           |  |                           |         
|                                           |  | For the Nine Months Ended |         
|                                           |  | December 31,              |         
|                                           |  |                           |         
|                                           |  | 2001                      |          |   | 2000 |  
|                                           |  |                           |          |   |      |  
|Revenues                                   |  | $                         | 186,130  |   |      | $ | 173,813  |  
|Cost of Sales                              |  |                           | (159,238 | ) |      |   | (153,892 | )
|Selling, General & Administrative Expenses |  |                           | (17,482  | ) |      |   | (16,774  | )
|Interest                                   |  |                           | (1,460   | ) |      |   | (4,234   | )
|                                           |  |                           |          |   |      |  
|Operating Earnings (Loss)                  |  | $                         | 7,950    |   |      | $ | (1,087   | )
|                                           |  |                           |          |   |      |  

COMMERCIAL DEVELOPMENT

|                                           |  |                            |        |   |      |   |         |  
|------------------------------------------ |  | -------------------------- | ------ | - | ---- | - | ------- | -
|                                           |  |                            |       
|                                           |  | For the Three Months Ended |       
|                                           |  | December 31,               |       
|                                           |  |                            |       
|                                           |  | 2001                       |        |   | 2000 |  
|                                           |  |                            |        |   |      |  
|Sales Revenues                             |  | $                          | 95     |   |      | $ | 17,383  |  
|Rental Income and Other                    |  |                            | 4,970  |   |      |   | 2,791   |  
|Cost of Sales                              |  |                            | (13    | ) |      |   | (14,833 | )
|Selling, General & Administrative Expenses |  |                            | (1,635 | ) |      |   | (1,354  | )
|Interest                                   |  |                            | (1,699 | ) |      |   | (1,112  | )
|                                           |  |                            |        |   |      |  
|Operating Earnings Before Depreciation     |  |                            | 1,718  |   |      |   | 2,875   |  
|Depreciation                               |  |                            | (887   | ) |      |   | (543    | )
|                                           |  |                            |        |   |      |  
|Operating Earnings                         |  | $                          | 831    |   |      | $ | 2,332   |  
|                                           |  |                            |        |   |      |  

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|                                           |  |                           |         |   |      |   |         |  
|------------------------------------------ |  | ------------------------- | ------- | - | ---- | - | ------- | -
|                                           |  |                           |        
|                                           |  | For the Nine Months Ended |        
|                                           |  | December 31,              |        
|                                           |  |                           |        
|                                           |  | 2001                      |         |   | 2000 |  
|                                           |  |                           |         |   |      |  
|Sales Revenues                             |  | $                         | 12,597  |   |      | $ | 17,383  |  
|Rental Income and Other                    |  |                           | 13,779  |   |      |   | 7,709   |  
|Cost of Sales                              |  |                           | (11,190 | ) |      |   | (14,833 | )
|Selling, General & Administrative Expenses |  |                           | (5,063  | ) |      |   | (3,332  | )
|Interest                                   |  |                           | (4,956  | ) |      |   | (3,137  | )
|                                           |  |                           |         |   |      |  
|Operating Earnings Before Depreciation     |  |                           | 5,167   |   |      |   | 3,790   |  
|Depreciation                               |  |                           | (2,551  | ) |      |   | (1,500  | )
|                                           |  |                           |         |   |      |  
|Operating Earnings                         |  | $                         | 2,616   |   |      | $ | 2,290   |  
|                                           |  |                           |         |   |      |  

MULTI-FAMILY COMMUNITIES

|                                           |  |                            |         |   |      |   |      |  
|------------------------------------------ |  | -------------------------- | ------- | - | ---- | - | ---- | -
|                                           |  |                            |        
|                                           |  | For the Three Months Ended |        
|                                           |  | December 31,               |        
|                                           |  |                            |        
|                                           |  | 2001                       |         |   | 2000 |  
|                                           |  |                            |         |   |      |  
|Revenues                                   |  | $                          | 28,957  |   |      | $ | 654  |  
|Cost of Sales                              |  |                            | (25,150 | ) |      |   |     |  
|Selling, General & Administrative Expenses |  |                            | (785    | ) |      |   | (574 | )
|                                           |  |                            |         |   |      |  
|Operating Earnings                         |  | $                          | 3,022   |   |      | $ | 80   |  
|                                           |  |                            |         |   |      |  

|                                           |  |                           |         |   |      |   |        |  
|------------------------------------------ |  | ------------------------- | ------- | - | ---- | - | ------ | -
|                                           |  |                           |        
|                                           |  | For the Nine Months Ended |        
|                                           |  | December 31,              |        
|                                           |  |                           |        
|                                           |  | 2001                      |         |   | 2000 |  
|                                           |  |                           |         |   |      |  
|Revenues                                   |  | $                         | 52,578  |   |      | $ | 1,662  |  
|Cost of Sales                              |  |                           | (46,832 | ) |      |   |       |  
|Selling, General & Administrative Expenses |  |                           | (1,989  | ) |      |   | (1,605 | )
|                                           |  |                           |         |   |      |  
|Operating Earnings                         |  | $                         | 3,757   |   |      | $ | 57     |  
|                                           |  |                           |         |   |      |  

CORPORATE-OTHER

|                                           |  |                            |      |   |      |   |      |  
|------------------------------------------ |  | -------------------------- | ---- | - | ---- | - | ---- | -
|                                           |  |                            |     
|                                           |  | For the Three Months Ended |     
|                                           |  | December 31,               |     
|                                           |  |                            |     
|                                           |  | 2001                       |      |   | 2000 |  
|                                           |  |                            |      |   |      |  
|Revenues                                   |  | $                          | 253  |   |      | $ | 234  |  
|Selling, General & Administrative Expenses |  |                            | (698 | ) |      |   | (170 | )
|                                           |  |                            |      |   |      |  
|Operating (Loss) Earnings                  |  | $                          | (445 | ) |      | $ | 64   |  
|                                           |  |                            |      |   |      |  

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|                                           |  |                           |        |   |      |   |      |  
|------------------------------------------ |  | ------------------------- | ------ | - | ---- | - | ---- | -
|                                           |  |                           |       
|                                           |  | For the Nine Months Ended |       
|                                           |  | December 31,              |       
|                                           |  |                           |       
|                                           |  | 2001                      |        |   | 2000 |  
|                                           |  |                           |        |   |      |  
|Revenues                                   |  | $                         | 1,024  |   |      | $ | 493  |  
|Cost of Sales                              |  |                           | (707   | ) |      |   |     |  
|Selling, General & Administrative Expenses |  |                           | (1,700 | ) |      |   | (480 | )
|                                           |  |                           |        |   |      |  
|Operating (Loss) Earnings                  |  | $                         | (1,383 | ) |      | $ | 13   |  
|                                           |  |                           |        |   |      |  

(H)     The Companies are exposed to the risk of interest rate fluctuations on
their debt obligations. As part of their strategy to manage the obligations
that are subject to changes in interest rates, the Companies have entered into
an interest rate swap agreement, designated as a cash flow hedge. The swap
agreement is recorded at its fair value in Other Assets 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.

The Companies have an interest rate swap agreement, which, in effect,
fixes the variable interest rate on a portion of their outstanding debt at
December 31, 2001. During the three months ended December 31, 2001, 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. Based on the balance in Accumulated Other Comprehensive Income at
December 31, 2001, the Companies anticipate adjustments to interest incurred
over the next 12 months to be approximately $0.2 million. As of December 31,
2001, the asset and Accumulated Other Comprehensive Income was $540 thousand
($378 thousand net of tax).

(I)      The Companies have adopted, effective April 1, 2001, Statement of Financial
Accounting Standards No. 142, Goodwill and Other Intangible Assets (SFAS
142), which provides that intangible assets, including goodwill, that are not
subject to amortization must be tested for impairment as of the beginning of
the fiscal year in which this statement is initially applied and annually
thereafter at the reporting unit level using a two-step impairment assessment.
Impairment testing must be performed more frequently if events or changes in
circumstances indicate that the asset might be impaired. The Companies have
completed the assessment of impairment as of the beginning of the fiscal year
and have determined that there is no impairment.

The pro forma adoption of SFAS 142 for the three and nine month periods
ended December 31, 2000, which included amortization of goodwill, would have
resulted in an increase in net earnings of $393 thousand and $1.35 million,
respectively, and an increase of $5.56 and $19.46 in earnings per unit.
Goodwill was $28.3 million at December 31, 2001 and $27.6 million at March 31,
2001. The increase relates to the impact of foreign currency translation.

(J)      In August 2001, Statement of Financial Accounting Standards No. 144,
Accounting for the Impairment or Disposal of Long-Lived Assets (SFAS 144)
was issued. The Companies have not yet determined the impact SFAS 144 will
have on their results of operations or financial position.

(K)      The Companies conduct certain operations through their participation in
joint ventures in which the Companies hold less than a majority interest. The
Companies Investment in Joint Ventures was $6.4 million and $2.7 million at
December 31, 2001 and March 31, 2001, respectively. These non-consolidated joint

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ventures had total debt outstanding of approximately $21.8
million as of December 31, 2001 and $15.3 million as of March 31, 2001. The
Companies liability is limited to approximately $10.5 million and $7.6
million, respectively.

(L)      Certain prior year balances have been reclassified to be consistent with
the December 31, 2001 presentation.

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|        |                                                                                       
|------- | --------------------------------------------------------------------------------------
|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF  OPERATIONS
|        |                                                                                       

RESULTS OF OPERATIONS

On a combined basis, the Companies revenues were $95.9 million for the
three months ended December 31, 2001, an 18.7% increase over $80.7 million for
the same period last year; operating earnings were $5.8 million, a 112.2%
increase over $2.7 million for the same period last year; and net earnings were
$5.5 million, a 51.8% increase over $3.6 million for the same period last year.

On a combined basis, the Companies revenues were $266.1 million for the
nine months ended December 31, 2001, a 19.6% increase over $222.5 million for
the same period last year; operating earnings were $12.9 million, a 332.3%
increase over $3.0 million for the same period last year; and net earnings were
$12.0 million, a 210.4% increase over $3.9 million for the same period last
year.

INTERNATIONAL HOME BUILDING

The following summarizes International Home Buildings results for the
three and nine months ended December 31, 2001 compared to the same periods last
year (dollars in thousands, except per unit data):

|                                                     |          |   |                                         |      
|---------------------------------------------------- | -------- | - | --------------------------------------- | -----
|                                                     |          |   | For the Three Months Ended December 31, |      
|                                                     |          |   |                                         |      
|                                                     |          |   | 2001                                    |      
|                                                     |          |   |                                         |      
|Revenues  Home Building                             |          | $ | 61,471                                  |      
|Revenues  Land Sales & Other                        |          |   | 120                                     |      
|Cost of Sales  Home Building                        |          |   | (52,549                                 | )    
|Cost of Sales  Land Sales                           |          |   | (110                                    | )    
|General & Administrative Expenses                    |          |   | (6,077                                  | )    
|                                                     |          |   |                                         |      
|Operating Earnings (Loss) Before Interest            |          |   | 2,855                                   |      
|Interest                                             |          |   | (489                                    | )    
|                                                     |          |   |                                         |      
|Operating Earnings (Loss) Before Taxes               |          | $ | 2,366                                   |      
|                                                     |          |   |                                         |      
|Units Closed                                         |          |   | 317                                     |      
|                                                     | % Change |   |                                         | 30.5 
|Unit Sales Price                                     |          | $ | 193,915                                 |      
|                                                     | % Change |   |                                         | (5.4 
|Operating Earnings (Loss) Per Unit
(Before Interest) |          | $ | 9,006                                   |      
|                                                     | % Change |   |                                         | 329.9

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|                                              |          |   |                                       
|--------------------------------------------- | -------- | - | --------------------------------------
|                                              |          |   | For the Nine Months Ended December 31,
|                                              |          |   |                                       
|                                              |          |   | 2001                                  
|                                              |          |   |                                       
|Revenues  Home Building                      |          | $ | 182,212                               
|Revenues  Land Sales & Other                 |          |   | 3,918                                 
|Cost of Sales  Home Building                 |          |   | (156,108                              
|Cost of Sales  Land Sales                    |          |   | (3,130                                
|General & Administrative Expense              |          |   | (17,482                               
|                                              |          |   |                                       
|Operating Earnings Before Interest            |          |   | 9,410                                 
|Interest                                      |          |   | (1,460                                
|                                              |          |   |                                       
|Operating Earnings (Loss) Before Taxes        |          | $ | 7,950                                 
|                                              |          |   |                                       
|Units Closed                                  |          |   | 931                                   
|                                              | % Change |   |                                       
|Unit Sales Price                              |          | $ | 195,716                               
|                                              | % Change |   |                                       
|Operating Earnings Per Unit (Before Interest) |          | $ | 10,107                                
|                                              | % Change |   |                                       

The increase in International Home Building revenues for the three and
nine months ended December 31, 2001 is attributable to an increase in the
number of units sold compared to the same periods last year, offset by a lower
per-unit sales price and a reduction in the average exchange rate used for
foreign currency translation. Revenues from land sales also increased for the
nine months ended December 31, 2001 as compared to the same period last year,
primarily as the result of a sale of a portion of International Home Buildings
interest in a Yorkshire development.

Interest expense for the three and nine months ended December 31, 2001
represents interest expense incurred on bank debt, reduced by capitalized
external interest expense of $2.7 million. Interest expense for the same
periods last year represents preferred distributions due to the seller in
connection with preference shares issued at acquisition, which entitled the
seller to receive substantially all of the net after-tax earnings of
Fairclough Homes Group Limited until March 31, 2001. Although preference
shares are ordinarily treated as an equity security, in this case the
preference shares had the essential characteristics of debt and, among other
things, had a nominal residual interest value that was subject to redemption.
Therefore, the preference shares were treated as debt and the preferred
distributions were recorded as interest expense.

For the three and nine months ended December 31, 2001, home sales (orders)
totaled 300 and 1,024 units, respectively, as compared to 250 and 858 units for
the same periods last year. The backlog of homes sold but not closed as of
December 31, 2001 was 412 units, as compared to 334 units at December 31, 2000.

International Home Building, whose functional currency is the British
pound sterling, translates its operating results into U.S. dollars using the
average exchange rate for the period. For the three months ended December 31,
2001 and 2000, respectively, the average exchange rate used for translation was
1.44 and 1.45, representing a decrease of 0.3%. For the nine months ended
December 31, 2001 and 2000, respectively, the average exchange rate used for
translation was 1.44 and 1.49, representing a decrease of 3.5%.

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DOMESTIC HOME BUILDING

Results for the Domestic Home Building segment for the three and nine
months ended December 31, 2000, were revenues of $9.8 million and $21.5
million, respectively, and operating earnings of $1.1 million and $1.7 million,
respectively. On March 31, 2001, the Partnership sold its Domestic Home
Building segment to Centex Homes.

COMMERCIAL DEVELOPMENT

The following summarizes Commercial Developments results for the three
and nine months ended December 31, 2001, compared to the same periods last year
(dollars and square feet in thousands):

|                                              |  |                            |        |   |      |   |         |  
|--------------------------------------------- |  | -------------------------- | ------ | - | ---- | - | ------- | -
|                                              |  |                            |       
|                                              |  | For the Three Months Ended |       
|                                              |  | December 31,               |       
|                                              |  |                            |       
|                                              |  | 2001                       |        |   | 2000 |  
|                                              |  |                            |        |   |      |  
|Sales Revenues                                |  | $                          | 95     |   |      | $ | 17,383  |  
|Rental Income and Other                       |  |                            | 4,970  |   |      |   | 2,791   |  
|Cost of Sales                                 |  |                            | (13    | ) |      |   | (14,833 | )
|Selling, General & Administrative Expenses    |  |                            | (1,635 | ) |      |   | (1,354  | )
|Interest Expense                              |  |                            | (1,699 | ) |      |   | (1,112  | )
|                                              |  |                            |        |   |      |  
|Operating Earnings Before Depreciation        |  |                            | 1,718  |   |      |   | 2,875   |  
|Depreciation                                  |  |                            | (887   | ) |      |   | (543    | )
|                                              |  |                            |        |   |      |  
|Operating Earnings                            |  | $                          | 831    |   |      | $ | 2,332   |  
|                                              |  |                            |        |   |      |  
|Rentable Square Feet for Operating Properties |  |                            | 1,933  |   |      |   | 1,512   |  
|                                              |  |                            |        |   |      |  

|                                              |  |                           |         |   |      |   |         |  
|--------------------------------------------- |  | ------------------------- | ------- | - | ---- | - | ------- | -
|                                              |  |                           |        
|                                              |  | For the Nine Months Ended |        
|                                              |  | December
31,              |        
|                                              |  |                           |        
|                                              |  | 2001                      |         |   | 2000 |  
|                                              |  |                           |         |   |      |  
|Sales Revenues                                |  | $                         | 12,597  |   |      | $ | 17,383  |  
|Rental Income and Other                       |  |                           | 13,779  |   |      |   | 7,709   |  
|Cost of Sales                                 |  |                           | (11,190 | ) |      |   | (14,833 | )
|Selling, General & Administrative Expenses    |  |                           | (5,063  | ) |      |   | (3,332  | )
|Interest Expense                              |  |                           | (4,956  | ) |      |   | (3,137  | )
|                                              |  |                           |         |   |      |  
|Operating Earnings Before Depreciation        |  |                           | 5,167   |   |      |   | 3,790   |  
|Depreciation                                  |  |                           | (2,551  | ) |      |   | (1,500  | )
|                                              |  |                           |         |   |      |  
|Operating Earnings                            |  | $                         | 2,616   |   |      | $ | 2,290   |  
|                                              |  |                           |         |   |      |  
|Rentable Square Feet for Operating Properties |  |                           | 1,933   |   |      |   | 1,512   |  
|                                              |  |                           |         |   |      |  

As detailed below, at December 31, 2001, Commercial Development owned,
either directly or through interests in joint ventures, 1,933,000 square feet
of industrial, office and medical office space in California, Florida,
Massachusetts, Michigan, North Carolina and Texas, and interests in projects
under construction totaling 1,225,000 square feet of industrial, manufacturing,
office, medical office and retail space in Arizona, California, Florida,
Mississippi, North Carolina and Texas.

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Sales Revenues and Cost of Sales for the three and nine months ended
December 31, 2001, reflect the sale of two industrial projects and the sale of
approximately two acres of land. Sales Revenues and Cost of Sales for the
three and nine months ended December 31, 2000, reflect the sale of land in
Texas and California. Rental income for the three and nine months ended
December 31, 2001, increased as a result of an increase in the number of
operating properties, offset by a decline in the weighted average portfolio
occupancy. Selling, General and Administrative Expenses, Interest Expense and
Depreciation for the three and nine months ended December 31, 2001, increased
as a result of an increase in the number of operating properties.

Operating Properties

|                           |  |                   |       |  |                   |  |      |            |            |  |           |  |  |  |      |  
|-------------------------- |  | ----------------- | ----- |  | ----------------- |  | ---- | ---------- | ---------- |  | --------- |  |  |  | ---- | -
|                           |  | December 31, 2001 |       |  | December 31, 2000 | 
|                           |  |                   |       |  |                   | 
|                           |  | (000's)           |       |  | Weighted          |  |      | (000's)    |            |  | Weighted  | 
|                           |  | Rentable          |       |  | Average           |  |      | Rentable   |            |  | Average   | 
|                           |  | Square Ft.        |       |  | Occupancy         |  |      | Square Ft. |            |  | Occupancy | 
|                           |  |                   |       |  |                   |  |      |            |            |  |           | 
|Industrial                 |  |                   | 1,394 |  |                   |  | 88.6 | %          |            |  | 1,085     |  |  |  | 90.0 | %
|Office/Medical Office      |  |                   | 539   |  |                   |  | 83.2 | %          |            |  | 427       |  |  |  | 97.1 | %
|                           |  |                   |       |  |                   |  |      |            |            |  |           | 
|                           |  |                   | 1,933 |  |                   |  | 87.1 | %          |            |  | 1,512     |  |  |  | 92.0 | %
|                           |  |                   |       |  |                   |  |      |            |            |  |           |  |  | 
|                          
|Projects Under Development
|                          
|                           |  | (000's)           |       |  |                   |  |      |            | (000's)    | 
|                           |  | Rentable          |       |  |                   |  |      |            | Rentable   | 
|                           |  | Square Ft.        |       |  |                   |  |      |            | Square Ft. | 
|                           |  |                   |       |  |                   |  |      |            |            | 
|Industrial/Manufacturing   |  |                   | 969   |  |                   |  |      |            |            |  | 446       | 
|Office/Medical Office      |  |                   | 62    |  |                   |  |      |            |            |  |          | 
|Retail                     |  |                   | 194   |  |                   |  |      |            |            |  |          | 
|                           |  |                   |       |  |                   |  |      |            |            | 
|                           |  |                   | 1,225 |  |                   |  |      |            |            |  | 446       | 
|                           |  |                   |       |  |                   |  |      |            |            | 

MULTI-FAMILY COMMUNITIES

The following summarizes Multi-Family Communities (Multi-Family)
results for the three and nine months ended December 31, 2001, compared to the
same periods last year (dollars in thousands):

|                                           |  |                            |         |   |      |   |      |  
|------------------------------------------ |  | -------------------------- | ------- | - | ---- | - | ---- | -
|                                           |  |                            |        
|                                           |  | For the Three Months Ended |        
|                                           |  | December 31,               |        
|                                           |  |                            |        
|                                           |  | 2001                       |         |   | 2000 |  
|                                           |  |                            |         |   |      |  
|Revenues                                   |  | $                          | 28,957  |   |      | $ | 654  |  
|Cost of Sales                              |  |                            | (25,150 | ) |      |   |     |  
|Selling, General & Administrative Expenses |  |                            | (785    | ) |      |   | (574 | )
|                                           |  |                            |         |   |      |  
|Operating Earnings                         |  | $                          | 3,022   |   |      | $ | 80   |  
|                                           |  |                            |         |   |      |  

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|                                           |  |                           |         |   |      |   |        |  
|------------------------------------------ |  | ------------------------- | ------- | - | ---- | - | ------ | -
|                                           |  |                           |        
|                                           |  | For the Nine Months Ended |        
|                                           |  | December 31,              |        
|                                           |  |                           |        
|                                           |  | 2001                      |         |   | 2000 |  
|                                           |  |                           |         |   |      |  
|Revenues                                   |  | $                         | 52,578  |   |      | $ | 1,662  |  
|Cost of Sales                              |  |                           | (46,832 | ) |      |   |       |  
|Selling, General & Administrative Expenses |  |                           | (1,989  | ) |      |   | (1,605 | )
|                                           |  |                           |         |   |      |  
|Operating Earnings                         |  | $                         | 3,757   |   |      | $ | 57     |  
|                                           |  |                           |         |   |      |  

During the nine months ended December 31, 2001, Multi-Family closed on the sale
of a 382-unit apartment complex in St. Petersburg, Florida and a 400-unit
apartment complex in Grand Prairie, Texas. During the nine months ended
December 31, 2000, a joint venture in which Multi-Family had an interest closed
on the sale of a 182-unit apartment complex in College Station, Texas, and
Multi-Family received an earn-out payment related to the 1999 sale of an
apartment complex located in The Colony, Texas.

CORPORATE-OTHER

The following summarizes Corporate-Others results for the three and nine
months ended December 31, 2001, compared to the same periods last year (dollars
in thousands):



|                                           |  |                            |      |   |      |   |      |  
|------------------------------------------ |  | -------------------------- | ---- | - | ---- | - | ---- | -
|                                           |  |                            |     
|                                           |  | For the
Three Months Ended |     
|                                           |  | December 31,               |     
|                                           |  |                            |     
|                                           |  | 2001                       |      |   | 2000 |  
|                                           |  |                            |      |   |      |  
|Revenues                                   |  | $                          | 253  |   |      | $ | 234  |  
|Selling, General & Administrative Expenses |  |                            | (698 | ) |      |   | (170 | )
|                                           |  |                            |      |   |      |  
|Operating (Loss)
Earnings                  |  | $                          | (445 | ) |      | $ | 64   |  
|                                           |  |                            |      |   |      |  

|                                           |  |                           |        |   |      |   |      |  
|------------------------------------------ |  | ------------------------- | ------ | - | ---- | - | ---- | -
|                                           |  |                           |       
|                                           |  | For the Nine Months Ended |       
|                                           |  | December 31,              |       
|                                           |  |                           |       
|                                           |  | 2001                      |        |   | 2000 |  
|                                           |  |                           |        |   |      |  
|Revenues                                   |  | $                         | 1,024  |   |      | $ | 493  |  
|Cost of Sales                              |  |                           | (707   | ) |      |   |     |  
|Selling, General & Administrative Expenses |  |                           | (1,700 | ) |      |   | (480 | )
|                                           |  |                           |        |   |      |  
|Operating
(Loss) Earnings                  |  | $                         | (1,383 | ) |      | $ | 13   |  
|                                           |  |                           |        |   |      |  

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The Corporate-Other (formerly known as Land Sales and Other) segment is
involved in the acquisition and disposition of land and other assets of the
Partnership not identified with another business segment. For the three months
ended December 31, 2001 and 2000, revenues included $225,000 and $0 in other
income, respectively, $0 and $86,000 from earnings in joint ventures,
respectively, and $28,000 and $148,000 in interest income, respectively. For
the nine months ended December 31, 2001 and 2000, revenues included $655,000
and $0 in sales revenues, $221,000 and $0 in other income, respectively, $0 and
$231,000 from earnings in joint ventures, respectively, and $148,000 and
$262,000 in interest income, respectively.

LIQUIDITY AND CAPITAL RESOURCES

The Companies 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 (comprised largely of proceeds from the sale of real
estate).

Properties under development are typically financed 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.
Commercial and multi-family construction loans totaled $37.2 million at
December 31, 2001. As properties are completed, the properties are either sold
or refinanced with long-term fixed-rate debt. In both instances, the proceeds
are used to repay the short-term borrowings. Permanent commercial project
loans outstanding at December 31, 2001 totaled $74.4 million. Seller-financed
land acquisition loans totaled $62.6 million at December 31, 2001.

The International Home Building segment has a secured revolving bank
credit facility of £100 million. The term of this facility expires in fiscal
2004. Advances under this facility totaled £58 million, or $84 million, at
December 31, 2001.

During the three and nine months ended December 31, 2001, the Partnership
issued 4,383 and 20,157 Class C limited partnership units in exchange for
assets valued at $4.4 million and $20.2 million.

The Companies believe that the revenues, earnings, and liquidity from the
sale of single-family homes, land sales, and the sale and permanent financing
of development projects will be sufficient to provide the necessary funding for
their current and future needs.

---

FORWARD-LOOKING STATEMENTS


The Managements Discussion and Analysis of Financial Condition and
Results of Operations, and other sections of this Report 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 the
Companies are discussing their 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 such forward-looking statements. The
principal risks and uncertainties that may affect the Companies actual
performance and results of operations include the following: general economic
conditions and interest rates; the cyclical and seasonal nature of the
Companies businesses; adverse weather; changes in property taxes; changes in

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federal income tax laws; government regulation;
changes in governmental and public policy; changes in economic conditions
specific to any one or more of the Companies markets and businesses;
competition; availability of raw materials; and unexpected operations
difficulties. Other risks and uncertainties may also affect the outcome of the
Companies actual performance and results of operations.




ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in the Companies market risk from
March 31, 2001. For more information regarding the Companies market risk,
refer to the Companies Annual Report on Form 10-K for the fiscal year ended
March 31, 2001.




Part II. Other Information




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



| |     
| | ----
| | None




ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K



| |             
| | ------------
| | (1) Exhibits



| |                                                          
| | ---------------------------------------------------------
| | Exhibit 3.1 Bylaws of 3333 Holding Corporation as Amended



| |                        
| | -----------------------
| | (2) Reports on Form 8-K



| |                                                                                        
| | ---------------------------------------------------------------------------------------
| | The Registrant filed no reports on Form 8-K during the quarter
ended December 31, 2001.

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##### Table of Contents






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
CORPORATION              
|                  |  | Registrant                            
|                  |  |                                       
|                  |  |                                       
|February 13, 2001 |  | /s/ Stephen M.
Weinberg               
|                  |  | by Stephen M. Weinberg                
|                  |  | President and Chief Executive Officer 
|                  |  | (principal executive officer)         
|                  |  |                                       
|February 13, 2001 |  | /s/ Todd D.
Newman                    
|                  |  | Todd D. Newman                        
|                  |  | Senior Vice President, Chief Financial
|                  |  | Officer and Treasurer                 
|                  |  | (principal financial officer and      
|                  |  | chief accounting officer)             

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##### Table of Contents



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 13, 2001 |  | /s/ Stephen M. Weinberg               
|                  |  | by Stephen M. Weinberg                
|                  |  | President and Chief Executive Officer 
|                  |  | (principal executive officer)         
|                  |  |                                       
|February 13, 2001 |  | /s/ Todd D. Newman                    
|                  |  | Todd D. Newman                        
|                  |  | Senior Vice President, Chief Financial
|                  |  | Officer and Treasurer                 
|                  |  | (principal financial officer and      
|                  |  | chief accounting officer)             

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INDEX TO EXHIBITS

|               |  |                                              
|-------------- |  | ---------------------------------------------
|EXHIBIT
NUMBER |  | DESCRIPTION                                  
|               |  |                                              
|              
|              
|              
|              
|3.1            |  | Bylaws of 3333 Holding Corporation as Amended