##### 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

June 30, 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 July 31, 2001:

|                                                                                                              |  |                                                                                                                       |  |                                                          
|------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------
|Centex Corporation
3333 Holding Corporation
Centex Development Company, L.P.
Centex Development Company, L.P. |  | Common Stock
Common Stock
Class A Units of Limited Partnership Interest
Class C Units of Limited Partnership Interest |  | 60,687,912 shares
1,000 shares
32,260 units
185,711 units





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TABLE OF CONTENTS



|                                                                                                                        |                                                                                               |                                                      |  |  |  |  |  | 
|----------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------- | ---------------------------------------------------- |  |  |  |  |  | 
|Centex Corporation and Subsidiaries Part I.  Financial Information                                                     
|                                                                                                                        | ITEM 1.  Condensed Consolidated 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 6. EXHIBITS AND REPORTS ON FORM 8-K                                                     
|Signatures                                                                                                             
|3333 Holding Corporation and Subsidiary Centex Development Company, L.P. and Subsidiaries Part I. Financial Information
|                                                                                                                        | ITEM 1. Condensed Combining 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 6. EXHIBITS AND REPORTS ON FORM 8-K                                                     
|Signatures                                                                                                             
|EX-10.1 Management Agreement dated April 1, 2001                                                                       
|EX-10.2 Employment Agreement - Richard C. Decker                                                                       



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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

June 30, 2001

Centex Corporation and Subsidiaries

|                              |                                                                   |                                                                                          |      |    |    | 
|----------------------------- | ----------------------------------------------------------------- | ---------------------------------------------------------------------------------------- | ---- | -- | -- | 
|                              |                                                                   |                                                                                          | Page |   
|                             
|                             
|                             
|                             
|Part I. Financial Information
|                             
|                             
|                             
|                             
|                              | Item 1.                                                           | Condensed Consolidated Financial Statements                                              |      |    | 1  | 
|                             
|                             
|                             
|                             
|                              |                                                                   | Condensed Consolidated Statements of Earnings
for the Three Months Ended June 30, 2001   |      |    | 2  | 
|                             
|                             
|                             
|                             
|                              |                                                                   | Condensed Consolidated Balance Sheets                                                    |      |    | 3  | 
|                             
|                             
|                             
|                             
|                              |                                                                   | Condensed Consolidated Statements of Cash Flows
for the Three Months Ended June 30, 2001 |      |    | 5  | 
|                             
|                             
|                             
|                             
|                              |                                                                   | Notes to Condensed Consolidated Financial Statements                                     |      |    | 6  | 
|                             
|                             
|                             
|                             
|                              | Item 2.                                                           | Managements Discussion and Analysis of Financial Condition
and Results of Operations    |      |    | 15 | 
|                             
|                             
|                             
|                             
|                              | Item 3.Quantitative and Qualitative Disclosures about Market Risk |                                                                                          |      | 24 |   
|                             
|                             
|                             
|                             
|Part II. Other Information   
|                             
|                             
|                             
|                             
|                              | Item 6.Exhibits and Reports on Form 8-K                           |                                                                                          |      | 25 |   
|                             
|                             
|                             
|                             
|Signatures                    |                                                                   |                                                                                          | 26   |   

i



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##### Table of Contents

TABLE OF CONTENTS

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

|                              |                                                                   |                                                                                       |      |    |    | 
|----------------------------- | ----------------------------------------------------------------- | ------------------------------------------------------------------------------------- | ---- | -- | -- | 
|                              |                                                                   |                                                                                       | Page |   
|                             
|                             
|                             
|                             
|Part I. Financial Information
|                             
|                             
|                             
|                             
|                              | Item 1.                                                           | Condensed Combining Financial Statements                                              |      |    | 27 | 
|                             
|                             
|                             
|                             
|                              |                                                                   | Condensed Combining Statements of Operations
for the Three Months Ended June 30, 2001 |      |    | 28 | 
|                             
|                             
|                             
|                             
|                              |                                                                   | Condensed Combining Balance Sheets                                                    |      |    | 29 | 
|                             
|                             
|                             
|                             
|                              |                                                                   | Condensed Combining Statements of Cash Flows
for the Three Months Ended June 30, 2001 |      |    | 30 | 
|                             
|                             
|                             
|                             
|                              |                                                                   | Notes to Condensed Combining Financial Statements                                     |      |    | 31 | 
|                             
|                             
|                             
|                             
|                              | Item 2.                                                           | Managements Discussion and Analysis of Financial Condition
and Results of Operations |      |    | 36 | 
|                             
|                             
|                             
|                             
|                              | Item 3.Quantitative and Qualitative Disclosures about Market Risk |                                                                                       |      | 40 |   
|                             
|                             
|                             
|                             
|Part II. Other Information   
|                             
|                             
|                             
|                             
|                              | Item 6.Exhibits and Reports on Form 8-K                           |                                                                                       |      | 40 |   
|                             
|                             
|                             
|                             
|Signatures                    |                                                                   |                                                                                       | 41   |   

ii



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##### Table of Contents









Centex Corporation and Subsidiaries

Part I. Financial Information

Condensed Consolidated Financial Statements

ITEM 1.

The condensed consolidated financial statements include the accounts of
Centex Corporation and subsidiaries and have been prepared by the Company,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. References herein to Centex or the Company will
include all subsidiaries of Centex Corporation, through which all operations
are conducted, except where the context indicates that such reference is only
to the registrant, Centex Corporation. 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 pursuant to such rules and regulations, although the
Company believes that the disclosures are adequate to make the information
presented not misleading. 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. 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.

-1-



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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 Three Months Ended June 30, |          
|                                                          |                                       |                                        |           |                                     |          
|                                                          |                                       |                                        |           | 2001                                |           |   | 2000      |           
|                                                          |                                       |                                        |           |                                     |           |   |           |           
|Revenues                                                 
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Home Building                         |                                       
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          |                                       | Conventional Homes                     |           | $                                   | 1,039,161 |   |           | $          | 887,022 | 
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          |                                       | Manufactured Homes                     |           |                                     | 27,570    |   |           |            | 36,486  | 
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Financial Services                    |                                        |           | 162,593                             |           |   |           | 95,909     |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Construction Products                 |                                        |           | 117,423                             |           |   |           | 115,065    |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Contracting and Construction Services |                                        |           | 313,633                             |           |   |           | 298,659    |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Investment Real Estate                |                                        |           | 24,098                              |           |   |           | 3,481      |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Home Services                         |                                        |           | 24,667                              |           |   |           |           |        
|                                                          |                                       |                                        |           |                                     |           |  
|                                                          |                                       |                                        | 1,709,145 |                                     |           |   | 1,436,622 |           
|                                                          |                                       |                                        |           |                                     |           |  
|Costs And Expenses                                       
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Home Building                        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          |                                       | Conventional Homes                     |           |                                     | 941,041   |   |           |            | 814,472 | 
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          |                                       | Manufactured Homes                     |           |                                     | 29,126    |   |           |            | 36,583  | 
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Financial Services                    |                                        |           | 137,423                             |           |   |           | 95,841     |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Construction Products                 |                                        |           | 104,481                             |           |   |           | 78,886     |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Contracting and Construction Services |                                        |           | 306,175                             |           |   |           | 292,155    |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Investment Real Estate                |                                        |           | 8,843                               |           |   |           | (2,621     | )      
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Home
Services and Other               |                                        |           | 22,749                              |           |   |           | (320       | )      
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Corporate General and Administrative  |                                        |           | 11,246                              |           |   |           | 8,731      |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Interest Expense                      |                                        |           | 27,242                              |           |   |           | 21,790     |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Minority Interest                     |                                        |           | 2,833                               |           |   |           | 13,036     |        
|                                                          |                                       |                                        |           |                                     |           |  
|                                                          |                                       |                                        | 1,591,159 |                                     |           |   | 1,358,553 |           
|                                                          |                                       |                                        |           |                                     |           |  
|Earnings Before Income Taxes                              |                                       |                                        | 117,986   |                                     |           |   | 78,069    |           
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Income Taxes                          |                                        |           | 42,770                              |           |   |           | 29,864     |        
|                                                          |                                       |                                        |           |                                     |           |  
|Net Earnings                                              |                                       | $                                      | 75,216    |                                     |           | $ | 48,205    |           
|                                                          |                                       |                                        |           |                                     |           |  
|Earnings Per Share                                       
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Basic                                 |                                        | $         | 1.25                                |           |   | $         | 0.82       |        
|                                                          |                                       |                                        |           |                                     |           |  
|                                                          | Diluted                               |                                        | $         | 1.22                                |           |   | $         | 0.81       |        
|                                                          |                                       |                                        |           |                                     |           |  
|Average Shares Outstanding                               
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Basic                                 |                                        |           | 60,174,973                          |           |   |           | 58,803,345 |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Common Share Equivalents             
|                                                          |                                       | Options                                |           |                                     | 1,332,271 |   |           |            | 651,220 | 
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          |                                       | Convertible Debenture/Restricted Stock |           |                                     | 402,848   |   |           |            | 400,000 | 
|                                                          |                                       |                                        |           |                                     |           |  
|                                                          | Diluted                               |                                        |           | 61,910,092                          |           |   |           | 59,854,565 |        
|                                                          |                                       |                                        |           |                                     |           |  
|Cash Dividends Per Share                                  |                                       | $                                      | 0.04      |                                     |           | $ | 0.04      |           
|                                                          |                                       |                                        |           |                                     |           |  
|                                                         
|                                                         
|                                                         
|                                                         
|                                                         
|                                                         
|                                                         
|                                                         
|See
notes to condensed consolidated financial statements.

-2-



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##### Table of Contents






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

|                                                          |                                                                                                                           |                     |           |                                     |   |   |           |           |   | 
|--------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------- | ------------------- | --------- | ----------------------------------- | - | - | --------- | --------- | - | 
|                                                          |                                                                                                                           |                     |           |                                     |  
|                                                          |                                                                                                                           |                     |           | Centex Corporation and Subsidiaries |  
|                                                          |                                                                                                                           |                     |           |                                     |  
|                                                          |                                                                                                                           |                     |           | June 30,                            |   |   | March 31, |          
|                                                          |                                                                                                                           |                     |           | 2001*                               |   |   | 2001**    |          
|                                                          |                                                                                                                           |                     |           |                                     |   |   |           |          
|Assets                                                   
|                                                         
|                                                         
|                                                         
|                                                         
|Cash and Cash Equivalents                                 |                                                                                                                           | $                   | 87,299    |                                     |   | $ | 57,752    |          
|                                                         
|                                                         
|                                                         
|                                                         
|Restricted Cash                                           |                                                                                                                           |                     | 63,977    |                                     |   |   | 57,428    |          
|                                                         
|                                                         
|                                                         
|                                                         
|Receivables -                                            
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Residential Mortgage Loans                                                                                                |                     |           | 2,444,014                           |   |   |           | 1,996,746 |  
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Other                                                                                                                     |                     |           | 609,684                             |   |   |           | 606,069   |  
|                                                         
|                                                         
|                                                         
|                                                         
|Inventories                                               |                                                                                                                           |                     | 2,375,065 |                                     |   |   | 2,202,295 |          
|                                                         
|                                                         
|                                                         
|                                                         
|Investments -                                            
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Centex Development Company, L.P.                                                                                          |                     |           | 224,016                             |   |   |           | 210,807   |  
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Joint Ventures and Other                                                                                                  |                     |           | 85,711                              |   |   |           | 72,035    |  
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Unconsolidated Subsidiaries                                                                                               |                     |           |                                    |   |   |           |          |  
|                                                         
|                                                         
|                                                         
|                                                         
|Property and Equipment, net                               |                                                                                                                           |                     | 737,150   |                                     |   |   | 729,099   |          
|                                                         
|                                                         
|                                                         
|                                                         
|Other Assets -                                           
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Deferred Income Taxes                                                                                                     |                     |           | 38,263                              |   |   |           | 43,116    |  
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Goodwill, net                                                                                                             |                     |           | 356,059                             |   |   |           | 323,971   |  
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Mortgage Securitization Residual Interest                                                                                 |                     |           | 143,434                             |   |   |           | 146,394   |  
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Deferred Charges and Other                                                                                                |                     |           | 215,593                             |   |   |           | 203,331   |  
|                                                          |                                                                                                                           |                     |           |                                     |   |  
|                                                          |                                                                                                                           | $                   | 7,380,265 |                                     |   | $ | 6,649,043 |          
|                                                          |                                                                                                                           |                     |           |                                     |   |  
|Liabilities and Stockholders Equity                     
|                                                         
|                                                         
|                                                         
|                                                         
|Accounts Payable and Accrued Liabilities                  |                                                                                                                           | $                   | 1,222,626 |                                     |   | $ | 1,271,464 |          
|                                                         
|                                                         
|                                                         
|                                                         
|Debt -                                                   
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Non-Financial Services                                                                                                    |                     |           | 1,695,550                           |   |   |           | 1,464,993 |  
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Financial Services                                                                                                        |                     |           | 2,520,545                           |   |   |           | 2,054,898 |  
|                                                         
|                                                         
|                                                         
|                                                         
|Payables to Affiliates                                    |                                                                                                                           |                     |          |                                     |   |   |          |          
|                                                         
|                                                         
|                                                         
|                                                         
|Minority Stockholders Interest                           |                                                                                                                           |                     | 146,677   |                                     |   |   | 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
60,413,944 and 59,929,344 respectively |                     |           | 15,092                              |   |   |           | 14,982    |  
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Capital in Excess of Par Value                                                                                            |                     |           | 39,852                              |   |   |           | 25,779    |  
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Unamortized Value of Restricted Stock                                                                                     |                     |           | (2,662                              | ) |   |           |          |  
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Retained Earnings                                                                                                         |                     |           | 1,751,200                           |   |   |           | 1,678,400 |  
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Accumulated Other Comprehensive Loss                                                                                      |                     |           | (8,615                              | ) |   |           | (5,097    | )
|                                                          |                                                                                                                           |                     |           |                                     |   |  
|Total Stockholders Equity                                |                                                                                                                           |                     | 1,794,867 |                                     |   |   | 1,714,064 |          
|                                                          |                                                                                                                           |                     |           |                                     |   |  
|                                                          |                                                                                                                           | $                   | 7,380,265 |                                     |   | $ | 6,649,043 |          
|                                                          |                                                                                                                           |                     |           |                                     |   |  
|                                                         
|See notes to condensed consolidated financial statements.
|*   Unaudited                                            
|**   Condensed from audited financial statements.        
|                                                         

-3-



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##### Table of Contents



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

| |  |                                                                                                                                                                                                                                                                                                                     |           |   |                    |   |           |          |  |   |           |   |  |   |           |  |  |  |  | 
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------- | - | ------------------ | - | --------- | -------- |  | - | --------- | - |  | - | --------- |  |  |  |  | 
| |  |                                                                                                                                                                                                                                                                                                                     |          
| |  | Centex Corporation                                                                                                                                                                                                                                                                                                  |           |   | Financial Services |  
| |  |                                                                                                                                                                                                                                                                                                                     |           |   |                    |  
| |  | June 30,                                                                                                                                                                                                                                                                                                            |           |   | March 31,          |   |           | June 30, |  |   | March 31, |  
| |  | 2001*                                                                                                                                                                                                                                                                                                               |           |   | 2001**             |   |           | 2001*    |  |   | 2001**    |  
| |  |                                                                                                                                                                                                                                                                                                                     |           |   |                    |   |           |          |  |   |           |  
|
| |  | $                                                                                                                                                                                                                                                                                                                   | 56,709    |   |                    | $ | 45,987    |          |  | $ | 30,590    |   |  | $ | 11,765    | 
|
|
|
|
| |  |                                                                                                                                                                                                                                                                                                                     | 4,643     |   |                    |   | 5,442     |          |  |   | 59,334    |   |  |   | 51,986    | 
|
| |  |                                                                                                                                                                                                                                                                                                                     |          |   |                    |   |          |          |  |   | 2,444,014 |   |  |   | 1,996,746 | 
|
|
|
|
| |  |                                                                                                                                                                                                                                                                                                                     | 472,281   |   |                    |   | 486,816   |          |  |   | 137,403   |   |  |   | 119,253   | 
|
|
|
|
| |  |                                                                                                                                                                                                                                                                                                                     | 2,366,106 |   |                    |   | 2,193,838 |          |  |   | 8,959     |   |  |   | 8,457     | 
|
| |  |                                                                                                                                                                                                                                                                                                                     | 224,016   |   |                    |   | 210,807   |          |  |   |          |   |  |   |          | 
|
|
|
|
| |  |                                                                                                                                                                                                                                                                                                                     | 85,711    |   |                    |   | 72,035    |          |  |   |          |   |  |   |          | 
|
|
|
|
| |  |                                                                                                                                                                                                                                                                                                                     | 346,901   |   |                    |   | 314,868   |          |  |   |          |   |  |   |          | 
|
|
|
|
| |  |                                                                                                                                                                                                                                                                                                                     | 684,892   |   |                    |   | 673,846   |          |  |   | 52,258    |   |  |   | 55,253    | 
|
| |  |                                                                                                                                                                                                                                                                                                                     | 2,185     |   |                    |   | 12,838    |          |  |   | 36,078    |   |  |   | 30,278    | 
|
|
|
|
| |  |                                                                                                                                                                                                                                                                                                                     | 339,457   |   |                    |   | 307,369   |          |  |   | 16,602    |   |  |   | 16,602    | 
|
|
|
|
| |  |                                                                                                                                                                                                                                                                                                                     |          |   |                    |   |          |          |  |   | 143,434   |   |  |   | 146,394   | 
|
|
|
|
| |  |                                                                                                                                                                                                                                                                                                                     | 160,037   |   |                    |   | 149,917   |          |  |   | 55,556    |   |  |   | 53,414    | 
| |  |                                                                                                                                                                                                                                                                                                                     |           |   |                    |   |           |          |  |   |           |  
| |  | $                                                                                                                                                                                                                                                                                                                   | 4,742,938 |   |                    | $ | 4,473,763 |          |  | $ | 2,984,228 |   |  | $ | 2,490,148 | 
| |  |                                                                                                                                                                                                                                                                                                                     |           |   |                    |   |           |          |  |   |           |  
|
| |  | $                                                                                                                                                                                                                                                                                                                   | 1,108,643 |   |                    | $ | 1,153,215 |          |  | $ | 113,983   |   |  | $ | 118,249   | 
|
| |  |                                                                                                                                                                                                                                                                                                                     | 1,695,550 |   |                    |   | 1,464,993 |          |  |   |          |   |  |   |          | 
|
|
|
|
| |  |                                                                                                                                                                                                                                                                                                                     |          |   |                    |   |          |          |  |   | 2,520,545 |   |  |   | 2,054,898 | 
|
|
|
|
| |  |                                                                                                                                                                                                                                                                                                                     |          |   |                    |   |          |          |  |   | 64,992    |   |  |   | 50,072    | 
|
|
|
|
| |  |                                                                                                                                                                                                                                                                                                                     | 143,878   |   |                    |   | 141,491   |          |  |   | 2,799     |   |  |   | 2,133     | 
|
|
| |  |                                                                                                                                                                                                                                                                                                                     |          |   |                    |   |          |          |  |   |          |   |  |   |          | 
|
| |  |                                                                                                                                                                                                                                                                                                                     | 15,092    |   |                    |   | 14,982    |          |  |   | 1         |   |  |   | 1         | 
|
|
|
|
| |  |                                                                                                                                                                                                                                                                                                                     | 39,852    |   |                    |   | 25,779    |          |  |   | 201,944   |   |  |   | 200,467   | 
|
|
|
|
| |  |                                                                                                                                                                                                                                                                                                                     | (2,662    | ) |                    |   |          |          |  |   |          |   |  |   |          | 
|
|
|
|
| |  |                                                                                                                                                                                                                                                                                                                     | 1,751,200 |   |                    |   | 1,678,400 |          |  |   | 80,015    |   |  |   | 64,328    | 
|
|
|
|
| |  |                                                                                                                                                                                                                                                                                                                     | (8,615    | ) |                    |   | (5,097    | )        |  |   | (51       | ) |  |   |          | 
| |  |                                                                                                                                                                                                                                                                                                                     |           |   |                    |   |           |          |  |   |           |  
| |  |                                                                                                                                                                                                                                                                                                                     | 1,794,867 |   |                    |   | 1,714,064 |          |  |   | 281,909   |   |  |   | 264,796   | 
| |  |                                                                                                                                                                                                                                                                                                                     |           |   |                    |   |           |          |  |   |           |  
| |  | $                                                                                                                                                                                                                                                                                                                   | 4,742,938 |   |                    | $ | 4,473,763 |          |  | $ | 2,984,228 |   |  | $ | 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.

-4-



---



##### Table of Contents






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

|                                                                            |                                                                    |                                                                           |          |                                     |          |   |          |          |          |  
|--------------------------------------------------------------------------- | ------------------------------------------------------------------ | ------------------------------------------------------------------------- | -------- | ----------------------------------- | -------- | - | -------- | -------- | -------- | -
|                                                                            |                                                                    |                                                                           |          |                                     |         
|                                                                            |                                                                    |                                                                           |          | For the Three Months Ended June 30, |         
|                                                                            |                                                                    |                                                                           |          |                                     |         
|                                                                            |                                                                    |                                                                           |          | 2001                                |          |   | 2000     |         
|                                                                            |                                                                    |                                                                           |          |                                     |          |   |          |         
|Cash Flows  Operating Activities                                          
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Net Earnings                                                       |                                                                           | $        | 75,216                              |          |   | $        | 48,205   |         
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Adjustments -                                                     
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                                                    | Depreciation and Amortization                                             |          |                                     | 21,365   |   |          |          | 13,447   |  
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                                                    | Deferred Income Taxes                                                     |          |                                     | 3,475    |   |          |          | 519      |  
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                                                    | Equity in Earnings of Centex Development
Company, L.P. and Joint Ventures |          |                                     | (2,660   | ) |          |          | (313     | )
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                                                    | Minority Interest, net of taxes                                           |          |                                     | 1,898    |   |          |          | 8,291    |  
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Increase in Restricted Cash                                        |                                                                           |          | (6,549                              | )        |   |          | (8,372   | )       
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Increase in Receivables                                            |                                                                           |          | (3,615                              | )        |   |          | (26,785  | )       
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Increase in Residential Mortgage Loans                             |                                                                           |          | (447,268                            | )        |   |          | (397,695 | )       
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Increase in Inventories                                            |                                                                           |          | (168,253                            | )        |   |          | (157,687 | )       
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Decrease in Payables and Accruals                                  |                                                                           |          | (48,838                             | )        |   |          | (83,728  | )       
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Increase in Other Assets                                           |                                                                           |          | (49,282                             | )        |   |          | (38,147  | )       
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Other, net                                                         |                                                                           |          | 1,155                               |          |   |          | 10,095   |         
|                                                                            |                                                                    |                                                                           |          |                                     |          |  
|                                                                            |                                                                    |                                                                           | (623,356 | )                                   |          |   | (632,170 | )       
|                                                                            |                                                                    |                                                                           |          |                                     |          |  
|Cash Flows  Investing Activities                                          
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Increase in Advances to Centex Development
Company, L.P. and Joint Ventures |                                                                    |                                                                           | (28,742  | )                                   |          |   | (26,134  | )       
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Increase in Property and Equipment, net                            |                                                                           |          | (25,037                             | )        |   |          | (19,078  | )       
|                                                                            |                                                                    |                                                                           |          |                                     |          |  
|                                                                            |                                                                    |                                                                           | (53,779  | )                                   |          |   | (45,212  | )       
|                                                                            |                                                                    |                                                                           |          |                                     |          |  
|Cash Flows  Financing Activities                                          
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Increase in Short-Term Debt, net                                   |                                                                           |          | 147,866                             |          |   |          | 185,733  |         
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Non-Financial Services                                                     
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                                                    | Issuance of Long-Term Debt                                                |          |                                     | 376,213  |   |          |          | 287,607  |  
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                                                    | Repayment of Long-Term Debt                                               |          |                                     | (221,843 | ) |          |          | (115,117 | )
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Financial Services                                                         
|                                                                            |                                                                    | Issuance of Long-Term Debt                                                |          |                                     | 480,000  |   |          |          | 350,000  |  
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                                                    | Repayment of Long-Term Debt                                               |          |                                     | (86,032  | ) |          |          |         |  
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Retirement of Common Stock                                         |                                                                           |          |                                    |          |   |          | (784     | )       
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Proceeds from Stock Option Exercises
and Restricted Stock Activity |                                                                           |          | 11,521                              |          |   |          | 1,078    |         
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Dividends Paid                                                     |                                                                           |          | (2,416                              | )        |   |          | (2,352   | )       
|                                                                            |                                                                    |                                                                           |          |                                     |          |  
|                                                                            |                                                                    |                                                                           | 705,309  |                                     |          |   | 706,165  |         
|                                                                            |                                                                    |                                                                           |          |                                     |          |  
|Effect of Exchange Rate Changes on Cash                                     |                                                                    |                                                                           | 1,373    |                                     |          |   | 882      |         
|                                                                            |                                                                    |                                                                           |          |                                     |          |  
|Net Increase In Cash and Cash Equivalents                                   |                                                                    |                                                                           | 29,547   |                                     |          |   | 29,665   |         
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Cash and Cash Equivalents At Beginning of Period                            |                                                                    |                                                                           | 57,752   |                                     |          |   | 135,853  |         
|                                                                            |                                                                    |                                                                           |          |                                     |          |  
|Cash and Cash Equivalents At End of Period                                  |                                                                    | $                                                                         | 87,299   |                                     |          | $ | 165,518  |         
|                                                                            |                                                                    |                                                                           |          |                                     |          |  

See notes to condensed consolidated financial statements.

-5-



---



##### Table of Contents






Centex Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements
June 30, 2001
(Dollars in thousands)
(unaudited)

(A)A summary of comprehensive income for the three months ended June 30, 2001 is presented below:

|                                   |                                          |   |        |        |  
|---------------------------------- | ---------------------------------------- | - | ------ | ------ | -
|Net Earnings                       |                                          | $ | 75,216 |       
|                                  
|                                  
|                                  
|                                  
|Other Comprehensive Income (Loss):
|                                  
|                                  
|                                  
|                                  
|                                   | Foreign Currency Translation Adjustments |   |        | 1,373  |  
|                                  
|                                  
|                                  
|                                  
|                                   | Unrealized Loss on Hedging Instruments   |   |        | (4,891 | )
|                                   |                                          |   |       
|Comprehensive Income               |                                          | $ | 71,698 |       
|                                   |                                          |   |       

The Foreign Currency Translation Adjustments are primarily the result of
Centexs investment in Centex Development Company, L.P. and its foreign
subsidiaries. For additional information on Centex Development Company, L.P.
and subsidiaries, see their separate financial statements included elsewhere in
this Report. The Unrealized Loss on Hedging Instruments represents the
deferral in Other Comprehensive Income of the unrealized loss on swap
agreements designated as cash flow hedges. The accounting for interest rate
swaps and other derivative financial instruments is discussed in detail in Note
(G) of this Report.

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

|                        |                                          |   |           |   |  |        |        |    |           |   |            |            |  |          |             |        |   |               |           |        |       |             |        |        |   |   |           |        |  
|----------------------- | ---------------------------------------- | - | --------- | - |  | ------ | ------ | -- | --------- | - | ---------- | ---------- |  | -------- | ----------- | ------ | - | ------------- | --------- | ------ | ----- | ----------- | ------ | ------ | - | - | --------- | ------ | -
|                        |                                          |   |           |   |  |        |        |    |           |   |            |            |  |          | Unamortized |        |   |               |           |        |       | Accumulated |       
|                        |                                          |   |           |   |  |        |        |    |           |   | Capital in |            |  | Value of |             |        |   |               |           |        | Other |            
|                        |                                          |   | Preferred |   |  | Common |        |    | Excess of |   |            | Restricted |  |          | Retained    |        |   | Comprehensive |          
|                        |                                          |   | Stock     |   |  | Stock  |        |    | Par Value |   |            | Stock      |  |          | Earnings    |        |   | (Loss) Income |           |        | Total |            
|                        |                                          |   |           |   |  |        |        |    |           |   |            |            |  |          |             |        |   |               |           |        |       |            
|Balance, March 31, 2001 |                                          | $ |          |   |  | $      | 14,982 |    |           | $ | 25,779     |            |  | $        |            |        |   | $             | 1,678,400 |        |       | $           | (5,097 | )      |   | $ | 1,714,064 |       
|                       
|                       
|                       
|                       
|                        | Net Earnings                             |   |           |  |  |        |        |   |           |   |            |           |  |          |             |       |   |               |           | 75,216 |       |             |        |       |   |   |           | 75,216 |  
|                       
|                       
|                       
|                       
|                        | Issuance of Restricted Stock             |   |           |  |  |        |        | 17 |           |   |            | 2,738      |  |          |             | (2,755 | ) |               |           |       |       |             |        |       |   |   |           |       |  
|                       
|                       
|                       
|                       
|                        | Amortization of
Restricted Stock         |   |           |  |  |        |        |   |           |   |            |           |  |          |             | 93     |   |               |           |       |       |             |        |       |   |   |           | 93     |  
|                       
|                       
|                       
|                       
|                        | Exercise of Stock Options                |   |           |  |  |        |        | 93 |           |   |            | 11,335     |  |          |             |       |   |               |           |       |       |             |        |       |   |   |           | 11,428 |  
|                       
|                       
|                       
|                       
|                        | Cash Dividends                           |   |           |  |  |        |        |   |           |   |            |           |  |          |             |       |   |               |           | (2,416 | )     |             |        |       |   |   |           | (2,416 | )
|                       
|                       
|                       
|                       
|                        | Unrealized Loss on
Hedging Instruments   |   |           |  |  |        |        |   |           |   |            |           |  |          |             |       |   |               |           |       |       |             |        | (4,891 | ) |   |           | (4,891 | )
|                       
|                       
|                       
|                       
|                        | Foreign Currency Translation
Adjustments |   |           |  |  |        |        |   |           |   |            |           |  |          |             |       |   |               |           |       |       |             |        | 1,373  |   |   |           | 1,373  |  
|                        |                                          |   |           |   |  |        |        |    |           |   |            |            |  |          |             |        |   |               |           |        |      
|Balance, June 30, 2001  |                                          | $ |          |   |  | $      | 15,092 |    |           | $ | 39,852     |            |  | $        | (2,662      | )      |   | $             | 1,751,200 |        |       | $           | (8,615 | )      |   | $ | 1,794,867 |       
|                        |                                          |   |           |   |  |        |        |    |           |   |            |            |  |          |             |        |   |               |           |        |      

-6-



---



##### Table of Contents



(C)In March 1987, certain of Centexs subsidiaries contributed to Centex
Development Company, L.P. (the Partnership), a newly-formed master limited
partnership, properties in exchange for 1,000 Class A limited
partnership units (Class A Units). The Partnership was formed to enable the
stockholders of Centex to participate in long-term real estate development
projects, the dynamics of which are inconsistent with Centexs traditional
financial objectives.

The Partnership is managed by its general partner, 3333 Development
Corporation (Development), which is in turn wholly-owned by 3333 Holding
Corporation (Holding). Holding is a separate public company whose stock
trades in tandem with Centexs common stock. The common stock of Holding was
distributed in 1987, together with warrants to purchase approximately 80% of
the Partnerships Class B limited partnership units (Class B Units), as a
dividend to the stockholders of Centex. These securities are held by a nominee
on behalf of the stockholders and will trade in tandem with the common stock of
Centex until such time as they are detached. The securities may be detached at
any time by Centexs Board of Directors, but the warrants to purchase Class B
Units will automatically become detached in November 2007.

The stockholders of Centex elect the four-person Board of Directors of
Holding. Three of the Board members, representing the majority of the Board,
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 manage how the Partnership conducts its
activities, including the acquisition, development, maintenance, operation, and
sale of properties. The general partner, acting on behalf of the Partnership,
may sell or acquire properties, including the contributed property, and enter
into other business transactions without the consent of the limited partners.
In addition, the limited partners cannot remove the general partner. The
Company accounts for its limited partner investment in the Partnership on the
equity method of accounting because the Company does not control the
Partnership.

During fiscal year 1998, the agreement governing the Partnership was
amended to allow for the issuance of Class C limited partnership units (Class
C Units). During fiscal 1998, the 1,000 outstanding Class A Units owned by
Centex were converted to 32,260 new Class A Units. As of June 30, 2001,
185,711 Class C Units had been issued in exchange for assets,
including cash and land, with a fair market
value of $185.7 million. These assets were recorded by the Partnership at fair
market value. The partnership agreement provides that Centex, as the Class A
and Class C limited partner, is entitled to a cumulative preferred return of 9%
per annum on the average outstanding balance of its Unrecovered Capital, which
is defined as its capital contributions, adjusted for cash or other
distributions representing return of capital contributions. As of June 30,
2001, Unrecovered Capital totaled $218.5 million, and preference payments in
arrears amounted to $26.0 million. No preference payments have been made since
fiscal 1998.

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.

-7-



---



##### Table of Contents



Supplementary Condensed Combined Balance Sheets

|                                     |                                          |   |           |           |  |           |           |           | 
|------------------------------------ | ---------------------------------------- | - | --------- | --------- |  | --------- | --------- | --------- | 
|                                     |                                          |   |           |          
|                                     |                                          |   | June 30,  |           |  | March 31, |          
|                                     |                                          |   | 2001      |           |  | 2001*     |          
|                                     |                                          |   |           |           |  |           |          
|Assets                              
|                                    
|                                    
|                                    
|                                    
|                                     | Cash and Cash Equivalents                |   | $         | 97,211    |  |           | $         | 60,786    | 
|                                    
|                                    
|                                    
|                                    
|                                     | Restricted Cash                          |   |           | 63,977    |  |           |           | 57,428    | 
|                                    
|                                    
|                                    
|                                    
|                                     | Receivables                              |   |           | 3,058,298 |  |           |           | 2,613,035 | 
|                                    
|                                    
|                                    
|                                    
|                                     | Inventories                              |   |           | 2,853,351 |  |           |           | 2,629,733 | 
|                                    
|                                    
|                                    
|                                    
|                                     | Investments in Joint Ventures and Other  |   |           | 86,727    |  |           |           | 72,679    | 
|                                    
|                                    
|                                    
|                                    
|                                     | Property and Equipment, net              |   |           | 740,783   |  |           |           | 732,490   | 
|                                    
|                                    
|                                    
|                                    
|                                     | Other Assets                             |   |           | 798,587   |  |           |           | 757,882   | 
|                                     |                                          |   |           |           |  |          
|                                     |                                          | $ | 7,698,934 |           |  | $         | 6,924,033 |          
|                                     |                                          |   |           |           |  |          
|Liabilities And Stockholders Equity
|                                    
|                                    
|                                    
|                                    
|                                     | Accounts Payable and Accrued Liabilities |   | $         | 1,304,654 |  |           | $         | 1,352,467 | 
|                                    
|                                    
|                                    
|                                    
|                                     | Short-term Debt                          |   |           | 787,896   |  |           |           | 602,185   | 
|                                    
|                                    
|                                    
|                                    
|                                     | Long-term Debt                           |   |           | 3,664,445 |  |           |           | 3,111,607 | 
|                                    
|                                    
|                                    
|                                    
|                                     | Minority Stockholders Interest          |   |           | 147,072   |  |           |           | 143,710   | 
|                                    
|                                    
|                                    
|                                    
|                                     | Stockholders Equity                     |   |           | 1,794,867 |  |           |           | 1,714,064 | 
|                                     |                                          |   |           |           |  |          
|                                     |                                          | $ | 7,698,934 |           |  | $         | 6,924,033 |          
|                                     |                                          |   |           |           |  |          

*   Condensed from audited financial statements.

Supplementary Condensed Combined Statements of Earnings

|                             |  |                            |           |   |      |   |           |  
|---------------------------- |  | -------------------------- | --------- | - | ---- | - | --------- | -
|                             |  |                            |          
|                             |  | For the Three Months Ended |          
|                             |  | June 30,                   |          
|                             |  |                            |          
|                             |  | 2001                       |           |   | 2000 |  
|                             |  |                            |           |   |      |  
|Revenues                     |  | $                          | 1,789,975 |   |      | $ | 1,507,364 |  
|                            
|                            
|                            
|                            
|Costs and Expenses           |  |                            | 1,671,698 |   |      |   | 1,428,649 |  
|                             |  |                            |           |   |      |  
|Earnings Before Income Taxes |  |                            | 118,277   |   |      |   | 78,715    |  
|                            
|                            
|                            
|                            
|Income Taxes                 |  |                            | 43,061    |   |      |   | 30,510    |  
|                             |  |                            |           |   |      |  
|Net Earnings                 |  |                            | 75,216    |   |      |   | 48,205    |  
|                            
|                            
|                            
|                            
|Other Comprehensive Loss     |  |                            | (3,518    | ) |      |   | (270      | )
|                             |  |                            |           |   |      |  
|Comprehensive Income         |  | $                          | 71,698    |   |      | $ | 47,935    |  
|                             |  |                            |           |   |      |  

(D)The Companys home building activities include: the acquisition of raw and
semi-developed land; the planning, supervision and funding of subcontractors
activities to complete development of that land primarily into single-family
home sites; and the construction of homes on those sites for sale to individual
home purchasers. 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.

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##### Table of Contents



The Company has paid $61 million as options toward the
purchase of undeveloped land and developed lots having a total purchase price
of approximately $1.6 billion in order to ensure the future availability of
land for home building. These options expire at various dates through the year
2007. The Company has also committed to purchase land and developed lots
totaling approximately $1.8 million.

(E)Interest expenses relating to the Financial Services segments are included
in its costs and expenses. Interest related to segments other than Financial
Services is included as interest expense. For the three months ending June 30,
2001, $10.4 million of interest costs were capitalized to qualifying assets,
principally within the Home Building segment, and $6.4 million of previously
capitalized interest was charged to interest expense.

|                          |  |                            |         |   |      |   |         |  
|------------------------- |  | -------------------------- | ------- | - | ---- | - | ------- | -
|                          |  |                            |        
|                          |  | For the Three Months Ended |        
|                          |  | June 30,                   |        
|                          |  |                            |        
|                          |  | 2001                       |         |   | 2000 |  
|                          |  |                            |         |   |      |  
|Total Interest Incurred   |  | $                          | 67,167  |   |      | $ | 33,898  |  
|                         
|                         
|                         
|                         
|Capitalized Interest, net |  |                            | (3,992  | ) |      |   |        |  
|                         
|                         
|                         
|                         
|Less  Financial Services |  |                            | (35,933 | ) |      |   | (12,108 | )
|                          |  |                            |         |   |      |  
|Interest Expense, net     |  | $                          | 27,242  |   |      | $ | 21,790  |  
|                          |  |                            |         |   |      |  

(F)The Company operates in six principal business segments: Home Building,
Financial Services, Construction Products, Contracting and Construction
Services, Investment Real Estate, and Home Services and Other. 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 $224 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 EndedJune 30, |        
|                                           |  |                                    |        
|                                           |  | 2001                               |         |   | 2000 |  
|                                           |  |                                    |         |   |      |  
|                                           |  | (Dollars in
millions)              |        
|Revenues                                   |  | $                                  | 1,039.2 |   |      | $ | 887.0  |  
|                                          
|                                          
|                                          
|                                          
|Cost of Sales                              |  |                                    | (772.4  | ) |      |   | (679.5 | )
|                                          
|                                          
|                                          
|                                          
|Selling, General & Administrative Expenses |  |                                    | (168.7  | ) |      |   | (135.0 | )
|                                           |  |                                    |         |   |      |  
|Operating Earnings                         |  | $                                  | 98.1    |   |      | $ | 72.5   |  
|                                           |  |                                    |         |   |      |  

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##### Table of Contents



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 |      
|                                           |  | June 30,                   |      
|                                           |  |                            |      
|                                           |  | 2001                       |       |   | 2000 |  
|                                           |  |                            |       |   |      |  
|                                           |  | (Dollars in millions)      |      
|Revenues                                   |  | $                          | 27.6  |   |      | $ | 36.5  |  
|                                          
|                                          
|                                          
|                                          
|Cost of Sales                              |  |                            | (23.4 | ) |      |   | (29.3 | )
|                                          
|                                          
|                                          
|                                          
|Selling, General & Administrative Expenses |  |                            | (5.8  | ) |      |   | (7.3  | )
|                                           |  |                            |       |   |      |  
|Operating Loss                             |  | $                          | (1.6  | ) |      | $ | (0.1  | )
|                                           |  |                            |       |   |      |  

FINANCIAL SERVICES

Financial Services operations consist primarily of home financing, home
equity and sub-prime 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 |       
|                                           |  | June 30,                   |       
|                                           |  |                            |       
|                                           |  | 2001                       |        |   | 2000 |  
|                                           |  |                            |        |   |      |  
|                                           |  | (Dollars in millions)      |       
|Revenues*                                  |  | $                          | 162.6  |   |      | $ | 95.9  |  
|                                          
|                                          
|                                          
|                                          
|Selling, General & Administrative Expenses |  |                            | (101.5 | ) |      |   | (83.7 | )
|                                          
|                                          
|                                          
|                                          
|Interest Expense                           |  |                            | (35.9  | ) |      |   | (12.1 | )
|                                           |  |                            |        |   |      |  
|Operating Earnings                         |  | $                          | 25.2   |   |      | $ | 0.1   |  
|                                           |  |                            |        |   |      |  



| |  |  | * | Financial Services revenues include interest income of $52.6
million and $16.1 million for the three months ended June 30, 2001
and 2000, respectively.
| |  |  | - | -------------------------------------------------------------------------------------------------------------------------------------------------------

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##### Table of Contents



CONSTRUCTION PRODUCTS

Construction Products operations involve the manufacture, production,
distribution, and sale of cement, gypsum wallboard, recycled paperboard,
aggregates, and readymix concrete.

|                                           |  |                            |        |   |      |   |       |  
|------------------------------------------ |  | -------------------------- | ------ | - | ---- | - | ----- | -
|                                           |  |                            |       
|                                           |  | For the Three Months Ended |       
|                                           |  | June 30,                   |       
|                                           |  |                            |       
|                                           |  | 2001                       |        |   | 2000 |  
|                                           |  |                            |        |   |      |  
|                                           |  | (Dollars in millions)      |       
|Revenues                                   |  | $                          | 117.4  |   |      | $ | 115.0 |  
|                                          
|                                          
|                                          
|                                          
|Cost of Sales                              |  |                            | (103.3 | ) |      |   | (77.2 | )
|                                          
|                                          
|                                          
|                                          
|Selling, General & Administrative Expenses |  |                            | (1.2   | ) |      |   | (1.7  | )
|                                           |  |                            |        |   |      |  
|Operating Earnings                         |  |                            | 12.9   |   |      |   | 36.1  |  
|                                          
|                                          
|                                          
|                                          
|Minority Interest*                         |  |                            | (2.8   | ) |      |   | (13.0 | )
|                                           |  |                            |        |   |      |  
|Net Operating Earnings to Centex           |  | $                          | 10.1   |   |      | $ | 23.1  |  
|                                           |  |                            |        |   |      |  

*   Minority interest includes interest expense, which is significantly
higher in fiscal 2001.

Centexs ownership interest in Construction Products was 65.2% as of June
30, 2001 and 64.4% as of June 30, 2000.

CONTRACTING AND CONSTRUCTION SERVICES

Contracting and Construction Services operations involve the construction
of buildings for both private and government interests, including (among
others) office, commercial and industrial buildings, hospitals, hotels,
museums, 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.

|                                           |  |                            |        |   |      |   |        |  
|------------------------------------------ |  | -------------------------- | ------ | - | ---- | - | ------ | -
|                                           |  |                            |       
|                                           |  | For the Three Months Ended |       
|                                           |  | June 30,                   |       
|                                           |  |                            |       
|                                           |  | 2001                       |        |   | 2000 |  
|                                           |  |                            |        |   |      |  
|                                           |  | (Dollars in
millions)      |       
|Revenues                                   |  | $                          | 313.6  |   |      | $ | 298.7  |  
|                                          
|                                          
|                                          
|                                          
|Construction Contract Costs                |  |                            | (291.0 | ) |      |   | (279.2 | )
|                                          
|                                          
|                                          
|                                          
|Selling, General & Administrative Expenses |  |                            | (15.1  | ) |      |   | (13.0  | )
|                                           |  |                            |        |   |      |  
|Operating Income, as reported              |  |                            | 7.5    |   |      |   | 6.5    |  
|                                          
|                                          
|                                          
|                                          
|Intercompany Interest Income               |  |                            | 2.1    |   |      |   | 2.3    |  
|                                           |  |                            |        |   |      |  
|Total Economic Return                      |  | $                          | 9.6    |   |      | $ | 8.8    |  
|                                           |  |                            |        |   |      |  

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##### Table of Contents



INVESTMENT REAL ESTATE

Investment Real Estate 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 |     
|                                           |  | June 30,                   |     
|                                           |  |                            |     
|                                           |  | 2001                       |      |   | 2000 |  
|                                           |  |                            |      |   |      |  
|                                           |  | (Dollars in millions)      |     
|Revenues                                   |  | $                          | 24.1 |   |      | $ | 3.5  |  
|                                          
|                                          
|                                          
|                                          
|Cost of Sales                              |  |                            | (5.2 | ) |      |   | (0.3 | )
|                                          
|                                          
|                                          
|                                          
|Selling, General & Administrative Expenses |  |                            | (3.6 | ) |      |   | (1.1 | )
|                                          
|                                          
|                                          
|                                          
|Negative Goodwill Amortization             |  |                            |     |   |      |   | 4.0  |  
|                                           |  |                            |      |   |      |  
|Operating Earnings                         |  | $                          | 15.3 |   |      | $ | 6.1  |  
|                                           |  |                            |      |   |      |  

HOME SERVICES AND OTHER

Home Services operations include pest management, electronic security,
structured wiring, and chemical lawn care.

|                                           |                            |          |       |  
|------------------------------------------ | -------------------------- | -------- | ----- | -
|                                           |                           
|                                           | For the Three Months Ended
|                                           |                            | June 30, |      
|                                           |                           
|                                           |                            | 2001     |      
|                                           |                           
|                                           | (Dollars in millions)     
|Revenues                                   |                            | $        | 24.7  |  
|                                          
|                                          
|                                          
|                                          
|Cost of Sales                              |                            |          | (9.2  | )
|                                          
|                                          
|                                          
|                                          
|Selling, General & Administrative Expenses |                            |          | (13.6 | )
|                                           |                            |          |      
|Operating Earnings                         |                            | $        | 1.9   | *
|                                           |                            |          |      



| |  |  | * | Before fiscal 2002, revenues and operating expenses of the Home
Services and Other segment were reflected on a net basis, as this
segment was not considered material for purposes of segment
reporting. Operating earnings for the three months ended June 30,
2000 were $0.3 million.
| |  |  | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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(G)The Company adopted the provisions of Statement of Financial Accounting
Standards (SFAS) No. 133, Accounting for Derivative Instruments and Hedging
Activities, on April 1, 2001. This statement requires that derivatives be
recognized as either assets or liabilities in the balance sheet and that those
instruments be measured at fair value. The accounting for the gain or loss
resulting from the change in fair value depends on the intended use of the
derivative. For a derivative used to hedge changes in fair value of a
recognized asset or liability or an unrecognized firm commitment, the gain or
loss on the derivative will be recognized in earnings along with the offsetting
loss or gain on the hedged item. This results in earnings recognition only to
the extent that the hedge is ineffective in achieving offsetting changes in
fair value. For a derivative used to hedge changes in cash flows, the gain or
loss on the effective portion of the derivative will be deferred and reported
as accumulated other comprehensive income until such time as the hedged
transaction affects earnings. For derivative instruments not accounted for as
hedges, changes in fair value are required to be recognized in
earnings. The effect of the adoption of SFAS No. 133 on the Company's
operating earnings was not significant.

The Company has various interest rate swap agreements which effectively
fix the variable interest rate on approximately $378 million of outstanding
debt. The swap agreements have been designated as cash flow hedges and,
accordingly, are reflected at their fair value in Other Assets in the condensed
consolidated balance sheets. The related loss is deferred in stockholders
equity as Accumulated Other Comprehensive Loss. The Company accounts for its
interest rate swaps using the shortcut method, as described in SFAS No. 133.
Amounts to be received or paid as a result of the swap agreements are
recognized as adjustments to interest incurred on the related debt
instrument. Subsequent to the Company's adoption of SFAS No. 133
through June 30, 2001, the liability and accumulated other
comprehensive loss was $4.9 million.

Financial Services, in the normal course of business, uses derivative
financial instruments to reduce its exposure to fluctuations in interest rates.
CTX Mortgage Company 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. These IRLCs
are derivative instruments. CTX Mortgage
Company also executes mandatory forward trades of mortgage loans
to hedge the risk of fluctuations in value of these IRLCs and of
mortgage loans.
The gain resulting from the net change in the estimated fair value
of such mandatory forward trades
and IRLCs was $1.5 million for the quarter ended June 30, 2001,
and is
reflected in the accompanying condensed consolidated statements of earnings.

From time to time, Centex Home Equity Corporation uses interest rate swaps
to hedge the market risk associated with the carrying of mortgages in
anticipation of issuance of securitization debt to finance subprime mortgages.
At June 30, 2001, there were no such interest rate swaps outstanding.

(H)In July 2001, the Financial Accounting Standards Board issued new
Statements, SFAS No. 141,
Business Combinations and SFAS No. 142, Goodwill and Other Intangible
Assets, which the Company has elected to adopt effective April 1, 2001. SFAS
No. 141 requires all business combinations to be accounted for using the
purchase method and requires acquired intangible assets to be recognized as
assets apart from goodwill if certain criteria are met. SFAS No. 142 provides
guidance on accounting for intangible assets and eliminates the amortization of
goodwill and certain identifiable intangible assets. Under the provisions of
SFAS No. 142, intangible assets, including goodwill, that are not subject to
amortization will be tested for impairment annually 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 is in the process of
completing the first step, which tests for  potential impairment by determining whether the
carrying amount of a reporting unit exceeds its fair value.

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##### Table of Contents



This step must be
completed within six months of adoption. If an impairment is identified, the
second step of the goodwill impairment test, which measures the amount of
impairment loss, if any, will be performed. If required, this step must be
performed within a year of adoption.

The pro forma adoption of SFAS No. 142 for the three months ended June 30,
2000, which included amortization of goodwill and negative goodwill, would have
resulted in a decrease in net earnings of $981 thousand and a decrease of $.02
in both basic and diluted earnings per share. Identifiable intangible assets,
other than goodwill, are immaterial. Goodwill was $356.1 million at June 30,
2001 and $324.0 million at March 31, 2001. The increase
relates to acquisitions
made in the first quarter of fiscal 2002.

(I)SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities, was issued in September 2000. This
statement replaces SFAS No. 125, Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities. SFAS No. 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 No. 125s provisions without reconsideration. The implementation of SFAS
No. 140 on April 1, 2001 did not have a material impact on the Companys
results of operations or financial position.

(J)Certain prior year balances have been reclassified to be consistent with
the June 30, 2001 presentation.

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##### Table of Contents






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

Centexs consolidated revenues for the three months ended June 30, 2001
were $1.7 billion, a 19% increase over $1.4 billion for the same period last
year. Earnings before income taxes were $118.0 million, 51% higher than $78.1
million last year. Net earnings for the three months ended June 30, 2001 were
$75.2 million, 56% higher than $48.2 million for the same period last year.

HOME BUILDING

Conventional Homes

The following summarizes Conventional Homes results for the three months
ended June 30, 2001 compared to the same period last year (dollars in millions,
except per unit data):

|                                           |          |   |                                     |      |   |      |       |    |  |  |  |  |  |   |         |      |   |  |       |    |  |  |  |  | 
|------------------------------------------ | -------- | - | ----------------------------------- | ---- | - | ---- | ----- | -- |  |  |  |  |  | - | ------- | ---- | - |  | ----- | -- |  |  |  |  | 
|                                           |          |   |                                     |     
|                                           |          |   | For the Three Months Ended June 30, |     
|                                           |          |   |                                     |     
|                                           |          |   | 2001                                |      |   | 2000 |      
|                                           |          |   |                                     |      |   |      |       |    |  |  | 
|Revenues                                   |          | $ | 1,039.2                             |      |   |      | 100.0 | %  |  |  |  |  |  | $ | 887.0   |      |   |  | 100.0 | % 
|                                          
|                                          
|                                          
|                                          
|Cost of Sales                              |          |   | (772.4                              | )    |   |      | (74.4 | )% |  |  |  |  |  |   | (679.5  | )    |   |  | (76.6 | )%
|                                          
|                                          
|                                          
|                                          
|Selling, General & Administrative Expenses |          |   | (168.7                              | )    |   |      | (16.2 | )% |  |  |  |  |  |   | (135.0  | )    |   |  | (15.2 | )%
|                                           |          |   |                                     |      |   |      |       |    |  |  |  |  |  |   |         |     
|Operating Earnings                         |          | $ | 98.1                                |      |   |      | 9.4   | %  |  |  |  |  |  | $ | 72.5    |      |   |  | 8.2   | % 
|                                           |          |   |                                     |      |   |      |       |    |  |  |  |  |  |   |         |     
|Units Closed                               |          |   | 4,850                               |      |   |      |       |    |  |  |  |  |  |   | 4,408   |     
|                                          
|                                          
|                                          
|                                          
|                                           | % Change |   |                                     | 10.0 | % |      |       |    |  |  |  |  |  |   |         | 12.0 | %
|                                          
|                                          
|                                          
|                                          
|Unit Sales Price                           |          | $ | 210,754                             |      |   |      |       |    |  |  |  |  |  | $ | 196,314 |     
|                                          
|                                          
|                                          
|                                          
|                                           | % Change |   |                                     | 7.4  | % |      |       |    |  |  |  |  |  |   |         | 4.1  | %
|                                          
|                                          
|                                          
|                                          
|Operating Earnings Per Unit                |          | $ | 20,231                              |      |   |      |       |    |  |  |  |  |  | $ | 16,459  |     
|                                          
|                                          
|                                          
|                                          
|                                           | % Change |   |                                     | 22.9 | % |      |       |    |  |  |  |  |  |   |         | 9.5  | %
|                                          
|                                          
|                                          
|                                          
|Backlog Units                              |          |   | 10,152                              |      |   |      |       |    |  |  |  |  |  |   | 8,707   |     
|                                          
|                                          
|                                          
|                                          
|                                           | % Change |   |                                     | 16.6 | % |      |       |    |  |  |  |  |  |   |         | 14.4 | %

Conventional Homes revenues for the three months ended June 30, 2001
increased by $152.2 million from revenues for the same period last year. This
improvement resulted from an increased number of operating neighborhoods along
with an increase in units per neighborhood, and a higher average unit selling
price compared to the fiscal 2001 per-unit sales price.

Operating earnings for the three months ended June 30, 2001 were 9.4% of
revenue and approximately $20,231 on a per-unit basis compared to operating
earnings of 8.2% of revenue and approximately $16,459 on a per-unit basis for
the same period last year. The operating earnings increase was primarily
attributable to sales price increases and continued cost reductions due to
lower raw material prices and process improvements.

Home sales (orders) totaled 5,658 units during the three months ended June
30, 2001, compared to 5,537 units during the same period last year,
representing a 2.2% increase. The backlog of homes sold but not closed at June
30, 2001 was 10,152 units, 16.6% more than the 8,707 units for the same period
last year.

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##### Table of Contents



Manufactured Homes

The following summarizes Manufactured Homes results for the three months
ended June 30, 2001 compared to the same period last year (dollars in
millions):

|                                  |  |                                     |       |   |      |  |       |    |  |  |  |   |       |   |  |  |       |   
|--------------------------------- |  | ----------------------------------- | ----- | - | ---- |  | ----- | -- |  |  |  | - | ----- | - |  |  | ----- | --
|                                  |  |                                     |      
|                                  |  | For the Three Months Ended June 30, |      
|                                  |  |                                     |      
|                                  |  | 2001                                |       |   | 2000 | 
|                                  |  |                                     |       |   |      | 
|Revenues                          |  | $                                   | 27.6  |   |      |  | 100.0 | %  |  |  |  | $ | 36.5  |   |  |  | 100.0 | % 
|                                 
|                                 
|                                 
|                                 
|Cost of Sales                     |  |                                     | (23.4 | ) |      |  | (84.7 | )% |  |  |  |   | (29.3 | ) |  |  | (80.4 | )%
|                                 
|                                 
|                                 
|                                 
|Selling, General & Administrative |  |                                     | (5.8  | ) |      |  | (20.9 | )% |  |  |  |   | (7.3  | ) |  |  | (19.9 | )%
|                                  |  |                                     |       |   |      |  |       |    |  |  |  |   |       |  
|Operating Loss                    |  | $                                   | (1.6  | ) |      |  | (5.6  | )% |  |  |  | $ | (0.1  | ) |  |  | (0.3  | )%
|                                  |  |                                     |       |   |      |  |       |    |  |  |  |   |       |  
|Units sold                        |  |                                     | 874   |   |      |  |       |    |  |  |  |   | 1,226 |  

Manufactured Homes currently operates three manufacturing plants in the
Phoenix, Arizona area and 26 retail locations. As a consequence of an
oversupply of homes in the total industry distribution pipeline and the reduced
availability and higher cost of financing for purchasers of manufactured homes,
Manufactured Homes construction sales and retail sales declined from the same
period last year. In response, management idled its New Mexico and Texas
plants last year, and slowed production in its other plants until the return of
more favorable market conditions.

FINANCIAL SERVICES

The following summarizes Financial Services results for the three months
ended June 30, 2001 compared to the same period last year (dollars in
millions):

|                           |                                |                                   |       |                            |        |   |       |       |        | 
|-------------------------- | ------------------------------ | --------------------------------- | ----- | -------------------------- | ------ | - | ----- | ----- | ------ | 
|                           |                                |                                   |       |                            |       
|                           |                                |                                   |       | For the Three Months Ended |       
|                           |                                |                                   |       | June 30,                   |       
|                           |                                |                                   |       |                            |       
|                           |                                |                                   |       | 2001                       |        |   | 2000  |      
|                           |                                |                                   |       |                            |        |   |       |      
|Revenues                   |                                | $                                 | 162.6 |                            |        | $ | 95.9  |      
|                           |                                |                                   |       |                            |        |   |       |      
|Operating Earnings         |                                | $                                 | 25.2  |                            |        | $ | 0.1   |      
|                           |                                |                                   |       |                            |        |   |       |      
|Origination Volume         |                                | $                                 | 3,719 |                            |        | $ | 2,379 |      
|                           |                                |                                   |       |                            |        |   |       |      
|Number of Loans Originated |                                |                                   |       |                            |        |   |       |      
|                          
|                          
|                          
|                          
|                           | CTX Mortgage Company           |                                   |       |                            |        |   |       |       |       
|                          
|                          
|                          
|                          
|                           |                                | Centex-built Homes (Builder)    |       |                            | 3,182  |   |       |       | 2,466  | 
|                          
|                          
|                          
|                          
|                           |                                | Non-Centex-built Homes (Retail) |       |                            | 18,110 |   |       |       | 11,699 | 
|                           |                                |                                   |       |                            |        |   |       |      
|                           |                                |                                   |       |                            | 21,292 |   |       |       | 14,165 | 
|                          
|                          
|                          
|                          
|                           | Centex Home Equity Corporation |                                   |       | 6,808                      |        |   |       | 6,429 |       
|                           |                                |                                   |       |                            |        |   |       |      
|                           |                                |                                   |       |                            | 28,100 |   |       |       | 20,594 | 
|                           |                                |                                   |       |                            |        |   |       |      

Financial Services operating earnings for the three months ended June 30,
2001 were $25.2 million compared to $0.1 million for the same period last
year, due primarily to results from CTX Mortgage Company, which benefitted from
a significant increase in mortgage refinancings. Financial Services revenues
for the first quarter of fiscal 2002 increased $66.7 million, or 70%, from the
same period last year.

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CTX Mortgage Company and related companies (CTX Mortgage) had operating
earnings totaling $24.7 million for the three months ended June 30, 2001
compared to operating earnings of $5.2 million for the same period last year.
The increase in CTX Mortgages operating earnings is primarily due to lower
interest rates in the first quarter of fiscal 2002 compared to the same period
last year, which has resulted in a significant increase in mortgage
refinancings. Originations for the three months ended June 30, 2001 totaled
21,292 compared to 14,165 originations in the same period last year. The
per-loan profit for the three months ended June 30, 2001 was $1,189, 224%
higher than $367 for the same period last year. CTX Mortgages total mortgage
applications for the three months ended June 30, 2001 increased 39% to 22,016
from 15,828 applications for the same period last year.

Centex Home Equity Corporation and related companies (Home Equity)
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 of $433 thousand for the
quarter ended June 30, 2001 compared to an operating loss of $5.1 million for
the same period last year.

Home Equitys originations for the three months ended June 30, 2001 were
6,808, a 6% increase over 6,429 originations for the same period last year.
Loan volume for the three months ended June 30, 2001 was $503.9 million, a 27%
improvement over $395.7 million in volume in the same period last year. Loan
volume for the three months ended June 30, 2001 was favorably impacted by an
increase in average loan size to $74 thousand from $62 thousand. Home Equitys
mortgage applications totaled 41,074 for the quarter ended June 30, 2001, an
increase of 9% over the 37,653 applications for the same period last year.

Substantially all of the mortgage loans produced by Home Equity are
securitized, generally on a quarterly basis. As a result of increased loan
volume during the quarter ended June 30, 2001, Home Equity completed $480
million in loan securitizations, compared to $350 million of loan
securitizations during the same period last year. Home Equity retains the
servicing rights associated with these securitized loans and is the long-term
servicer of these loans. At June 30, 2001, Home Equitys servicing portfolio
consisted of 52,804 loans totaling $3.55 billion, compared to 36,484 loans
totaling $2.34 billion at June 30, 2000. Service fee income related to this
long-term servicing was $8.5 million in the three months ended June 30, 2001, a
67% increase from the $5.1 million in the same period last year.

Home Equitys securitizations entered into prior to March 31, 2000 were
structured in a manner that caused them to be accounted for as sales. The
resulting gains on such sales were reported as revenues during the month in
which the securitizations closed. Home Equity changed the structure for
securitizations occurring subsequent to March 31, 2000, such that
securitizations after that date are being accounted for as borrowings.
Although the change in structure of the securitizations resulting in the
transaction being accounted for as borrowings will have no effect on the profit
recognized over the life of the mortgages, the change does affect the timing of
profit recognition. The transaction
structure requires that loan originations be reflected as
loans receivable on the Companys balance sheets and the interest income and
interest expense associated with this loan portfolio be reflected on the
Companys income statements. Consequently, net interest income, rather than
gain on sale of loans, as in past years, will be Home Equitys primary source
of operating income. Primarily as a result of this change, Home Equitys
interest income increased 330% in the first quarter of fiscal 2002 to $47.7
million from $11.1 million for last year, and interest expense for the first
quarter of fiscal 2002 was $31.6 million, a 327% increase from $7.4 million
for the first quarter of last fiscal year. Therefore, Home Equitys net
interest income increased 335% in the first quarter of fiscal 2002 to $16.1
million from $3.7 million for the same period last year.

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The Financial Services segment also has other sources of income that
include, among other things, loan origination fees, servicing fee income, title
policy fees and insurance commissions, mortgage loan broker fees, and fees for
mortgage loan quality control and processing services. In addition, the United
Kingdom mortgage operation, which was formed in fiscal 2001, incurred start-up
costs of $572,000 for the first quarter of fiscal 2002.

CONSTRUCTION PRODUCTS

The following summarizes Construction Products results for the three
months ended June 30, 2001 compared to the same period last year (dollars in
millions):

|                                                                                             |  |                            |        |   |      |   |       |  
|-------------------------------------------------------------------------------------------- |  | -------------------------- | ------ | - | ---- | - | ----- | -
|                                                                                             |  |                            |       
|                                                                                             |  | For the Three Months Ended |       
|                                                                                             |  | June 30,                   |       
|                                                                                             |  |                            |       
|                                                                                             |  | 2001                       |        |   | 2000 |  
|                                                                                             |  |                            |        |   |      |  
|Revenues                                                                                     |  | $                          | 117.4  |   |      | $ | 115.0 |  
|                                                                                            
|                                                                                            
|                                                                                            
|                                                                                            
|Interest Income                                                                              |  |                            | 1.0    |   |      |   | 1.7   |  
|                                                                                            
|                                                                                            
|                                                                                            
|                                                                                            
|Cost of Sales                                                                                |  |                            | (104.3 | ) |      |   | (78.9 | )
|                                                                                            
|                                                                                            
|                                                                                            
|                                                                                            
|Selling, General & Administrative Expenses                                                   |  |                            | (1.2   | ) |      |   | (1.7  | )
|                                                                                             |  |                            |        |   |      |  
|Operating Earnings                                                                           |  |                            | 12.9   |   |      |   | 36.1  |  
|                                                                                            
|                                                                                            
|                                                                                            
|                                                                                            
|Minority Interest*                                                                           |  |                            | (2.8   | ) |      |   | (13.0 | )
|                                                                                             |  |                            |        |   |      |  
|Net Operating Earnings to Centex                                                             |  | $                          | 10.1   |   |      | $ | 23.1  |  
|                                                                                             |  |                            |        |   |      |  
|                                                                                            
|                                                                                            
|                                                                                            
|                                                                                            
|                                                                                            
|                                                                                            
|                                                                                            
|                                                                                            
|                                                                                            
|                                                                                            
|                                                                                            
|                                                                                            
|* Minority interest includes interest expense, which is significantly higher in fiscal 2001.

Construction Products revenues were $117.4 million for the three months
ended June 30, 2001, a 2% increase from the same period last year. For the
three months ended June 30, 2001, Construction Products operating earnings,
net of minority interest, were $10.1 million, a 56% decrease from the $23.1
million reported for the same period last year. Construction Products results
for the three month period ending June 30, 2001 include the November 2000
strategic assets purchase of recycled paperboard and wallboard operations.
These results were negatively impacted due to a 55% drop in gypsum wallboard
pricing.

CONTRACTING AND CONSTRUCTION SERVICES

The following summarizes Contracting and Construction Services results
for the three months ended June 30, 2001 compared to the same period last year
(dollars in millions):

|                                 |  |                            |       |  |      |   |       | 
|-------------------------------- |  | -------------------------- | ----- |  | ---- | - | ----- | 
|                                 |  |                            |      
|                                 |  | For the Three Months Ended |      
|                                 |  | June 30,                   |      
|                                 |  |                            |      
|                                 |  | 2001                       |       |  | 2000 |  
|                                 |  |                            |       |  |      |  
|Revenues                         |  | $                          | 313.6 |  |      | $ | 298.7 | 
|                                 |  |                            |       |  |      |  
|Operating Earnings               |  | $                          | 7.5   |  |      | $ | 6.5   | 
|                                 |  |                            |       |  |      |  
|New Contracts Executed           |  | $                          | 391   |  |      | $ | 303   | 
|                                 |  |                            |       |  |      |  
|Backlog of Uncompleted Contracts |  | $                          | 2,099 |  |      | $ | 1,387 | 
|                                 |  |                            |       |  |      |  

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Contracting and Construction Services revenues for the three months ended
June 30, 2001 were $313.6 million. Operating earnings for the group improved
15% to $7.5 million for the three months ended June 30, 2001 over the same
period 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.

The Contracting and Construction Services operations provided a positive
average net cash flow in excess of Centexs investment in the group of $110.5
million for the three months ended June 30, 2001 and $96.8 million for the same
period last year.

INVESTMENT REAL ESTATE

The following summarizes Investment Real Estates results for the three
months ended June 30, 2001 compared to the same period last year (dollars in
millions):

|                   |  |                            |      |  |      |   |     | 
|------------------ |  | -------------------------- | ---- |  | ---- | - | --- | 
|                   |  |                            |     
|                   |  | For the Three Months Ended |     
|                   |  | June 30,                   |     
|                   |  |                            |     
|                   |  | 2001                       |      |  | 2000 |  
|                   |  |                            |      |  |      |  
|Revenues           |  | $                          | 24.1 |  |      | $ | 3.5 | 
|                   |  |                            |      |  |      |  
|Operating Earnings |  | $                          | 15.3 |  |      | $ | 6.1 | 
|                   |  |                            |      |  |      |  

For the three months ended June 30, 2001, Centexs Investment Real Estate
operations, through which all investment property transactions are reported,
had operating earnings of $15.3 million, 150% higher than $6.1 million for the
same period a year ago. The timing of land sales is uncertain and can vary
significantly from period to period.

Negative goodwill amortization was zero and $4 million for the three
months ended June 30, 2001 and 2000, respectively.

A significant portion of Investment Real Estates revenues and operating
earnings is derived from its investment in the Partnership. As noted in Note C
to the condensed consolidated financial statements, this investment is
accounted for on the equity method of accounting because Investment Real Estate
does not control the Partnership. 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 resulted in operating
earnings of $2.4 million for the three months ended June 30, 2001. Fairclough
closed 299 units at an average sales price per unit of $188,000 and had
operating earnings per unit of $8,000 for the three months ended June 30, 2001.

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##### Table of Contents



HOME SERVICES AND OTHER

The following summarizes Home Services and Others results for the three
months ended June 30, 2001 (dollars in millions):

|                   |                            |          |      | 
|------------------ | -------------------------- | -------- | ---- | 
|                   |                           
|                   | For the Three Months Ended
|                   |                            | June 30, |     
|                   |                           
|                   |                            | 2001     |     
|                   |                           
|Revenues           |                            | $        | 24.7 | 
|                   |                            |          |     
|Operating Earnings |                            | $        | 1.9  | 
|                   |                            |          |     

Before fiscal 2002, revenues and operating expenses of the Home Services
and Other segment were reflected on a net basis, as this segment was not
considered material for purposes of segment reporting. Operating earnings for
the three months ended June 30, 2001 were $1.9 million compared to $0.3 million
for the same period last year. This increase is primarily the result of
increased revenue and margin from internal growth and acquisitions.

FINANCIAL CONDITION AND LIQUIDITY

At June 30, 2001, the Company had cash and cash equivalents of $151.3
million, including $64.0 million of restricted cash and $21.8 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 three months ended June 30, 2001 and 2000 is summarized below (dollars in
thousands):

|                               |                                  |                      |        |                            |          |   |        |     |          |  
|------------------------------ | -------------------------------- | -------------------- | ------ | -------------------------- | -------- | - | ------ | --- | -------- | -
|                               |                                  |                      |        |                            |         
|                               |                                  |                      |        | For the Three Months Ended |         
|                               |                                  |                      |        | June 30,                   |         
|                               |                                  |                      |        |                            |         
|                               |                                  |                      |        | 2001                       |          |   | 2000   |    
|                               |                                  |                      |        |                            |          |   |        |    
|Net cash provided by (used in)
|                              
|                              
|                              
|                              
|                               | Traditional Operations*         
|                              
|                              
|                              
|                              
|                               |                                  | Operating Activities |        | $                          | (162,632 | ) |        | $   | (180,832 | )
|                              
|                              
|                              
|                              
|                               |                                  | Investing Activities |        |                            | (53,408  | ) |        |     | (42,895  | )
|                              
|                              
|                              
|                              
|                               |                                  | Financing Activities |        |                            | 226,742  |   |        |     | 240,326  |  
|                               |                                  |                      |        |                            |          |  
|                               |                                  |                      | 10,702 |                            |          |   | 16,599 |    
|                               |                                  |                      |        |                            |          |  
|                               | Financial Services              
|                              
|                              
|                              
|                              
|                               |                                  | Operating Activities |        |                            | (460,724 | ) |        |     | (451,338 | )
|                              
|                              
|                              
|                              
|                               |                                  | Investing Activities |        |                            | (371     | ) |        |     | (2,317   | )
|                              
|                              
|                              
|                              
|                               |                                  | Financing Activities |        |                            | 478,567  |   |        |     | 465,839  |  
|                               |                                  |                      |        |                            |          |  
|                               |                                  |                      | 17,472 |                            |          |   | 12,184 |    
|                               |                                  |                      |        |                            |          |  
|                               | Effect of exchange rates on cash |                      |        | 1,373                      |          |   |        | 882 |         
|                               |                                  |                      |        |                            |          |  
|Net increase in cash           |                                  | $                    | 29,547 |                            |          | $ | 29,665 |    
|                               |                                  |                      |        |                            |          |  



| |  |  | * | Traditional operations is the combining of all subsidiaries other
than those included in the Financial Services business segment.
| |  |  | - | ---------------------------------------------------------------------------------------------------------------------------------

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For the first three months of fiscal 2002, cash was used in Traditional
Operations  Operating Activities to finance increases in housing inventories.
The increase in housing inventories relates to the increased level
of sales and resulting units under construction during the year and to the
acquisition of land for development. The funds provided by Traditional
Operations  Financing Activities included new debt used to fund the increased
home building activity.

For the first three months of fiscal 2002, 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.

Short-term debt as of June 30, 2001 was $627 million, which included
$550.7 million of debt applicable to the Financial Services operation (see
below). 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. In August 2000, the Company entered into a $600 million committed
multi-bank revolving credit facility expiring in 2005 which serves as backup
for commercial paper borrowings. Construction Products has a $325 million
senior revolving credit facility, expiring in November 2003, which was reduced
to $275 million in July 2001, under which $259.8 million had been borrowed at
June 30, 2001. In June 2001, Construction Products entered into an annually
renewable committed $50 million trade receivable financing through a bank
multi-seller commercial paper conduit. At June 30, 2001 $26.2 million was
outstanding. These Construction Products facilities have no recourse to
Centex Corporation.

The Financial Services segment obtains most of its own short-term
liquidity needs through separate facilities which require only limited support
from Centex Corporation. CTX Mortgage sells, at closing, substantially all of
its Conforming, Jumbo A, and GNMA eligible mortgages to Harwood
Street Funding I, LLC (HSF-I) under a revolving
sales agreement. HSF-I, an unaffiliated special purpose entity, acquires and
then resells mortgages originated by CTX Mortgage into secondary markets. Under
the sales agreement between CTX Mortgage and HSF-I, which expires in November
2004 with certain renewal options, CTX Mortgage is not required to sell its
mortgage loans to HSF-I; however, HSF-I has committed to purchase all eligible
loans offered by CTX Mortgage. This arrangement gives CTX Mortgage daily
access, on a revolving basis, to HSF-Is $1.5 billion of capacity. CTX
Mortgage also maintains $150 million of committed secured mortgage warehouse
facilities to finance mortgages not sold to HSF-I. At June 30, 2001, CTX
Mortgage had borrowed $100 million under these facilities.

In addition, the various consolidated joint ventures, of which CTX
Mortgage is the managing general partner, maintain, in the aggregate, $40
million of secured committed mortgage warehouse facilities with no recourse to
Centex Corporation or Financial Services, to finance mortgages. At June 30,
2001, these joint ventures had borrowed a total of $13.1 million under these
facilities.

Home Equity finances its inventory of mortgage loans through Harwood
Street Funding II, LLC (HSF-II) under a revolving sales agreement. HSF-II, a
wholly-owned special purpose entity, finances mortgages
originated or acquired by Home Equity and then resells them into the secondary
market or into securitization structures. Under the sales agreement between
Home Equity and HSF-II, Home Equity is not required to sell its mortgage loans
to HSF-II; however, HSF-II has committed to purchase all eligible loans offered
by Home Equity. This arrangement gives Home Equity daily access, on a
revolving basis, to HSF-IIs $550 million of capacity. HSF-II obtains funds
through the sale by it in the capital markets of five-year subordinated notes
and short-term secured liquidity notes. At June 30, 2001,

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HSF-II had
outstanding $27.5 million of subordinated notes and $186 million of secured
liquidity notes, which are included in Financial Services debt in the
accompanying consolidated balance sheets. Home Equity continues to service the
loans acquired by HSF-II. Home Equity also has $325 million of committed
secured mortgage
warehouse facilities, expiring through March 2002, to finance sub-prime
mortgages not financed by HSF-II. There were no borrowings outstanding under
these facilities at June 30, 2001.

Financial Services also maintains a $90 million uncommitted unsecured
credit facility under which it can borrow and, in turn, allocate such borrowed
funds to its CTX Mortgage, Home Equity, and other subsidiaries. At June 30,
2001, Financial Services had borrowed $90 million under this facility; $45
million of such borrowings were allocated to CTX Mortgage and $45 million to
Home Equity. All borrowings under this unsecured facility are guaranteed by
Centex Corporation.

CTX Mortgage and Home Equity share a $175 million uncommitted secured
credit facility to finance mortgage inventory. At June 30, 2001, CTX Mortgage
had borrowed $64.5 million and Home Equity had borrowed $5.7 million under this
facility. This facility has limited recourse to Centex Corporation.

In addition, Centex Corporation and Financial Services share a $125
million uncommited unsecured credit facility. At June 30, 2001, CTX Mortgage
had borrowed $57 million, Home Equity had borrowed $34.5 million, and Centex
Corporation had no borrowings under this facility.

-22-



---



##### Table of Contents



Debt outstanding as of June 30, 2001 was as follows (dollars in
thousands):

|                        |                                                                               |                                                              |           |         |         | 
|----------------------- | ----------------------------------------------------------------------------- | ------------------------------------------------------------ | --------- | ------- | ------- | 
|Non-Financial Services:
|                       
|                       
|                       
|                       
|                        | Short-Term Notes Payable                                                      |                                                              | $         | 76,187  |        
|                       
|                       
|                       
|                       
|                        | Senior Debt:                                                                 
|                       
|                       
|                       
|                       
|                        |                                                                               | Medium-Term Note Programs, 5.28% to 7.95%, due through 2007  |           |         | 506,499 | 
|                       
|                       
|                       
|                       
|                        |                                                                               | Long-Term Notes, 6.40% to 9.75%, due through 2011            |           |         | 614,946 | 
|                       
|                       
|                       
|                       
|                        |                                                                               | Other Indebtedness, weighted-average 5.52%, due through 2027 |           |         | 298,522 | 
|                       
|                       
|                       
|                       
|                        | Subordinated Debt:                                                           
|                       
|                       
|                       
|                       
|                        |                                                                               | Subordinated Debentures, 7.38%, due in 2006                  |           |         | 99,808  | 
|                       
|                       
|                       
|                       
|                        |                                                                               | Subordinated Debentures, 8.75%, due in 2007                  |           |         | 99,588  | 
|                        |                                                                               |                                                              |          
|                        |                                                                               |                                                              | 1,695,550 |        
|                        |                                                                               |                                                              |          
|                       
|                       
|                       
|                       
|Financial Services:    
|                       
|                       
|                       
|                       
|                        | Short-Term Bank Notes Payable                                                 |                                                              |           | 174,773 |        
|                       
|                       
|                       
|                       
|                        | Secured Liquidity Notes                                                       |                                                              |           | 186,036 |        
|                       
|                       
|                       
|                       
|                        | Other Short-Term Debt                                                         |                                                              |           | 189,900 |        
|                       
|                       
|                       
|                       
|                        | Home Equity Loans Asset-backed Certificates, 4.21% to 7.81%, due through 2032 |                                                              |           | 480,000 |        
|                       
|                       
|                       
|                       
|                        | Home Equity Loans Asset-backed Certificates, 4.04% to 8.48%, due through 2031 |                                                              |           | 285,111 |        
|                       
|                       
|                       
|                       
|                        | Home Equity Loans Asset-backed Certificates, 4.04% to 7.99%, due through 2030 |                                                              |           | 348,806 |        
|                       
|                       
|                       
|                       
|                        | Home Equity Loans Asset-backed Certificates, 4.05% to 7.17%, due through 2031 |                                                              |           | 369,826 |        
|                       
|                       
|                       
|                       
|                        | Home Equity Loans Asset-backed Certificates, 4.04% to 6.80%, due through 2031 |                                                              |           | 458,593 |        
|                       
|                       
|                       
|                       
|                        | Home Equity Loans Asset-backed Subordinated Note, 5.51% due 2006              |                                                              |           | 27,500  |        
|                        |                                                                               |                                                              |          
|                        |                                                                               |                                                              | 2,520,545 |        
|                        |                                                                               |                                                              |          
|Total                   |                                                                               | $                                                            | 4,216,095 |        
|                        |                                                                               |                                                              |           |        

Maturities of non-financial services long-term debt (in thousands), during
the next five fiscal years are: 2002, $347,596; 2003, $69,919; 2004, $268,666;
2005, $236; 2006, $324,976; and $607,970 thereafter.

Financial Services debt related to securitized residential mortgage loans
structured as collateralized borrowings was $2.0 billion at June 30, 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
on the payment received on the underlying residential mortgage loans. The
expected maturities of this component of long-term debt (in thousands) based on
contractual maturities adjusted for projected repayments and prepayments of
principal during the next five fiscal years are: 2002, $416,000; 2003,
$397,537; 2004, $287,427; 2005, $209,560; 2006, $187,587; and $471,725
thereafter.

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---

FORWARD-LOOKING STATEMENTS

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 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 April
25, 2001, filed with the SEC on April 26, 2001.  
|
| |     |  | Current Report on Form 8-K of Centex Corporation dated June 19,
2001, and filed with the SEC on June 22, 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.

|                |  |                                
|--------------- |  | -------------------------------
|                |  | CENTEX CORPORATION             
|                |  | Registrant                     
|                |  |                                
|                |  |                                
|August 13, 2001 |  | /s/ Leldon E. Echols           
|                |  | Leldon E. Echols               
|                |  | Executive Vice President and   
|                |  | Chief Financial Officer        
|                |  | (principal financial officer)  
|                |  |                                
|August 13, 2001 |  | /s/ Mark A. Blinn              
|                |  | Mark A. Blinn                  
|                |  | Vice President  Controller and
|                |  | Financial Strategy             
|                |  | (chief accounting officer)     

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##### Table of Contents









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

Part I. Financial Information

Condensed Combining Financial Statements

ITEM 1.

The condensed combining financial statements include the accounts of 3333
Holding Corporation (Holding) and subsidiary and Centex Development Company,
L.P. (the Partnership) and subsidiaries (collectively the Companies), and
have been prepared by the Companies, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. 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 pursuant to such rules and regulations, although
the Companies believe that the disclosures are adequate to make the information
presented not misleading. The Companies suggest that these condensed combining
financial statements be read in conjunction with the financial statements and
the notes thereto included in the Companies latest Annual Report on Form 10-K.
In the opinion of the Companies, all adjustments necessary to present fairly
the information in the following condensed combining financial statements of
the Companies have been included. The results of operations for such interim
periods are not necessarily indicative of the results for the full year.

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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 Three Months Ended June 30, |       
|                                           |  |                                     |       
|                                           |  | 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                                   |  | $                                   | 83,955 |  |              | $             | 83,345  |                |              | $ | 660      |  |  | $            | 71,117 |               |                | $ | 71,116       |  |  | $ | 1     |  
|                                          
|                                          
|                                          
|                                          
|Costs and Expenses                         |  |                                     | 80,589 |  |              |               | 80,555  |                |              |   | 84       |  |  |              | 70,070 |               |                |   | 69,965       |  |  |   | 105   |  
|                                           |  |                                     |        |  |              |               |         |                |              |   |          |  |  |              |        |               |                |  
|Earnings (Loss) Before Income Taxes        |  |                                     | 3,366  |  |              |               | 2,790   |                |              |   | 576      |  |  |              | 1,047  |               |                |   | 1,151        |  |  |   | (104  | )
|                                          
|                                          
|                                          
|                                          
|Income Taxes                               |  |                                     | 291    |  |              |               | 291     |                |              |   |         |  |  |              | 646    |               |                |   | 646          |  |  |   |      |  
|                                           |  |                                     |        |  |              |               |         |                |              |   |          |  |  |              |        |               |                |  
|Net Earnings (Loss)                        |  | $                                   | 3,075  |  |              | $             | 2,499   |                |              | $ | 576      |  |  | $            | 401    |               |                | $ | 505          |  |  | $ | (104  | )
|                                           |  |                                     |        |  |              |               |         |                |              |   |          |  |  |              |        |               |                |  
|Net Earnings Allocable to Limited Partners |  |                                     |        |  |              | $             | 2,499   |                |              |   |          |  |  |              |        |               |                | $ | 505          | 
|                                           |  |                                     |        |  |              |               |         |                |              |   |          |  |  |              |        |               |                |  
|Earnings (Loss) Per Unit/Share             |  |                                     |        |  |              | $             | 13.79   |                |              | $ | 576      |  |  |              |        |               |                | $ | 7.49         |  |  | $ | (104  | )
|                                           |  |                                     |        |  |              |               |         |                |              |   |          |  |  |              |        |               |                |   |              | 
|Weighted-Average Units/Shares Outstanding  |  |                                     |        |  |              |               | 181,244 |                |              |   | 1,000    |  |  |              |        |               |                |   | 67,356       |  |  |   | 1,000 |  

See notes to condensed combining financial statements.

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##### Table of Contents






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

|                                                        |                            |                   |         |                |         |   |                  |               |         |                |              |       |          |   |         |              |         |               |                |        |              |   |        |       |       |  |  |  |  | 
|------------------------------------------------------- | -------------------------- | ----------------- | ------- | -------------- | ------- | - | ---------------- | ------------- | ------- | -------------- | ------------ | ----- | -------- | - | ------- | ------------ | ------- | ------------- | -------------- | ------ | ------------ | - | ------ | ----- | ----- |  |  |  |  | 
|                                                        |                            |                   |         |                |        
|                                                        |                            |                   |         | June 30, 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                                                    |                            | $                 | 9,912   |                |         | $ | 9,908            |               |         | $              | 4            |       |          | $ | 3,034   |              |         | $             | 3,029          |        |              | $ | 5      |      
|                                                       
|                                                       
|                                                       
|                                                       
|Accounts Receivable                                     |                            |                   | 4,545   |                |         |   | 9,914            |               |         |                |             |       |          |   | 10,185  |              |         |               | 15,353         |        |              |   |       |      
|                                                       
|                                                       
|                                                       
|                                                       
|Notes Receivable                                        |                            |                   | 10      |                |         |   | 10               |               |         |                |             |       |          |   | 14      |              |         |               | 14             |        |              |   |       |      
|                                                       
|                                                       
|                                                       
|                                                       
|Inventories                                             |                            |                   | 378,148 |                |         |   | 376,726          |               |         |                | 1,422        |       |          |   | 340,827 |              |         |               | 339,455        |        |              |   | 1,372  |      
|                                                       
|                                                       
|                                                       
|                                                       
|Investments -                                          
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        | Commercial Properties, net |                   |         | 91,575         |         |   |                  | 91,575        |         |                |              |      |          |   |         | 83,649       |         |               |                | 83,649 |              |   |        |      |      
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        | Real Estate Joint Ventures |                   |         | 2,881          |         |   |                  | 2,881         |         |                |              |      |          |   |         | 2,699        |         |               |                | 2,699  |              |   |        |      |      
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        | Affiliate                  |                   |         |               |         |   |                  |              |         |                |              | 1,716 |          |   |         |             |         |               |                |       |              |   |        | 1,716 |      
|                                                       
|                                                       
|                                                       
|                                                       
|Property and Equipment, net                             |                            |                   | 3,633   |                |         |   | 3,633            |               |         |                |             |       |          |   | 3,391   |              |         |               | 3,331          |        |              |   | 60     |      
|                                                       
|                                                       
|                                                       
|                                                       
|Other Assets -                                         
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        | Goodwill, net              |                   |         | 27,585         |         |   |                  | 27,585        |         |                |              |      |          |   |         | 27,616       |         |               |                | 27,616 |              |   |        |      |      
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        | Deferred Charges and Other |                   |         | 17,405         |         |   |                  | 17,305        |         |                |              | 100   |          |   |         | 13,235       |         |               |                | 13,135 |              |   |        | 100   |      
|                                                        |                            |                   |         |                |         |   |                  |               |         |                |              |       |          |   |         |              |         |              
|                                                        |                            | $                 | 535,694 |                |         | $ | 539,537          |               |         | $              | 3,242        |       |          | $ | 484,650 |              |         | $             | 488,281        |        |              | $ | 3,253  |      
|                                                        |                            |                   |         |                |         |   |                  |               |         |                |              |       |          |   |         |              |         |              
|Liabilities, Stockholders Equity
and Partners Capital
|                                                       
|                                                       
|                                                       
|                                                       
|Accounts Payable and Accrued Liabilities                |                            | $                 | 82,349  |                |         | $ | 82,921           |               |         | $              | 5,371        |       |          | $ | 81,536  |              |         | $             | 81,320         |        |              | $ | 5,958  |      
|                                                       
|                                                       
|                                                       
|                                                       
|Notes Payable                                           |                            |                   | 229,386 |                |         |   | 229,386          |               |         |                |             |       |          |   | 187,301 |              |         |               | 187,301        |        |              |   |       |      
|                                                        |                            |                   |         |                |         |   |                  |               |         |                |              |       |          |   |         |              |         |              
|                                                        |                            | Total Liabilities |         |                | 311,735 |   |                  |               | 312,307 |                |              |       | 5,371    |   |         |              | 268,837 |               |                |        | 268,621      |   |        |       | 5,958 | 
|                                                        |                            |                   |         |                |         |   |                  |               |         |                |              |       |          |   |         |              |         |              
|Stockholders Equity and Partners Capital              |                            |                   | 223,959 |                |         |   | 227,230          |               |         |                | (2,129       | )     |          |   | 215,813 |              |         |               | 219,660        |        |              |   | (2,705 | )    
|                                                        |                            |                   |         |                |         |   |                  |               |         |                |              |       |          |   |         |              |         |              
|                                                        |                            | $                 | 535,694 |                |         | $ | 539,537          |               |         | $              | 3,242        |       |          | $ | 484,650 |              |         | $             | 488,281        |        |              | $ | 3,253  |      
|                                                        |                            |                   |         |                |         |   |                  |               |         |                |              |       |          |   |         |              |         |              

*     Unaudited.

**   Condensed from audited financial statements.

See notes to condensed combining financial statements.

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##### Table of Contents






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



|                                                                             |                                        |   |                                     |    
|---------------------------------------------------------------------------- | -------------------------------------- | - | ----------------------------------- | ---
|                                                                             |                                        |   | For the Three Months Ended June 30, |    
|                                                                             |                                        |   |                                     |    
|                                                                             |                                        |   | 2001                                |    
|                                                                             |                                        |   |                                     |    
|                                                                             |                                        |   |                                     |    
|                                                                             |                                        |   |                                     |    
|                                                                             |                                        |   |                                     |    
|                                                                             |                                        |   |                                     |    
|                                                                             |                                        |   | Combined                            |    
|                                                                             |                                        |   |                                     |    
|Cash Flows  Operating Activities                                           
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Net Earnings (Loss)                                                          |                                        | $ | 3,075                               |    
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Adjustments:                                                                
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|                                                                             | Depreciation and Amortization          |   |                                     | 896
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|                                                                             | Equity in Earnings from Joint Ventures |   |                                     | (10
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Decrease (Increase) in Receivables                                           |                                        |   | 5,658                               |    
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Decrease in Notes Receivable                                                 |                                        |   | 4                                   |    
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Increase in Inventories                                                      |                                        |   | (33,187                             | )  
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Increase in Commercial Properties                                            |                                        |   | (8,617                              | )  
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Increase in Other Assets                                                     |                                        |   | (4,282                              | )  
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Increase (Decrease) in Payables
and Accruals                                 |                                        |   | 1,620                               |    
|                                                                             |                                        |   |                                     |    
|                                                                             |                                        |   | (34,843                             | )  
|                                                                             |                                        |   |                                     |    
|Cash Flows  Investing Activities                                           
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|(Increase) Decrease in Advances to
Joint Venture and Investment in
Affiliate |                                        |   | (172                                | )  
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Property and Equipment Additions, net                                        |                                        |   | (358                                | )  
|                                                                             |                                        |   |                                     |    
|                                                                             |                                        |   | (530                                | )  
|                                                                             |                                        |   |                                     |    
|Cash Flows  Financing Activities                                           
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Increase (Decrease) in Notes Payable                                         |                                        |   | 42,275                              |    
|                                                                             |                                        |   |                                     |    
|                                                                             |                                        |   | 42,275                              |    
|                                                                             |                                        |   |                                     |    
|Effect of Exchange Rate Changes                                             
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|                                                                             | On Cash                                |   |                                     | (24
|                                                                             |                                        |   |                                     |    
|Net Increase (Decrease) In Cash                                              |                                        |   | 6,878                               |    
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Cash at Beginning of Period                                                  |                                        |   | 3,034                               |    
|                                                                             |                                        |   |                                     |    
|Cash at End of Period                                                        |                                        | $ | 9,912                               |    
|                                                                             |                                        |   |                                     |    
|Supplemental Disclosures:                                                   
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Issuance of Class C Units in
Exchange for Assets                             |                                        | $ | 4,517                               |    

See notes to condensed combining financial statements.

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##### Table of Contents






3333 Holding Corporation and Subsidiary
and Centex Development Company, L.P. and Subsidiaries
Notes to Condensed Combining Financial Statements
June 30, 2001
(Dollars in thousands)
(unaudited)

(A)In March 1987, certain subsidiaries of Centex Corporation (Centex)
contributed to Centex Development Company, L.P. (the Partnership), a
newly-formed master limited partnership, properties with a historical cost
basis (which approximated market value) of approximately $76 million in
exchange for 1,000 Class A limited partnership units (Class A Units). The
Partnership was formed to enable the stockholders of Centex to participate in
long-term real estate development projects, the dynamics of which are
inconsistent with Centexs traditional financial objectives.

The Partnership is managed by its general partner, 3333 Development
Corporation (Development), which is in turn wholly-owned by 3333 Holding
Corporation (Holding). Holding is a separate public company whose stock
trades in tandem with Centexs common stock. The common stock of Holding was
distributed in 1987, together with warrants to purchase approximately 80% of
the Partnerships Class B limited partnership units (Class B Units), as a
dividend to the stockholders of Centex. These securities are held by a nominee
on behalf of the stockholders and will trade in tandem with the common stock of
Centex until such time as they are detached. The securities may be detached at
any time by Centexs Board of Directors, but the warrants to purchase Class B
Units will automatically become detached in November 2007.

The stockholders of Centex elect the four-person Board of Directors of
Holding. Three of the Board members, representing the majority of the Board,
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 manage how the Partnership conducts its
activities, including the acquisition, development, maintenance , operation ,
and sale of properties. The general partner, acting on behalf of the
Partnership, may sell or acquire properties, including the contributed
property, and enter into other business transactions without the consent of the
limited partners. In addition, the limited partners cannot remove the general
partner.

During fiscal 1998, the agreement governing the Partnership was
amended to allow for the issuance of Class C limited partnership units (Class
C Units). During fiscal 1998, the 1,000 outstanding Class A Units owned
by Centex were converted to 32,260 new Class A Units. As of June 30, 2001,
185,711 Class C Units had been issued in exchange for assets,
including cash and land, with a fair market
value of $185.7 million. These assets were recorded by the Partnership at fair
market value. The partnership agreement provides that Centex, as the Class A
and Class C limited partner, is entitled to a cumulative preferred return of 9%
per annum on the average outstanding balance of its Unrecovered Capital, which
is defined as its capital contributions, adjusted for cash or other
distributions representing return of capital contributions. As of June 30,
2001, Unrecovered Capital totaled $218.5 million, and preference payments in
arrears amounted to $26.0 million. No preference payments have been made since
fiscal 1998.

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##### Table of Contents



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

(B)During the quarter ended June 30, 2001, a subsidiary of the Partnership
purchased approximately 43 acres in South Kohala, Hawaii, from an unaffiliated
third party. The total consideration of $33 million consisted of a $32 million non-recourse
purchase money mortgage note and a $1 million cash payment. Concurrently,
Centex Homes has entered into a purchase agreement for this property.

During the quarter ended June 30, 2001, the Partnership issued 4,517 Class
C Units to Centex Homes in exchange for land with a fair market value
of $4.5 million.

(C)A summary of comprehensive income for the three months ended June 30, 2001
is presented below:

|                                        |                                          |   |       |     | 
|--------------------------------------- | ---------------------------------------- | - | ----- | --- | 
|Net Earnings                            |                                          | $ | 3,075 |    
|                                       
|                                       
|                                       
|                                       
|Accumulated Other Comprehensive Income:
|                                       
|                                       
|                                       
|                                       
|                                        | Foreign Currency Translation Adjustments |   |       | 554 | 
|                                        |                                          |   |      
|Comprehensive Income                    |                                          | $ | 3,629 |    
|                                        |                                          |   |      

(D)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 |                                              |         | 4,517    |     |   |          |                            |   |         |                          |  |         |           |         | 4,517    |       |   |           |          |            |           |          |         |   |   |        |    |  
|                         
|                         
|                         
|                         
|                          | Net Earnings                                    |                                              |         | 3,075    |     |   |          |                            |   |         |                          |  |         |           |         | 2,499    |       |   |           |          |            |           |          |         |   |   |        | 576 |  
|                         
|                         
|                         
|                         
|                          | Accumulated
Other Comprehensive Income:        
|                         
|                         
|                         
|                         
|                          |                                                 | Foreign
Currency   Translation   Adjustments |         |          | 554 |   |          |                             |  |         |                          |   |        |           |         |          | 554   |   |           |           |           |           |          |          |  |   |        |     |  | 
|                          |                                                 |                                              |         |          |     |   |          |                             |   |         |                          |   |         |           |         |          |       |   |           |           |           
|Balance at June 30, 2001  |                                                 | $                                            | 223,959 |          |     | $ | 500      |                             |   | $       | 1,142                    |   |         | $         | 225,588 |          |       | $ | 1         |           |            | $         | 800      |          |   | $ | (2,930 | )  
|                          |                                                 |                                              |         |          |     |   |          |                             |   |         |                          |   |         |           |         |          |       |   |           |           |           

(E)On April 15, 1999, Centex Development Company UK Limited (CDCUK), a
company incorporated in England and Wales and a wholly-owned subsidiary of the
Partnership, closed its acquisition of all the voting shares of Fairclough.
The purchase price at closing (approximately $219 million) was paid by the
delivery of two-year non-interest-bearing promissory notes. In addition, the
seller of the voting shares retained non-voting preference shares in Fairclough
that entitled it to receive substantially all of the net after-tax earnings of
Fairclough until March 31, 2001. Because the non-voting preference shares
retained by the seller had the characteristics of debt, the preference
obligations were reported as interest expense in the financial statements.

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As of March 31, 2001, the non-interest-bearing promissory notes were
repaid in full (less the holdback described below) 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 $6.9 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.

During the quarter ended June 30, 2001, the Partnership entered into a
management agreement with Centex Homes, pursuant to which Centex Homes agreed
to manage and oversee the Partnerships investment in Fairclough Homes Group
Limited, a British home builder (Fairclough). The Partnership will pay
Centex Homes a monthly fee and will reimburse Centex Homes for its direct
expenses associated with its management and oversight.

(F)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 $3.4 million and operating earnings of $4 thousand for
the three months ended June 30, 2000.

The following tables set forth financial information relating to the
business segments for the three months ended June 30, 2001 and 2000.

INTERNATIONAL HOME BUILDING

|                                           |  |                            |         |   |      |   |         |  
|------------------------------------------ |  | -------------------------- | ------- | - | ---- | - | ------- | -
|                                           |  |                            |        
|                                           |  | For the Three Months Ended |        
|                                           |  | June 30,                   |        
|                                           |  |                            |        
|                                           |  | 2001                       |         |   | 2000 |  
|                                           |  |                            |         |   |      |  
|Revenues                                   |  | $                          | 56,163  |   |      | $ | 64,172  |  
|                                          
|                                          
|                                          
|                                          
|Cost of Sales                              |  |                            | (48,201 | ) |      |   | (55,321 | )
|                                          
|                                          
|                                          
|                                          
|Selling, General & Administrative Expenses |  |                            | (5,589  | ) |      |   | (5,660  | )
|                                          
|                                          
|                                          
|                                          
|Interest                                   |  |                            |        |   |      |   | (2,536  | )
|                                           |  |                            |         |   |      |  
|Operating Earnings                         |  | $                          | 2,373   |   |      | $ | 655     |  
|                                           |  |                            |         |   |      |  

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COMMERCIAL DEVELOPMENT

|                                           |  |                            |        |   |      |   |        |  
|------------------------------------------ |  | -------------------------- | ------ | - | ---- | - | ------ | -
|                                           |  |                            |       
|                                           |  | For the Three Months Ended |       
|                                           |  | June 30,                   |       
|                                           |  |                            |       
|                                           |  | 2001                       |        |   | 2000 |  
|                                           |  |                            |        |   |      |  
|Rental Income and Other                    |  | $                          | 4,110  |   |      | $ | 2,380  |  
|                                          
|                                          
|                                          
|                                          
|Cost of Sales                              |  |                            | 153    |   |      |   |       |  
|                                          
|                                          
|                                          
|                                          
|Selling, General & Administrative Expenses |  |                            | (1,767 | ) |      |   | (1,019 | )
|                                          
|                                          
|                                          
|                                          
|Interest                                   |  |                            | (1,591 | ) |      |   | (1,007 | )
|                                           |  |                            |        |   |      |  
|Operating Earnings before Depreciation     |  |                            | 905    |   |      |   | 354    |  
|                                          
|                                          
|                                          
|                                          
|Depreciation                               |  |                            | (751   | ) |      |   | (462   | )
|                                           |  |                            |        |   |      |  
|Operating Earnings (Loss)                  |  | $                          | 154    |   |      | $ | (108   | )
|                                           |  |                            |        |   |      |  

MULTI-FAMILY COMMUNITIES

|                                           |  |                            |         |   |      |   |       |  
|------------------------------------------ |  | -------------------------- | ------- | - | ---- | - | ----- | -
|                                           |  |                            |        
|                                           |  | For the Three Months Ended |        
|                                           |  | June 30,                   |        
|                                           |  |                            |        
|                                           |  | 2001                       |         |   | 2000 |  
|                                           |  |                            |         |   |      |  
|Revenues                                   |  | $                          | 23,621  |   |      | $ | 1,004 |  
|                                          
|                                          
|                                          
|                                          
|Cost of Sales                              |  |                            | (21,682 | ) |      |   |      |  
|                                          
|                                          
|                                          
|                                          
|Selling, General & Administrative Expenses |  |                            | (559    | ) |      |   | (476  | )
|                                           |  |                            |         |   |      |  
|Operating Earnings                         |  | $                          | 1,380   |   |      | $ | 528   |  
|                                           |  |                            |         |   |      |  

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CORPORATE-OTHER

|                                           |  |                            |      |   |      |   |      |  
|------------------------------------------ |  | -------------------------- | ---- | - | ---- | - | ---- | -
|                                           |  |                            |     
|                                           |  | For the Three Months Ended |     
|                                           |  | June 30,                   |     
|                                           |  |                            |     
|                                           |  | 2001                       |      |   | 2000 |  
|                                           |  |                            |      |   |      |  
|Revenues                                   |  | $                          | 61   |   |      | $ | 115  |  
|                                          
|                                          
|                                          
|                                          
|Selling, General & Administrative Expenses |  |                            | (602 | ) |      |   | (146 | )
|                                           |  |                            |      |   |      |  
|Operating Loss                             |  | $                          | (541 | ) |      | $ | (31  | )
|                                           |  |                            |      |   |      |  

(G)In July 2001, the
Financial Accounting Standards Board issued new Statements, SFAS No.
141, Business Combinations and SFAS No. 142, Goodwill and Other
Intangible Assets, which the Companies have elected to adopt
effective April 1, 2001. SFAS No. 141 requires all business
combinations to be accounted for using the purchase method and
requires intangible assets to be recognized as assets apart from
goodwill if certain criteria are met. SFAS No. 142 provides guidance
on accounting for intangible assets and eliminates the amortization
of goodwill and certain identifiable intangible assets. Under the provisions of SFAS No. 142,
intangible assets, including goodwill, that are not subject to amortization
will be tested for impairment annually 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 first step, which the Companies are in the process of
completing, is to identify potential impairment by determining whether the
carrying amount of a reporting unit exceeds its fair value. This step must be
completed within six months of adoption. If an impairment is identified, the
second step of the goodwill impairment test, which measures the amount of
impairment loss, if any, will be performed. If necessary, this step must be
performed within a year of adoption.

The pro forma adoption of SFAS No. 142 for the three months ended June 30,
2000, which included amortization of goodwill, would have caused an increase in
net earnings of $288 thousand and an increase of $4.28 in earnings per unit.
Identifiable intangible assets, other than goodwill, are immaterial. Goodwill
was $27.6 million at June 30, 2001 and at March 31, 2001.

(H)Certain prior year balances have been reclassified to be consistent with
the June 30, 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 for the three months ended
June 30, 2001 totaled $84.0 million compared to $71.1 million for the three
months ended June 30, 2000. Operating results for the three months ended June
30, 2001 reflect net earnings of $3.1 million compared to $401 thousand for the
same period last year. The increase in revenues for the quarter ended June 30,
2001 compared to the same period last year primarily resulted from
significantly increased sales revenue in the Companies Multi-Family
Communities segment, offset by decreased sales revenue in the Companies
International Home Building business segment.

INTERNATIONAL HOME BUILDING

The following summarizes International Home Buildings results for the
quarter ended June 30, 2001 compared to the same period last year (dollars in
thousands, except per unit data):

|                                  |          |   |                                     |       |    |      |       |    |  |  |  |  |  |   |         |       |    |  |       |    |  |  |  |  | 
|--------------------------------- | -------- | - | ----------------------------------- | ----- | -- | ---- | ----- | -- |  |  |  |  |  | - | ------- | ----- | -- |  | ----- | -- |  |  |  |  | 
|                                  |          |   |                                     |      
|                                  |          |   | For the Three Months Ended June 30, |      
|                                  |          |   |                                     |      
|                                  |          |   | 2001                                |       |    | 2000 |      
|                                  |          |   |                                     |       |    |      |      
|Revenues                          |          | $ | 56,163                              |       |    |      | 100.0 | %  |  |  |  |  |  | $ | 64,172  |       |    |  | 100.0 | % 
|                                 
|                                 
|                                 
|                                 
|Cost of Sales                     |          |   | (48,201                             | )     |    |      | (85.8 | )% |  |  |  |  |  |   | (55,321 | )     |    |  | (86.2 | )%
|                                 
|                                 
|                                 
|                                 
|General & Administrative Expenses |          |   | (5,589                              | )     |    |      | (10.0 | )% |  |  |  |  |  |   | (5,660  | )     |    |  | (8.8  | )%
|                                 
|                                 
|                                 
|                                 
|Interest Expense, Paid to Seller  |          |   |                                    |       |    |      |      | %  |  |  |  |  |  |   | (2,536  | )     |    |  | (4.0  | )%
|                                  |          |   |                                     |       |    |      |       |    |  |  |  |  |  |   |        
|Operating Earnings                |          | $ | 2,373                               |       |    |      | 4.2   | %  |  |  |  |  |  | $ | 655     |       |    |  | 1.0   | % 
|                                  |          |   |                                     |       |    |      |       |    |  |  |  |  |  |   |         |      
|Units Closed                      |          |   | 299                                 |       |    |      |       |    |  |  |  |  |  |   | 300     |      
|                                 
|                                 
|                                 
|                                 
|                                  | % Change |   |                                     | (0.3  | )% |      |       |    |  |  |  |  |  |   |         | (26.7 | )%
|                                 
|                                 
|                                 
|                                 
|Unit Sales Price                  |          | $ | 187,836                             |       |    |      |       |    |  |  |  |  |  | $ | 213,907 |      
|                                 
|                                 
|                                 
|                                 
|                                  | % Change |   |                                     | (12.2 | )% |      |       |    |  |  |  |  |  |   |         | 25.8  | % 
|                                 
|                                 
|                                 
|                                 
|Operating Earnings Per Unit       |          | $ | 7,936                               |       |    |      |       |    |  |  |  |  |  | $ | 2,183   |      
|                                 
|                                 
|                                 
|                                 
|                                  | % Change |   |                                     | 263.5 | %  |      |       |    |  |  |  |  |  |   |         | 242.1 | % 

International Home Buildings revenues for the three months ended June 30,
2001 decreased by $8.0 million from revenues for the same period last year.
This decrease is attributable to a lower per unit sales price resulting from an
increase in the number of lower-priced units sold compared to the same period
last year.

Operating earnings for the three months ended June 30, 2001 were 4.2% as a
percentage of revenues and approximately $7,936 on a per unit basis compared to
the same period last year, which had operating earnings of 1.0% of revenues and
approximately $2,183 on a per unit basis. International Home Building, whose
functional currency is the British pound sterling, translates its financial
statements into U.S. dollars. Income statement accounts are translated using
the average exchange rate for the period.

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The average exchange rate used for
translation was 1.42 and 1.53 for the quarters ending June 30, 2001 and 2000,
respectively, representing a decrease of 7.2%.

Home sales (orders) totaled 404 units during the three months ended June
30, 2001 compared to 299 units during the same period last year. The backlog
of homes sold but not closed as of June 30, 2001 was 432 units, 18% more than
the 365 units for the same period last year.

The preferred distribution to the seller totaled $0 and $2.5 million for
the three months ended June 30, 2001 and 2000, respectively. Although
preferred stock is 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
distribution was recorded as interest expense for the three months ended June
30, 2000. The Companies obligation to pay such continuing preferred
distributions ceased as of March 31, 2001.

DOMESTIC HOME BUILDING

Results for the Domestic Home Building segment for the three months ended
June 30, 2000, were revenues of $3.4 million, and operating earnings of $4
thousand. 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 quarter
ended June 30, 2001, compared to the same period last year (dollars and square
feet in thousands):

|                                           |  |                            |        |   |      |   |        |  
|------------------------------------------ |  | -------------------------- | ------ | - | ---- | - | ------ | -
|                                           |  |                            |       
|                                           |  | For the Three Months Ended |       
|                                           |  | June 30,                   |       
|                                           |  |                            |       
|                                           |  | 2001                       |        |   | 2000 |  
|                                           |  |                            |        |   |      |  
|Rental Income                              |  | $                          | 4,110  |   |      | $ | 2,380  |  
|                                          
|                                          
|                                          
|                                          
|Cost of Sales                              |  |                            | 153    |   |      |   |       |  
|                                          
|                                          
|                                          
|                                          
|Selling, General & Administrative Expenses |  |                            | (1,767 | ) |      |   | (1,019 | )
|                                          
|                                          
|                                          
|                                          
|Interest Expense                           |  |                            | (1,591 | ) |      |   | (1,007 | )
|                                           |  |                            |        |   |      |  
|Operating Earnings before Depreciation     |  |                            | 905    |   |      |   | 354    |  
|                                          
|                                          
|                                          
|                                          
|Depreciation                               |  |                            | (751   | ) |      |   | (462   | )
|                                           |  |                            |        |   |      |  
|Operating Earnings (Loss)                  |  | $                          | 154    |   |      | $ | (108   | )
|                                           |  |                            |        |   |      |  
|Operating Square Feet                      |  |                            | 1,664  |   |      |   | 1,043  |  
|                                           |  |                            |        |   |      |  

At June 30, 2001, Commercial Development owned, either directly or through
interests in joint ventures, 1,664,000 square feet of office and industrial
space in California, Texas, Florida, North Carolina and Massachusetts. As of
June 30, 2001, the occupancy level was 95%. Operating earnings
increased

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---



##### Table of Contents



during the quarter ended June 30, 2001, as compared to the same period last
year due to the addition of 621,000 square feet of operating properties.

MULTI-FAMILY COMMUNITIES

The following summarizes Multi-Family Communities (Multi-Family)
results for the quarter ended June 30, 2001, compared to the same period last
year (dollars in thousands):

|                                           |  |                            |         |   |      |   |       |  
|------------------------------------------ |  | -------------------------- | ------- | - | ---- | - | ----- | -
|                                           |  |                            |        
|                                           |  | For the Three Months Ended |        
|                                           |  | June 30,                   |        
|                                           |  |                            |        
|                                           |  | 2001                       |         |   | 2000 |  
|                                           |  |                            |         |   |      |  
|Revenues                                   |  | $                          | 23,621  |   |      | $ | 1,004 |  
|                                          
|                                          
|                                          
|                                          
|Cost of Sales                              |  |                            | (21,682 | ) |      |   |      |  
|                                          
|                                          
|                                          
|                                          
|Selling, General & Administrative Expenses |  |                            | (559    | ) |      |   | (476  | )
|                                           |  |                            |         |   |      |  
|Operating Earnings                         |  | $                          | 1,380   |   |      | $ | 528   |  
|                                           |  |                            |         |   |      |  

During the quarter ended June 30, 2001, Multi-Family closed on the sale of
a 400-unit apartment complex in Grand Prairie, Texas. During the quarter ended
June 30, 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.

CORPORATE-OTHER

The following summarizes Corporate-Others results for the three months
ended June 30, 2001, compared to the same period last year (dollars in
thousands):

|                                           |  |                            |      |   |      |   |      |  
|------------------------------------------ |  | -------------------------- | ---- | - | ---- | - | ---- | -
|                                           |  |                            |     
|                                           |  | For the Three Months Ended |     
|                                           |  | June 30,                   |     
|                                           |  |                            |     
|                                           |  | 2001                       |      |   | 2000 |  
|                                           |  |                            |      |   |      |  
|Revenues                                   |  | $                          | 61   |   |      | $ | 115  |  
|                                          
|                                          
|                                          
|                                          
|Selling, General & Administrative Expenses |  |                            | (602 | ) |      |   | (146 | )
|                                           |  |                            |      |   |      |  
|Operating Loss                             |  | $                          | (541 | ) |      | $ | (31  | )
|                                           |  |                            |      |   |      |  

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. Revenues for the
three months ended June 30, 2001 and 2000, included $0 and $47 thousand from
earnings in joint ventures, respectively, $53 thousand and $68 thousand in
interest income, respectively, and $8 thousand and $0 in other income,
respectively.

General and Administrative Expenses for the three months ended June 30, 2001
have increased as compared to the same period last year, reflecting
employment-related expenses for certain employees of the Companies who were
previously employed by Centex Corporation (Centex).

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##### Table of Contents



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.
Construction loans totaled $39.0 million at June 30, 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 June
30, 2001 totaled $75.2 million compared to $50.8 million at June 30, 2000.

The
International Home Building segment has secured a revolving bank
credit facility of 100 million in British pounds sterling. The term
of this facility expires in fiscal 2003. Advances under this facility
totaled $70.8 million at June 30, 2001.

During the three months ended June 30, 2001, the Partnership issued 4,517
Class C limited partnership units in exchange for land valued at $4.5 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.

OTHER DEVELOPMENTS

During the first quarter of fiscal 2002, Multi-Family Communities entered
into an agreement with the City of Saint Paul, Minnesota, and a related
governmental agency, to re-develop a site along the Mississippi River in
downtown Saint Paul into a mixed-use project containing for-sale and
for-rent housing units and related retail. Multi-Family Communities also has
a 398-unit multi-family project under construction in Haltom City, Texas.

---

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

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---



##### Table of Contents



in property taxes; changes in
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 6. EXHIBITS AND REPORTS ON FORM 8-K



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

|     |  |                                                                                                                                          | 
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------- | 
|10.1 |  | Management Agreement dated as of April 1, 2001, by and between Centex
Development Company, L.P. and Centex Homes, (filed
herewith).     
|     |  |                                                                                                                                          | 
|10.2 |  | Employment Agreement, dated as of April 1, 2001, by and between
Centex Development Company, L.P. and Richard C. Decker (filed
herewith).



|
|
|
|
|

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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                                     
|                |  |                                                
|                |  |                                                
|August 13, 2001 |  | /s/ Stephen M. Weinberg                        
|                |  | Stephen M. Weinberg                            
|                |  | Director, President and Chief Executive Officer
|                |  | (principal executive officer)                  
|                |  |                                                
|August 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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---



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Signatures

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

|                |  |                                                
|--------------- |  | -----------------------------------------------
|                |  | CENTEX DEVELOPMENT COMPANY, L.P.               
|                |  | Registrant                                     
|                |  | By: 3333 Development Corporation,              
|                |  | General Partner                                
|                |  |                                                
|August 13, 2001 |  | /s/ Stephen M. Weinberg                        
|                |  | Stephen M. Weinberg                            
|                |  | Director, President and Chief Executive Officer
|                |  | (principal executive officer)                  
|                |  |                                                
|August 13, 2001 |  | /s/ Todd D. Newman                             
|                |  | Todd D. Newman                                 
|                |  | Senior Vice President, Chief Financial         
|                |  | Officer and Treasurer                          
|                |  | (principal financial officer and               
|                |  | chief accounting officer)                      

-42-



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##### Table of Contents



INDEX TO EXHIBITS

|               |  |                                                                                                                                         
|-------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------
|EXHIBIT
NUMBER |  | DESCRIPTION                                                                                                                             
|               |  |                                                                                                                                         
|              
|              
|              
|              
|10.1           |  | Management Agreement, dated as of April 1, 2001, by and between Centex
Development Company, L.P. and Centex Homes (filed herewith).     
|              
|              
|              
|              
|10.2           |  | Employment Agreement, dated as of April 1, 2001, by and between
Centex Development Company, L.P. and Richard C. Decker (filed
herewith).