##### 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

September 30, 2002

Commission File No. 1-6776

Centex Corporation

A Nevada Corporation

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

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

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

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

The registrants have filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and
have been subject to such filing requirements for the past 90 days.

Indicate the number of shares of each of the registrants classes of common
stock (or other similar equity securities) outstanding as of the close of
business on October 31, 2002:

|                                 |  |                                               |  |                  
|-------------------------------- |  | --------------------------------------------- |  | -----------------
|Centex Corporation               |  | Common Stock                                  |  | 61,617,803 shares
|3333 Holding Corporation         |  | Common Stock                                  |  | 1,000 shares     
|Centex Development Company, L.P. |  | Class A Units of Limited Partnership Interest |  | 32,260 units     
|Centex Development Company, L.P. |  | Class C Units of Limited Partnership Interest |  | 208,330 units    





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TABLE OF CONTENTS



|                               |                                                                                               |                                                                  |  |  |  |  |  | 
|------------------------------ | --------------------------------------------------------------------------------------------- | ---------------------------------------------------------------- |  |  |  |  |  | 
|Part I. Financial Information 
|                               | Item 1. Financial Statements                                                                 
|                               |                                                                                               | Statements of Consolidated Earnings                             
|                               |                                                                                               | Consolidated Balance Sheets with Consolidating Details          
|                               |                                                                                               | Statements of Consolidated Cash Flows with Consolidating Details
|                               |                                                                                               | Notes to Consolidated Financial Statements                      
|                               | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                               | Item 3. Quantitative and Qualitative Disclosures About Market Risk                           
|                               | Item 4. Controls and Procedures                                                              
|Part II. Other Information    
|                               | Item 4. Submission of Matters to a Vote of Security Holders                                  
|                               | Item 6. Exhibits and Reports on Form 8-K                                                     
|Signatures                    
|Certifications                
|Part I. Financial Information 
|                               | Item 1. Financial Statements                                                                 
|                               |                                                                                               | Condensed Combining Statements of Operations                    
|                               |                                                                                               | Condensed Combining Balance Sheets                              
|                               |                                                                                               | Condensed Combining Statements of Cash Flows                    
|                               |                                                                                               | Notes to Condensed Combining Financial Statements               
|                               | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                               | Item 3. Quantitative and Qualitative Disclosures About Market Risk                           
|                               | Item 4. Controls and Procedures                                                              
|Part II. Other Information    
|                               | Item 4. Submission of Matters to a Vote of Security Holders                                  
|                               | Item 6. Exhibits and Reports on Form 8-K                                                     
|Signatures                    
|Certifications                
|EX-10.1 Supplemental Agreement



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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

September 30, 2002

Centex Corporation and Subsidiaries

|               |  |                       |  |         |  |                                                                                       |  |                                                                  |    |  |   | 
|-------------- |  | --------------------- |  | ------- |  | ------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------- | -- |  | - | 
|Part I.        |  | Financial Information |  | Page    | 
|               |  |                       |  | Item 1. |  | Financial Statements                                                                  |  |                                                                  |    | 
|               |  |                       |  |         |  |                                                                                       |  | Statements of Consolidated Earnings                              |    |  | 1 | 
|               |  |                       |  |         |  |                                                                                       |  | Consolidated Balance Sheets with Consolidating Details           |    |  | 3 | 
|               |  |                       |  |         |  |                                                                                       |  | Statements of Consolidated Cash Flows with Consolidating Details |    |  | 5 | 
|               |  |                       |  |         |  |                                                                                       |  | Notes to Consolidated Financial Statements                       |    |  | 7 | 
|               |  |                       |  | Item 2. |  | Managements Discussion and Analysis of Financial Condition
and Results of Operations |  |                                                                  | 22 | 
|               |  |                       |  | Item 3. |  | Quantitative and Qualitative Disclosures about Market Risk                            |  |                                                                  | 39 | 
|               |  |                       |  | Item 4. |  | Controls and Procedures                                                               |  |                                                                  | 40 | 
|Part II.       |  | Other Information    
|               |  |                       |  | Item 4. |  | Submission of Matters to a Vote of Security Holders                                   |  |                                                                  | 40 | 
|               |  |                       |  | Item 6. |  | Exhibits and Reports on Form 8-K                                                      |  |                                                                  | 40 | 
|Signatures     |  |                       |  |         |  |                                                                                       |  |                                                                  | 42 | 
|Certifications |  |                       |  |         |  |                                                                                       |  |                                                                  | 43 | 

i



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##### Table of Contents



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

|               |  |                       |  |         |  |                                                                                       |  |                                                   |    |  |    | 
|-------------- |  | --------------------- |  | ------- |  | ------------------------------------------------------------------------------------- |  | ------------------------------------------------- | -- |  | -- | 
|Part I.        |  | Financial Information |  | Page    | 
|               |  |                       |  | Item 1. |  | Financial Statements                                                                  |  |                                                   |    | 
|               |  |                       |  |         |  |                                                                                       |  | Condensed Combining Statements of Operations      |    |  | 45 | 
|               |  |                       |  |         |  |                                                                                       |  | Condensed Combining Balance Sheets                |    |  | 47 | 
|               |  |                       |  |         |  |                                                                                       |  | Condensed Combining Statements of Cash Flows      |    |  | 48 | 
|               |  |                       |  |         |  |                                                                                       |  | Notes to Condensed Combining Financial Statements |    |  | 49 | 
|               |  |                       |  | Item 2. |  | Managements Discussion and Analysis of Financial Condition
and Results of Operations |  |                                                   | 56 | 
|               |  |                       |  | Item 3. |  | Quantitative and Qualitative Disclosures about Market Risk                            |  |                                                   | 64 | 
|               |  |                       |  | Item 4. |  | Controls and Procedures                                                               |  |                                                   | 64 | 
|Part II.       |  | Other Information    
|               |  |                       |  | Item 4. |  | Submission of Matters to a Vote of Security Holders                                   |  |                                                   | 65 | 
|               |  |                       |  | Item 6. |  | Exhibits and Reports on Form 8-K                                                      |  |                                                   | 65 | 
|Signatures     |  |                       |  |         |  |                                                                                       |  |                                                   | 66 | 
|Certifications |  |                       |  |         |  |                                                                                       |  |                                                   | 68 | 

ii



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##### Table of Contents












Part I. Financial Information

Item 1. Financial Statements

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

|                             |                                      |                                            |           |                                          |           |   |           |            |           | 
|---------------------------- | ------------------------------------ | ------------------------------------------ | --------- | ---------------------------------------- | --------- | - | --------- | ---------- | --------- | 
|                             |                                      |                                            |           |                                          |          
|                             |                                      |                                            |           | For the Three Months Ended September 30, |          
|                             |                                      |                                            |           |                                          |          
|                             |                                      |                                            |           | 2002                                     |           |   | 2001      |           
|                             |                                      |                                            |           |                                          |           |   |           |           
|Revenues                     |                                      |                                            |           |                                          |           |   |           |           
|                             | Home Building                        |                                            | $         | 1,281,515                                |           |   | $         | 1,170,721  |          
|                             | Financial Services                   |                                            |           | 204,819                                  |           |   |           | 165,973    |          
|                             | Construction Products                |                                            |           | 135,993                                  |           |   |           | 129,545    |          
|                             | Construction Services                |                                            |           | 391,740                                  |           |   |           | 336,796    |          
|                             | Investment Real Estate               |                                            |           | 7,356                                    |           |   |           | 23,225     |          
|                             | Other                                |                                            |           | 62,346                                   |           |   |           | 57,373     |          
|                             |                                      |                                            |           |                                          |           |  
|                             |                                      |                                            | 2,083,769 |                                          |           |   | 1,883,633 |           
|                             |                                      |                                            |           |                                          |           |  
|Costs and Expenses           |                                      |                                            |           |                                          |           |   |           |           
|                             | Home Building                        |                                            |           | 1,144,469                                |           |   |           | 1,047,743  |          
|                             | Financial Services                   |                                            |           | 168,244                                  |           |   |           | 136,712    |          
|                             | Construction Products                |                                            |           | 109,250                                  |           |   |           | 107,014    |          
|                             | Construction Services                |                                            |           | 382,539                                  |           |   |           | 329,475    |          
|                             | Investment Real Estate               |                                            |           | 1,420                                    |           |   |           | 7,091      |          
|                             | Other                                |                                            |           | 62,593                                   |           |   |           | 54,725     |          
|                             | Corporate General and Administrative |                                            |           | 14,447                                   |           |   |           | 12,980     |          
|                             | Interest Expense                     |                                            |           | 27,009                                   |           |   |           | 29,342     |          
|                             | Minority Interest                    |                                            |           | 8,501                                    |           |   |           | 6,237      |          
|                             |                                      |                                            |           |                                          |           |  
|                             |                                      |                                            | 1,918,472 |                                          |           |   | 1,731,319 |           
|                             |                                      |                                            |           |                                          |           |  
|Earnings Before Income Taxes |                                      |                                            | 165,297   |                                          |           |   | 152,314   |           
|                             | Income Taxes                         |                                            |           | 49,688                                   |           |   |           | 58,925     |          
|                             |                                      |                                            |           |                                          |           |  
|Net Earnings                 |                                      | $                                          | 115,609   |                                          |           | $ | 93,389    |           
|                             |                                      |                                            |           |                                          |           |  
|Earnings Per Share           |                                      |                                            |           |                                          |           |   |           |           
|                             | Basic                                |                                            | $         | 1.90                                     |           |   | $         | 1.54       |          
|                             |                                      |                                            |           |                                          |           |  
|                             | Diluted                              |                                            | $         | 1.83                                     |           |   | $         | 1.50       |          
|                             |                                      |                                            |           |                                          |           |  
|Average Shares Outstanding   |                                      |                                            |           |                                          |           |   |           |           
|                             | Basic                                |                                            |           | 60,875,672                               |           |   |           | 60,568,258 |          
|                             | Dilutive Securities:                 |                                            |           |                                          |           |   |           |            |          
|                             |                                      | Options                                    |           |                                          | 1,619,150 |   |           |            | 1,314,175 | 
|                             |                                      | Convertible Debenture and Restricted Stock |           |                                          | 541,468   |   |           |            | 407,469   | 
|                             |                                      |                                            |           |                                          |           |  
|                             | Diluted                              |                                            |           | 63,036,290                               |           |   |           | 62,289,902 |          
|                             |                                      |                                            |           |                                          |           |  
|Cash Dividends Per Share     |                                      | $                                          | 0.04      |                                          |           | $ | 0.04      |           
|                             |                                      |                                            |           |                                          |           |  

See Notes to Consolidated Financial Statements.

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##### Table of Contents



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

|                             |                                      |                                            |           |                                        |           |   |           |            |           | 
|---------------------------- | ------------------------------------ | ------------------------------------------ | --------- | -------------------------------------- | --------- | - | --------- | ---------- | --------- | 
|                             |                                      |                                            |           |                                        |          
|                             |                                      |                                            |           | For the Six Months Ended September 30, |          
|                             |                                      |                                            |           |                                        |          
|                             |                                      |                                            |           | 2002                                   |           |   | 2001      |           
|                             |                                      |                                            |           |                                        |           |   |           |           
|Revenues                     |                                      |                                            |           |                                        |           |   |           |           
|                             | Home Building                        |                                            | $         | 2,387,233                              |           |   | $         | 2,209,882  |          
|                             | Financial Services                   |                                            |           | 385,359                                |           |   |           | 328,566    |          
|                             | Construction Products                |                                            |           | 264,768                                |           |   |           | 246,968    |          
|                             | Construction Services                |                                            |           | 752,461                                |           |   |           | 650,429    |          
|                             | Investment Real Estate               |                                            |           | 13,301                                 |           |   |           | 47,323     |          
|                             | Other                                |                                            |           | 124,502                                |           |   |           | 109,610    |          
|                             |                                      |                                            |           |                                        |           |  
|                             |                                      |                                            | 3,927,624 |                                        |           |   | 3,592,778 |           
|                             |                                      |                                            |           |                                        |           |  
|Costs and Expenses           |                                      |                                            |           |                                        |           |   |           |           
|                             | Home Building                        |                                            |           | 2,141,563                              |           |   |           | 1,988,784  |          
|                             | Financial Services                   |                                            |           | 324,478                                |           |   |           | 274,135    |          
|                             | Construction Products                |                                            |           | 210,293                                |           |   |           | 211,495    |          
|                             | Construction Services                |                                            |           | 735,180                                |           |   |           | 635,650    |          
|                             | Investment Real Estate               |                                            |           | 3,968                                  |           |   |           | 15,934     |          
|                             | Other                                |                                            |           | 126,174                                |           |   |           | 106,600    |          
|                             | Corporate General and Administrative |                                            |           | 27,081                                 |           |   |           | 24,226     |          
|                             | Interest Expense                     |                                            |           | 50,735                                 |           |   |           | 56,584     |          
|                             | Minority Interest                    |                                            |           | 17,383                                 |           |   |           | 9,070      |          
|                             |                                      |                                            |           |                                        |           |  
|                             |                                      |                                            | 3,636,855 |                                        |           |   | 3,322,478 |           
|                             |                                      |                                            |           |                                        |           |  
|Earnings Before Income Taxes |                                      |                                            | 290,769   |                                        |           |   | 270,300   |           
|                             | Income Taxes                         |                                            |           | 87,405                                 |           |   |           | 101,695    |          
|                             |                                      |                                            |           |                                        |           |  
|Net Earnings                 |                                      | $                                          | 203,364   |                                        |           | $ | 168,605   |           
|                             |                                      |                                            |           |                                        |           |  
|Earnings Per Share           |                                      |                                            |           |                                        |           |   |           |           
|                             | Basic                                |                                            | $         | 3.33                                   |           |   | $         | 2.79       |          
|                             |                                      |                                            |           |                                        |           |  
|                             | Diluted                              |                                            | $         | 3.21                                   |           |   | $         | 2.72       |          
|                             |                                      |                                            |           |                                        |           |  
|Average Shares Outstanding   |                                      |                                            |           |                                        |           |   |           |           
|                             | Basic                                |                                            |           | 61,021,424                             |           |   |           | 60,372,690 |          
|                             | Dilutive Securities:                 |                                            |           |                                        |           |   |           |            |          
|                             |                                      | Options                                    |           |                                        | 1,808,690 |   |           |            | 1,323,223 | 
|                             |                                      | Convertible Debenture and Restricted Stock |           |                                        | 539,670   |   |           |            | 404,786   | 
|                             |                                      |                                            |           |                                        |           |  
|                             | Diluted                              |                                            |           | 63,369,784                             |           |   |           | 62,100,699 |          
|                             |                                      |                                            |           |                                        |           |  
|Cash Dividends Per Share     |                                      | $                                          | 0.08      |                                        |           | $ | 0.08      |           
|                             |                                      |                                            |           |                                        |           |  

See Notes to Consolidated Financial Statements.

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##### Table of Contents






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

|                                     |                                          |                                                                                                           |            |                                     |           |   |                |           |           |  
|------------------------------------ | ---------------------------------------- | --------------------------------------------------------------------------------------------------------- | ---------- | ----------------------------------- | --------- | - | -------------- | --------- | --------- | -
|                                     |                                          |                                                                                                           |            |                                     |          
|                                     |                                          |                                                                                                           |            | Centex Corporation and Subsidiaries |          
|                                     |                                          |                                                                                                           |            |                                     |          
|                                     |                                          |                                                                                                           |            | September 30, 2002*                 |           |   | March 31, 2002 |          
|                                     |                                          |                                                                                                           |            |                                     |           |   |                |          
|Assets                               |                                          |                                                                                                           |            |                                     |           |   |                |          
|                                     | Cash and Cash Equivalents                |                                                                                                           | $          | 63,230                              |           |   | $              | 219,716   |          
|                                     | Restricted Cash                          |                                                                                                           |            | 127,270                             |           |   |                | 106,270   |          
|                                     | Receivables -                            |                                                                                                           |            |                                     |           |   |                |           |          
|                                     |                                          | Residential Mortgage Loans Held for Investment                                                            |            |                                     | 3,797,376 |   |                |           | 3,254,017 |  
|                                     |                                          | Residential Mortgage Loans Held for Sale                                                                  |            |                                     | 201,595   |   |                |           | 241,793   |  
|                                     |                                          | Construction Contracts                                                                                    |            |                                     | 258,840   |   |                |           | 221,705   |  
|                                     |                                          | Trade, including Notes of $41,592 and $30,908                                                             |            |                                     | 406,173   |   |                |           | 345,311   |  
|                                     | Inventories -                            |                                                                                                           |            |                                     |           |   |                |           |          
|                                     |                                          | Housing Projects                                                                                          |            |                                     | 3,080,196 |   |                |           | 2,513,168 |  
|                                     |                                          | Land Held for Development and Sale                                                                        |            |                                     | 101,296   |   |                |           | 85,997    |  
|                                     |                                          | Construction Products                                                                                     |            |                                     | 53,363    |   |                |           | 54,220    |  
|                                     |                                          | Other                                                                                                     |            |                                     | 68,963    |   |                |           | 51,059    |  
|                                     | Investments -                            |                                                                                                           |            |                                     |           |   |                |           |          
|                                     |                                          | Centex Development Company, L.P.                                                                          |            |                                     | 292,011   |   |                |           | 269,178   |  
|                                     |                                          | Joint Ventures and Other                                                                                  |            |                                     | 124,635   |   |                |           | 94,609    |  
|                                     |                                          | Unconsolidated Subsidiaries                                                                               |            |                                     |          |   |                |           |          |  
|                                     | Property and Equipment, net              |                                                                                                           |            | 723,794                             |           |   |                | 720,285   |          
|                                     | Other Assets -                           |                                                                                                           |            |                                     |           |   |                |           |          
|                                     |                                          | Deferred Income Taxes                                                                                     |            |                                     | 49,150    |   |                |           | 76,167    |  
|                                     |                                          | Goodwill                                                                                                  |            |                                     | 334,365   |   |                |           | 349,712   |  
|                                     |                                          | Mortgage Securitization Residual Interest                                                                 |            |                                     | 116,361   |   |                |           | 125,272   |  
|                                     |                                          | Deferred Charges and Other, net                                                                           |            |                                     | 253,877   |   |                |           | 256,976   |  
|                                     |                                          |                                                                                                           |            |                                     |           |  
|                                     |                                          | $                                                                                                         | 10,052,495 |                                     |           | $ | 8,985,455      |          
|                                     |                                          |                                                                                                           |            |                                     |           |  
|Liabilities and Stockholders Equity |                                          |                                                                                                           |            |                                     |           |   |                |          
|                                     | Accounts Payable and Accrued Liabilities |                                                                                                           | $          | 1,462,188                           |           |   | $              | 1,438,613 |          
|                                     | Debt -                                   |                                                                                                           |            |                                     |           |   |                |           |          
|                                     |                                          | Non-Financial Services                                                                                    |            |                                     | 2,077,800 |   |                |           | 1,791,752 |  
|                                     |                                          | Financial Services                                                                                        |            |                                     | 4,045,708 |   |                |           | 3,485,027 |  
|                                     | Payables to Affiliates                   |                                                                                                           |            |                                    |           |   |                |          |          
|                                     | Minority Stockholders Interest          |                                                                                                           |            | 162,299                             |           |   |                | 153,290   |          
|                                     | Stockholders Equity -                   |                                                                                                           |            |                                     |           |   |                |           |          
|                                     |                                          | Preferred Stock, Authorized 5,000,000 Shares, None Issued                                                 |            |                                     |          |   |                |           |          |  
|                                     |                                          | Common Stock, $.25 Par Value; Authorized 100,000,000
Shares; Outstanding 60,752,888 and 61,171,149 Shares |            |                                     | 15,404    |   |                |           | 15,348    |  
|                                     |                                          | Capital in Excess of Par Value                                                                            |            |                                     | 86,854    |   |                |           | 72,446    |  
|                                     |                                          | Unamortized Value of Restricted Stock                                                                     |            |                                     | (2,914    | ) |                |           | (2,408    | )
|                                     |                                          | Retained Earnings                                                                                         |            |                                     | 2,249,379 |   |                |           | 2,050,902 |  
|                                     |                                          | Treasury Stock, at cost; 861,615 and 221,854 Shares                                                       |            |                                     | (35,495   | ) |                |           | (6,559    | )
|                                     |                                          | Accumulated Other Comprehensive Loss                                                                      |            |                                     | (8,728    | ) |                |           | (12,956   | )
|                                     |                                          |                                                                                                           |            |                                     |           |  
|                                     | Total Stockholders Equity               |                                                                                                           |            | 2,304,500                           |           |   |                | 2,116,773 |          
|                                     |                                          |                                                                                                           |            |                                     |           |  
|                                     |                                          | $                                                                                                         | 10,052,495 |                                     |           | $ | 8,985,455      |          
|                                     |                                          |                                                                                                           |            |                                     |           |  

See Notes to Consolidated Financial Statements.
*Unaudited

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##### Table of Contents



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

| |  |                       |           |   |                    |   |           |                     |  |   |                |   |  |   |           |  
| |  | --------------------- | --------- | - | ------------------ | - | --------- | ------------------- |  | - | -------------- | - |  | - | --------- | -
| |  |                       |           |   |                    |  
| |  | Centex Corporation ** |           |   | Financial Services |  
| |  |                       |           |   |                    |  
| |  | September 30, 2002*   |           |   | March 31, 2002     |   |           | September 30, 2002* |  |   | March 31, 2002 |  
| |  |                       |           |   |                    |   |           |                     |  |   |                |  
|
| |  | $                     | 40,401    |   |                    | $ | 192,591   |                     |  | $ | 22,829         |   |  | $ | 27,125    |  
| |  |                       | 5,640     |   |                    |   | 4,760     |                     |  |   | 121,630        |   |  |   | 101,510   |  
|
| |  |                       |          |   |                    |   |          |                     |  |   | 3,797,376      |   |  |   | 3,254,017 |  
| |  |                       |          |   |                    |   |          |                     |  |   | 201,595        |   |  |   | 241,793   |  
| |  |                       | 258,840   |   |                    |   | 221,705   |                     |  |   |               |   |  |   |          |  
| |  |                       | 220,295   |   |                    |   | 197,613   |                     |  |   | 185,878        |   |  |   | 147,698   |  
|
| |  |                       | 3,080,196 |   |                    |   | 2,513,168 |                     |  |   |               |   |  |   |          |  
| |  |                       | 101,296   |   |                    |   | 85,997    |                     |  |   |               |   |  |   |          |  
| |  |                       | 53,363    |   |                    |   | 54,220    |                     |  |   |               |   |  |   |          |  
| |  |                       | 22,354    |   |                    |   | 22,186    |                     |  |   | 46,609         |   |  |   | 28,873    |  
|
| |  |                       | 292,011   |   |                    |   | 269,178   |                     |  |   |               |   |  |   |          |  
| |  |                       | 124,635   |   |                    |   | 94,609    |                     |  |   |               |   |  |   |          |  
| |  |                       | 454,923   |   |                    |   | 498,117   |                     |  |   |               |   |  |   |          |  
| |  |                       | 682,011   |   |                    |   | 672,165   |                     |  |   | 41,783         |   |  |   | 48,120    |  
|
| |  |                       | (45,878   | ) |                    |   | (3,456    | )                   |  |   | 95,028         |   |  |   | 79,623    |  
| |  |                       | 317,550   |   |                    |   | 332,897   |                     |  |   | 16,815         |   |  |   | 16,815    |  
| |  |                       |          |   |                    |   |          |                     |  |   | 116,361        |   |  |   | 125,272   |  
| |  |                       | 171,646   |   |                    |   | 179,810   |                     |  |   | 82,231         |   |  |   | 77,166    |  
| |  |                       |           |   |                    |   |           |                     |  |   |                |  
| |  | $                     | 5,779,283 |   |                    | $ | 5,335,560 |                     |  | $ | 4,728,135      |   |  | $ | 4,148,012 |  
| |  |                       |           |   |                    |   |           |                     |  |   |                |  
|
| |  | $                     | 1,236,471 |   |                    | $ | 1,275,720 |                     |  | $ | 225,717        |   |  | $ | 162,893   |  
|
| |  |                       | 2,077,800 |   |                    |   | 1,791,752 |                     |  |   |               |   |  |   |          |  
| |  |                       |          |   |                    |   |          |                     |  |   | 4,045,708      |   |  |   | 3,485,027 |  
| |  |                       |          |   |                    |   |          |                     |  |   | 112,582        |   |  |   | 187,764   |  
| |  |                       | 160,512   |   |                    |   | 151,315   |                     |  |   | 1,787          |   |  |   | 1,975     |  
|
| |  |                       |          |   |                    |   |          |                     |  |   |               |   |  |   |          |  
|
| |  |                       | 15,404    |   |                    |   | 15,348    |                     |  |   | 1              |   |  |   | 1         |  
| |  |                       | 86,854    |   |                    |   | 72,446    |                     |  |   | 202,671        |   |  |   | 202,671   |  
| |  |                       | (2,914    | ) |                    |   | (2,408    | )                   |  |   |               |   |  |   |          |  
| |  |                       | 2,249,379 |   |                    |   | 2,050,902 |                     |  |   | 158,876        |   |  |   | 116,748   |  
| |  |                       | (35,495   | ) |                    |   | (6,559    | )                   |  |   |               |   |  |   |          |  
| |  |                       | (8,728    | ) |                    |   | (12,956   | )                   |  |   | (19,207        | ) |  |   | (9,067    | )
| |  |                       |           |   |                    |   |           |                     |  |   |                |  
| |  |                       | 2,304,500 |   |                    |   | 2,116,773 |                     |  |   | 342,341        |   |  |   | 310,353   |  
| |  |                       |           |   |                    |   |           |                     |  |   |                |  
| |  | $                     | 5,779,283 |   |                    | $ | 5,335,560 |                     |  | $ | 4,728,135      |   |  | $ | 4,148,012 |  
| |  |                       |           |   |                    |   |           |                     |  |   |                |  



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

-4-



---



##### Table of Contents






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

|                                                     |                                                                                            |                                                                           |          |                                        |          |   |           |          |          |  
|---------------------------------------------------- | ------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------- | -------- | -------------------------------------- | -------- | - | --------- | -------- | -------- | -
|                                                     |                                                                                            |                                                                           |          |                                        |         
|                                                     |                                                                                            |                                                                           |          | Centex Corporation and Subsidiaries    |         
|                                                     |                                                                                            |                                                                           |          |                                        |         
|                                                     |                                                                                            |                                                                           |          | For the Six Months Ended September 30, |         
|                                                     |                                                                                            |                                                                           |          |                                        |         
|                                                     |                                                                                            |                                                                           |          | 2002                                   |          |   | 2001      |         
|                                                     |                                                                                            |                                                                           |          |                                        |          |   |           |         
|Cash Flows  Operating Activities                    |                                                                                            |                                                                           |          |                                        |          |   |           |         
|                                                     | Net Earnings                                                                               |                                                                           | $        | 203,364                                |          |   | $         | 168,605  |         
|                                                     | Adjustments                                                                                |                                                                           |          |                                        |          |   |           |          |         
|                                                     |                                                                                            | Depreciation, Depletion and Amortization                                  |          |                                        | 48,023   |   |           |          | 43,884   |  
|                                                     |                                                                                            | Provision for Losses on Residential Mortgage Loans Held for
Investment    |          |                                        | 13,556   |   |           |          | 5,791    |  
|                                                     |                                                                                            | Deferred Income Tax Provision (Benefit)                                   |          |                                        | 29,118   |   |           |          | 7,016    |  
|                                                     |                                                                                            | Equity in Earnings of Centex Development Company, L.P. and
Joint Ventures |          |                                        | (3,202   | ) |           |          | (5,596   | )
|                                                     |                                                                                            | Minority Interest, Net of Taxes                                           |          |                                        | 11,562   |   |           |          | 6,033    |  
|                                                     | (Increase) Decrease in Restricted Cash                                                     |                                                                           |          | (21,000                                | )        |   |           | (7,977   | )       
|                                                     | Increase in Receivables                                                                    |                                                                           |          | (91,749                                | )        |   |           | (29,317  | )       
|                                                     | Decrease (Increase) in Residential Mortgage Loans Held for Sale                            |                                                                           |          | 40,198                                 |          |   |           | (56,544  | )       
|                                                     | Increase in Housing Projects and Land Held for Development
and Sale Inventories            |                                                                           |          | (582,599                               | )        |   |           | (358,678 | )       
|                                                     | (Increase) Decrease in Construction Products and Other Inventories                         |                                                                           |          | (11,422                                | )        |   |           | 3,806    |         
|                                                     | Increase (Decrease) in Accounts Payable and Accrued Liabilities                            |                                                                           |          | 6,029                                  |          |   |           | 66,566   |         
|                                                     | Decrease (Increase) in Other Assets, net                                                   |                                                                           |          | 15,361                                 |          |   |           | (65,525  | )       
|                                                     | Increase (Decrease) in Payables to Affiliates                                              |                                                                           |          |                                       |          |   |           |         |         
|                                                     | Other, net                                                                                 |                                                                           |          | (1,057                                 | )        |   |           | 1,064    |         
|                                                     |                                                                                            |                                                                           |          |                                        |          |  
|                                                     |                                                                                            |                                                                           | (343,818 | )                                      |          |   | (220,872  | )       
|                                                     |                                                                                            |                                                                           |          |                                        |          |  
|Cash Flows  Investing Activities                    |                                                                                            |                                                                           |          |                                        |          |   |           |         
|                                                     | Increase in Residential Mortgage Loans Held for Investment                                 |                                                                           |          | (558,411                               | )        |   |           | (806,066 | )       
|                                                     | Increase in Investment and Advances to Centex Development
Company, L.P. and Joint Ventures |                                                                           |          | (32,588                                | )        |   |           | (68,126  | )       
|                                                     | Purchases of Property and Equipment, net                                                   |                                                                           |          | (48,039                                | )        |   |           | (46,000  | )       
|                                                     |                                                                                            |                                                                           |          |                                        |          |  
|                                                     |                                                                                            |                                                                           | (639,038 | )                                      |          |   | (920,192  | )       
|                                                     |                                                                                            |                                                                           |          |                                        |          |  
|Cash Flows  Financing Activities                    |                                                                                            |                                                                           |          |                                        |          |   |           |         
|                                                     | Increase in Short-Term Debt, net                                                           |                                                                           |          | 532,896                                |          |   |           | 976,713  |         
|                                                     | Non-Financial Services                                                                    
|
|                                                     |                                                                                            | Issuance of Long-Term Debt                                                |          |                                        | 255,638  |   |           |          | 438,374  |  
|                                                     |                                                                                            | Repayment of Long-Term Debt                                               |          |                                        | (107,582 | ) |           |          | (560,661 | )
|                                                     | Financial Services                                                                        
|                                                     |                                                                                            | Issuance of Long-Term Debt                                                |          |                                        | 620,723  |   |           |          | 480,000  |  
|                                                     |                                                                                            | Repayment of Long-Term Debt                                               |          |                                        | (454,946 | ) |           |          | (199,047 | )
|                                                     | Proceeds from Stock Option Exercises and Other                                             |                                                                           |          | 13,464                                 |          |   |           | 21,429   |         
|                                                     | Purchase of Treasury Stock                                                                 |                                                                           |          | (28,936                                | )        |   |           | (6,611   | )       
|                                                     | Dividends Paid                                                                             |                                                                           |          | (4,887                                 | )        |   |           | (4,847   | )       
|                                                     | Dividends Received from (Paid to) Affiliate                                                |                                                                           |          |                                       |          |   |           |         |         
|                                                     |                                                                                            |                                                                           |          |                                        |          |  
|                                                     |                                                                                            |                                                                           | 826,370  |                                        |          |   | 1,145,350 |         
|                                                     |                                                                                            |                                                                           |          |                                        |          |  
|Net (Decrease) Increase in Cash and Cash Equivalents |                                                                                            |                                                                           | (156,486 | )                                      |          |   | 4,286     |         
|Cash and Cash Equivalents at Beginning of Period     |                                                                                            |                                                                           | 219,716  |                                        |          |   | 57,752    |         
|                                                     |                                                                                            |                                                                           |          |                                        |          |  
|Cash and Cash Equivalents at End of Period           |                                                                                            | $                                                                         | 63,230   |                                        |          | $ | 62,038    |         
|                                                     |                                                                                            |                                                                           |          |                                        |          |  

See Notes to Consolidated Financial Statements.

-5-



---



##### Table of Contents



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

| |  |                                        |          |   |                                        |   |          |      |  |   |          |   |  |   |          |  
| |  | -------------------------------------- | -------- | - | -------------------------------------- | - | -------- | ---- |  | - | -------- | - |  | - | -------- | -
| |  |                                        |          |   |                                        |  
| |  | Centex Corporation **                  |          |   | Financial Services                     |  
| |  |                                        |          |   |                                        |  
| |  | For the Six Months Ended September 30, |          |   | For the Six Months Ended September 30, |  
| |  |                                        |          |   |                                        |  
| |  | 2002                                   |          |   | 2001                                   |   |          | 2002 |  |   | 2001     |  
| |  |                                        |          |   |                                        |   |          |      |  |   |          |  
|
| |  | $                                      | 136,236  |   |                                        | $ | 134,753  |      |  | $ | 67,128   |   |  | $ | 33,852   |  
|
| |  |                                        | 39,653   |   |                                        |   | 36,728   |      |  |   | 8,370    |   |  |   | 7,156    |  
|
| |  |                                        |         |   |                                        |   |         |      |  |   | 13,556   |   |  |   | 5,791    |  
| |  |                                        | 39,081   |   |                                        |   | 10,752   |      |  |   | (9,963   | ) |  |   | (3,736   | )
|
| |  |                                        | (3,202   | ) |                                        |   | (5,596   | )    |  |   |         |   |  |   |         |  
| |  |                                        | 11,562   |   |                                        |   | 6,033    |      |  |   |         |   |  |   |         |  
| |  |                                        | (880     | ) |                                        |   | 888      |      |  |   | (20,120  | ) |  |   | (8,865   | )
| |  |                                        | (53,569  | ) |                                        |   | (3,943   | )    |  |   | (38,180  | ) |  |   | (25,374  | )
|
| |  |                                        |         |   |                                        |   |         |      |  |   | 40,198   |   |  |   | (56,544  | )
|
| |  |                                        | (582,599 | ) |                                        |   | (358,678 | )    |  |   |         |   |  |   |         |  
|
| |  |                                        | 6,314    |   |                                        |   | 8,255    |      |  |   | (17,736  | ) |  |   | (4,449   | )
|
| |  |                                        | (46,655  | ) |                                        |   | 32,651   |      |  |   | 52,684   |   |  |   | 33,915   |  
| |  |                                        | 18,061   |   |                                        |   | (59,578  | )    |  |   | (2,700   | ) |  |   | (5,947   | )
| |  |                                        | 69,067   |   |                                        |   | 48,307   |      |  |   | (69,067  | ) |  |   | (48,307  | )
| |  |                                        | (2,365   | ) |                                        |   | 456      |      |  |   | 1,308    |   |  |   | 608      |  
| |  |                                        |          |   |                                        |   |          |      |  |   |          |  
| |  |                                        | (369,296 | ) |                                        |   | (148,972 | )    |  |   | 25,478   |   |  |   | (71,900  | )
| |  |                                        |          |   |                                        |   |          |      |  |   |          |  
|
|
| |  |                                        |         |   |                                        |   |         |      |  |   | (558,411 | ) |  |   | (806,066 | )
|
| |  |                                        | (32,588  | ) |                                        |   | (68,126  | )    |  |   |         |   |  |   |         |  
| |  |                                        | (40,995  | ) |                                        |   | (42,835  | )    |  |   | (7,044   | ) |  |   | (3,165   | )
| |  |                                        |          |   |                                        |   |          |      |  |   |          |  
| |  |                                        | (73,583  | ) |                                        |   | (110,961 | )    |  |   | (565,455 | ) |  |   | (809,231 | )
| |  |                                        |          |   |                                        |   |          |      |  |   |          |  
|
| |  |                                        | 137,992  |   |                                        |   | 369,536  |      |  |   | 394,904  |   |  |   | 607,177  |  
|
| |  |                                        | 255,638  |   |                                        |   | 438,374  |      |  |   |         |   |  |   |         |  
| |  |                                        | (107,582 | ) |                                        |   | (560,661 | )    |  |   |         |   |  |   |         |  
|
| |  |                                        |         |   |                                        |   |         |      |  |   | 620,723  |   |  |   | 480,000  |  
| |  |                                        |         |   |                                        |   |         |      |  |   | (454,946 | ) |  |   | (199,047 | )
| |  |                                        | 13,464   |   |                                        |   | 20,076   |      |  |   |         |   |  |   | 1,353    |  
| |  |                                        | (28,936  | ) |                                        |   | (6,611   | )    |  |   |         |   |  |   |         |  
| |  |                                        | (4,887   | ) |                                        |   | (4,847   | )    |  |   |         |   |  |   |         |  
| |  |                                        | 25,000   |   |                                        |   | 8,000    |      |  |   | (25,000  | ) |  |   | (8,000   | )
| |  |                                        |          |   |                                        |   |          |      |  |   |          |  
| |  |                                        | 290,689  |   |                                        |   | 263,867  |      |  |   | 535,681  |   |  |   | 881,483  |  
| |  |                                        |          |   |                                        |   |          |      |  |   |          |  
| |  |                                        | (152,190 | ) |                                        |   | 3,934    |      |  |   | (4,296   | ) |  |   | 352      |  
| |  |                                        | 192,591  |   |                                        |   | 45,987   |      |  |   | 27,125   |   |  |   | 11,765   |  
| |  |                                        |          |   |                                        |   |          |      |  |   |          |  
| |  | $                                      | 40,401   |   |                                        | $ | 49,921   |      |  | $ | 22,829   |   |  | $ | 12,117   |  
| |  |                                        |          |   |                                        |   |          |      |  |   |          |  



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

-6-



---



##### Table of Contents






Centex Corporation and Subsidiaries
Notes to Consolidated Financial Statements
September 30, 2002
(Dollars and shares in thousands, except per share data)
(unaudited)

(A) BASIS OF PRESENTATION

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

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

(B) STATEMENTS OF CONSOLIDATED CASH FLOWS  SUPPLEMENTAL DISCLOSURES

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

|                                         |  |                      |         |   |      |   |         |  
|---------------------------------------- |  | -------------------- | ------- | - | ---- | - | ------- | -
|                                         |  |                      |        
|                                         |  | For the Three Months |        
|                                         |  | Ended September 30,  |        
|                                         |  |                      |        
|                                         |  | 2002                 |         |   | 2001 |  
|                                         |  |                      |         |   |      |  
|Total Interest Incurred                  |  | $                    | 80,696  |   |      | $ | 73,657  |  
|Interest Capitalized                     |  |                      | (18,447 | ) |      |   | (13,351 | )
|Capitalized Interest Relieved to Expense |  |                      | 10,447  |   |      |   | 8,896   |  
|Less  Financial Services                |  |                      | (45,687 | ) |      |   | (39,860 | )
|                                         |  |                      |         |   |      |  
|Interest Expense, net                    |  | $                    | 27,009  |   |      | $ | 29,342  |  
|                                         |  |                      |         |   |      |  

|                                         |  |                     |         |   |      |   |         |  
|---------------------------------------- |  | ------------------- | ------- | - | ---- | - | ------- | -
|                                         |  |                     |        
|                                         |  | For the Six Months  |        
|                                         |  | Ended September 30, |        
|                                         |  |                     |        
|                                         |  | 2002                |         |   | 2001 |  
|                                         |  |                     |         |   |      |  
|Total Interest Incurred                  |  | $                   | 159,262 |   |      | $ | 140,824 |  
|Interest Capitalized                     |  |                     | (36,998 | ) |      |   | (23,798 | )
|Capitalized Interest Relieved to Expense |  |                     | 18,805  |   |      |   | 15,351  |  
|Less  Financial Services                |  |                     | (90,334 | ) |      |   | (75,793 | )
|                                         |  |                     |         |   |      |  
|Interest Expense, net                    |  | $                   | 50,735  |   |      | $ | 56,584  |  
|                                         |  |                     |         |   |      |  

-7-



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##### Table of Contents



Cash payments made for interest, excluding Financial Services, were $43.0
million and $34.3 million for the three months ended September 30, 2002 and
2001, respectively. Cash payments made for interest, excluding Financial
Services, were $66.0 million and $62.5 million for the six months ended
September 30, 2002 and 2001, respectively. Net payments made for federal,
state and foreign income taxes during the three months ended September 30, 2002
and 2001 were $45.2 million and $45.9 million, respectively. Net payments made
for federal, state and foreign income taxes during the six months ended
September 30, 2002 and 2001 were $82.3 million and $55.9 million, respectively.

(C) STOCKHOLDERS EQUITY

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

|                            |                                          |  |              |      |   |            |        |    |            |   |        |          |  |   |             |          |   |               |           |         |               |   |         |         |   |             |         |         |   |   |           |         |  
|--------------------------- | ---------------------------------------- |  | ------------ | ---- | - | ---------- | ------ | -- | ---------- | - | ------ | -------- |  | - | ----------- | -------- | - | ------------- | --------- | ------- | ------------- | - | ------- | ------- | - | ----------- | ------- | ------- | - | - | --------- | ------- | -
|                            |                                          |  |              |     
|                            |                                          |  |              |      |   |            |        |    |            |   |        |          |  |   | Unamortized |          |   |               |           |         |               |   |         |         |   | Accumulated |         |         |   |   |          
|                            |                                          |  | Common Stock |      |   | Capital in |        |    | Value of   |   |        |          |  |   |             | Treasury |   |               | Other     |         |               |   |         |        
|                            |                                          |  |              |      |   | Excess of  |        |    | Restricted |   |        | Retained |  |   | Stock at    |          |   | Comprehensive |           |         |               |   |        
|                            |                                          |  | Shares       |      |   | Amount     |        |    | Par Value  |   |        | Stock    |  |   | Earnings    |          |   | Cost          |           |         | (Loss) Income |   |         | Total   |  
|                            |                                          |  |              |      |   |            |        |    |            |   |        |          |  |   |             |          |   |               |           |         |               |   |         |         |  
|Balance, March 31, 2002     |                                          |  | 61,171       |      |   | $          | 15,348 |    |            | $ | 72,446 |          |  | $ | (2,408      | )        |   | $             | 2,050,902 |         |               | $ | (6,559  | )       |   | $           | (12,956 | )       |   | $ | 2,116,773 |        
|                            | Issuance of Restricted Stock             |  |              | 20   |   |            |        | 5  |            |   |        | 995      |  |   |             | (1,000   | ) |               |           |        |               |   |         |        |   |             |         |        |   |   |           |        |  
|                            | Amortization of
Restricted Stock         |  |              |     |   |            |        |   |            |   |        |         |  |   |             | 494      |   |               |           |        |               |   |         |        |   |             |         |        |   |   |           | 494     |  
|                            | Exercise of Stock Options                |  |              | 202  |   |            |        | 51 |            |   |        | 7,889    |  |   |             |         |   |               |           |        |               |   |         |        |   |             |         |        |   |   |           | 7,940   |  
|                            | Cash Dividends                           |  |              |     |   |            |        |   |            |   |        |         |  |   |             |         |   |               |           | (4,887  | )             |   |         |        |   |             |         |        |   |   |           | (4,887  | )
|                            | Purchase of Common Stock
for Treasury    |  |              | (640 | ) |            |        |   |            |   |        |         |  |   |             |         |   |               |           |        |               |   |         | (28,936 | ) |             |         |        |   |   |           | (28,936 | )
|                            | Net Earnings                             |  |              |     |   |            |        |   |            |   |        |         |  |   |             |         |   |               |           | 203,364 |               |   |         |        |   |             |         |        |   |   |           | 203,364 |  
|                            | Unrealized Loss on
Hedging Instruments   |  |              |     |   |            |        |   |            |   |        |         |  |   |             |         |   |               |           |        |               |   |         |        |   |             |         | (11,942 | ) |   |           | (11,942 | )
|                            | Foreign Currency
Translation Adjustments |  |              |     |   |            |        |   |            |   |        |         |  |   |             |         |   |               |           |        |               |   |         |        |   |             |         | 17,608  |   |   |           | 17,608  |  
|                            | Other                                    |  |              |     |   |            |        |   |            |   |        | 5,524    |  |   |             |         |   |               |           |        |               |   |         |        |   |             |         | (1,438  | ) |   |           | 4,086   |  
|                            |                                          |  |              |      |   |            |        |    |            |   |        |          |  |   |             |          |   |               |           |         |               |   |         |        
|Balance, September 30, 2002 |                                          |  | 60,753       |      |   | $          | 15,404 |    |            | $ | 86,854 |          |  | $ | (2,914      | )        |   | $             | 2,249,379 |         |               | $ | (35,495 | )       |   | $           | (8,728  | )       |   | $ | 2,304,500 |        
|                            |                                          |  |              |      |   |            |        |    |            |   |        |          |  |   |             |          |   |               |           |         |               |   |         |        

(D) RESIDENTIAL MORTGAGE LOANS HELD FOR INVESTMENT

Residential mortgage loans held for investment consisted of the following:

|                                                                            |  |                    |           |   |                |   |           |  
|--------------------------------------------------------------------------- |  | ------------------ | --------- | - | -------------- | - | --------- | -
|                                                                            |  |                    |           |   |                |  
|                                                                            |  | September 30, 2002 |           |   | March 31, 2002 |  
|                                                                            |  |                    |           |   |                |  
|Residential Mortgage Loans Held for Investment                              |  | $                  | 3,818,519 |   |                | $ | 3,268,123 |  
|Allowance for Losses on Residential Mortgage Loans
Held for Investment      |  |                    | (21,143   | ) |                |   | (14,106   | )
|                                                                            |  |                    |           |   |                |  
|Residential Mortgage Loans Held for Investment,
net of Allowance for Losses |  | $                  | 3,797,376 |   |                | $ | 3,254,017 |  
|                                                                            |  |                    |           |   |                |  

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

|                               |                                 |   |                            |        |   |      |       |       |  
|------------------------------ | ------------------------------- | - | -------------------------- | ------ | - | ---- | ----- | ----- | -
|                               |                                 |   |                            |       
|                               |                                 |   | For the Three Months Ended |       
|                               |                                 |   | September 30,              |       
|                               |                                 |   |                            |       
|                               |                                 |   | 2002                       |        |   | 2001 |      
|                               |                                 |   |                            |        |   |      |      
|Balance at Beginning of Period |                                 | $ | 17,320                     |        |   | $    | 4,036 |      
|                               | Provision for Losses            |   |                            | 7,670  |   |      |       | 3,143 |  
|                               | Recoveries on Loans Charged Off |   |                            | 33     |   |      |       | 6     |  
|                               | Losses Sustained                |   |                            | (3,880 | ) |      |       | (871  | )
|                               |                                 |   |                            |        |   |     
|Balance at End of Period       |                                 | $ | 21,143                     |        |   | $    | 6,314 |      
|                               |                                 |   |                            |        |   |     

|                               |                                 |   |                          |        |   |      |       |        |  
|------------------------------ | ------------------------------- | - | ------------------------ | ------ | - | ---- | ----- | ------ | -
|                               |                                 |   |                          |       
|                               |                                 |   | For the Six Months Ended |       
|                               |                                 |   | September 30,            |       
|                               |                                 |   |                          |       
|                               |                                 |   | 2002                     |        |   | 2001 |      
|                               |                                 |   |                          |        |   |      |      
|Balance at Beginning of Period |                                 | $ | 14,106                   |        |   | $    | 2,814 |       
|                               | Provision for Losses            |   |                          | 13,556 |   |      |       | 5,791  |  
|                               | Recoveries on Loans Charged Off |   |                          | 51     |   |      |       | 6      |  
|                               | Losses Sustained                |   |                          | (6,570 | ) |      |       | (2,297 | )
|                               |                                 |   |                          |        |   |     
|Balance at End of Period       |                                 | $ | 21,143                   |        |   | $    | 6,314 |       
|                               |                                 |   |                          |        |   |     

(E) GOODWILL

A summary of changes in goodwill by segment for the six months ended
September 30, 2002 is presented below:

|                                      |  |          |        |  |           |   |        |              |  |   |              |   |  |       |       |  |       |   |         |   |  |   |         |  
|------------------------------------- |  | -------- | ------ |  | --------- | - | ------ | ------------ |  | - | ------------ | - |  | ----- | ----- |  | ----- | - | ------- | - |  | - | ------- | -
|                                      |  |          |       
|                                      |  | Home     |        |  | Financial |   |        | Construction |  |   | Construction |   |  |       |       |  |       |   |         |  
|                                      |  | Building |        |  | Services  |   |        | Products     |  |   | Services     |   |  | Other |       |  | Total |  
|                                      |  |          |        |  |           |   |        |              |  |   |              |   |  |       |       |  |       |  
|Balance as of March 31, 2002          |  | $        | 84,151 |  |           | $ | 16,815 |              |  | $ | 41,088       |   |  | $     | 1,007 |  |       | $ | 206,651 |   |  | $ | 349,712 |  
|Goodwill Acquired                     |  |          |       |  |           |   |       |              |  |   |             |   |  |       |      |  |       |   | 3,584   |   |  |   | 3,584   |  
|Sale of Chemical Lawn Care
Operations |  |          |       |  |           |   |       |              |  |   |             |   |  |       |      |  |       |   | (17,393 | ) |  |   | (17,393 | )
|Other                                 |  |          |       |  |           |   |       |              |  |   | (891         | ) |  |       |      |  |       |   | (647    | ) |  |   | (1,538  | )
|                                      |  |          |        |  |           |   |        |              |  |   |              |   |  |       |       |  |       |  
|Balance as of September 30,
2002      |  | $        | 84,151 |  |           | $ | 16,815 |              |  | $ | 40,197       |   |  | $     | 1,007 |  |       | $ | 192,195 |   |  | $ | 334,365 |  
|                                      |  |          |        |  |           |   |        |              |  |   |              |   |  |       |       |  |       |  

Goodwill for the Other segment at September 30, 2002 includes $69.0
million related to the Companys manufactured housing operations, $71.6 million
related to the Companys home services operations and $51.6 million related to
the Companys investment in Construction Products.

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(F) INDEBTEDNESS

Short-term Debt

Balances of short-term debt were:

|                             |  |                    |         |   |                |   |         |  |           |   |         |             |  |   |        |   |  |   |           |  |  |   |         |    |  |  |  | 
|---------------------------- |  | ------------------ | ------- | - | -------------- | - | ------- |  | --------- | - | ------- | ----------- |  | - | ------ | - |  | - | --------- |  |  | - | ------- | -- |  |  |  | 
|                             |  |                    |         |   |                |  
|                             |  | September 30, 2002 |         |   | March 31, 2002 |  
|                             |  |                    |         |   |                |  
|                             |  | Centex             |         |   |                |   |         |  | Financial |   |         | Centex      |  |   |        |   |  |   | Financial |  |  |   |         |   
|                             |  | Corporation        |         |   |                |   |         |  | Services  |   |         | Corporation |  |   |        |   |  |   | Services  |  |  |   |         |   
|                             |  |                    |         |   |                |   |         |  |           |   |         |             |  |   |        |   |  |   |           |  |  |   |         |   
|Banks                        |  | $                  | 29,982  | * |                |   |         |  |           | $ | 106,271 |             |  | $ | 18,630 | * |  |   |           |  |  | $ | 92,109  |   
|Commercial Paper             |  |                    | 120,000 |   |                |   |         |  |           |   |        |             |  |   |       |   |  |   |           |  |  |   |        |   
|Secured Liquidity Notes      |  |                    |        |   |                |   |         |  |           |   | 550,241 | **          |  |   |       |   |  |   |           |  |  |   | 102,583 | **
|Other Financial Institutions |  |                    | 6,640   |   |                |   |         |  |           |   | 53,017  |             |  |   |       |   |  |   |           |  |  |   | 119,933 |   
|                             |  |                    |         |   |                |   |         |  |           |   |         |             |  |   |        |   |  |   |           | 
|                             |  | $                  | 156,622 |   |                |   |         |  |           | $ | 709,529 |             |  | $ | 18,630 |   |  |   |           |  |  | $ | 314,625 |   
|                             |  |                    |         |   |                |   |         |  |           |   |         |             |  |   |        |   |  |   |           | 
|Consolidated Short-term Debt |  |                    |         |   |                | $ | 866,151 |  |           |   |         |             |  |   |        |   |  | $ | 333,255   |  |  |   |         |   
|                             |  |                    |         |   |                |   |         |  |           |   |         |             |  |   |        |   |  |   |           |  |  |  

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

The Company borrows on a short-term basis from banks under uncommitted
lines that bear interest at prevailing market rates. The weighted-average
interest rates of balances at September 30, 2002 and March 31, 2002 were 2.1%
and 2.4%, respectively.

Long-term Debt

Balances of long-term debt were:

|                        |                                                                                      |                                             |           |               |        |   |           |           |        | 
|----------------------- | ------------------------------------------------------------------------------------ | ------------------------------------------- | --------- | ------------- | ------ | - | --------- | --------- | ------ | 
|                        |                                                                                      |                                             |           |               |        |   |           |          
|                        |                                                                                      |                                             |           | September 30, |        |   | March 31, |          
|                        |                                                                                      |                                             |           | 2002          |        |   | 2002      |          
|                        |                                                                                      |                                             |           |               |        |   |           |          
|Non-Financial Services: |                                                                                      |                                             |           |               |        |   |           |          
|                        | Medium-Term Note Programs, 2.44% to 7.95%, due through 2007                          |                                             | $         | 383,000       |        |   | $         | 418,000   |       
|                        | Long-Term Notes, 5.80% to 9.75%, due through 2012                                    |                                             |           | 1,188,007     |        |   |           | 962,892   |       
|                        | Other Indebtedness, 1.80% to 10.00%, due through 2027                                |                                             |           | 150,639       |        |   |           | 192,753   |       
|                        | Subordinated Debt:                                                                   |                                             |           |               |        |   |           |           |       
|                        |                                                                                      | Subordinated Debentures, 7.38%, due in 2006 |           |               | 99,870 |   |           |           | 99,845 | 
|                        |                                                                                      | Subordinated Debentures, 8.75%, due in 2007 |           |               | 99,662 |   |           |           | 99,632 | 
|                        |                                                                                      |                                             |           |               |        |  
|                        |                                                                                      |                                             | 1,921,178 |               |        |   | 1,773,122 |          
|                        |                                                                                      |                                             |           |               |        |  
|Financial Services:     |                                                                                      |                                             |           |               |        |   |           |          
|                        | Home Equity Loans Asset-Backed Certificates, 2.91% to 8.48%,
due through 2032        |                                             |           | 3,286,179     |        |   |           | 3,120,402 |       
|                        | Harwood Street Funding II, L.L.C. Variable Rate Subordinated
Notes, due through 2007 |                                             |           | 50,000        |        |   |           | 50,000    |       
|                        |                                                                                      |                                             |           |               |        |  
|                        |                                                                                      |                                             | 3,336,179 |               |        |   | 3,170,402 |          
|                        |                                                                                      |                                             |           |               |        |  
|Total                   |                                                                                      | $                                           | 5,257,357 |               |        | $ | 4,943,524 |          
|                        |                                                                                      |                                             |           |               |        |  

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

|           |      |   |               |        
|---------- | ---- | - | ------------- | -------
|           |      |   | Non-Financial |        
|           |      |   | Services      |        
|           |      |   |               |        
|           | 2003 |   | $             | 138,452
|           | 2004 |   |               | 129,783
|           | 2005 |   |               | 33,629 
|           | 2006 |   |               | 325,392
|           | 2007 |   |               | 290,575
|Thereafter |      |   | 1,003,347     |        
|           |      |   |               |        
|           |      | $ | 1,921,178     |        
|           |      |   |               |        

Financial Services debt related to securitized residential mortgage loans
structured as collateralized borrowings (Home Equity Loans Asset-Backed
Certificates) was $3.3 billion at September 30, 2002. The principal and
interest on these notes are paid using the cash flow from the underlying
residential mortgage loans, which serve as collateral for the debt.
Accordingly, the timing of the principal payments on these notes is dependent
upon the payment received on the underlying residential mortgage loans. The
expected maturities of this component of long-term debt are based on
contractual maturities adjusted for projected repayments and prepayments of
principal.

Included in other indebtedness is a $2.1 million convertible subordinated
debenture sold at par in 1985 to a corporate officer. The indebtedness, which
matures in 2010, bears interest at LIBOR plus 1.5% and is convertible into
400,000 shares of the Companys common stock. In connection with this
transaction, the Company has guaranteed the payment of a $2.1 million note
payable to a bank by the officer.

Under our debt covenants, we are required to maintain certain leverage and
interest coverage ratios and a minimum tangible net worth. At September 30,
2002, we were in compliance with all of these covenants.

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Credit Facilities

The Companys existing credit facilities and available capacity as of
September 30, 2002 are summarized below:

|                       |                                             |   |                 |           |  |           |           |         |    
|---------------------- | ------------------------------------------- | - | --------------- | --------- |  | --------- | --------- | ------- | ---
|                       |                                             |   |                 |          
|                       |                                             |   | Existing Credit |           |  | Available |          
|                       |                                             |   | Facilities      |           |  | Capacity  |          
|                       |                                             |   |                 |           |  |           |          
|Non-Financial Services |                                             |   |                 |           |  |           |           |        
|                       | Centex Corporation                          |   |                 |           |  |           |           |         |    
|                       | Multi-Bank Revolving Credit Facility        |   | $               | 700,000   |  |           | $         | 700,000 | (1)
|                       | Uncommitted Bank Lines                      |   |                 | 60,000    |  |           |           | 60,000  |    
|                       | Construction Products                       |   |                 |           |  |           |           |         |    
|                       | Senior Revolving Credit Facility            |   |                 | 175,000   |  |           |           | 66,400  | (2)
|                       | Annually Renewable Commercial Paper Conduit |   |                 | 50,000    |  |           |           | 20,000  | (2)
|                       |                                             |   |                 |           |  |          
|                       |                                             |   | 985,000         |           |  |           | 846,400   |        
|                       |                                             |   |                 |           |  |          
|Financial Services     |                                             |   |                 |           |  |           |           |        
|                       | Unsecured Credit Facilities                 |   |                 | 125,000   |  |           |           | 110,000 | (3)
|                       | Secured Credit Facilities                   |   |                 | 395,000   |  |           |           | 250,712 | (4)
|                       | Harwood Street Funding II, L.L.C. Facility  |   |                 | 1,000,000 |  |           |           | 399,759 |    
|                       |                                             |   |                 |           |  |          
|                       |                                             |   | 1,520,000       |           |  |           | 760,471   |        
|                       |                                             |   |                 |           |  |          
|                       |                                             | $ | 2,505,000       |           |  | $         | 1,606,871 | (5)    
|                       |                                             |   |                 |           |  |          



|(1) |  | This is a committed, multi-bank revolving credit facility, maturing in
August 2005, which serves as backup for commercial paper borrowings. As
of September 30, 2002, there were no borrowings under this backup
facility, and the Companys $600 million commercial paper program had $120
million outstanding. There have been no borrowings under this facility
since inception.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | These committed facilities were entered into by Construction Products and
have no recourse to Centex Corporation. The Senior Revolving Credit
Facility matures in November 2003 and the Annually Renewable Commercial
Paper Conduit matures in June 2003.                                                                                                                          
|   
|(3) |  | Centex Corporation, CTX Mortgage Company, L.L.C. (CTX Mortgage) and
Centex Home Equity Company L.L.C. (Home Equity), on a joint and several
basis, share in a $125 million uncommitted, unsecured credit facility.                                                                                                                                                             
|   
|(4) |  | CTX Mortgage and Home Equity share in $250 million of uncommitted secured
credit facilities to finance mortgage inventory. As of October 25, 2002,
these facilities became committed. CTX Mortgage also maintains $145
million of committed secured mortgage warehouse facilities to finance
mortgages not sold to HSF-I.                                                          
|   
|(5) |  | The amount of available capacity includes $335 million of uncommitted
borrowings as of September 30, 2002. Although the Company believes that
this capacity is currently available, there can be no assurance that the
lenders under the applicable facilities would elect to make advances to
the Company or its subsidiaries if and when requested to do so.                     

Home Equity finances its inventory of mortgage loans held for investment
through Harwood Street Funding II, L.L.C. (HSF-II), a wholly-owned,
consolidated entity, under a revolving sales agreement that expires upon final
payment of the senior and subordinated debt issued by HSF-II. This
arrangement, where HSF-II has committed to finance all eligible loans, gives
Home Equity daily access to HSF-IIs capacity of $1.0 billion. HSF-II obtains
funds through the sale of five year subordinated notes that are rated BBB by
Standard & Poors (S&P), Baa2 by Moodys Investors Service (Moodys), and
BBB by Fitch Ratings (Fitch) and short-term secured liquidity notes that are
rated A1+ by S&P, P1 by Moodys and F1+ by Fitch. Because HSF-II is a
consolidated entity, the debt, interest income and interest expense of HSF-II
are reflected in the financial statements of Financial Services.

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Harwood Street Funding I, L.L.C.

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

Under the terms of the HSF-I Purchase Agreement, CTX Mortgage may elect to
sell to HSF-I, and HSF-I is obligated to purchase from CTX Mortgage, mortgage
loans that satisfy certain eligibility criteria and portfolio requirements.
The maximum amount of mortgage loans that HSF-I is allowed to carry in its
inventory under the HSF-I Purchase Agreement is limited to $2.0 billion.

HSF-Is commitment to purchase eligible mortgage loans is subject to
termination upon the occurrence of certain events of default and other
termination events described in the HSF-I Purchase Agreement, including a
downgrade in Centexs credit ratings below BB+ by S&P or Ba1 by Moodys. In
the event CTX Mortgage was unable to sell loans to HSF-I, it might need to make
other customary financing arrangements to fund its mortgage loan origination
activities. Although we believe that CTX Mortgage could arrange for
alternative financing that is common for non-investment grade mortgage
companies, there can be no assurance that such financing would be available on
satisfactory terms, and any delay in obtaining such financing could adversely
affect the results of operations of CTX Mortgage.

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

HSF-I has entered into a swap arrangement with a bank (the Harwood Swap)
under which the bank has agreed to make certain payments to HSF-I, and HSF-I
has agreed to make certain payments to the bank, the net effect of which is
that the bank has agreed to bear certain interest rate risks and non-credit
related market risks related to the mortgage loans held by HSF-I. The purpose
of this arrangement is to provide credit enhancement to HSF-I by permitting it
to hedge these risks with a counterparty having a short-term credit rating of
A1+ from S&P and P1 from Moodys. Additionally, Centex has entered into a
separate swap arrangement with the bank pursuant to which Centex has agreed to
pay to the bank all amounts that the bank is required to pay to HSF-I pursuant
to the Harwood Swap plus a monthly fee equal to a percentage of the notional
amount of the Harwood Swap, and the bank is required to pay to Centex all
amounts that the bank

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

As of September 30, 2002, HSF-I owned $1.8 billion in securitized
residential mortgage loans sold to it by CTX Mortgage and had $1.7 billion of
outstanding securitized term debt and $93 million of outstanding subordinated
certificates. Centex does not guarantee the payment of any debt or
subordinated certificates of HSF-I and is not liable for credit losses relating
to securitized residential mortgage loans sold to HSF-I. However, Centex
retains certain risks related to the portfolio of mortgage loans held by HSF-I.
In particular, CTX Mortgage makes representations and warranties to HSF-I to
the effect that each mortgage loan sold to HSF-I satisfies the eligibility
criteria and portfolio requirements discussed above. CTX Mortgage may be
required to repurchase mortgage loans sold to HSF-I if such mortgage loans are
determined to be ineligible loans or there occur certain other breaches of
representations and warranties of CTX Mortgage, as seller or servicer. CTX
Mortgages obligation to repurchase such loans is guaranteed by Centex. During
the six months ended September 30, 2002, CTX Mortgage sold $4.4 billion of
mortgage loans to HSF-I.

(G) CENTEX DEVELOPMENT COMPANY, L.P.

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

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

As holder of the Class A and Class C Units, Centex is entitled to a
cumulative preferred return of 9% per annum on the average outstanding balance
of its capital contributions to the Partnership, adjusted for cash and other
distributions representing return of capital. As of September 30, 2002, these
adjusted capital contributions, or Unrecovered Capital, were $241.1 million and
preference payments in arrears totaled $52.2 million. The Partnership has made
no preference payments since fiscal 1998.

The Partnership is managed by its general partner, 3333 Development
Corporation, a wholly-owned subsidiary of 3333 Holding Corporation (Holding).
The common stock of Holding is held by the stockholders of Centex through a
nominee arrangement and trades in tandem with the common stock of Centex. The
stockholders of Centex elect the four-person board of directors of Holding,
three of whom are independent outside directors who are not directors,
affiliates or employees of Centex. Thus, through Holding, the stockholders of
Centex control the general partner of the Partnership. The general partner,

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through its independent board and the independent board of Holding,
including its non-executive Chairman, oversees the Partnerships activities,
including the acquisition, development, maintenance, operation and sale of
properties. Consent of the limited partners for the activities of the
Partnership is not required, and the limited partners cannot remove the general
partner. As a result, Centex accounts for its limited partnership interest in
the Partnership using the equity method of accounting for investments.

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

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

|                                     |                                          |   |               |           |  |           |           |           | 
|------------------------------------ | ---------------------------------------- | - | ------------- | --------- |  | --------- | --------- | --------- | 
|                                     |                                          |   |               |           |  |           |          
|                                     |                                          |   | September 30, |           |  | March 31, |          
|                                     |                                          |   | 2002          |           |  | 2002      |          
|                                     |                                          |   |               |           |  |           |          
|Assets                               |                                          |   |               |           |  |           |           |          
|                                     | Cash and Cash Equivalents                |   | $             | 95,426    |  |           | $         | 242,254   | 
|                                     | Restricted Cash                          |   |               | 127,270   |  |           |           | 106,270   | 
|                                     | Receivables                              |   |               | 4,669,267 |  |           |           | 4,066,401 | 
|                                     | Inventories                              |   |               | 3,918,996 |  |           |           | 3,283,719 | 
|                                     | Investments in Joint Ventures and Other  |   |               | 129,013   |  |           |           | 99,962    | 
|                                     | Property and Equipment, net              |   |               | 727,217   |  |           |           | 723,497   | 
|                                     | Other Assets                             |   |               | 808,096   |  |           |           | 862,580   | 
|                                     |                                          |   |               |           |  |          
|                                     |                                          | $ | 10,475,285    |           |  | $         | 9,384,683 |          
|                                     |                                          |   |               |           |  |          
|Liabilities and Stockholders Equity |                                          |   |               |           |  |           |           |          
|                                     | Accounts Payable and Accrued Liabilities |   | $             | 1,573,142 |  |           | $         | 1,546,334 | 
|                                     | Short-term Debt                          |   |               | 1,100,235 |  |           |           | 545,789   | 
|                                     | Long-term Debt                           |   |               | 5,333,020 |  |           |           | 5,020,116 | 
|                                     | Minority Stockholders Interest          |   |               | 164,388   |  |           |           | 155,671   | 
|                                     | Stockholders Equity                     |   |               | 2,304,500 |  |           |           | 2,116,773 | 
|                                     |                                          |   |               |           |  |          
|                                     |                                          | $ | 10,475,285    |           |  | $         | 9,384,683 |          
|                                     |                                          |   |               |           |  |          

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

|                                  |  |                     |           |  |      |   |           |  
|--------------------------------- |  | ------------------- | --------- |  | ---- | - | --------- | -
|                                  |  |                     |          
|                                  |  | For the Six Months  |          
|                                  |  | Ended September 30, |          
|                                  |  |                     |          
|                                  |  | 2002                |           |  | 2001 |  
|                                  |  |                     |           |  |      |  
|Revenues                          |  | $                   | 4,097,585 |  |      | $ | 3,756,213 |  
|Costs and Expenses                |  |                     | 3,806,507 |  |      |   | 3,485,204 |  
|                                  |  |                     |           |  |      |  
|Earnings Before Income Taxes      |  |                     | 291,078   |  |      |   | 271,009   |  
|Income Taxes                      |  |                     | 87,714    |  |      |   | 102,404   |  
|                                  |  |                     |           |  |      |  
|Net Earnings                      |  |                     | 203,364   |  |      |   | 168,605   |  
|Other Comprehensive Income (Loss) |  |                     | 4,228     |  |      |   | (283      | )
|                                  |  |                     |           |  |      |  
|Comprehensive Income              |  | $                   | 207,592   |  |      | $ | 168,322   |  
|                                  |  |                     |           |  |      |  

(H) COMMITMENTS AND CONTINGENCIES

The Company conducts a portion of its land acquisition, development and
other activities directly and through its participation in joint ventures in
which the Company holds less than a majority interest. The Companys
investment in these non-consolidated joint ventures was $124.6 million and
$94.6 million at September 30, 2002 and March 31, 2002, respectively. These
joint ventures had total outstanding secured construction debt of approximately
$197.4 million at September 30, 2002 and $144.6 million at March 31, 2002. The
Companys pro rata liability with respect to this debt is limited to
approximately $31.3 million and $27.9 million at September 30, 2002 and March
31, 2002, respectively. Under the structure of this debt, the Company becomes
liable up to these amounts only to the extent that the construction debt
exceeds a certain percentage of the value of the project. At September 30,
2002 and March 31, 2002, the Company was not liable for any of this debt.

In order to ensure the future availability of land for homebuilding, the
Company has deposited or invested with third parties $88.3 million, as of
September 30, 2002, as options toward the purchase of undeveloped land and
developed lots having a total purchase price of approximately $2.0 billion.
These options include amounts related to agreements with the Partnership, as
discussed in Note (M), Related Party Transactions, below. These options, which do not contain performance
requirements from the Company, expire at various dates through the year 2007.

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(I) COMPREHENSIVE INCOME

A summary of comprehensive income for the three and six months ended
September 30, 2002 and 2001 is presented below:

|                                   |                                          |   |                            |        |   |      |        |        |  
|---------------------------------- | ---------------------------------------- | - | -------------------------- | ------ | - | ---- | ------ | ------ | -
|                                   |                                          |   |                            |       
|                                   |                                          |   | For the Three Months Ended |       
|                                   |                                          |   | September 30,              |       
|                                   |                                          |   |                            |       
|                                   |                                          |   | 2002                       |        |   | 2001 |       
|                                   |                                          |   |                            |        |   |      |       
|Net Earnings                       |                                          | $ | 115,609                    |        |   | $    | 93,389 |       
|Other Comprehensive Income (Loss): |                                          |   |                            |        |   |      |        |       
|                                   | Foreign Currency Translation Adjustments |   |                            | 3,632  |   |      |        | 7,461  |  
|                                   | Unrealized Loss on Hedging Instruments   |   |                            | (4,991 | ) |      |        | (4,322 | )
|                                   | Other                                    |   |                            | (504   | ) |      |        | 96     |  
|                                   |                                          |   |                            |        |   |     
|Comprehensive Income               |                                          | $ | 113,746                    |        |   | $    | 96,624 |       
|                                   |                                          |   |                            |        |   |     

|                                   |                                          |   |                          |         |   |      |         |        |  
|---------------------------------- | ---------------------------------------- | - | ------------------------ | ------- | - | ---- | ------- | ------ | -
|                                   |                                          |   |                          |        
|                                   |                                          |   | For the Six Months Ended |        
|                                   |                                          |   | September 30,            |        
|                                   |                                          |   |                          |        
|                                   |                                          |   | 2002                     |         |   | 2001 |        
|                                   |                                          |   |                          |         |   |      |        
|Net Earnings                       |                                          | $ | 203,364                  |         |   | $    | 168,605 |       
|Other Comprehensive Income (Loss): |                                          |   |                          |         |   |      |         |       
|                                   | Foreign Currency Translation Adjustments |   |                          | 17,608  |   |      |         | 8,834  |  
|                                   | Unrealized Loss on Hedging Instruments   |   |                          | (11,942 | ) |      |         | (9,213 | )
|                                   | Other                                    |   |                          | (1,438  | ) |      |         | 96     |  
|                                   |                                          |   |                          |         |   |     
|Comprehensive Income               |                                          | $ | 207,592                  |         |   | $    | 168,322 |       
|                                   |                                          |   |                          |         |   |     

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

(J) BUSINESS SEGMENTS

The Company operates in five principal business segments: Home Building,
Financial Services, Construction Products, Construction Services and Investment
Real Estate. These segments operate primarily in the United States, and their
markets are nationwide. Revenues from any one customer are not significant to
the Company.

Intersegment revenues and investments in joint ventures are not material
and are not shown in the following tables. The investment in the Partnership
(approximately $292.0 million as of September 30, 2002) is included in the
Investment Real Estate segment.

Home Building

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

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##### Table of Contents



Financial Services

Financial Services operations consist primarily of home financing,
sub-prime home equity lending and the sale of title insurance and other various
insurance coverages. These activities include mortgage origination, servicing
and other related services for homes sold by Centex subsidiaries and others.
Financial Services revenues include interest income of $85.6 million and $61.6
million for the three months and $166.4 million and $114.2 million for the six
months ended September 30, 2002 and 2001, respectively. Substantially all of
Centexs interest income in each year is earned by the Financial Services
segment. Financial Services cost of sales is primarily comprised of interest
expense related to debt issued to fund its home financing and sub-prime home
equity lending activities.

Construction Products

Construction Products operations involve the manufacture, production,
distribution and sale of cement, gypsum wallboard, recycled paperboard,
aggregates and readymix concrete. The Company owned 65.2% of Centex
Construction Products, Inc. at September 30, 2002 and 65.2% at September 30,
2001. Construction Products results are shown before minority interest in the
table presented below.

Construction Services

Construction Services operations involve the construction of buildings
for both private and government interests including office, commercial and
industrial buildings, hospitals, hotels, correctional facilities, educational
institutions, museums, libraries, airport facilities and sports facilities. As
this segment generates significant positive cash flow, intercompany interest
income (credited at the prime rate in effect) of $1.2 million and $1.8 million
for the three months and $2.8 million and $3.8 million for the six months ended
September 30, 2002 and 2001, respectively, is included in the evaluation of
this segment. However, the intercompany interest income is eliminated in
consolidation and excluded from the table presented below.

Investment Real Estate

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

Other

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

Included in Other in the tables below are corporate general and
administrative expenses of $14.4 million and $13.0 million; interest expense of
$27.0 million and $29.3 million; and minority interest of $8.5 million and $6.2
million for the three months ended September 30, 2002 and 2001, respectively.
Also included in Other in the tables below are corporate general and
administrative expenses of $27.1 million and $24.2 million; interest expense of
$50.7 million and $56.6 million; and minority interest of $17.4 million and
$9.1 million for the six months ended September 30, 2002 and 2001,
respectively.

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|                                           |  |                                               |         |   |           |   |        |              |  |   |              |   |  |             |        |   |       |   |      |       |  |   |       |   |  |   |          |  
|------------------------------------------ |  | --------------------------------------------- | ------- | - | --------- | - | ------ | ------------ |  | - | ------------ | - |  | ----------- | ------ | - | ----- | - | ---- | ----- |  | - | ----- | - |  | - | -------- | -
|                                           |  |                                               |        
|                                           |  | For the Three Months Ended September 30, 2002 |        
|                                           |  | (Dollars in millions)                         |        
|                                           |  |                                               |        
|                                           |  | Home                                          |         |   | Financial |   |        | Construction |  |   | Construction |   |  | Investment  |        |   |       |   |      |       |  |   |      
|                                           |  | Building                                      |         |   | Services  |   |        | Products     |  |   | Services     |   |  | Real Estate |        |   | Other |   |      | Total | 
|                                           |  |                                               |         |   |           |   |        |              |  |   |              |   |  |             |        |   |       |   |      |       | 
|Revenues                                   |  | $                                             | 1,281.5 |   |           | $ | 204.8  |              |  | $ | 136.0        |   |  | $           | 391.7  |   |       | $ | 7.4  |       |  | $ | 62.4  |   |  | $ | 2,083.8  |  
|Cost of Sales                              |  |                                               | (947.5  | ) |           |   | (45.7  | )            |  |   | (107.9       | ) |  |             | (366.2 | ) |       |   | 0.4  |       |  |   | (40.5 | ) |  |   | (1,507.4 | )
|Selling, General &
Administrative Expenses |  |                                               | (196.9  | ) |           |   | (122.5 | )            |  |   | (1.4         | ) |  |             | (16.3  | ) |       |   | (1.9 | )     |  |   | (72.1 | ) |  |   | (411.1   | )
|                                           |  |                                               |         |   |           |   |        |              |  |   |              |   |  |             |        |   |       |   |      |       | 
|Earnings (Loss) Before
Income Tax          |  | $                                             | 137.1   |   |           | $ | 36.6   |              |  | $ | 26.7         |   |  | $           | 9.2    |   |       | $ | 5.9  |       |  | $ | (50.2 | ) |  | $ | 165.3    |  
|                                           |  |                                               |         |   |           |   |        |              |  |   |              |   |  |             |        |   |       |   |      |       | 

|                                           |  |                                               |         |   |           |   |       |              |  |   |              |   |  |             |        |   |       |   |      |       |  |   |       |   |  |   |          |  
|------------------------------------------ |  | --------------------------------------------- | ------- | - | --------- | - | ----- | ------------ |  | - | ------------ | - |  | ----------- | ------ | - | ----- | - | ---- | ----- |  | - | ----- | - |  | - | -------- | -
|                                           |  |                                               |        
|                                           |  | For the Three Months Ended September 30, 2001 |        
|                                           |  | (Dollars in millions)                         |        
|                                           |  |                                               |        
|                                           |  | Home                                          |         |   | Financial |   |       | Construction |  |   | Construction |   |  | Investment  |        |   |       |   |      |       |  |   |      
|                                           |  | Building                                      |         |   | Services  |   |       | Products     |  |   | Services     |   |  | Real Estate |        |   | Other |   |      | Total | 
|                                           |  |                                               |         |   |           |   |       |              |  |   |              |   |  |             |        |   |       |   |      |       | 
|Revenues                                   |  | $                                             | 1,170.7 |   |           | $ | 166.0 |              |  | $ | 129.5        |   |  | $           | 336.8  |   |       | $ | 23.2 |       |  | $ | 57.4  |   |  | $ | 1,883.6  |  
|Cost of Sales                              |  |                                               | (868.8  | ) |           |   | (39.9 | )            |  |   | (105.7       | ) |  |             | (316.3 | ) |       |   | (4.7 | )     |  |   | (36.7 | ) |  |   | (1,372.1 | )
|Selling, General &
Administrative Expenses |  |                                               | (178.9  | ) |           |   | (96.8 | )            |  |   | (1.3         | ) |  |             | (13.2  | ) |       |   | (2.4 | )     |  |   | (66.6 | ) |  |   | (359.2   | )
|                                           |  |                                               |         |   |           |   |       |              |  |   |              |   |  |             |        |   |       |   |      |       | 
|Earnings (Loss) Before
Income Tax          |  | $                                             | 123.0   |   |           | $ | 29.3  |              |  | $ | 22.5         |   |  | $           | 7.3    |   |       | $ | 16.1 |       |  | $ | (45.9 | ) |  | $ | 152.3    |  
|                                           |  |                                               |         |   |           |   |       |              |  |   |              |   |  |             |        |   |       |   |      |       | 

|                                           |  |                                             |          |   |           |   |        |              |  |   |              |   |  |             |        |   |       |   |      |       |  |   |        |   |  |   |          |  
|------------------------------------------ |  | ------------------------------------------- | -------- | - | --------- | - | ------ | ------------ |  | - | ------------ | - |  | ----------- | ------ | - | ----- | - | ---- | ----- |  | - | ------ | - |  | - | -------- | -
|                                           |  |                                             |         
|                                           |  | For the Six Months Ended September 30, 2002 |         
|                                           |  | (Dollars in millions)                       |         
|                                           |  |                                             |         
|                                           |  | Home                                        |          |   | Financial |   |        | Construction |  |   | Construction |   |  | Investment  |        |   |       |   |      |       |  |   |       
|                                           |  | Building                                    |          |   | Services  |   |        | Products     |  |   | Services     |   |  | Real Estate |        |   | Other |   |      | Total | 
|                                           |  |                                             |          |   |           |   |        |              |  |   |              |   |  |             |        |   |       |   |      |       | 
|Revenues                                   |  | $                                           | 2,387.2  |   |           | $ | 385.4  |              |  | $ | 264.8        |   |  | $           | 752.5  |   |       | $ | 13.3 |       |  | $ | 124.4  |   |  | $ | 3,927.6  |  
|Cost of Sales                              |  |                                             | (1,759.6 | ) |           |   | (90.3  | )            |  |   | (207.5       | ) |  |             | (701.6 | ) |       |   |     |       |  |   | (79.1  | ) |  |   | (2,838.1 | )
|Selling, General &
Administrative Expenses |  |                                             | (381.9   | ) |           |   | (234.2 | )            |  |   | (2.8         | ) |  |             | (33.6  | ) |       |   | (4.0 | )     |  |   | (142.2 | ) |  |   | (798.7   | )
|                                           |  |                                             |          |   |           |   |        |              |  |   |              |   |  |             |        |   |       |   |      |       | 
|Earnings (Loss) Before
Income Tax          |  | $                                           | 245.7    |   |           | $ | 60.9   |              |  | $ | 54.5         |   |  | $           | 17.3   |   |       | $ | 9.3  |       |  | $ | (96.9  | ) |  | $ | 290.8    |  
|                                           |  |                                             |          |   |           |   |        |              |  |   |              |   |  |             |        |   |       |   |      |       | 

|                                           |  |                                             |          |   |           |   |        |              |  |   |              |   |  |             |        |   |       |   |      |       |  |   |        |   |  |   |          |  
|------------------------------------------ |  | ------------------------------------------- | -------- | - | --------- | - | ------ | ------------ |  | - | ------------ | - |  | ----------- | ------ | - | ----- | - | ---- | ----- |  | - | ------ | - |  | - | -------- | -
|                                           |  |                                             |         
|                                           |  | For the Six Months Ended September 30, 2001 |         
|                                           |  | (Dollars in millions)                       |         
|                                           |  |                                             |         
|                                           |  | Home                                        |          |   | Financial |   |        | Construction |  |   | Construction |   |  | Investment  |        |   |       |   |      |       |  |   |       
|                                           |  | Building                                    |          |   | Services  |   |        | Products     |  |   | Services     |   |  | Real Estate |        |   | Other |   |      | Total | 
|                                           |  |                                             |          |   |           |   |        |              |  |   |              |   |  |             |        |   |       |   |      |       | 
|Revenues                                   |  | $                                           | 2,209.9  |   |           | $ | 328.6  |              |  | $ | 247.0        |   |  | $           | 650.4  |   |       | $ | 47.3 |       |  | $ | 109.6  |   |  | $ | 3,592.8  |  
|Cost of Sales                              |  |                                             | (1,641.1 | ) |           |   | (75.8  | )            |  |   | (209.0       | ) |  |             | (607.3 | ) |       |   | (9.9 | )     |  |   | (69.2  | ) |  |   | (2,612.3 | )
|Selling, General &
Administrative Expenses |  |                                             | (347.7   | ) |           |   | (198.4 | )            |  |   | (2.5         | ) |  |             | (28.3  | ) |       |   | (6.0 | )     |  |   | (127.3 | ) |  |   | (710.2   | )
|                                           |  |                                             |          |   |           |   |        |              |  |   |              |   |  |             |        |   |       |   |      |       | 
|Earnings (Loss) Before
Income Tax          |  | $                                           | 221.1    |   |           | $ | 54.4   |              |  | $ | 35.5         |   |  | $           | 14.8   |   |       | $ | 31.4 |       |  | $ | (86.9  | ) |  | $ | 270.3    |  
|                                           |  |                                             |          |   |           |   |        |              |  |   |              |   |  |             |        |   |       |   |      |       | 

(K) INCOME TAXES

Income tax expense for the Company decreased from $58.9 million to $49.7
million and the effective tax rate decreased from 38.7% to 30.1% for the three
months ended September 30, 2001 and 2002, respectively. Income tax expense
also decreased from $101.7 million to $87.4 million and the effective tax rate
decreased from 37.6% to 30.1% for the six months ended September 30, 2001 and
2002, respectively. The decrease in the effective tax rate is primarily the
result of the expected utilization of net operating loss carryforwards during
fiscal 2003.

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(L) DERIVATIVES AND HEDGING

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

Centex Corporation and Construction Products each have interest rate swap
agreements that, in effect, fix the variable interest rate on a portion of
their outstanding debt at September 30, 2002. During the three and six months
ended September 30, 2002, there was no hedge ineffectiveness related to these
derivatives. These swaps expire at varying times through October 2005.
Amounts to be received or paid under the swap agreements are recognized as a
change in interest incurred on the related debt instrument. Based on the
balance in Accumulated Other Comprehensive Loss at September 30, 2002 related
to these derivatives, the Company would estimate increases in interest incurred
over the next 12 months to be approximately $3 million. As of September 30,
2002, the balance in Accumulated Other Comprehensive Loss related to these
derivatives was $5.3 million ($3.4 million net of tax).

Financial Services, through Home Equity, uses interest rate swaps to hedge
the market risk associated with the anticipated issuance of fixed rate
securitization debt used to finance sub-prime mortgages. Changes in fair value
of these derivatives are deferred in Accumulated Other Comprehensive Loss and
recorded through current earnings as an adjustment of the interest incurred
over the life of the securitization debt. Home Equity also uses interest rate
swaps that, in effect, fix the interest rate on its variable interest rate
debt. Amounts to be received or paid as a result of these swap agreements are
recognized as adjustments to interest incurred on the related debt instrument.
During the three and six months ended September 30, 2002, there was no hedge
ineffectiveness related to these interest rate swaps. These swaps expire at
varying times through June 2005. Based on the balance in Accumulated Other
Comprehensive Loss at September 30, 2002 related to these derivatives, the
Company estimates increases in interest incurred over the next 12 months to be
approximately $8 million. As of September 30, 2002, the balance in Accumulated
Other Comprehensive Loss related to these derivatives was $9.9 million ($6.4
million net of tax).

Financial Services, through CTX Mortgage, enters into interest rate lock
commitments (IRLCs) with its customers under which CTX Mortgage agrees to
make mortgage loans at agreed upon rates within a period of time, generally
from 1 to 30 days, if certain conditions are met within the terms of the IRLCs.
In order to hedge the risk of fluctuations in the value of these IRLCs and
mortgage loans held by it, CTX Mortgage executes mandatory forward trades of
mortgage loans and mortgage-backed securities. CTX Mortgage also uses
mandatory forward trades to hedge the Companys obligation, created through the
Harwood Swap, to protect against certain interest rate risk and non-credit
related market risk related to mortgage loans held by HSF-I, an unaffiliated
entity that is not consolidated with Financial Services or the Company. The
Company has elected not to utilize hedge accounting treatment under SFAS 133
for these derivatives. Initially, the fair value of the IRLCs is recorded on
the balance sheet as a deferred item. Subsequent changes in the fair value of
the IRLCs, mandatory forward trades and swaps are recorded as an adjustment to
earnings. The net change in the estimated fair value of these derivative
positions resulted in a loss of $2.7 million and $10.9 million, respectively,
for the three and six months ended September 30, 2002.

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(M) RELATED PARTY TRANSACTIONS

At September 30, 2002 and March 31, 2002, Centex Homes had $9.1 million
deposited with the Partnership as option deposits for the purchase of land.
Centex Homes also entered into agreements to reimburse the Partnership for
certain costs and fees incurred by the Partnership in the purchase and
ownership of these tracts of land. During the six months ended September 30,
2002, Centex Homes paid $1.6 million to the Partnership in fees and
reimbursements pursuant to these agreements and $24.1 million for the purchase
of residential lots. Centex Homes expects to pay an additional $38.6 million
to the Partnership to complete the purchase of these tracts of land over the
next three years.

Construction Services has executed contracts with the Partnership for the
construction of two industrial facilities. Contracts in progress totaled $4.6
million and $15.0 million at September 30, 2002 and March 31, 2002,
respectively. During the six months ended September 30, 2002 and 2001, the
Partnership paid $4.7 million and $0.3 million, respectively, to Construction
Services pursuant to these contracts.

(N) STATEMENTS OF FINANCIAL ACCOUNTING STANDARDS

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

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

(O) OFF-BALANCE-SHEET RISK

The Company enters into various off-balance-sheet transactions in the
normal course of business in order to reduce financing costs and improve access
to liquidity, facilitate homebuilding activities and manage exposure to
changing interest rates. Further discussion regarding these transactions can
be found above in Note (F), Indebtedness, and Note (L), Derivatives and
Hedging.

(P) RECLASSIFICATIONS

Certain prior year balances have been reclassified to be consistent with
the September 30, 2002 presentation.

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

For the three months ended September 30, 2002, our consolidated revenues
were $2.1 billion, a 10.5% increase over $1.9 billion for the same period last
year, and earnings before income taxes were $165.3 million, 8.5% higher than
$152.3 million for the same period last year. For the six months ended
September 30, 2002, our consolidated revenues were $3.9 billion, an 8.3%
increase over $3.6 billion for the same period last year, and earnings before
income taxes were $290.8 million, 7.6% higher than $270.3 million for the same
period last year. The fluctuations in our revenues and earnings before income
taxes are explained below by segment.

Net earnings for the three months ended September 30, 2002 were $115.6
million, 23.8% higher than $93.4 million for the same period last year. Net
earnings for the six months ended September 30, 2002 were $203.4 million, 20.6%
higher than $168.6 million for the same period last year. The increase in net
earnings is significantly higher than the increase in earnings before income
taxes due to a change in our effective tax rate. Our effective tax rate
decreased to 30.1% for the three and six months ended September 30, 2002 from
38.7% and 37.6% for the same periods last year. The decrease in the effective
tax rate is primarily the result of the expected utilization of net operating
loss carryforwards during fiscal 2003.

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

HOME BUILDING

The following summarizes results of our Home Building operations for the
three and six months ended September 30, 2002 compared to the same periods last
year (dollars in millions, except per unit data):

|                                           |          |   |                                          |      |   |      |       |    |  |   |         |      |   |  |       |    | 
|------------------------------------------ | -------- | - | ---------------------------------------- | ---- | - | ---- | ----- | -- |  | - | ------- | ---- | - |  | ----- | -- | 
|                                           |          |   |                                          |     
|                                           |          |   | For the Three Months Ended September 30, |     
|                                           |          |   |                                          |     
|                                           |          |   | 2002                                     |      |   | 2001 |      
|                                           |          |   |                                          |      |   |      |      
|Revenues                                   |          | $ | 1,281.5                                  |      |   |      | 100.0 | %  |  | $ | 1,170.7 |      |   |  | 100.0 | % 
|Cost of Sales                              |          |   | (947.5                                   | )    |   |      | (73.9 | %) |  |   | (868.8  | )    |   |  | (74.2 | %)
|Selling, General &
Administrative Expenses |          |   | (196.9                                   | )    |   |      | (15.4 | %) |  |   | (178.9  | )    |   |  | (15.3 | %)
|                                           |          |   |                                          |      |   |      |       |    |  |   |         |     
|Operating Earnings                         |          | $ | 137.1                                    |      |   |      | 10.7  | %  |  | $ | 123.0   |      |   |  | 10.5  | % 
|                                           |          |   |                                          |      |   |      |       |    |  |   |         |     
|Units Closed                               |          |   | 5,788                                    |      |   |      |       |    |  |   | 5,418  
|                                           | % Change |   |                                          | 6.8  | % |      |       |    |  |   |         | 10.5 | %
|Unit Sales Price                           |          | $ | 218,167                                  |      |   |      |       |    |  | $ | 214,004
|                                           | % Change |   |                                          | 1.9  | % |      |       |    |  |   |         | 5.0  | %
|Operating Earnings Per Unit                |          | $ | 23,678                                   |      |   |      |       |    |  | $ | 22,698 
|                                           | % Change |   |                                          | 4.3  | % |      |       |    |  |   |         | 24.2 | %
|Backlog Units                              |          |   | 12,619                                   |      |   |      |       |    |  |   | 9,978  
|                                           | % Change |   |                                          | 26.5 | % |      |       |    |  |   |         | 9.1  | %

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|                                           |          |   |                                        |      |   |      |       |    |  |   |          |      |   |  |       |    | 
|------------------------------------------ | -------- | - | -------------------------------------- | ---- | - | ---- | ----- | -- |  | - | -------- | ---- | - |  | ----- | -- | 
|                                           |          |   |                                        |     
|                                           |          |   | For the Six Months Ended September 30, |     
|                                           |          |   |                                        |     
|                                           |          |   | 2002                                   |      |   | 2001 |      
|                                           |          |   |                                        |      |   |      |      
|Revenues                                   |          | $ | 2,387.2                                |      |   |      | 100.0 | %  |  | $ | 2,209.9  |      |   |  | 100.0 | % 
|Cost of Sales                              |          |   | (1,759.6                               | )    |   |      | (73.7 | %) |  |   | (1,641.1 | )    |   |  | (74.3 | %)
|Selling, General & Administrative Expenses |          |   | (381.9                                 | )    |   |      | (16.0 | %) |  |   | (347.7   | )    |   |  | (15.7 | %)
|                                           |          |   |                                        |      |   |      |       |    |  |   |          |     
|Operating Earnings                         |          | $ | 245.7                                  |      |   |      | 10.3  | %  |  | $ | 221.1    |      |   |  | 10.0  | % 
|                                           |          |   |                                        |      |   |      |       |    |  |   |          |     
|Units Closed                               |          |   | 10,783                                 |      |   |      |       |    |  |   | 10,268   |     
|                                           | % Change |   |                                        | 5.0  | % |      |       |    |  |   |          | 10.3 | %
|Unit Sales Price                           |          | $ | 216,156                                |      |   |      |       |    |  | $ | 212,469  |     
|                                           | % Change |   |                                        | 1.7  | % |      |       |    |  |   |          | 6.1  | %
|Operating Earnings Per Unit                |          | $ | 22,783                                 |      |   |      |       |    |  | $ | 21,533   |     
|                                           | % Change |   |                                        | 5.8  | % |      |       |    |  |   |          | 23.7 | %
|Backlog Units                              |          |   | 12,619                                 |      |   |      |       |    |  |   | 9,978    |     
|                                           | % Change |   |                                        | 26.5 | % |      |       |    |  |   |          | 9.1  | %

Revenues for the three and six months ended September 30, 2002 increased
9.5% and 8.0%, respectively, versus the same periods last year primarily due to
an increase in units closed and higher unit sales prices. Units closed during
the three months ended September 30, 2002 increased 6.8% from 5,418 units to
5,788 units, and the average unit sales price increased 1.9% from $214,004 to
$218,167. Units closed during the six months ended September 30, 2002 increased
5.0% from 10,268 units to 10,783 units, and the average unit sales price
increased 1.7% from $212,469 to $216,156. The increase in units closed was the
result of a higher number of operating neighborhoods in the current year versus
last year. The increase in the unit sales price was largely driven by higher
selling prices in the New Jersey, Washington, D.C. and California markets.

Cost of sales were 73.9% and 73.7% of revenues for the three and six
months ended September 30, 2002 compared to 74.2% and 74.3% of revenues for the
same periods last year. The decrease in cost of sales primarily resulted from
purchasing efficiencies realized through regional and national programs, more
efficient house designs, other process improvement initiatives and lower lumber
prices.

Selling, general and administrative expenses were 15.4% and 16.0% of
revenues for the three and six months ended September 30, 2002 compared to
15.3% and 15.7% for the same periods last year. The cost increase is primarily
attributable to higher casualty insurance costs and employee increases to support neighborhood growth.

Operating earnings for the three and six months ended September 30, 2002
were 10.7% and 10.3% as a percentage of revenues and approximately $23,678 and
$22,783 on a per-unit basis, compared to operating earnings of 10.5% and 10.0%
of revenues and approximately $22,698 and $21,533 on a per-unit basis for the
same periods last year.

Units in backlog increased 26.5% to 12,619 units at September 30, 2002,
compared to 9,978 units at September 30, 2001. The increase in backlog
resulted from a 38% increase in sales versus the prior year for the three
months ended September 30, 2002. We define backlog units as units that have
been sold, as indicated by a signed contract, but not closed.

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Centex Homes announced in September that it plans to acquire substantially
all of the St. Louis and Indianapolis homebuilding operations of The Jones
Company. The Jones Company is a privately held builder of both single-family
and multi-family homes, and is headquartered in St. Louis, Missouri. The
acquisition, to be completed in January 2003, is expected to add approximately
800 units annually to Centex Homes closings.

FINANCIAL SERVICES

The following summarizes Financial Services results for the three and six
months ended September 30, 2002 compared to the same periods last year (dollars
in millions):

|                           |                                    |                                   |        |                            |        |   |        |       |        | 
|-------------------------- | ---------------------------------- | --------------------------------- | ------ | -------------------------- | ------ | - | ------ | ----- | ------ | 
|                           |                                    |                                   |        |                            |       
|                           |                                    |                                   |        | For the Three Months Ended |       
|                           |                                    |                                   |        | September 30,              |       
|                           |                                    |                                   |        |                            |       
|                           |                                    |                                   |        | 2002                       |        |   | 2001   |      
|                           |                                    |                                   |        |                            |        |   |        |      
|Revenues                   |                                    | $                                 | 204.8  |                            |        | $ | 166.0  |      
|                           |                                    |                                   |        |                            |        |  
|Interest Margin            |                                    | $                                 | 39.9   |                            |        | $ | 21.7   |      
|                           |                                    |                                   |        |                            |        |  
|Operating Earnings         |                                    | $                                 | 36.6   |                            |        | $ | 29.3   |      
|                           |                                    |                                   |        |                            |        |  
|Origination Volume         |                                    | $                                 | 3,943  |                            |        | $ | 3,417  |      
|                           |                                    |                                   |        |                            |        |  
|Number of Loans Originated |                                    |                                   |        |                            |        |   |        |      
|                           | CTX Mortgage Company, L.L.C.       |                                   |        |                            |        |   |        |       |       
|                           |                                    | Centex-built Homes (Builder)    |        |                            | 3,959  |   |        |       | 3,633  | 
|                           |                                    | Non-Centex-built Homes (Retail) |        |                            | 16,076 |   |        |       | 14,974 | 
|                           |                                    |                                   |        |                            |        |  
|                           |                                    |                                   | 20,035 |                            |        |   | 18,607 |      
|                           | Centex Home Equity Company, L.L.C. |                                   |        | 7,373                      |        |   |        | 7,257 |       
|                           |                                    |                                   |        |                            |        |  
|                           |                                    |                                   | 27,408 |                            |        |   | 25,864 |      
|                           |                                    |                                   |        |                            |        |  

|                           |                                    |                                   |        |                          |        |   |        |        |        | 
|-------------------------- | ---------------------------------- | --------------------------------- | ------ | ------------------------ | ------ | - | ------ | ------ | ------ | 
|                           |                                    |                                   |        |                          |       
|                           |                                    |                                   |        | For the Six Months Ended |       
|                           |                                    |                                   |        | September 30,            |       
|                           |                                    |                                   |        |                          |       
|                           |                                    |                                   |        | 2002                     |        |   | 2001   |       
|                           |                                    |                                   |        |                          |        |   |        |       
|Revenues                   |                                    | $                                 | 385.4  |                          |        | $ | 328.6  |       
|                           |                                    |                                   |        |                          |        |  
|Interest Margin            |                                    | $                                 | 76.1   |                          |        | $ | 38.4   |       
|                           |                                    |                                   |        |                          |        |  
|Operating Earnings         |                                    | $                                 | 60.9   |                          |        | $ | 54.4   |       
|                           |                                    |                                   |        |                          |        |  
|Origination Volume         |                                    | $                                 | 6,922  |                          |        | $ | 7,136  |       
|                           |                                    |                                   |        |                          |        |  
|Number of Loans Originated |                                    |                                   |        |                          |        |   |        |       
|                           | CTX Mortgage Company, L.L.C.       |                                   |        |                          |        |   |        |        |       
|                           |                                    | Centex-built Homes (Builder)    |        |                          | 7,337  |   |        |        | 6,815  | 
|                           |                                    | Non-Centex-built Homes (Retail) |        |                          | 28,482 |   |        |        | 33,084 | 
|                           |                                    |                                   |        |                          |        |  
|                           |                                    |                                   | 35,819 |                          |        |   | 39,899 |       
|                           | Centex Home Equity Company, L.L.C. |                                   |        | 13,732                   |        |   |        | 14,065 |       
|                           |                                    |                                   |        |                          |        |  
|                           |                                    |                                   | 49,551 |                          |        |   | 53,964 |       
|                           |                                    |                                   |        |                          |        |  

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

Conforming Mortgage Banking

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

Revenues increased 16.4% to $107.7 million and 2.8% to $197.6 million for
the three and six months ended September 30, 2002, respectively, as compared to
the same periods last year. The increase in revenues for the three months
ended September 30, 2002 is primarily related to an increase in originations
and higher revenues from CTX Mortgages Title and Insurance operations. While
originations decreased for the six month period ended September 30, 2002,
revenues from CTX Mortgages Title and Insurance operations increased.

CTX Mortgages operating earnings were $25.2 million and $40.1 million,
respectively, for the three and six months ended September 30, 2002, resulting
in a 5.4% increase and an 18.5% decrease for the three and six months
ended September 30, 2002, respectively, as compared to the same periods last year. The 5.4% increase in
operating earnings for the three months ended September 30, 2002 is due
primarily to increased originations. However, originations during the six
months ended September 30, 2002 decreased, which is the primary reason for the
18.5% decrease in operating earnings.

For the three months ended September 30, 2002, originations totaled 20,035
compared to 18,607 originations in the same period last year; origination
volume was $3.3 billion compared to $2.9 billion for the same period last year;
the per-loan profit was $1,258, a decrease of 2.0% compared to $1,284 for the
same period last year and total mortgage applications increased 24.7% to
23,950 from 19,205 applications for the same period last year. For the six
months ended September 30, 2002, originations totaled 35,819 compared to 39,899
originations in the same period last year; origination volume was $5.8 billion
compared to $6.1 billion for the same period last year; the per-loan profit was
$1,119, a decrease of 9.2% compared to $1,233 for the same period last year
and total mortgage applications decreased 3.3% to 39,869 from 41,221
applications for the same period last year. For the six months ended September
30, 2002, originations decreased due to a decrease in refinance activity during
the initial quarter of the fiscal year as compared to the same period last
year. However, during the three months ended September 30, 2002, mortgage
interest rates declined, resulting in a resurgence of refinance activity. CTX
Mortgage continues to focus on improving its capture ratio on Centex Homes
closings while expanding its retail operations through commissioned loan
officer growth. CTX Mortgage has positioned itself to capitalize on the
current refinance market, but continues to position itself for growth in
the less volatile purchase money market. The results of operations of CTX
Mortgage depend to a significant extent on the level of interest rates.

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Sub-Prime Home Equity Lending

The revenues of Centex Home Equity Company, L.L.C., or Home Equity,
increased 32.2% to $97.1 million and 37.8% to $187.8 million for the three and
six months ended September 30, 2002, respectively, as a result of continued
growth in residential mortgage loans held for investment, due in part to the
accounting change discussed further below. Interest margin, which we define as
the difference between interest revenue on mortgage loans held for sale or
investment and interest expense on debt used to fund the mortgage loans,
increased to $38.2 million and $72.0 million for the three and six months ended
September 30, 2002 as compared to $21.7 million and $37.9 million for the same
periods last year. The increase in interest margin is primarily a result of an
increase in the portfolio of mortgage loans held for investment. Home Equity
reported operating earnings of $11.7 million and $22.4 million for the three
and six months ended September 30, 2002, as compared to operating earnings of
$5.9 million and $6.3 million for the same periods last year. The increase in
Home Equitys operating earnings is primarily the result of the increase in
interest margin, as noted above. This was partially offset by an increase in
general and administrative costs, mostly attributable to an increase in
servicing and production overhead to support our volume and loan servicing
growth, and an increase in the provision for losses on residential mortgage
loans held for investment.

From October 1997 through March 2000, a majority of Home Equitys loans
originated were included in securitizations that utilized a structure that
caused them to be accounted for as sales. Under this structure, Home Equity
retained a residual interest as well as the servicing rights to the securitized
loans. We call this retained residual interest the mortgage securitization
residual interest, or MSRI. As a result, our balance sheet does not reflect
the mortgage loans receivable and offsetting debt resulting from these
securitizations. The estimated gain on the sale of these loans was included in
earnings during the period in which the securitization transaction closed. We
changed the structure of securitizations beginning April 1, 2000.
Securitizations since that time have been accounted for as borrowings. Under
this structure, we record interest over the life of the loans using the
interest, or actuarial, method. The mortgage loans receivable and the
securitization debt remain on Home Equitys balance sheet and the related
interest margin is reflected in our income statement. Although the change in
structure of the securitizations has no effect on the cash flow and profit
recognized over the life of the mortgages, the change does affect the timing of
profit recognition. Interest margin, rather than gain on sale of loans, is now
Home Equitys primary source of operating income. As the balance of
securitizations accounted for as borrowings increases, the operating earnings
should continue to increase. For the three and six months ended September 30,
2002, respectively, originations totaled 7,373 and 13,732 compared to 7,257 and
14,065 originations for the same periods last year; origination volume was
$600.7 million and $1.10 billion compared to $554.2 million and $1.06 billion
for the same periods last year and total applications increased 39.8% and
30.1% to 57,737 and 107,781 from 41,294 and 82,368 applications for the same
periods last year. For the six months ended September 30, 2002, originations
decreased 2.4% while origination volume increased 3.8% due to an increase in
average loan size. The decrease in the number of originations despite the
increase in total applications is mainly attributable to a decrease in approval
ratios related to Home Equitys continued adherence to its credit underwriting
guidelines.

At September 30, 2002, Home Equitys total servicing portfolio consisted
of 67,400 loans totaling $4.79 billion compared to 56,660 loans totaling $3.88
billion at September 30, 2001. For the three and six months ended September
30, 2002, service fee income related to this long-term servicing, which is not
included in interest income, was $12.6 million and $24.4 million, respectively,
compared to $9.3 million and $17.8 million, respectively, for the same periods
last year.

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Allowance for Losses

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

We believe that the allowance for losses is sufficient to provide for
credit losses in the existing residential mortgage loans held for investment.
We evaluate the allowance on an aggregate basis considering, among other
things, the relationship of the allowance to residential mortgage loans held
for investment and historical credit losses. The allowance reflects our
judgment of the present loss exposure at the end of the reporting period.

Although we consider the allowance for losses on residential mortgage
loans held for investment reflected in our consolidated balance sheet to be
adequate, there can be no assurance that this allowance will prove to be
adequate over time to cover ultimate losses. This allowance may prove to be
inadequate due to unanticipated adverse changes in the economy or discrete
events adversely affecting specific customers or industries.

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

|                               |                                 |   |                            |        |   |      |       |       |  
|------------------------------ | ------------------------------- | - | -------------------------- | ------ | - | ---- | ----- | ----- | -
|                               |                                 |   |                            |       
|                               |                                 |   | For the Three Months Ended |       
|                               |                                 |   | September 30,              |       
|                               |                                 |   |                            |       
|                               |                                 |   | 2002                       |        |   | 2001 |      
|                               |                                 |   |                            |        |   |      |      
|Balance at Beginning of Period |                                 | $ | 17,320                     |        |   | $    | 4,036 |      
|                               | Provision for Losses            |   |                            | 7,670  |   |      |       | 3,143 |  
|                               | Recoveries on Loans Charged Off |   |                            | 33     |   |      |       | 6     |  
|                               | Losses Sustained                |   |                            | (3,880 | ) |      |       | (871  | )
|                               |                                 |   |                            |        |   |     
|Balance at End of Period       |                                 | $ | 21,143                     |        |   | $    | 6,314 |      
|                               |                                 |   |                            |        |   |     

|                               |                                 |   |                          |        |   |      |       |        |  
|------------------------------ | ------------------------------- | - | ------------------------ | ------ | - | ---- | ----- | ------ | -
|                               |                                 |   |                          |       
|                               |                                 |   | For the Six Months Ended |       
|                               |                                 |   | September 30,            |       
|                               |                                 |   |                          |       
|                               |                                 |   | 2002                     |        |   | 2001 |      
|                               |                                 |   |                          |        |   |      |      
|Balance at Beginning of Period |                                 | $ | 14,106                   |        |   | $    | 2,814 |       
|                               | Provision for Losses            |   |                          | 13,556 |   |      |       | 5,791  |  
|                               | Recoveries on Loans Charged Off |   |                          | 51     |   |      |       | 6      |  
|                               | Losses Sustained                |   |                          | (6,570 | ) |      |       | (2,297 | )
|                               |                                 |   |                          |        |   |     
|Balance at End of Period       |                                 | $ | 21,143                   |        |   | $    | 6,314 |       
|                               |                                 |   |                          |        |   |     

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|                                                                       |  |   |               |   |  |      |        |   | 
|---------------------------------------------------------------------- |  | - | ------------- | - |  | ---- | ------ | - | 
|                                                                       |  |   |               |  
|                                                                       |  |   | September 30, |  
|                                                                       |  |   |               |  
|                                                                       |  |   | 2002          |   |  | 2001 |       
|                                                                       |  |   |               |   |  |      |       
|Allowance for Losses to Residential Mortgage Loans
Held for Investment |  |   | 0.6           | % |  |      | 0.2    | %
|90+ Days Contractual Delinquency
Total Dollars Delinquent              |  | $ | 101,863       |   |  | $    | 54,420 |  
|% Delinquent                                                           |  |   | 2.7           | % |  |      | 2.1    | %

The allowance for losses on residential mortgage loans held for investment
has increased to $21.1 million at September 30, 2002 from $6.3 million at
September 30, 2001. In addition, the ratio of allowance for losses to
residential mortgage loans held for investment, or the allowance ratio,
increased to 0.6% at September 30, 2002 from 0.2% at September 30, 2001. Prior
to April 2000, the residential mortgage loans were recorded as sales and
anticipated future credit losses were considered in valuing the MSRI. As a
result, no allowance for losses was necessary. After April 2000, we began
recording residential mortgage loans held for investment on the balance sheet,
as previously discussed, and, accordingly, began recording an allowance for
losses based on managements judgment of loss exposure. The increase in the
allowance for losses occurred primarily because the amount of the residential
mortgage loans held for investment increased and the residential mortgage loan
portfolio continued to mature. As the age and size of the residential mortgage
loan portfolio continues to mature and grow, we expect the balance in the
allowance for losses and the allowance ratio to continue to increase. The
increase in 90+ days contractual delinquency occurred primarily because the
residential mortgage loan portfolio continued to mature.

CONSTRUCTION PRODUCTS

The following summarizes Construction Products results for the three and
six months ended September 30, 2002 compared to the same periods last year
(dollars in millions):

|                                           |  |                            |        |   |      |   |        |  
|------------------------------------------ |  | -------------------------- | ------ | - | ---- | - | ------ | -
|                                           |  |                            |       
|                                           |  | For the Three Months Ended |       
|                                           |  | September 30,              |       
|                                           |  |                            |       
|                                           |  | 2002                       |        |   | 2001 |  
|                                           |  |                            |        |   |      |  
|Revenues                                   |  | $                          | 136.0  |   |      | $ | 129.5  |  
|Interest Income                            |  |                            |       |   |      |   | 1.1    |  
|Cost of Sales                              |  |                            | (107.9 | ) |      |   | (106.8 | )
|Selling, General & Administrative Expenses |  |                            | (1.4   | ) |      |   | (1.3   | )
|                                           |  |                            |        |   |      |  
|Operating Earnings *                       |  | $                          | 26.7   |   |      | $ | 22.5   |  
|                                           |  |                            |        |   |      |  

* Before Minority Interest of $8.5 million and $6.2 million, respectively.

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|                                           |  |                          |        |   |      |   |        |  
|------------------------------------------ |  | ------------------------ | ------ | - | ---- | - | ------ | -
|                                           |  |                          |       
|                                           |  | For the Six Months Ended |       
|                                           |  | September 30,            |       
|                                           |  |                          |       
|                                           |  | 2002                     |        |   | 2001 |  
|                                           |  |                          |        |   |      |  
|Revenues                                   |  | $                        | 264.8  |   |      | $ | 247.0  |  
|Interest Income                            |  |                          |       |   |      |   | 2.1    |  
|Cost of Sales                              |  |                          | (207.5 | ) |      |   | (211.1 | )
|Selling, General & Administrative Expenses |  |                          | (2.8   | ) |      |   | (2.5   | )
|                                           |  |                          |        |   |      |  
|Operating Earnings *                       |  | $                        | 54.5   |   |      | $ | 35.5   |  
|                                           |  |                          |        |   |      |  

* Before Minority Interest of $17.4 million and $9.1 million, respectively.

Construction Products revenues for the three and six months ended
September 30, 2002 were 5.0% and 7.2% higher than the same periods last year.
These increases were primarily the result of a $7.8 million and a $22.4 million
increase in gypsum wallboard revenues for the three and six months ended
September 30, 2002, respectively. The increase in gypsum wallboard revenues
was primarily caused by a higher average net sales price, offset by slightly
lower volume, when compared to the same periods last year.

Construction Products cost of sales for the three and six months ended
September 30, 2002 was 1.0% higher and 1.7% lower, respectively, than the same periods last
year. The increase for the quarter was primarily the result of a one-time
charge of $2.6 million related to closing an aggregates quarry and crushing
plant in Georgetown, Texas, partially offset by lower paperboard costs due to
reduced energy costs and better plant operating efficiencies compared to the
prior year. The six month decrease was primarily the result of the decreased
paperboard costs, described above, and lower sales volume.

Construction Products selling, general and administrative expenses for
the three and six months ended September 30, 2002 were 7.7% and 12.0% higher
than the same periods last year. This increase was primarily the result of
increased personnel and higher office expenses.

For the three and six months ended September 30, 2002, Construction
Products operating earnings, net of minority interest, represented an 18.7%
and 53.5% increase, respectively, from results for the same periods a year ago. Operating
earnings increased primarily due to the increase in gypsum wallboard pricing.

CONSTRUCTION SERVICES

The following summarizes Construction Services results for the three and
six months ended September 30, 2002 compared to the same periods last year
(dollars in millions):

|                                 |  |                            |       |  |      |   |       | 
|-------------------------------- |  | -------------------------- | ----- |  | ---- | - | ----- | 
|                                 |  |                            |      
|                                 |  | For the Three Months Ended |      
|                                 |  | September 30,              |      
|                                 |  |                            |      
|                                 |  | 2002                       |       |  | 2001 |  
|                                 |  |                            |       |  |      |  
|Revenues                         |  | $                          | 391.7 |  |      | $ | 336.8 | 
|                                 |  |                            |       |  |      |  
|Operating Earnings               |  | $                          | 9.2   |  |      | $ | 7.3   | 
|                                 |  |                            |       |  |      |  
|New Contracts Executed           |  | $                          | 157   |  |      | $ | 387   | 
|                                 |  |                            |       |  |      |  
|Backlog of Uncompleted Contracts |  | $                          | 1,857 |  |      | $ | 2,149 | 
|                                 |  |                            |       |  |      |  

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|                                 |  |                          |       |  |      |   |       | 
|-------------------------------- |  | ------------------------ | ----- |  | ---- | - | ----- | 
|                                 |  |                          |      
|                                 |  | For the Six Months Ended |      
|                                 |  | September 30,            |      
|                                 |  |                          |      
|                                 |  | 2002                     |       |  | 2001 |  
|                                 |  |                          |       |  |      |  
|Revenues                         |  | $                        | 752.5 |  |      | $ | 650.4 | 
|                                 |  |                          |       |  |      |  
|Operating Earnings               |  | $                        | 17.3  |  |      | $ | 14.8  | 
|                                 |  |                          |       |  |      |  
|New Contracts Executed           |  | $                        | 429   |  |      | $ | 777   | 
|                                 |  |                          |       |  |      |  
|Backlog of Uncompleted Contracts |  | $                        | 1,857 |  |      | $ | 2,149 | 
|                                 |  |                          |       |  |      |  

Construction Services revenues for the three and six months ended
September 30, 2002 were 16.3% and 15.7% higher, respectively, than revenues for
the same periods last year. The increase was the result of several high
revenue, short-term contracts that were underway in the current quarter.
Operating earnings for the group improved in the three and six months ended
September 30, 2002 compared to the same periods last year as a result of
the higher revenue base. For the three and six
months ended September 30, 2002, new contracts executed decreased 59.4% and
44.8% and backlog of uncompleted contracts decreased 13.6% from the same
periods last year, primarily due to timing differences experienced with
contract awards and executions and declines in new commercial
construction activity.

The Construction Services segment provided a positive average net cash
flow in excess of our investment in the segment of $103.3 million and $116.2
million for the three and six months ended September 30, 2002 compared to
$106.5 million and $108.6 million for the same periods last year.

INVESTMENT REAL ESTATE

The following summarizes Investment Real Estates results for the three
and six months ended September 30, 2002 compared to the same periods last year
(dollars in millions):

|                   |  |                            |     |  |      |   |      | 
|------------------ |  | -------------------------- | --- |  | ---- | - | ---- | 
|                   |  |                            |    
|                   |  | For the Three Months Ended |    
|                   |  | September 30,              |    
|                   |  |                            |    
|                   |  | 2002                       |     |  | 2001 |  
|                   |  |                            |     |  |      |  
|Revenues           |  | $                          | 7.4 |  |      | $ | 23.2 | 
|                   |  |                            |     |  |      |  
|Operating Earnings |  | $                          | 5.9 |  |      | $ | 16.1 | 
|                   |  |                            |     |  |      |  

|                   |  |                          |      |  |      |   |      | 
|------------------ |  | ------------------------ | ---- |  | ---- | - | ---- | 
|                   |  |                          |     
|                   |  | For the Six Months Ended |     
|                   |  | September 30,            |     
|                   |  |                          |     
|                   |  | 2002                     |      |  | 2001 |  
|                   |  |                          |      |  |      |  
|Revenues           |  | $                        | 13.3 |  |      | $ | 47.3 | 
|                   |  |                          |      |  |      |  
|Operating Earnings |  | $                        | 9.3  |  |      | $ | 31.4 | 
|                   |  |                          |      |  |      |  

Investment Real Estates revenues for the three and six months ended
September 30, 2002 were 68.1% and 71.9% lower than revenues for the same
periods last year. Operating earnings from Investment Real Estate for the
three and six months ended September 30, 2002 totaled $5.9 million and $9.3
million,

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respectively, compared to $16.1 million and $31.4 million in the same
period last year. The decreases in revenues and operating earnings were
primarily related to the timing of property sales of nominally-valued assets.

Property sales related to Investment Real Estates nominally-valued assets
contributed operating earnings of $0.4 million for the three months ended
September 30, 2002 and $13.4 million for the same period last year. Property
sales related to Investment Real Estates nominally-valued assets contributed
operating earnings of $1.8 million for the six months ended September 30, 2002
and $27.1 million for the same period last year. These nominally-valued assets
resulted from the fiscal 1996 acquisition of Vista Properties, Inc., or Vista,
and its subsequent combination with Centex Real Estate Corporation. The Vista
portfolio of properties was reduced to a nominal book basis after recording
certain deferred tax benefits related to the combination. The timing of land
sales is uncertain and can vary significantly from period to period.

Included in Investment Real Estates operating earnings for the three and
six months ended September 30, 2002 were earnings of $4.4 million and $3.7
million, respectively, derived from its investment in the Partnership compared
to earnings of $3.8 million and $7.2 million for the same periods last year.
As noted in Note (G) of the Notes to Consolidated Financial Statements of
Centex, the investment in the Partnership is not consolidated and is accounted
for on the equity method of accounting because we do not control the
Partnership.

The largest component of the Partnership is its International Home
Building segment, based in London, England. Included in Investment Real
Estates operating earnings were earnings of $4.2 million and $3.2 million for
the three months ended September 30, 2002 and 2001, respectively, and earnings
of $3.8 million and $5.6 million for the six months ended September 30, 2002
and 2001, respectively, derived from International Home Building. The increase
in earnings for the three months ended September 30, 2002 was primarily due to
an increase in unit closings, offset by a decline in operating margins. The
decrease in earnings for the six months ended September 30, 2002 was primarily
due to a decline in operating margins and an increase in general and
administrative expenses resulting from personnel additions. For the three
months ended September 30, 2002 and 2001, this segment closed 383 units at an
average sales price per unit of $236,514 and 315 units at an average sales
price per unit of $205,010, respectively. For the six months ended September
30, 2002 and 2001, this segment closed 652 units at an average sales price per
unit of $232,449 and 614 units at an average sales price per unit of $196,647,
respectively. Operating earnings per unit, before interest, were $12,676 and
$13,276 for the three months ended September 30, 2002 and 2001, respectively.
Operating earnings per unit, before interest, were $7,637 and $10,676 for the
six months ended September 30, 2002 and 2001, respectively.

OTHER

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

Our manufactured housing operations had operating earnings of $0.8 million
for the three months ended September 30, 2002 versus earnings of $0.1 million
for the same period last year. For the six months ended September 30, 2002,
our manufactured housing operations had operating earnings of $0.9 million
versus an operating loss of $1.5 million for the same period last year. The
improvement in operating earnings is the result of higher production and
improved efficiency in manufacturing and lower general and administrative
expenses.

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Our home services operations reported operating losses of $1.0 million for
the three months ended September 30, 2002 compared to operating earnings of
$2.6 million for the same period last year. For the six months ended September
30, 2002, our home services operations reported operating losses of $2.6
million compared to operating earnings of $4.5 million for the same period last
year. The decrease in earnings is primarily due to higher general and
administrative expenses. Our home services operations sold its chemical lawn
care business in the current quarter. The sale of this business did not have a
material effect on our company.

Corporate general and administrative expense increased 10.8% to $14.4
million for the three months ended September 30, 2002 compared to $13.0 million
for the same period last year. For the six months ended September 30, 2002,
corporate general and administrative expense increased 12.0% to $27.1 million
compared to $24.2 million for the same period last year. The increase
primarily relates to an increase in personnel and higher compensation resulting
from growth in our profitability. Corporate general and administrative
expense represents compensation and other costs not identifiable with a
specific segment.

Interest expense decreased 7.8% to $27.0 million for the three months
ended September 30, 2002 compared to $29.3 million for the same period last
year. For the six months ended September 30, 2002, interest expense decreased
10.4% to $50.7 million compared to $56.6 million for the same period last year.
The change is primarily related to an increase in the net interest capitalized
and lower borrowing costs during the three and six months ended September 30,
2002 as compared to the same periods last year. This was somewhat offset by an
increase in average debt outstanding for the three and six months ended
September 30, 2002 as compared to the same periods last year. The increase in
net interest capitalized is a result of growth in our housing projects
inventory.

FINANCIAL CONDITION AND LIQUIDITY

At September 30, 2002, we had cash and cash equivalents of $63.2 million,
including $22.8 million in Financial Services and $12.7 million belonging to
our 65.2%-owned Construction Products subsidiary. The net cash used in or
provided by the operating, investing and financing activities for the six
months ended September 30, 2002 and 2001 is summarized below (dollars in
thousands):

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|                                |                          |                      |          |                          |          |   |       |   |          |  
|------------------------------- | ------------------------ | -------------------- | -------- | ------------------------ | -------- | - | ----- | - | -------- | -
|                                |                          |                      |          |                          |         
|                                |                          |                      |          | For the Six Months Ended |         
|                                |                          |                      |          | September 30,            |         
|                                |                          |                      |          |                          |         
|                                |                          |                      |          | 2002                     |          |   | 2001  |  
|                                |                          |                      |          |                          |          |   |       |  
|Net cash (used in) provided by  |                          |                      |          |                          |          |   |       |  
|                                | Non-Financial Services * |                      |          |                          |          |   |       |   |         
|                                |                          | Operating Activities |          | $                        | (369,296 | ) |       | $ | (148,972 | )
|                                |                          | Investing Activities |          |                          | (73,583  | ) |       |   | (110,961 | )
|                                |                          | Financing Activities |          |                          | 290,689  |   |       |   | 263,867  |  
|                                |                          |                      |          |                          |          |  
|                                |                          |                      | (152,190 | )                        |          |   | 3,934 |  
|                                |                          |                      |          |                          |          |  
|                                | Financial Services       |                      |          |                          |          |   |       |   |         
|                                |                          | Operating Activities |          |                          | 25,478   |   |       |   | (71,900  | )
|                                |                          | Investing Activities |          |                          | (565,455 | ) |       |   | (809,231 | )
|                                |                          | Financing Activities |          |                          | 535,681  |   |       |   | 881,483  |  
|                                |                          |                      |          |                          |          |  
|                                |                          |                      | (4,296   | )                        |          |   | 352   |  
|                                |                          |                      |          |                          |          |  
|Net (decrease) increase in cash |                          | $                    | (156,486 | )                        |          | $ | 4,286 |  
|                                |                          |                      |          |                          |          |   |       |  





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


We generally fund our Non-Financial Services operating and other
short-term needs through cash from operations, borrowings from commercial paper
and other short-term credit arrangements and the issuance of medium-term notes
and other debt securities. During the six months ended September 30, 2002, cash
was primarily used in Non-Financial Services-Operating Activities to finance
increases in housing inventories relating to the increased level of sales and
resulting units under construction during the year and for the acquisition of
land for development. The funds provided by Non-Financial Services-Financing
Activities were primarily from new debt used to fund the increased homebuilding
activity.

We generally fund our Financial Services operating and other short-term
needs through cash flows from operations, credit facilities, securitizations
and proceeds from the sale of mortgage loans to HSF-I, as described below.
During the six months ended September 30, 2002, cash was primarily used in
Financial Services-Investing Activities to finance increases in residential
mortgage loans held for investment. The funds provided by Financial
Services-Financing Activities were primarily from new debt used to fund the
increased residential mortgage loan activity.

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

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Our existing credit facilities and available capacity as of September 30,
2002 are summarized below (dollars in thousands):

|                       |                                             |   |                 |           |  |           |           |         |    
|---------------------- | ------------------------------------------- | - | --------------- | --------- |  | --------- | --------- | ------- | ---
|                       |                                             |   |                 |          
|                       |                                             |   | Existing Credit |           |  | Available |          
|                       |                                             |   | Facilities      |           |  | Capacity  |          
|                       |                                             |   |                 |           |  |           |          
|Non-Financial Services |                                             |   |                 |           |  |           |           |        
|                       | Centex Corporation                          |   |                 |           |  |           |           |         |    
|                       | Multi-Bank Revolving Credit Facility        |   | $               | 700,000   |  |           | $         | 700,000 | (1)
|                       | Uncommitted Bank Lines                      |   |                 | 60,000    |  |           |           | 60,000  |    
|                      
|                       | Construction Products                       |   |                 |           |  |           |           |         |    
|                       | Senior Revolving Credit Facility            |   |                 | 175,000   |  |           |           | 66,400  | (2)
|                       | Annually Renewable Commercial Paper
Conduit |   |                 | 50,000    |  |           |           | 20,000  | (2)
|                       |                                             |   |                 |           |  |          
|                       |                                             |   | 985,000         |           |  |           | 846,400   |        
|                       |                                             |   |                 |           |  |          
|Financial Services     |                                             |   |                 |           |  |           |           |        
|                       | Unsecured Credit Facilities                 |   |                 | 125,000   |  |           |           | 110,000 | (3)
|                       | Secured Credit Facilities                   |   |                 | 395,000   |  |           |           | 250,712 | (4)
|                       | Harwood Street Funding II, L.L.C. Facility  |   |                 | 1,000,000 |  |           |           | 399,759 |    
|                       |                                             |   |                 |           |  |          
|                       |                                             |   | 1,520,000       |           |  |           | 760,471   |        
|                       |                                             |   |                 |           |  |          
|                       |                                             | $ | 2,505,000       |           |  | $         | 1,606,871 | (5)    
|                       |                                             |   |                 |           |  |          



|(1) |  | This is a committed, multi-bank revolving credit facility, maturing in
August 2005, which serves as backup for commercial paper borrowings. As
of September 30, 2002, there were no borrowings under this backup
facility, and our $600 million commercial paper program had $120 million
outstanding. We have not borrowed under this facility since its
inception.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | These committed facilities were entered into by Construction Products and
have no recourse to Centex Corporation. The Senior Revolving Credit
Facility matures in November 2003 and the Annually Renewable Commercial
Paper Conduit matures in June 2003.                                                                                                           
|   
|(3) |  | Centex Corporation, CTX Mortgage and Home Equity, on a joint and several
basis, share in a $125 million uncommitted, unsecured credit facility.                                                                                                                                                                                                                     
|   
|(4) |  | CTX Mortgage and Home Equity share in $250 million of uncommitted secured
credit facilities to finance mortgage inventory. As of October 25, 2002,
these facilities became committed. CTX Mortgage also maintains $145
million of committed secured mortgage warehouse facilities to finance
mortgages not sold to HSF-I.                                           
|   
|(5) |  | The amount of available capacity includes $335 million of uncommitted
borrowings as of September 30, 2002. Although we believe that this
capacity is currently available, there can be no assurance that the
lenders under the applicable facilities would elect to make advances to
Centex Corporation or its subsidiaries if and when requested to do so.         

CTX Mortgage finances its inventory of mortgage loans principally through
sales of Jumbo A and conforming loans to HSF-I. These mortgage loans are
sold pursuant to a mortgage loan purchase agreement that expires in November
2004, subject to certain renewal options. HSF-I acquires mortgage loans from
CTX Mortgage, holds them for a period averaging between 45 and 60 days and then
resells them into the secondary market. HSF-I obtains the funds needed to
purchase eligible mortgage loans from CTX Mortgage by issuing investment grade
senior debt obligations and subordinated certificates. The purpose of this
arrangement is to allow CTX Mortgage to reduce the cost of financing the
mortgage loans originated by it and to improve its liquidity. For additional
information regarding HSF-I, see Certain Off-Balance-Sheet and Other
Obligations.

Home Equity finances its inventory of mortgage loans through HSF-II, a
wholly-owned, consolidated entity, under a revolving sales agreement that
expires upon final payment of the senior and subordinated debt

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issued by HSF-II. This arrangement, where HSF-II has committed to finance all
eligible loans, gives Home Equity daily access to HSF-IIs capacity of $1.0
billion. HSF-II obtains funds through the sale of five-year subordinated
notes, that are rated BBB by Standard & Poors, or S&P, Baa2 by Moodys
Investors Service, or Moodys, and BBB by Fitch Ratings, or Fitch, and
short-term secured liquidity notes that are rated A1+ by S&P, P1 by Moodys and
F1+ by Fitch. Because HSF-II is a consolidated entity, the debt, interest
income and interest expense of HSF-II are reflected in the financial statements
of Financial Services.

Under our debt covenants, we are required to maintain certain leverage and
interest coverage ratios and a minimum tangible net worth. At September 30,
2002, we were in compliance with all of these covenants.

As of September 30, 2002, our short-term debt was $866.2 million,
approximately $709.5 million of which was applicable to Financial Services and
$30.0 million of which was applicable to Construction Products. Excluding
Financial Services and Construction Products, our short-term borrowings are
generally financed at prevailing market interest rates from our commercial
paper programs and from uncommitted bank facilities.

Our outstanding debt as of September 30, 2002 was as follows (dollars in thousands)(1):

|                        |                                                                                      |                                                             |           |           |           | 
|----------------------- | ------------------------------------------------------------------------------------ | ----------------------------------------------------------- | --------- | --------- | --------- | 
|Non-Financial Services: |                                                                                      |                                                             |           |          
|                        | Short-Term Notes Payable                                                             |                                                             | $         | 156,622   |          
|                        | Senior Debt:                                                                         |                                                             |           |           |          
|                        |                                                                                      | Medium-Term Note Programs, 2.44% to 7.95%, due through 2007 |           |           | 383,000   | 
|                        |                                                                                      | Long-Term Notes, 5.80% to 9.75%, due through 2012           |           |           | 1,188,007 | 
|                        |                                                                                      | Other Indebtedness, 1.80% to 10.00%, due through 2027       |           |           | 150,639   | 
|                        | Subordinated Debt:                                                                   |                                                             |           |           |          
|                        |                                                                                      | Subordinated Debentures, 7.38%, due in 2006                 |           |           | 99,870    | 
|                        |                                                                                      | Subordinated Debentures, 8.75%, due in 2007                 |           |           | 99,662    | 
|                        |                                                                                      |                                                             |          
|                        |                                                                                      |                                                             | 2,077,800 |          
|                        |                                                                                      |                                                             |          
|Financial Services:     |                                                                                      |                                                             |           |          
|                        | Short-Term Debt:                                                                     |                                                             |           |           |          
|                        |                                                                                      | Short-Term Bank Notes Payable                               |           |           | 106,271   | 
|                        |                                                                                      | Harwood Street Funding II, L.L.C. Secured Liquidity Notes   |           |           | 550,241   | 
|                        |                                                                                      | Other Short-Term Debt                                       |           |           | 53,017    | 
|                        | Home Equity Loans Asset-Backed Certificates, 2.91% to 8.48%, due
through 2032        |                                                             |           | 3,286,179 |          
|                        | Harwood Street Funding II, L.L.C. Variable Rate Subordinated Notes, due
through 2007 |                                                             |           | 50,000    |          
|                        |                                                                                      |                                                             |          
|                        |                                                                                      |                                                             | 4,045,708 |          
|                        |                                                                                      |                                                             |          
|Total                   |                                                                                      | $                                                           | 6,123,508 |          
|                        |                                                                                      |                                                             |          



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

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

|           |      |   |               |         |  |           |           |         |       |   |           |         | 
|---------- | ---- | - | ------------- | ------- |  | --------- | --------- | ------- | ----- | - | --------- | ------- | 
|           |      |   |               |        
|           |      |   | Non-Financial |         |  | Financial |           |         |       |   |          
|           |      |   | Services      |         |  | Services  |           |         | Total |  
|           |      |   |               |         |  |           |           |         |       |  
|           | 2003 |   | $             | 138,452 |  |           | $         | 455,780 |       |   | $         | 594,232 | 
|           | 2004 |   |               | 129,783 |  |           |           | 768,152 |       |   |           | 897,935 | 
|           | 2005 |   |               | 33,629  |  |           |           | 575,615 |       |   |           | 609,244 | 
|           | 2006 |   |               | 325,392 |  |           |           | 410,725 |       |   |           | 736,117 | 
|           | 2007 |   |               | 290,575 |  |           |           | 529,903 |       |   |           | 820,478 | 
|Thereafter |      |   | 1,003,347     |         |  |           | 596,004   |         |       |   | 1,599,351 |        
|           |      |   |               |         |  |           |           |         |      
|           |      | $ | 1,921,178     |         |  | $         | 3,336,179 |         |       | $ | 5,257,357 |        
|           |      |   |               |         |  |           |           |         |      

Financial Services debt related to securitized residential mortgage loans
structured as collateralized borrowings (Home Equity Loans Asset-Backed
Certificates) was $3.3 billion at September 30, 2002. The principal and
interest on these notes are paid using the cash flow from the underlying
residential mortgage loans, which serve as collateral for the debt.
Accordingly, the timing of the principal payments on these notes is dependent
upon the payment received on the underlying residential mortgage loans. The
expected maturities of this component of long-term debt are based on
contractual maturities adjusted for projected repayments and prepayments of
principal.

CERTAIN OFF-BALANCE-SHEET AND OTHER OBLIGATIONS

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

Harwood Street Funding I, L.L.C.

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

Under the terms of the HSF-I Purchase Agreement, CTX Mortgage may elect to
sell to HSF-I, and HSF-I is obligated to purchase from CTX Mortgage, mortgage
loans that satisfy certain eligibility criteria and portfolio requirements.
The maximum amount of mortgage loans that HSF-I is allowed to carry in its
inventory under the HSF-I Purchase Agreement is limited to $2.0 billion.

The HSF-I Purchase Agreement currently has a term expiring in November
2004, subject to certain renewal options. In addition, HSF-Is commitment to
purchase eligible mortgage loans is subject to termination upon the occurrence
of certain events of default and other termination events described in the

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HSF-I Purchase Agreement, including a downgrade in Centex Corporations credit
ratings below BB+ by S&P or Ba1 by Moodys. In the event CTX Mortgage was
unable to sell loans to HSF-I, it would draw on existing credit facilities
currently held in addition to HSF-I. In addition, it might need to make other
customary financing arrangements to fund its mortgage loan origination
activities. Although we believe that CTX Mortgage could arrange for
alternative financing that is common for non-investment grade mortgage
companies, there can be no assurance that such financing would be available on
satisfactory terms, and any delay in obtaining such financing could adversely
affect the results of operations of CTX Mortgage.

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

HSF-I has entered into a swap arrangement with a bank, that we refer to as
the Harwood Swap, under which the bank has agreed to make certain payments to
HSF-I, and HSF-I has agreed to make certain payments to the bank, the net
effect of which is that the bank has agreed to bear certain interest rate risks
and non-credit related market risks related to the mortgage loans held by
HSF-I. The purpose of this arrangement is to provide credit enhancement to
HSF-I by permitting it to hedge these risks with a counterparty having a
short-term credit rating of A1+ from S&P and P1 from Moodys. Additionally, we
have entered into a separate swap arrangement with the bank pursuant to which
we have agreed to pay to the bank all amounts that the bank is required to pay
to HSF-I pursuant to the Harwood Swap plus a monthly fee equal to a percentage
of the notional amount of the Harwood Swap, and the bank is required to pay to
us all amounts that the bank receives from HSF-I pursuant to the Harwood Swap.
Accordingly, we effectively bear all interest rate risks and non-credit related
market risks that are the subject of the Harwood Swap. We are also required to
reimburse the bank for certain expenses, costs and damages that it may incur.

As of September 30, 2002, HSF-I owned $1.8 billion in securitized
residential mortgage loans sold to it by CTX Mortgage and had $1.7 billion of
outstanding securitized term debt and $93 million of outstanding subordinated
certificates. We do not guarantee the payment of any debt or subordinated
certificates of HSF-I, and we are not liable for credit losses relating to
securitized residential mortgage loans sold to HSF-I. However, we do retain
certain risks related to the portfolio of mortgage loans held by HSF-I. In
particular, CTX Mortgage makes representations and warranties to HSF-I to the
effect that each mortgage loan sold to HSF-I satisfies the eligibility criteria
and portfolio requirements discussed above. CTX Mortgage may be required to
repurchase mortgage loans sold to HSF-I if such mortgage loans are determined
to be ineligible loans or there occur certain other breaches of representations
and warranties of CTX Mortgage, as seller or servicer. During the six months
ended September 30, 2002, CTX Mortgage sold $4.4 billion of mortgage loans to
HSF-I.

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

3333 Holding Corporation, 3333 Development Corporation and the Partnership
are entities that are not affiliates of and are not consolidated with Centex
Corporation. These entities were established in 1987 in order to broaden the
range of business activities that may be conducted for the benefit of our
stockholders to include general real estate development. We determined that
this expansion would improve stockholder value

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through longer-term real estate investments, real estate developments and
the benefits of the partnership form of business. Because the real estate
development business generally requires a longer time horizon to maximize value
than our core homebuilding operations and typically involves substantial
acquisition and development indebtedness, we concluded that this new line of
business could best be conducted through the Partnership, an independent,
publicly-traded entity that is not consolidated with us. The Partnership is
managed by its general partner, 3333 Development Corporation, a wholly-owned
subsidiary of 3333 Holding Corporation. We generally are not liable for the
obligations of 3333 Holding Corporation, 3333 Development Corporation or the
Partnership. However, as of September 30, 2002, we guaranteed approximately
$2.3 million of indebtedness of the Partnership. In addition, we enter into
certain land purchase and other transactions with the Partnership. For
additional information regarding these entities, see Part B of this Report. In
addition, for information regarding these entities and Centex Corporation, on
an aggregate basis, see Note (G) of the Notes to Consolidated Financial
Statements of Centex Corporation.

Joint Ventures

We conduct a portion of our land acquisition, development and other
activities through joint ventures in which we hold less than a majority
interest. Our investment in these non-consolidated joint ventures was $124.6
million and $94.6 million at September 30, 2002 and March 31, 2002,
respectively. These joint ventures had total outstanding secured construction
debt of approximately $197.4 million at September 30, 2002 and $144.6 million
at March 31, 2002. Our pro rata liability with respect to this debt is limited
to approximately $31.3 million and $27.9 million at September 30, 2002 and
March 31, 2002, respectively. Under the structure of this debt, we become
liable up to these amounts only to the extent that the construction debt
exceeds a certain percentage of the value of the project. At September 30,
2002 and March 31, 2002, we were not liable for any of this debt.

Letters of Credit and Guarantees

At September 30, 2002, we had outstanding letters of credit of $113.0
million that primarily relate to projects undertaken by Construction Services
and development obligations of Home Building. We expect that the obligations
secured by these letters of credit will generally be performed by our
subsidiaries in the ordinary course of business and in accordance with the
applicable contractual terms. To the extent that the underlying commercial
obligations are performed by our subsidiaries, the related letters of credit
will be released and we will not have any continuing obligations. We have no
material third-party guarantees.



---

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

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| |  | Our residential Home Building and Construction Services operations are somewhat
cyclical and sensitive to changes in economic conditions, including levels of
employment, consumer confidence and income, availability of financing, interest
rate levels and changes in the economic condition of the local markets in which we
operate.                                                                                                                                                                                                                                                                                                      
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | Our residential Home Building and Construction Services operations are also
subject to other risks and uncertainties, including seasonal variations, adverse
weather conditions, the availability of adequate land in desirable locations, the
cost and availability of labor and construction materials, labor disputes, the
general demand for housing and new construction and the resale market for existing
homes.                                                                                                                                                                                                                        
| 
| |  | Virtually all of our homebuyers finance their home acquisitions through our
Financial Services operations or third party lenders. In general, our Home Building
operations can be adversely affected by increases in interest rates.                                                                                                                                                                                                                                                                                                                                                                                                           
| 
| |  | The results of operations of CTX Mortgage depend to a significant extent on the
level of interest rates. Any significant increases in mortgage rates above
currently prevailing levels could adversely affect the volume of loan originations.
There can be no assurance that mortgage rates will remain at the current level in
the future. Our mortgage loan operations are also dependent upon the
securitization market for mortgage-backed securities and the availability of
mortgage warehouse financing.                                                                                                                               
| 
| |  | Demand for the products that our Construction Products operations produce is
directly related to activity in the homebuilding and construction industries and to
general economic conditions. Our Construction Products operations are also
concentrated in particular regional and local markets that may experience cyclical
downturns at different times than the national economy. The price at which we
sell our construction products, particularly gypsum wallboard, is highly sensitive
to changes in supply and demand for such products, energy costs, raw material
prices and competition from other domestic and foreign producers.
| 
| |  | All of our businesses operate in very competitive environments, which are
characterized by competition from a number of other homebuilders, mortgage lenders,
construction products producers and contractors in each of the markets in which we
operate.                                                                                                                                                                                                                                                                                                                                                                                      
| 
| |  | We are subject to various federal, state and local statutes, rules and regulations
that could affect our businesses, including those concerning zoning, construction,
protecting the environment and health. In addition, our businesses could be
affected by changes in federal income tax policy, federal mortgage loan financing
programs and by other changes in regulation or policy.                                                                                                                                                                                                                                                     




Item 3. Quantitative and Qualitative Disclosures About Market Risk

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

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




Item 4. Controls and Procedures

An evaluation has been performed under the supervision and with the
participation of our management, including our CEO and CFO, of the
effectiveness of the design and operation of our disclosure controls and
procedures as of September 30, 2002. Based on that evaluation, our management,
including our CEO and CFO, concluded that our disclosure controls and
procedures were effective as of September 30, 2002. There have been no
significant changes in our internal controls or in other factors that could
significantly affect internal controls subsequent to September 30, 2002.




Part II. Other Information




Item 4. Submission of Matters to a Vote of Security Holders

On July 18, 2002, we held our Annual Meeting of Stockholders. At the
Annual Meeting, Barbara T. Alexander, Juan L. Elek and Timothy R. Eller were
elected as directors to serve for a three-year term until the 2005 Annual
Meeting. Voting results for these nominees are summarized as follows:

|                     |  |                  |            |  |         |  |         | 
|-------------------- |  | ---------------- | ---------- |  | ------- |  | ------- | 
|                     |  | Number of Shares |           
|                     |  |                  |           
|                     |  | For              |            |  | Against | 
|                     |  |                  |            |  |         | 
|Barbara T. Alexander |  |                  | 43,992,540 |  |         |  | 562,456 | 
|Juan L. Elek         |  |                  | 44,236,700 |  |         |  | 318,296 | 
|Timothy R. Eller     |  |                  | 44,236,398 |  |         |  | 318,598 | 




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 July 17,
2002 announcing the Companys first quarter net earnings for
the quarter ended June 30, 2002.                                                                                                                                                                                                                                                                                                                                                                             
| |  |  |     |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |  |  |     |  |  | Current Joint Report on Form 8-K of Centex Corporation, 3333
Holding Corporation and Centex Development Company, L.P. dated
August 13, 2002, furnishing the statements under oath of the
Principal Executive Officer and the Principal Financial Officer
of Centex Corporation pursuant to the SECs Order No. 4-460;
and the certification of the Chief Executive Officer and the
Chief Financial Officer of Centex Corporation pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
| |  |  |     |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |  |  |     |  |  | Current Report on Form 8-K of Centex Corporation dated
September 17, 2002 filing certain exhibits in connection with
the public offering of $225,000,000 aggregate principal amount
of the Companys 5.80% Senior Notes due 2009.                                                                                                                                                                                                                                                                                                         

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| |  |  |  |  |  |                                                                                                                                                                                                                                   
| |  |  |  |  |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |  |  |  |  | Current Report on Form 8-K of Centex Corporation dated
September 23, 2002 announcing that Centex Homes sales for the
quarter increased 36% and that the Company expected second
quarter earnings to rise 15% over the prior year.

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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                                                                                         
|                  |  |                                                                                                    
|November 12, 2002 |  | /s/ Leldon E. Echols                                                                               
|                  |  |                                                                                                    
|                  |  | Leldon E. Echols
Executive Vice President and
Chief Financial Officer
(principal financial officer)

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##### Table of Contents






Certifications

I, Laurence E. Hirsch, certify that:

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

2.     Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;

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

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

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

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

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

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

Date: November 12, 2002



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

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Certifications

I, Leldon E. Echols, certify that:

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

2.     Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;

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

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

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

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

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

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

Date: November 12, 2002

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

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##### Table of Contents












Part I. Financial Information

Item 1. Financial Statements

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

|                                                               |                                                                      |   |                                          |     |  |              |               |     |                |              |       |          |  |   |              |   |               |                |         |              |  |   |       |   | 
|-------------------------------------------------------------- | -------------------------------------------------------------------- | - | ---------------------------------------- | --- |  | ------------ | ------------- | --- | -------------- | ------------ | ----- | -------- |  | - | ------------ | - | ------------- | -------------- | ------- | ------------ |  | - | ----- | - | 
|                                                               |                                                                      |   |                                          |    
|                                                               |                                                                      |   | For the Three Months Ended September 30, |    
|                                                               |                                                                      |   |                                          |    
|                                                               |                                                                      |   | 2002                                     |     |  | 2001         |              
|                                                               |                                                                      |   |                                          |     |  |              |              
|                                                               |                                                                      |   |                                          |     |  |              | Centex        |     |                |              |       |          |  |   |              |   |               | Centex         |         |              |  |  
|                                                               |                                                                      |   |                                          |     |  |              | Development   |     |                |              |       |          |  |   |              |   |               | Development    |        
|                                                               |                                                                      |   |                                          |     |  |              | Company, L.P. |     |                | 3333 Holding |       |          |  |   |              |   | Company, L.P. |                |         | 3333 Holding | 
|                                                               |                                                                      |   |                                          |     |  |              | and           |     |                | Corporation  |       |          |  |   |              |   | and           |                |         | Corporation  | 
|                                                               |                                                                      |   | Combined                                 |     |  | Subsidiaries |               |     | and Subsidiary |              |       | Combined |  |   | Subsidiaries |   |               | and Subsidiary |        
|                                                               |                                                                      |   |                                          |     |  |              |               |     |                |              |       |          |  |   |              |   |               |               
|Revenues                                                       |                                                                      | $ | 105,534                                  |     |  | $            | 105,484       |     |                | $            | 87    |          |  | $ | 86,287       |   |               | $              | 86,287  |              |  | $ | 50    |  
|Costs and Expenses                                             |                                                                      |   | 101,571                                  |     |  |              | 101,553       |     |                |              | 55    |          |  |   | 82,487       |   |               |                | 82,450  |              |  |   | 87    |  
|                                                               |                                                                      |   |                                          |     |  |              |               |     |                |              |       |          |  |   |              |   |               |               
|Earnings (Loss) From Continuing Operations
Before Income Taxes |                                                                      |   | 3,963                                    |     |  |              | 3,931         |     |                |              | 32    |          |  |   | 3,800        |   |               |                | 3,837   |              |  |   | (37   | )
|Income Taxes                                                   |                                                                      |   | 779                                      |     |  |              | 779           |     |                |              |      |          |  |   | 418          |   |               |                | 418     |              |  |   |      |  
|                                                               |                                                                      |   |                                          |     |  |              |               |     |                |              |       |          |  |   |              |   |               |               
|Net Earnings (Loss) From Continuing
Operations                 |                                                                      |   | 3,184                                    |     |  |              | 3,152         |     |                |              | 32    |          |  |   | 3,382        |   |               |                | 3,419   |              |  |   | (37   | )
|                                                               |                                                                      |   |                                          |     |  |              |               |     |                |              |       |          |  |   |              |   |               |                |         |              |  |   |       |  
|Discontinued Operations:                                       |                                                                      |   |                                          |     |  |              |               |     |                |              |       |          |  |  
|                                                               | Income From Discontinued Operations
(Including Gain on Sale of $281) |   |                                          | 423 |  |              |               | 423 |                |              |       |         |  |   |              |  |               |                |         |             |  |   |       |  | 
|                                                               |                                                                      |   |                                          |     |  |              |               |     |                |              |       |          |  |   |              |   |               |               
|Net Earnings (Loss)                                            |                                                                      | $ | 3,607                                    |     |  | $            | 3,575         |     |                | $            | 32    |          |  | $ | 3,382        |   |               | $              | 3,419   |              |  | $ | (37   | )
|                                                               |                                                                      |   |                                          |     |  |              |               |     |                |              |       |          |  |   |              |   |               |               
|Net Earnings Allocable to Limited Partners                     |                                                                      |   |                                          |     |  | $            | 3,575         |     |                |              |       |          |  |   |              |   |               | $              | 3,419   |             
|                                                               |                                                                      |   |                                          |     |  |              |               |     |                |              |       |          |  |   |              |   |               |                |         |              |  |  
|Earnings (Loss) Per Unit/Share                                 |                                                                      |   |                                          |     |  | $            | 14.86         |     |                | $            | 32    |          |  |   |              |   |               | $              | 15.63   |              |  | $ | (37   | )
|                                                               |                                                                      |   |                                          |     |  |              |               |     |                |              |       |          |  |   |              |   |               |                |         |             
|Weighted-Average Units/Shares Outstanding                      |                                                                      |   |                                          |     |  |              | 240,591       |     |                |              | 1,000 |          |  |   |              |   |               |                | 218,785 |              |  |   | 1,000 |  

See Notes to Condensed Combining Financial Statements.

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

-45-



---



##### Table of Contents



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

|                                                        |                                                                      |   |                                        |     |  |              |               |     |                |              |       |          |  |   |              |   |               |                |         |              |  |   |       |   | 
|------------------------------------------------------- | -------------------------------------------------------------------- | - | -------------------------------------- | --- |  | ------------ | ------------- | --- | -------------- | ------------ | ----- | -------- |  | - | ------------ | - | ------------- | -------------- | ------- | ------------ |  | - | ----- | - | 
|                                                        |                                                                      |   |                                        |    
|                                                        |                                                                      |   | For the Six Months Ended September 30, |    
|                                                        |                                                                      |   |                                        |    
|                                                        |                                                                      |   | 2002                                   |     |  | 2001         |              
|                                                        |                                                                      |   |                                        |     |  |              |              
|                                                        |                                                                      |   |                                        |     |  |              | Centex        |     |                |              |       |          |  |   |              |   |               | Centex         |         |              |  |   |      
|                                                        |                                                                      |   |                                        |     |  |              | Development   |     |                |              |       |          |  |   |              |   |               | Development    |         |              |  |   |      
|                                                        |                                                                      |   |                                        |     |  |              | Company, L.P. |     |                | 3333 Holding |       |          |  |   |              |   | Company, L.P. |                |         | 3333 Holding | 
|                                                        |                                                                      |   |                                        |     |  |              | and           |     |                | Corporation  |       |          |  |   |              |   | and           |                |         | Corporation  | 
|                                                        |                                                                      |   | Combined                               |     |  | Subsidiaries |               |     | and Subsidiary |              |       | Combined |  |   | Subsidiaries |   |               | and Subsidiary |        
|                                                        |                                                                      |   |                                        |     |  |              |               |     |                |              |       |          |  |   |              |   |               |                |        
|Revenues                                                |                                                                      | $ | 195,437                                |     |  | $            | 195,337       |     |                | $            | 175   |          |  | $ | 170,242      |   |               | $              | 169,632 |              |  | $ | 710   |  
|Costs and Expenses                                      |                                                                      |   | 192,240                                |     |  |              | 192,184       |     |                |              | 131   |          |  |   | 163,076      |   |               |                | 163,005 |              |  |   | 171   |  
|                                                        |                                                                      |   |                                        |     |  |              |               |     |                |              |       |          |  |   |              |   |               |               
|Earnings From Continuing Operations
Before Income Taxes |                                                                      |   | 3,197                                  |     |  |              | 3,153         |     |                |              | 44    |          |  |   | 7,166        |   |               |                | 6,627   |              |  |   | 539   |  
|Income Taxes                                            |                                                                      |   | 309                                    |     |  |              | 309           |     |                |              |      |          |  |   | 709          |   |               |                | 709     |              |  |   |      |  
|                                                        |                                                                      |   |                                        |     |  |              |               |     |                |              |       |          |  |   |              |   |               |               
|Net Earnings From Continuing Operations                 |                                                                      |   | 2,888                                  |     |  |              | 2,844         |     |                |              | 44    |          |  |   | 6,457        |   |               |                | 5,918   |              |  |   | 539   |  
|                                                        |                                                                      |   |                                        |     |  |              |               |     |                |              |       |          |  |   |              |   |               |                |         |              |  |   |       |   | 
|Discontinued Operations:                                |                                                                      |   |                                        |     |  |              |               |     |                |              |       |          |  |   |              |   |               |                |         |              |  |   |       |  
|                                                        | Income From Discontinued Operations
(Including Gain on Sale of $281) |   |                                        | 416 |  |              |               | 416 |                |              |       |         |  |   |              |  |               |                |         |             |  |   |       |  | 
|                                                        |                                                                      |   |                                        |     |  |              |               |     |                |              |       |          |  |   |              |   |               |               
|Net Earnings                                            |                                                                      | $ | 3,304                                  |     |  | $            | 3,260         |     |                | $            | 44    |          |  | $ | 6,457        |   |               | $              | 5,918   |              |  | $ | 539   |  
|                                                        |                                                                      |   |                                        |     |  |              |               |     |                |              |       |          |  |   |              |   |               |               
|Net Earnings Allocable to Limited Partners              |                                                                      |   |                                        |     |  | $            | 3,260         |     |                |              |       |          |  |   |              |   |               | $              | 5,918   |              |  |   |       |  
|                                                        |                                                                      |   |                                        |     |  |              |               |     |                |              |       |          |  |   |              |   |               |                |         |              |  |  
|Earnings Per Unit/Share                                 |                                                                      |   |                                        |     |  | $            | 13.55         |     |                | $            | 44    |          |  |   |              |   |               | $              | 27.05   |              |  | $ | 539   |  
|                                                        |                                                                      |   |                                        |     |  |              |               |     |                |              |       |          |  |   |              |   |               |                |         |             
|Weighted-Average Units/Shares Outstanding               |                                                                      |   |                                        |     |  |              | 240,591       |     |                |              | 1,000 |          |  |   |              |   |               |                | 218,785 |              |  |   | 1,000 |  
|                                                        |                                                                      |   |                                        |     |  |              |               |     |                |              |       |          |  |   |              |   |               |                |         |             

See Notes to Condensed Combining Financial Statements.

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

-46-



---



##### Table of Contents






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

|                                                        |                            |                   |  |                     |  |   |                  |         |         |            |         |             |         |   |             |       |       |  |  |  |          |  |  |              |  |   |            |         |         |             |         |         |              |   |        |       |       | 
|------------------------------------------------------- | -------------------------- | ----------------- |  | ------------------- |  | - | ---------------- | ------- | ------- | ---------- | ------- | ----------- | ------- | - | ----------- | ----- | ----- |  |  |  | -------- |  |  | ------------ |  | - | ---------- | ------- | ------- | ----------- | ------- | ------- | ------------ | - | ------ | ----- | ----- | 
|                                                        |                            |                   |  |                     | 
|                                                        |                            |                   |  | September 30, 2002* |  |   | March 31, 2002** |        
|                                                        |                            |                   |  |                     |  |   |                  |         |         |            |         |             |         |   |             |      
|                                                        |                            |                   |  |                     |  |   |                  |         |         |            |         | Centex      |         |   |             |       |       |  |  |  |          |  |  |              |  |   |            |         |         |             | Centex  |         |              |   |        |      
|                                                        |                            |                   |  |                     |  |   |                  |         |         |            |         | Development |         |   | 3333        |       |       |  |  |  |          |  |  |              |  |   |            |         |         | Development |         |         |              |   |       
|                                                        |                            |                   |  |                     |  |   |                  |         |         |            |         | Company,    |         |   | Holding     |       |       |  |  |  |          |  |  |              |  |   |            |         |         | Company,    |         |         | 3333 Holding |  
|                                                        |                            |                   |  |                     |  |   |                  |         |         |            |         | L.P.        |         |   | Corporation |       |       |  |  |  |          |  |  |              |  |   |            |         |         | L.P.        |         |         | Corporation  |  
|                                                        |                            |                   |  |                     |  |   |                  |         |         |            |         | and         |         |   | and         |       |       |  |  |  |          |  |  |              |  |   |            |         |         | and         |         |         | and          |  
|                                                        |                            |                   |  | Combined            |  |   | Subsidiaries     |         |         | Subsidiary |         |             |         |   |             |       |       |  |  |  | Combined |  |  | Subsidiaries |  |   | Subsidiary |        
|                                                        |                            |                   |  |                     |  |   |                  |         |         |            |         |             |         |   |             |       |       |  |  |  |          |  |  |              |  |   |            |        
|Assets                                                  |                            |                   |  |                     |  |   |                  |         |         |            |         |             |         |   |             |       |       |  |  |  |          |  |  |              |  |   |            |         |         |             |         |         |              |   |        |      
|Cash and Cash Equivalents                               |                            |                   |  |                     |  | $ | 32,196           |         |         | $          | 32,182  |             |         | $ | 14          |       |       |  |  |  |          |  |  |              |  | $ | 22,538     |         |         | $           | 22,529  |         |              | $ | 9      |      
|Accounts Receivable                                     |                            |                   |  |                     |  |   | 5,174            |         |         |            | 9,358   |             |         |   | 143         |       |       |  |  |  |          |  |  |              |  |   | 7,481      |         |         |             | 11,778  |         |              |   | 71     |      
|Inventories                                             |                            |                   |  |                     |  |   | 463,825          |         |         |            | 463,825 |             |         |   |            |       |       |  |  |  |          |  |  |              |  |   | 440,825    |         |         |             | 440,825 |         |              |   |       |      
|Investments-                                            |                            |                   |  |                     |  |   |                  |         |         |            |         |             |         |   |             |       |       |  |  |  |          |  |  |              |  |   |            |         |         |             |         |         |              |   |        |      
|                                                        | Commercial Properties, net |                   |  |                     |  |   |                  | 135,391 |         |            |         | 135,391     |         |   |             |      |       |  |  |  |          |  |  |              |  |   |            | 121,290 |         |             |         | 121,290 |              |   |        |      |      
|                                                        | Real Estate Joint Ventures |                   |  |                     |  |   |                  | 4,378   |         |            |         | 4,378       |         |   |             |      |       |  |  |  |          |  |  |              |  |   |            | 5,353   |         |             |         | 5,353   |              |   |        |      |      
|                                                        | Affiliate                  |                   |  |                     |  |   |                  |        |         |            |         |            |         |   |             | 1,190 |       |  |  |  |          |  |  |              |  |   |            |        |         |             |         |        |              |   |        | 1,191 |      
|Assets Held for Sale                                    |                            |                   |  |                     |  |   | 16,498           |         |         |            | 16,498  |             |         |   |            |       |       |  |  |  |          |  |  |              |  |   | 17,774     |         |         |             | 17,774  |         |              |   |       |      
|Property and Equipment, net                             |                            |                   |  |                     |  |   | 3,423            |         |         |            | 3,423   |             |         |   |            |       |       |  |  |  |          |  |  |              |  |   | 3,212      |         |         |             | 3,212   |         |              |   |       |      
|Other Assets-                                           |                            |                   |  |                     |  |   |                  |         |         |            |         |             |         |   |             |       |       |  |  |  |          |  |  |              |  |   |            |         |         |             |         |         |              |   |        |      
|                                                        | Goodwill, net              |                   |  |                     |  |   |                  | 30,435  |         |            |         | 30,435      |         |   |             |      |       |  |  |  |          |  |  |              |  |   |            | 27,799  |         |             |         | 27,799  |              |   |        |      |      
|                                                        | Deferred Charges and Other |                   |  |                     |  |   |                  | 23,441  |         |            |         | 21,659      |         |   |             | 1,782 |       |  |  |  |          |  |  |              |  |   |            | 22,164  |         |             |         | 20,393  |              |   |        | 1,771 |      
|                                                        |                            |                   |  |                     |  |   |                  |         |         |            |         |             |         |   |             |       |       |  |  |  |          |  |  |              |  |   |            |         |         |            
|                                                        |                            |                   |  |                     |  | $ | 714,761          |         |         | $          | 717,149 |             |         | $ | 3,129       |       |       |  |  |  |          |  |  |              |  | $ | 668,436    |         |         | $           | 670,953 |         |              | $ | 3,042  |      
|                                                        |                            |                   |  |                     |  |   |                  |         |         |            |         |             |         |   |             |       |       |  |  |  |          |  |  |              |  |   |            |         |         |            
|Liabilities, Stockholders Equity
and Partners Capital |                            |                   |  |                     |  |   |                  |         |         |            |         |             |         |   |             |       |       |  |  |  |          |  |  |              |  |   |            |         |         |             |         |         |              |   |        |      
|Accounts Payable and Accrued
Liabilities                |                            |                   |  |                     |  | $ | 123,963          |         |         | $          | 123,885 |             |         | $ | 4,453       |       |       |  |  |  |          |  |  |              |  | $ | 115,377    |         |         | $           | 115,384 |         |              | $ | 4,410  |      
|Liabilities Related to Assets Held
for Sale             |                            |                   |  |                     |  |   | 12,249           |         |         |            | 12,249  |             |         |   |            |       |       |  |  |  |          |  |  |              |  |   | 13,771     |         |         |             | 13,771  |         |              |   |       |      
|Notes Payable                                           |                            |                   |  |                     |  |   | 296,291          |         |         |            | 296,291 |             |         |   |            |       |       |  |  |  |          |  |  |              |  |   | 277,141    |         |         |             | 277,141 |         |              |   |       |      
|                                                        |                            |                   |  |                     |  |   |                  |         |         |            |         |             |         |   |             |       |       |  |  |  |          |  |  |              |  |   |            |         |         |            
|                                                        |                            | Total Liabilities |  |                     |  |   |                  |         | 432,503 |            |         |             | 432,425 |   |             |       | 4,453 |  |  |  |          |  |  |              |  |   |            |         | 406,289 |             |         |         | 406,296      |   |        |       | 4,410 | 
|                                                        |                            |                   |  |                     |  |   |                  |         |         |            |         |             |         |   |             |       |       |  |  |  |          |  |  |              |  |   |            |         |         |            
|Stockholders Equity and
Partners Capital              |                            |                   |  |                     |  |   | 282,258          |         |         |            | 284,724 |             |         |   | (1,324      | )     |       |  |  |  |          |  |  |              |  |   | 262,147    |         |         |             | 264,657 |         |              |   | (1,368 | )    
|                                                        |                            |                   |  |                     |  |   |                  |         |         |            |         |             |         |   |             |       |       |  |  |  |          |  |  |              |  |   |            |         |         |            
|                                                        |                            |                   |  |                     |  | $ | 714,761          |         |         | $          | 717,149 |             |         | $ | 3,129       |       |       |  |  |  |          |  |  |              |  | $ | 668,436    |         |         | $           | 670,953 |         |              | $ | 3,042  |      
|                                                        |                            |                   |  |                     |  |   |                  |         |         |            |         |             |         |   |             |       |       |  |  |  |          |  |  |              |  |   |            |         |         |            

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

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

-47-



---



##### 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 Six Months Ended September 30, |      
|                                                                              |                                        |   |                                        |      
|                                                                              |                                        |   | 2002                                   |       |   | 2001         |              
|                                                                              |                                        |   |                                        |       |   |              |              
|                                                                              |                                        |   |                                        |       |   |              | Centex        |       |                |              |     |          |  |   |              |       |               | Centex         |         |              |   |   |       
|                                                                              |                                        |   |                                        |       |   |              | Development   |       |                |              |     |          |  |   |              |       |               | Development    |        
|                                                                              |                                        |   |                                        |       |   |              | Company, L.P. |       |                | 3333 Holding |     |          |  |   |              |       | Company, L.P. |                |         | 3333 Holding |  
|                                                                              |                                        |   |                                        |       |   |              | and           |       |                | Corporation  |     |          |  |   |              |       | and           |                |         | Corporation  |  
|                                                                              |                                        |   | Combined                               |       |   | Subsidiaries |               |       | and Subsidiary |              |     | Combined |  |   | Subsidiaries |       |               | and Subsidiary
|                                                                              |                                        |   |                                        |       |   |              |               |       |                |              |     |          |  |   |              |       |               |               
|Cash Flows  Operating Activities                                             |                                        |   |                                        |       |   |              |               |       |                |              |     |          | 
|Net Earnings                                                                  |                                        | $ | 3,304                                  |       |   | $            | 3,260         |       |                | $            | 44  |          |  | $ | 6,457        |       |               | $              | 5,918   |              |   | $ | 539    |  
|Adjustments:                                                                  |                                        |   |                                        |       |   |              |               |       |                |              |     |          |  |   |              |       |               |                |         |              |   |  
|                                                                              | Depreciation and Amortization          |   |                                        | 3,064 |   |              |               | 3,064 |                |              |     |         |  |   |              | 1,939 |               |                |         | 1,939        |   |   |        |  | 
|                                                                              | Equity in Earnings from Joint
Ventures |   |                                        | (575  | ) |              |               | (575  | )              |              |     |         |  |   |              | (203  | )             |                |         | (203         | ) |   |        |  | 
|Decrease (Increase) in Receivables                                            |                                        |   | 2,617                                  |       |   |              | 2,689         |       |                |              | (72 | )        |  |   | 6,427        |       |               |                | 6,427   |              |   |   |       |  
|Decrease in Notes Receivable                                                  |                                        |   |                                       |       |   |              |              |       |                |              |    |          |  |   | 5            |       |               |                | 5       |              |   |   |       |  
|Decrease (Increase) in Inventories                                            |                                        |   | 12,747                                 |       |   |              | 12,747        |       |                |              |    |          |  |   | (72,974      | )     |               |                | (74,202 | )            |   |   | 1,228  |  
|Increase in Commercial Properties                                             |                                        |   | (21,255                                | )     |   |              | (21,255       | )     |                |              |    |          |  |   | (14,559      | )     |               |                | (14,559 | )            |   |   |       |  
|Increase in Other Assets                                                      |                                        |   | (1,692                                 | )     |   |              | (1,681        | )     |                |              | (11 | )        |  |   | (4,882       | )     |               |                | (4,882  | )            |   |   |       |  
|(Decrease) Increase in Payables
and Accruals                                  |                                        |   | (3,534                                 | )     |   |              | (3,578        | )     |                |              | 44  |          |  |   | 22,548       |       |               |                | 24,375  |              |   |   | (1,827 | )
|                                                                              |                                        |   |                                        |       |   |              |               |       |                |              |     |          |  |   |              |       |               |               
|                                                                              |                                        |   | (5,324                                 | )     |   |              | (5,329        | )     |                |              | 5   |          |  |   | (55,242      | )     |               |                | (55,182 | )            |   |   | (60    | )
|                                                                              |                                        |   |                                        |       |   |              |               |       |                |              |     |          |  |   |              |       |               |               
|Cash Flows  Investing Activities                                             |                                        |   |                                        |       |   |              |               |       |                |              |     |          |  |   |              |      
|Decrease (Increase) in Advances to
Joint Ventures and Investment in
Affiliate |                                        |   | 1,550                                  |       |   |              | 1,550         |       |                |              |    |          |  |   | (4,933       | )     |               |                | (4,933  | )            |   |   |       |  
|(Increase) Decrease in Property and
Equipment, net                            |                                        |   | (197                                   | )     |   |              | (197          | )     |                |              |    |          |  |   | 141          |       |               |                | 80      |              |   |   | 61     |  
|                                                                              |                                        |   |                                        |       |   |              |               |       |                |              |     |          |  |   |              |       |               |               
|                                                                              |                                        |   | 1,353                                  |       |   |              | 1,353         |       |                |              |    |          |  |   | (4,792       | )     |               |                | (4,853  | )            |   |   | 61     |  
|                                                                              |                                        |   |                                        |       |   |              |               |       |                |              |     |          |  |   |              |       |               |               
|Cash Flows  Financing Activities                                             |                                        |   |                                        |       |   |              |               |       |                |              |     |          | 
|Increase in Notes Payable                                                     |                                        |   | 11,807                                 |       |   |              | 11,807        |       |                |              |    |          |  |   | 65,310       |       |               |                | 65,310  |              |   |   |       |  
|Issuance of Class C Units                                                     |                                        |   |                                       |       |   |              |              |       |                |              |    |          |  |   | 10,500       |       |               |                | 10,500  |              |   |   |       |  
|                                                                              |                                        |   |                                        |       |   |              |               |       |                |              |     |          |  |   |              |       |               |               
|                                                                              |                                        |   | 11,807                                 |       |   |              | 11,807        |       |                |              |    |          |  |   | 75,810       |       |               |                | 75,810  |              |   |   |       |  
|                                                                              |                                        |   |                                        |       |   |              |               |       |                |              |     |          |  |   |              |       |               |               
|Effect of Exchange Rate Changes
On Cash                                       |                                        |   | 1,822                                  |       |   |              | 1,822         |       |                |              |    |          |  |   | 416          |       |               |                | 416     |              |   |   |       |  
|                                                                              |                                        |   |                                        |       |   |              |               |       |                |              |     |          |  |   |              |       |               |               
|Net Increase In Cash                                                          |                                        |   | 9,658                                  |       |   |              | 9,653         |       |                |              | 5   |          |  |   | 16,192       |       |               |                | 16,191  |              |   |   | 1      |  
|Cash at Beginning of Period                                                   |                                        |   | 22,538                                 |       |   |              | 22,529        |       |                |              | 9   |          |  |   | 3,034        |       |               |                | 3,029   |              |   |   | 5      |  
|                                                                              |                                        |   |                                        |       |   |              |               |       |                |              |     |          |  |   |              |       |               |               
|Cash at End of Period                                                         |                                        | $ | 32,196                                 |       |   | $            | 32,182        |       |                | $            | 14  |          |  | $ | 19,226       |       |               | $              | 19,220  |              |   | $ | 6      |  
|                                                                              |                                        |   |                                        |       |   |              |               |       |                |              |     |          |  |   |              |       |               |               

See Notes to Condensed Combining Financial Statements.

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

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3333 Holding Corporation and Subsidiary
and Centex Development Company, L.P. and Subsidiaries
Notes to Condensed Combining Financial Statements
September 30, 2002
(Dollars in thousands, except per share data)
(unaudited)

(A) BASIS OF PRESENTATION

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

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

(B) ORGANIZATION

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

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

As holder of the Class A and Class C Units, Centex is entitled to a
cumulative preferred return of 9% per annum on the average outstanding balance
of its capital contributions to the Partnership, adjusted for cash and other
distributions representing return of capital. As of September 30, 2002, these
adjusted capital

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contributions, or Unrecovered Capital, were $241.1 million and preference
payments in arrears totaled $52.2 million. The Partnership has made no
preference payments since fiscal 1998.

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

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

(C) STATEMENTS OF COMBINING CASH FLOWS  SUPPLEMENTAL DISCLOSURES

|                        |  |                      |        |   |      |   |        |  
|----------------------- |  | -------------------- | ------ | - | ---- | - | ------ | -
|                        |  |                      |       
|                        |  | For the Three Months |       
|                        |  | Ended September 30,  |       
|                        |  |                      |       
|                        |  | 2002                 |        |   | 2001 |  
|                        |  |                      |        |   |      |  
|Total Interest Incurred |  | $                    | 4,296  |   |      | $ | 3,888  |  
|Interest Capitalized    |  |                      | (1,459 | ) |      |   | (1,251 | )
|                        |  |                      |        |   |      |  
|Interest Expense        |  | $                    | 2,837  |   |      | $ | 2,637  |  
|                        |  |                      |        |   |      |  

|                        |  |                     |        |   |      |   |        |  
|----------------------- |  | ------------------- | ------ | - | ---- | - | ------ | -
|                        |  |                     |       
|                        |  | For the Six Months  |       
|                        |  | Ended September 30, |       
|                        |  |                     |       
|                        |  | 2002                |        |   | 2001 |  
|                        |  |                     |        |   |      |  
|Total Interest Incurred |  | $                   | 8,830  |   |      | $ | 7,074  |  
|Interest Capitalized    |  |                     | (2,615 | ) |      |   | (2,846 | )
|                        |  |                     |        |   |      |  
|Interest Expense        |  | $                   | 6,215  |   |      | $ | 4,228  |  
|                        |  |                     |        |   |      |  

Cash payments made
for interest were $4.2 million and $4.0 million for the
three months ended September 30, 2002 and 2001, respectively. Cash payments
made for interest were $8.6 million and $7.1 million for the six months ended
September 30, 2002 and 2001, respectively. Land assets acquired by the
Partnership for Class C limited partnership units during the six months ended
September 30, 2002 and 2001 totaled zero and $5.3 million, respectively.

(D) RELATED PARTY TRANSACTIONS

At September 30, 2002 and March 31, 2002, Centex Homes had $9.1 million deposited with the Partnership as option deposits for
the purchase of land. Centex Homes also entered into

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agreements to reimburse the Partnership for certain costs and fees
incurred by the Partnership in the purchase and ownership of these tracts of
land. During the six months ended September 30, 2002, Centex Homes paid $1.6
million to the Partnership in fees and reimbursements pursuant to these
agreements and $24.1 million for the purchase of residential lots. Centex
Homes expects to pay an additional $38.6 million to the Partnership to complete
the purchase of these tracts of land over the next three years.

Construction Services has executed contracts with the Partnership for the
construction of two industrial facilities. Contracts in progress totaled $4.6
million and $15.0 million at September 30, 2002 and March 31, 2002,
respectively. During the six months ended September 30, 2002 and 2001, the
Partnership paid $4.7 million and $0.3 million, respectively, to Construction
Services pursuant to these contracts.

(E) COMPREHENSIVE INCOME

A summary of comprehensive income for the three and six months ended
September 30, 2002 and 2001 is presented below:

|                                   |                                          |   |                      |       |   |      |        |       | 
|---------------------------------- | ---------------------------------------- | - | -------------------- | ----- | - | ---- | ------ | ----- | 
|                                   |                                          |   |                      |      
|                                   |                                          |   | For the Three Months |      
|                                   |                                          |   | Ended September 30,  |      
|                                   |                                          |   |                      |      
|                                   |                                          |   | 2002                 |       |   | 2001 |       
|                                   |                                          |   |                      |       |   |      |       
|Net Earnings                       |                                          | $ | 3,607                |       |   | $    | 3,382  |      
|Other Comprehensive Income (Loss): |                                          |   |                      |       |   |      |        |      
|                                   | Foreign Currency Translation Adjustments |   |                      | 3,660 |   |      |        | 7,450 | 
|                                   | Unrealized Loss on Hedging Instruments   |   |                      | (592  | ) |      |        |      | 
|                                   |                                          |   |                      |       |   |     
|Comprehensive Income               |                                          | $ | 6,675                |       |   | $    | 10,832 |      
|                                   |                                          |   |                      |       |   |     

|                                   |                                          |   |                     |        |   |      |        |       | 
|---------------------------------- | ---------------------------------------- | - | ------------------- | ------ | - | ---- | ------ | ----- | 
|                                   |                                          |   |                     |       
|                                   |                                          |   | For the Six Months  |       
|                                   |                                          |   | Ended September 30, |       
|                                   |                                          |   |                     |       
|                                   |                                          |   | 2002                |        |   | 2001 |       
|                                   |                                          |   |                     |        |   |      |       
|Net Earnings                       |                                          | $ | 3,304               |        |   | $    | 6,457  |      
|Other Comprehensive Income (Loss): |                                          |   |                     |        |   |      |        |      
|                                   | Foreign Currency Translation Adjustments |   |                     | 17,633 |   |      |        | 8,004 | 
|                                   | Unrealized Loss on Hedging Instruments   |   |                     | (826   | ) |      |        |      | 
|                                   |                                          |   |                     |        |   |     
|Comprehensive Income               |                                          | $ | 20,111              |        |   | $    | 14,461 |      
|                                   |                                          |   |                     |        |   |     

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(F) STOCKHOLDERS EQUITY

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

|                              |                                          |   |          |        |   |                            |         |         |                          |         |           |   |          |        |   |           |           |            |           |          |          |   |  |   |        |   |  |  | 
|----------------------------- | ---------------------------------------- | - | -------- | ------ | - | -------------------------- | ------- | ------- | ------------------------ | ------- | --------- | - | -------- | ------ | - | --------- | --------- | ---------- | --------- | -------- | -------- | - |  | - | ------ | - |  |  | 
|                              |                                          |   |          |       
|                              |                                          |   |          |        |   | Centex Development Company |         |         | 3333 Holding Corporation |        
|                              |                                          |   |          |        |   | L.P. and Subsidiaries      |         |         | and Subsidiary           |        
|                              |                                          |   |          |        |   |                            |         |         |                          |         |          
|                              |                                          |   |          |        |   |                            | Class B |         | General                  |         | Limited   |   |          |        |   |           |           | Capital in |           |          | Retained |  
|                              |                                          |   |          |        |   |                            | Unit    |         | Partner's                |         | Partner's |   |          | Stock  |   |           | Excess of |            |           | Earnings |         
|                              |                                          |   | Combined |        |   | Warrants                   |         | Capital |                          | Capital |           |   | Warrants |        |   | Par Value |           |            | (Deficit) |         
|                              |                                          |   |          |        |   |                            |         |         |                          |         |           |   |          |        |   |           |           |            |           |         
|Balance at March 31, 2002     |                                          | $ | 262,147  |        |   | $                          | 500     |         | $                        | 1,142   |           | $ | 263,015  |        |   | $         | 1         |            |           | $        | 800      |   |  | $ | (2,169 | )
|Net Earnings                  |                                          |   | 3,304    |        |   |                            |        |         |                          |        |           |   | 3,260    |        |   |           |          |            |           |          |         |   |  |   | 44     |  
|Accumulated Other             |                                          |   |          |        |   |                            |         |         |                          |         |           |   |          |        |   |           |           |            |           |          |          |   |  |   |        |   |  | 
|Comprehensive Income:         |                                          |   |          |        |   |                            |         |         |                          |         |           |   |          |        |   |           |           |            |           |          |          |   |  |   |        |   |  | 
|                              | Foreign Currency
Translation Adjustments |   |          | 17,633 |   |                            |         |        |                          |         |          |   |          | 17,633 |   |           |           |           |           |          |          |  |  |   |        |  | 
|                              | Unrealized Loss on
Hedging Instruments   |   |          | (826   | ) |                            |         |        |                          |         |          |   |          | (826   | ) |           |           |           |           |          |          |  |  |   |        |  | 
|                              |                                          |   |          |        |   |                            |         |         |                          |         |           |   |          |        |   |           |           |            |          
|Balance at September 30, 2002 |                                          | $ | 282,258  |        |   | $                          | 500     |         | $                        | 1,142   |           | $ | 283,082  |        |   | $         | 1         |            |           | $        | 800      |   |  | $ | (2,125 | )
|                              |                                          |   |          |        |   |                            |         |         |                          |         |           |   |          |        |   |           |           |            |          

(G) BUSINESS SEGMENTS

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

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

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|                                                               |  |                                               |         |   |             |   |        |              |  |   |            |   |  |       |        |   |  |   |         |  
|-------------------------------------------------------------- |  | --------------------------------------------- | ------- | - | ----------- | - | ------ | ------------ |  | - | ---------- | - |  | ----- | ------ | - |  | - | ------- | -
|                                                               |  |                                               |        
|                                                               |  | For the Three Months Ended September 30, 2002 |        
|                                                               |  |                                               |        
|                                                               |  | Int'l Home                                    |         |   | Commercial  |   |        | Multi-Family |  |   | Corporate- |   |  |       |        |  
|                                                               |  | Building                                      |         |   | Development |   |        | Communities  |  |   | Other      |   |  | Total |       
|                                                               |  |                                               |         |   |             |   |        |              |  |   |            |   |  |       |       
|Revenues                                                       |  | $                                             | 94,426  |   |             | $ | 7,716  |              |  | $ | 116        |   |  | $     | 3,276  |   |  | $ | 105,534 |  
|Cost of Sales                                                  |  |                                               | (81,979 | ) |             |   | (859   | )            |  |   |           |   |  |       | (3,015 | ) |  |   | (85,853 | )
|Selling, General & Administrative
Expenses                     |  |                                               | (7,592  | ) |             |   | (4,011 | )            |  |   | (662       | ) |  |       | (742   | ) |  |   | (13,007 | )
|Interest Expense                                               |  |                                               | (683    | ) |             |   | (1,864 | )            |  |   |           |   |  |       | (164   | ) |  |   | (2,711  | )
|                                                               |  |                                               |         |   |             |   |        |              |  |   |            |   |  |       |       
|Earnings (Loss) from Continuing Operations Before Income Taxes |  |                                               | 4,172   |   |             |   | 982    |              |  |   | (546       | ) |  |       | (645   | ) |  |   | 3,963   |  
|Earnings from Discontinued Operations Before Income Taxes      |  |                                               |        |   |             |   | 423    |              |  |   |           |   |  |       |       |   |  |   | 423     |  
|                                                               |  |                                               |         |   |             |   |        |              |  |   |            |   |  |       |       
|Earnings (Loss) Before Income Taxes                            |  | $                                             | 4,172   |   |             | $ | 1,405  |              |  | $ | (546       | ) |  | $     | (645   | ) |  | $ | 4,386   |  
|                                                               |  |                                               |         |   |             |   |        |              |  |   |            |   |  |       |       

|                                           |  |                                               |         |   |             |   |         |              |  |   |            |   |  |       |      |   |  |   |         |  
|------------------------------------------ |  | --------------------------------------------- | ------- | - | ----------- | - | ------- | ------------ |  | - | ---------- | - |  | ----- | ---- | - |  | - | ------- | -
|                                           |  |                                               |        
|                                           |  | For the Three Months Ended September 30, 2001 |        
|                                           |  |                                               |        
|                                           |  | Int'l Home                                    |         |   | Commercial  |   |         | Multi-Family |  |   | Corporate- |   |  |       |      |  
|                                           |  | Building                                      |         |   | Development |   |         | Communities  |  |   | Other      |   |  | Total |     
|                                           |  |                                               |         |   |             |   |         |              |  |   |            |   |  |       |     
|Revenues                                   |  | $                                             | 68,376  |   |             | $ | 17,201  |              |  | $ |           |   |  | $     | 710  |   |  | $ | 86,287  |  
|Cost of Sales                              |  |                                               | (58,378 | ) |             |   | (11,330 | )            |  |   |           |   |  |       | (707 | ) |  |   | (70,415 | )
|Selling, General & Administrative Expenses |  |                                               | (5,816  | ) |             |   | (2,574  | )            |  |   | (645       | ) |  |       | (400 | ) |  |   | (9,435  | )
|Interest Expense                           |  |                                               | (971    | ) |             |   | (1,666  | )            |  |   |           |   |  |       |     |   |  |   | (2,637  | )
|                                           |  |                                               |         |   |             |   |         |              |  |   |            |   |  |       |     
|Earnings
(Loss) Before Income Taxes        |  | $                                             | 3,211   |   |             | $ | 1,631   |              |  | $ | (645       | ) |  | $     | (397 | ) |  | $ | 3,800   |  
|                                           |  |                                               |         |   |             |   |         |              |  |   |            |   |  |       |     

|                                                               |  |                                             |          |   |             |   |        |              |  |   |            |   |  |       |         |   |  |   |          |  
|-------------------------------------------------------------- |  | ------------------------------------------- | -------- | - | ----------- | - | ------ | ------------ |  | - | ---------- | - |  | ----- | ------- | - |  | - | -------- | -
|                                                               |  |                                             |         
|                                                               |  | For the Six Months Ended September 30, 2002 |         
|                                                               |  |                                             |         
|                                                               |  | Int'l Home                                  |          |   | Commercial  |   |        | Multi-Family |  |   | Corporate- |   |  |       |         |  
|                                                               |  | Building                                    |          |   | Development |   |        | Communities  |  |   | Other      |   |  | Total |        
|                                                               |  |                                             |          |   |             |   |        |              |  |   |            |   |  |       |        
|Revenues                                                       |  | $                                           | 155,426  |   |             | $ | 13,771 |              |  | $ | 458        |   |  | $     | 25,782  |   |  | $ | 195,437  |  
|Cost of Sales                                                  |  |                                             | (135,744 | ) |             |   | (1,134 | )            |  |   | (78        | ) |  |       | (24,100 | ) |  |   | (161,056 | )
|Selling, General & Administrative
Expenses                     |  |                                             | (14,703  | ) |             |   | (7,316 | )            |  |   | (1,291     | ) |  |       | (1,911  | ) |  |   | (25,221  | )
|Interest Expense                                               |  |                                             | (1,177   | ) |             |   | (3,834 | )            |  |   |           |   |  |       | (952    | ) |  |   | (5,963   | )
|                                                               |  |                                             |          |   |             |   |        |              |  |   |            |   |  |       |        
|Earnings
(Loss) from Continuing Operations Before Income Taxes |  |                                             | 3,802    |   |             |   | 1,487  |              |  |   | (911       | ) |  |       | (1,181  | ) |  |   | 3,197    |  
|Earnings from Discontinued Operations Before Income Taxes      |  |                                             |         |   |             |   | 416    |              |  |   |           |   |  |       |        |   |  |   | 416      |  
|                                                               |  |                                             |          |   |             |   |        |              |  |   |            |   |  |       |        
|Earnings
(Loss) Before Income Taxes                            |  | $                                           | 3,802    |   |             | $ | 1,903  |              |  | $ | (911       | ) |  | $     | (1,181  | ) |  | $ | 3,613    |  
|                                                               |  |                                             |          |   |             |   |        |              |  |   |            |   |  |       |        

|                                           |  |                                             |          |   |             |   |         |              |  |   |            |   |  |       |        |   |  |   |          |  
|------------------------------------------ |  | ------------------------------------------- | -------- | - | ----------- | - | ------- | ------------ |  | - | ---------- | - |  | ----- | ------ | - |  | - | -------- | -
|                                           |  |                                             |         
|                                           |  | For the Six Months Ended September 30, 2001 |         
|                                           |  |                                             |         
|                                           |  | Int'l Home                                  |          |   | Commercial  |   |         | Multi-Family |  |   | Corporate- |   |  |       |        |  
|                                           |  | Building                                    |          |   | Development |   |         | Communities  |  |   | Other      |   |  | Total |       
|                                           |  |                                             |          |   |             |   |         |              |  |   |            |   |  |       |       
|Revenues                                   |  | $                                           | 124,539  |   |             | $ | 21,311  |              |  | $ | 23,621     |   |  | $     | 771    |   |  | $ | 170,242  |  
|Cost of Sales                              |  |                                             | (106,579 | ) |             |   | (11,177 | )            |  |   | (21,682    | ) |  |       | (707   | ) |  |   | (140,145 | )
|Selling, General & Administrative Expenses |  |                                             | (11,405  | ) |             |   | (5,092  | )            |  |   | (1,204     | ) |  |       | (1,002 | ) |  |   | (18,703  | )
|Interest Expense                           |  |                                             | (971     | ) |             |   | (3,257  | )            |  |   |           |   |  |       |       |   |  |   | (4,228   | )
|                                           |  |                                             |          |   |             |   |         |              |  |   |            |   |  |       |       
|Earnings
(Loss) Before Income Taxes        |  | $                                           | 5,584    |   |             | $ | 1,785   |              |  | $ | 735        |   |  | $     | (938   | ) |  | $ | 7,166    |  
|                                           |  |                                             |          |   |             |   |         |              |  |   |            |   |  |       |       

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(H) GOODWILL

The Partnerships International Home Building segment carries all of the
Partnerships goodwill, which arose from the April 15, 1999 acquisition of all
of the voting shares of Fairclough Homes Group Limited, a British homebuilder
(Fairclough). The carrying amount of goodwill was
$30.4 million and $27.8 million at September 30, 2002 and March 31, 2002, respectively. The increase
during the six months ended September 30, 2002 reflects the impact of foreign
currency translation adjustments.

(I) DERIVATIVES AND HEDGING

The Partnership is exposed to the risk of interest rate fluctuations on
its debt obligations. As part of its strategy to manage the obligations that
are subject to changes in interest rates, the Partnership has entered into an
interest rate swap agreement, designated as a cash flow hedge, on a portion of
its debt. The swap agreement is recorded at its fair value in Other Assets or
Accrued Liabilities in the condensed combining balance sheets. To the extent
the hedging relationship is effective, fluctuations in the fair value of the
derivative are deferred as a component of Accumulated Other Comprehensive
Income. Fluctuations in the fair value of the ineffective portion of the
derivative would be reflected in the current period earnings. During the three
and six months ended September 30, 2002 there was no hedge ineffectiveness
related to this derivative.

This swap expires in March 2004. Amounts to be received or paid as a
result of the swap agreement are recognized as adjustments to interest incurred
on the related debt instrument. As of September 30, 2002, the Accumulated
Other Comprehensive Loss was $625 thousand ($438 thousand net of tax).

(J) STATEMENTS OF FINANCIAL ACCOUNTING STANDARDS

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

Due to the adoption of SFAS 144, the Companies now report assets
identified subsequent to March 31, 2002 as held for sale (as defined by SFAS
144), if any, and any such assets sold in the current period, as discontinued
operations. All results of these discontinued operations, less applicable
income taxes, are included as discontinued operations in the statements of
operations. Those assets identified as held for sale prior to April 1, 2002,
and any such assets sold subsequent to March 31, 2002, are reported in
continuing operations.

(K) INVESTMENTS IN CERTAIN JOINT VENTURES

The Partnership conducts certain operations through its participation in
joint ventures in which the Partnership holds less than a majority interest.
These non-consolidated joint ventures had total debt outstanding of
approximately $22.9 million as of September 30, 2002 and $16.1 million as of
March 31, 2002. The Partnerships liability for the obligations of these
non-consolidated joint ventures is limited to approximately $3.1 million as of
September 30, 2002.

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(L) COMMITMENTS AND CONTINGENCIES

As of
September 30, 2002, the Partnership had remaining commitments of
approximately $21.8 million on construction contracts.

To obtain construction financing for projects being developed by its
subsidiaries, the Partnership is often required to guarantee, for the benefit
of the construction lender, the completion of the project. To further
guarantee the completion of the project and the payment of the construction
loan obligations, the Partnership, in some instances, also has issued demand
notes made payable to its subsidiaries of up to 20% of the construction loan commitment amount. The subsidiaries then pledge the demand notes to the
lenders as a form of additional collateral on the construction loans. The
demand notes are payable only in the event of default on the construction
loans. As of September 30, 2002 the Partnership had issued demand notes
totaling $1.6 million. In some instances, the Partnership has also executed
partial recourse payment guarantees. At September 30, 2002 our subsidiaries
had outstanding letters of credit of $0.7 million that primarily relate to
development obligations of Multi-Family Communities.

Subsidiaries of the Partnership have also obtained demand notes or letters
of credit from Centex for up to 10% of the construction loan commitment amount.
These demand notes or letters of credit have been pledged or endorsed to the
lenders as additional collateral on the construction loans, and may be called
only in the event of an uncured default by the Partnership. This additional
collateral totals approximately $2.3 million as of September 30, 2002.

(M) SUBSEQUENT EVENTS

Subsequent to the
quarter ended September 30, 2002, the Partnership sold a 283,000
square foot industrial project in Tolleson, Arizona and a 40,000
square foot office project in Lewisville, Texas. Total proceeds of
$19.5 million were used, in part, to repay construction
financing of $13.5 million.

(N) RECLASSIFICATIONS

Certain prior year balances have been reclassified to be consistent with
the September 30, 2002 presentation.

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

On a combined basis, our revenues were
$105.5 million for the three months ended September 30,
2002, a 22.2% increase
over our revenues of $86.3 million for the same period last year. On a
combined basis, our revenues were $195.4 million for the six months ended
September 30, 2002, a 14.8% increase over our revenues of $170.2 million for
the same period last year. The revenue increase is primarily related to
Corporate-Others sale of residential lots to Centex Homes and an increase in
International Home Buildings unit closings and average unit sales price.
However, the revenue increase was offset by a decline in Commercial
Developments and Multi-Family Communities sales revenues. Revenues from
residential lot sales, multi-family project sales and commercial project sales
can vary significantly from period to period.

Our operating earnings for the three months ended September 30, 2002 were
$4.0 million compared to operating earnings of $3.8 million for the same period
last year, and our net earnings from continuing operations were $3.2 million compared to net earnings of
$3.4 million for the same period last year. Our operating earnings for the six
months ended September 30, 2002 were $3.2 million compared to operating earnings
of $7.2 million for the same period last year, and our net
earnings from continuing operations were $2.9
million compared to net earnings of $6.5 million for the same period last year.
The increase in operating earnings and net earnings from continuing
operations for the three months ended
September 30, 2002 is primarily related to an increase in International Home
Buildings unit closings and average unit sales price, offset by a decline in
operating margins and an increase in general and administrative expenses across
almost all segments. The decline in operating earnings and net
earnings from continuing operations for the
six months ended September 30, 2002 is primarily related to a decline in
International Home Buildings operating margins and a decline in Multi-Family
Communities earnings from property sales.

Our net earnings from
discontinued operations for the three and six months ended
September 30, 2002 were $423 thousand and $416 thousand,
respectively. In accordance with SFAS 144 Accounting for the
Impairment or Disposal of Long-Lived Assets, effective for us
beginning April 1, 2002, we now report assets as discontinued
operations if such assets are held for sale (as defined by
SFAS 144), or if such assets sold in the current period. We sold one of
these properties during the three months ending September 30,
2002, and sold the other two properties subsequent to
September 30, 2002. All three of these properties were under development as of
September 30, 2001, and thus did not generate net earnings
during the three or six months ended September 30, 2001.

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

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INTERNATIONAL HOME BUILDING

The following summarizes International Home Buildings results for the
three and six months ended September 30, 2002 compared to the same periods last
year (dollars in thousands, except per unit data):

|                                    |          |   |                                          |      |    |      |       |    |  |   |         |       |   |  |       |    | 
|----------------------------------- | -------- | - | ---------------------------------------- | ---- | -- | ---- | ----- | -- |  | - | ------- | ----- | - |  | ----- | -- | 
|                                    |          |   |                                          |     
|                                    |          |   | For the Three Months Ended September 30, |     
|                                    |          |   |                                          |     
|                                    |          |   | 2002                                     |      |    | 2001 |      
|                                    |          |   |                                          |      |    |      |      
|Revenues  Home Building            |          | $ | 90,585                                   |      |    |      | 95.9  | %  |  | $ | 64,578  |       |   |  | 94.4  | % 
|Revenues  Land Sales & Other       |          |   | 3,841                                    |      |    |      | 4.1   | %  |  |   | 3,798   |       |   |  | 5.6   | % 
|Cost of Sales  Home Building       |          |   | (78,159                                  | )    |    |      | (82.9 | %) |  |   | (55,358 | )     |   |  | (81.0 | %)
|Cost of Sales  Land Sales          |          |   | (3,820                                   | )    |    |      | (4.0  | %) |  |   | (3,020  | )     |   |  | (4.4  | %)
|General and Administrative Expenses |          |   | (7,592                                   | )    |    |      | (8.0  | %) |  |   | (5,816  | )     |   |  | (8.5  | %)
|                                    |          |   |                                          |      |    |      |       |    |  |   |         |      
|Operating Earnings                  |          |   | 4,855                                    |      |    |      | 5.1   | %  |  |   | 4,182   |       |   |  | 6.1   | % 
|Interest                            |          |   | (683                                     | )    |    |      | (0.7  | %) |  |   | (971    | )     |   |  | (1.4  | %)
|                                    |          |   |                                          |      |    |      |       |    |  |   |         |      
|Earnings
Before Income Taxes        |          | $ | 4,172                                    |      |    |      | 4.4   | %  |  | $ | 3,211   |       |   |  | 4.7   | % 
|                                    |          |   |                                          |      |    |      |       |    |  |   |         |      
|Units Closed                        |          |   | 383                                      |      |    |      |       |    |  |   | 315     |      
|                                    | % Change |   |                                          | 21.6 | %  |      |       |    |  |   |         | 5.7   | %
|Unit Sales Price                    |          | $ | 236,514                                  |      |    |      |       |    |  | $ | 205,010 |      
|                                    | % Change |   |                                          | 15.4 | %  |      |       |    |  |   |         | 2.3   | %
|Operating Earnings Per Unit         |          | $ | 12,676                                   |      |    |      |       |    |  | $ | 13,276  |      
|                                    | % Change |   |                                          | (4.5 | %) |      |       |    |  |   |         | 335.7 | %
|Backlog Units                       |          |   | 672                                      |      |    |      |       |    |  |   | 446     |      
|                                    | % Change |   |                                          | 50.7 | %  |      |       |    |  |   |         | 35.6  | %

|                                    |          |   |                                        |       |    |      |       |    |  |   |          |      |    |  |       |    | 
|----------------------------------- | -------- | - | -------------------------------------- | ----- | -- | ---- | ----- | -- |  | - | -------- | ---- | -- |  | ----- | -- | 
|                                    |          |   |                                        |      
|                                    |          |   | For the Six Months Ended September 30, |      
|                                    |          |   |                                        |      
|                                    |          |   | 2002                                   |       |    | 2001 |      
|                                    |          |   |                                        |       |    |      |      
|Revenues  Home Building            |          | $ | 151,557                                |       |    |      | 97.5  | %  |  | $ | 120,741  |      |    |  | 97.0  | % 
|Revenues  Land Sales & Other       |          |   | 3,869                                  |       |    |      | 2.5   | %  |  |   | 3,798    |      |    |  | 3.0   | % 
|Cost of Sales  Home Building       |          |   | (131,924                               | )     |    |      | (84.9 | %) |  |   | (103,559 | )    |    |  | (83.1 | %)
|Cost of Sales  Land Sales          |          |   | (3,820                                 | )     |    |      | (2.4  | %) |  |   | (3,020   | )    |    |  | (2.4  | %)
|General and Administrative Expenses |          |   | (14,703                                | )     |    |      | (9.5  | %) |  |   | (11,405  | )    |    |  | (9.2  | %)
|                                    |          |   |                                        |       |    |      |       |    |  |   |          |     
|Operating Earnings                  |          |   | 4,979                                  |       |    |      | 3.2   | %  |  |   | 6,555    |      |    |  | 5.3   | % 
|Interest                            |          |   | (1,177                                 | )     |    |      | (0.8  | %) |  |   | (971     | )    |    |  | (0.8  | %)
|                                    |          |   |                                        |       |    |      |       |    |  |   |          |     
|Earnings
Before Income Taxes        |          | $ | 3,802                                  |       |    |      | 2.4   | %  |  | $ | 5,584    |      |    |  | 4.5   | % 
|                                    |          |   |                                        |       |    |      |       |    |  |   |          |     
|Units Closed                        |          |   | 652                                    |       |    |      |       |    |  |   | 614      |     
|                                    | % Change |   |                                        | 6.2   | %  |      |       |    |  |   |          | 2.7  | % 
|Unit Sales Price                    |          | $ | 232,449                                |       |    |      |       |    |  | $ | 196,647  |     
|                                    | % Change |   |                                        | 18.2  | %  |      |       |    |  |   |          | (5.1 | %)
|Operating Earnings Per Unit         |          | $ | 7,637                                  |       |    |      |       |    |  | $ | 10,676   |     
|                                    | % Change |   |                                        | (28.5 | %) |      |       |    |  |   |          | 55.7 | % 
|Backlog Units                       |          |   | 672                                    |       |    |      |       |    |  |   | 446      |     
|                                    | % Change |   |                                        | 50.7  | %  |      |       |    |  |   |          | 35.6 | % 

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International Home Buildings revenues for the three months ended
September 30, 2002 increased by $26.0 million from revenues for the same period
last year. This increase is comprised of $9.9 million from an increase in the
average unit sales price, and $16.1 million from an increase in units closed.
Home sales totaled 383 units during the three months ended September 30, 2002,
compared to 315 units during the same period in the preceding year,
representing a 21.6% increase. International Home Buildings revenues for the
six months ended September 30, 2002 increased by $30.9 million from revenues
for the same period last year. This increase is primarily comprised of $22.0
million from an increase in the average unit sales price and $8.8 million from
an increase in units closed. Home sales totaled 652 units during the six
months ended September 30, 2002, compared to 614 units during the same period
in the preceding year, representing a 6.2% increase.

International Home Buildings cost of sales as a percentage of revenues
increased 1.5% for the three months ended September 30, 2002 and increased 1.8%
for the six months ended September 30, 2002, compared to the same periods last
year, primarily due to cost overruns, liquidation of remaining units
in completed neighborhoods at discounted prices, which resulted in lower
margins, and increases in labor costs caused by a shortage of
skilled labor.

International Home Buildings general and administrative expenses as a
percentage of revenues decreased 0.5% and increased 0.3%, respectively, for the
three and six months ended September 30, 2002 compared to the same periods last
year, primarily due to increased revenues, offset by the addition of personnel.

International Home Buildings financial statements are affected by
fluctuations in exchange rates. International Home Building, whose functional
currency is the British pound sterling, translates its financial statements
into U.S. dollars. Income statement accounts are translated using the average
exchange rate for the period, except for significant, non-recurring
transactions that are translated at the rate in effect as of the date of the
transaction. For the three months ending September 30, 2002 and 2001,
respectively, the average exchange rate used for translation was 1.55 and 1.44,
representing an increase of 7.7%. For the six months ending September 30, 2002
and 2001, respectively, the average exchange rate used for translation was 1.51
and 1.43, representing an increase of 5.3% over the prior year.

The backlog of homes sold but not closed at September 30, 2002 was 672
units, 50.7% more than the 446 units at the same point in the preceding year.

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COMMERCIAL DEVELOPMENT

The following summarizes Commercial Developments results for the three
and six months ended September 30, 2002, compared to the same periods last year
(dollars and square feet in thousands):

|                                             |  |                            |        |   |      |   |         |  
|-------------------------------------------- |  | -------------------------- | ------ | - | ---- | - | ------- | -
|                                             |  |                            |       
|                                             |  | For the Three Months Ended |       
|                                             |  | September 30,              |       
|                                             |  |                            |       
|                                             |  | 2002                       |        |   | 2001 |  
|                                             |  |                            |        |   |      |  
|Sales Revenues                               |  | $                          | 1,610  |   |      | $ | 12,502  |  
|Rental Income and Other Revenues             |  |                            | 6,106  |   |      |   | 4,699   |  
|Cost of Sales                                |  |                            | (859   | ) |      |   | (11,330 | )
|Selling, General and Administrative Expenses |  |                            | (2,387 | ) |      |   | (1,661  | )
|Interest                                     |  |                            | (1,864 | ) |      |   | (1,666  | )
|                                             |  |                            |        |   |      |  
|Operating Earnings before Depreciation       |  |                            | 2,606  |   |      |   | 2,544   |  
|Depreciation                                 |  |                            | (1,624 | ) |      |   | (913    | )
|                                             |  |                            |        |   |      |  
|Operating
Earnings                           |  |                            | 982    |   |      |   | 1,631   |  
|Earnings
from Discontinued Operations        |  |                            | 423    |   |      |   |        |  
|                                             |  |                            |        |   |      |  
|Earnings
Before Income Taxes                 |  | $                          | 1,405  |   |      | $ | 1,631   |  
|                                             |  |                            |        |   |      |  
|Operating Square Footage at September 30     |  |                            | 2,952  |   |      |   | 1,754   |  

|                                             |  |                          |        |   |      |   |         |  
|-------------------------------------------- |  | ------------------------ | ------ | - | ---- | - | ------- | -
|                                             |  |                          |       
|                                             |  | For the Six Months Ended |       
|                                             |  | September 30,            |       
|                                             |  |                          |       
|                                             |  | 2002                     |        |   | 2001 |  
|                                             |  |                          |        |   |      |  
|Sales Revenues                               |  | $                        | 2,335  |   |      | $ | 12,502  |  
|Rental Income and Other Revenues             |  |                          | 11,436 |   |      |   | 8,809   |  
|Cost of Sales                                |  |                          | (1,134 | ) |      |   | (11,177 | )
|Selling, General and Administrative Expenses |  |                          | (4,806 | ) |      |   | (3,428  | )
|Interest                                     |  |                          | (3,834 | ) |      |   | (3,257  | )
|                                             |  |                          |        |   |      |  
|Operating Earnings before Depreciation       |  |                          | 3,997  |   |      |   | 3,449   |  
|Depreciation                                 |  |                          | (2,510 | ) |      |   | (1,664  | )
|                                             |  |                          |        |   |      |  
|Operating
Earnings                           |  |                          | 1,487  |   |      |   | 1,785   |  
|Earnings
from Discontinued Operations        |  |                          | 416    |   |      |   |        |  
|
|                                             |  |                          |        |   |      |  
|                                             |  |                          |        |   |      |   |        
|                                             |  |                          |        |   |      |  
|Operating Square Footage at September 30     |  |                          | 2,952  |   |      |   | 1,754   |  

Commercial Developments operations during the six months ended September 30,
2002 included:



| |  |  | sale of three pad sites at the Vista Ridge retail project in Lewisville, Texas;                        
| | - |  | -------------------------------------------------------------------------------------------------------
|
| |  |  | completion of shell construction for a 223,000 square foot industrial
building in Grand Prairie, Texas;
|
| |  |  | completion of shell construction for a 58,000 square foot retail center in Lewisville, Texas; and      
|
| |  |  | completion of a 40,000 square foot office project in Lewisville, Texas.                                

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Commercial
Development's discontinued operations during the six months ended
September 30, 2002 include a 40,000 square foot industrial building
in Oxnard, California, which was sold during the three months ended
September 30, 2002; a 40,000 square foot office project in
Lewisville, Texas, which was sold subsequent to September 30, 2002;
and a 283,000 square foot industrial project in Tolleson, Arizona,
which was sold subsequent to September 30, 2002.

Sales revenues and cost of sales for fiscal 2003 reflect the sale of the
pad sites and the industrial project referred to above. Sales revenues and
cost of sales for fiscal 2002 reflect the sale of two industrial projects and
approximately two acres of land. Rental income and other revenues; selling,
general and administrative expenses; interest expense and depreciation
increased for the three and six months ended September 30, 2002 compared to the same periods in the preceding year as a
result of the increase in the square footage of our operating properties since
September 30, 2001.

|                            |  |                    |       |  |                    |  |      |          |  |  |           |  |  |  |      |  
|--------------------------- |  | ------------------ | ----- |  | ------------------ |  | ---- | -------- |  |  | --------- |  |  |  | ---- | -
|                            |  |                    |       |  |                    | 
|                            |  | September 30, 2002 |       |  | September 30, 2001 | 
|                            |  |                    |       |  |                    | 
|                            |  | (000's)            |       |  | Weighted           |  |      | (000's)  |  |  | Weighted  | 
|                            |  | Rentable           |       |  | Average            |  |      | Rentable |  |  | Average   | 
|                            |  | Sq. Ft.            |       |  | Occupancy          |  |      | Sq. Ft.  |  |  | Occupancy | 
|                            |  |                    |       |  |                    |  |      |          |  |  |           | 
|Operating Properties        |  |                    |       |  |                    |  |      |          |  |  |           |  |  |  |      |  
|Industrial                  |  |                    | 2,292 |  |                    |  | 80.8 | %        |  |  | 1,269     |  |  |  | 97.0 | %
|Office/Medical              |  |                    | 602   |  |                    |  | 82.0 | %        |  |  | 485       |  |  |  | 96.9 | %
|Retail                      |  |                    | 58    |  |                    |  | 63.4 | %        |  |  |          |  |  |  |     |  
|                            |  |                    |       |  |                    |  |      |          |  |  |           |  |  | 
|                            |  |                    | 2,952 |  |                    |  | 80.7 | %        |  |  | 1,754     |  |  |  | 97.0 | %
|                            |  |                    |       |  |                    |  |      |          |  |  |           |  |  | 
|                            |  |                    |      
|                            |  | (000's)            |       |  |                    |  |      | (000's)  |  |  |           | 
|                            |  | Rentable           |       |  |                    |  |      | Rentable |  |  |           | 
|                            |  | Sq. Ft.            |       |  |                    |  |      | Sq. Ft.  |  |  |           | 
|                            |  |                    |       |  |                    |  |      |          |  |  |           | 
|Projects
Under Construction |  |                    |       |  |                    |  |      |          |  |  |           |  |  |  |      |  
|Industrial                  |  |                    | 155   |  |                    |  |      |          |  |  | 869       |  |  |  |      |  
|Office/Medical              |  |                    |      |  |                    |  |      |          |  |  | 116       |  |  |  |      |  
|Retail                      |  |                    | 136   |  |                    |  |      |          |  |  | 136       |  |  |  |      |  
|                            |  |                    |       |  |                    |  |      |          |  |  |           |  |  | 
|                            |  |                    | 291   |  |                    |  |      |          |  |  | 1,121     |  |  |  |      |  
|                            |  |                    |       |  |                    |  |      |          |  |  |           |  |  | 

MULTI-FAMILY COMMUNITIES

The following summarizes the results of Multi-Family Communities for the
three and six months ended September 30, 2002, compared to the same periods
last year (dollars in thousands):

|                                             |  |                            |      |   |      |   |      |  
|-------------------------------------------- |  | -------------------------- | ---- | - | ---- | - | ---- | -
|                                             |  |                            |     
|                                             |  | For the Three Months Ended |     
|                                             |  | September 30,              |     
|                                             |  |                            |     
|                                             |  | 2002                       |      |   | 2001 |  
|                                             |  |                            |      |   |      |  
|Revenues                                     |  | $                          | 116  |   |      | $ |     |  
|Cost of Sales                                |  |                            |     |   |      |   |     |  
|Selling, General and Administrative Expenses |  |                            | (662 | ) |      |   | (645 | )
|                                             |  |                            |      |   |      |  
|Operating Loss                               |  | $                          | (546 | ) |      | $ | (645 | )
|                                             |  |                            |      |   |      |  

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|                                             |  |                          |        |   |      |   |         |      
|-------------------------------------------- |  | ------------------------ | ------ | - | ---- | - | ------- | -----
|                                             |  |                          |       
|                                             |  | For
the Six Months Ended |       
|                                             |  | September 30,            |       
|                                             |  |                          |       
|                                             |  | 2002                     |        |   | 2001 |  
|                                             |  |                          |        |   |      |  
|Revenues                                     |  | $                        | 458    |   |      | $ | 23,621  |      
|Cost of Sales                                |  |                          | (78    | ) |      |   | (21,682 | )    
|Selling, General and Administrative Expenses |  |                          | (1,291 | ) |      |   | (1,204  | )    
|                                             |  |                          |        |   |      |  
|Operating
(Loss) Earnings                    |  | $                        | (911   | ) |      | $ | 735     |  
|                                             |  |                          |        |   |      |  

During the six months ended September 30, 2002, Multi-Family Communities
revenues consisted of development fees and an earn-out payment related to the
prior sale of a 382-unit rental apartment complex in St. Petersburg, Florida.
During the six months ended September 30, 2001, Multi-Family Communities closed
on the sale of a 400-unit apartment complex in Grand Prairie, Texas.

As of September 30, 2002, Multi-Family Communities owns 984 rental
apartment units under construction in Florida and Texas and is developing an
additional 336 rental apartment units in Texas for unaffiliated owners.
Multi-Family Communities is also redeveloping a 21-acre site in downtown Saint
Paul, Minnesota, into a mixed-use project containing for sale and for rent
housing units and related retail.

CORPORATE-OTHER

The following summarizes the results of Corporate-Other for the three and
six months ended September 30, 2002, compared to the same periods last year
(dollars in thousands):

|                                             |  |                            |        |   |      |   |      |  
|-------------------------------------------- |  | -------------------------- | ------ | - | ---- | - | ---- | -
|                                             |  |                            |       
|                                             |  | For the Three Months Ended |       
|                                             |  | September 30,              |       
|                                             |  |                            |       
|                                             |  | 2002                       |        |   | 2001 |  
|                                             |  |                            |        |   |      |  
|Revenues                                     |  | $                          | 3,276  |   |      | $ | 710  |  
|Cost of Sales                                |  |                            | (3,015 | ) |      |   | (707 | )
|Selling, General and Administrative Expenses |  |                            | (742   | ) |      |   | (400 | )
|Interest Expense                             |  |                            | (164   | ) |      |   |     |  
|                                             |  |                            |        |   |      |  
|Operating Loss                               |  | $                          | (645   | ) |      | $ | (397 | )
|                                             |  |                            |        |   |      |  

|                                             |  |                          |         |   |      |   |        |  
|-------------------------------------------- |  | ------------------------ | ------- | - | ---- | - | ------ | -
|                                             |  |                          |        
|                                             |  | For the Six Months Ended |        
|                                             |  | September 30,            |        
|                                             |  |                          |        
|                                             |  | 2002                     |         |   | 2001 |  
|                                             |  |                          |         |   |      |  
|Revenues                                     |  | $                        | 25,782  |   |      | $ | 771    |  
|Cost of Sales                                |  |                          | (24,100 | ) |      |   | (707   | )
|Selling, General and Administrative Expenses |  |                          | (1,911  | ) |      |   | (1,002 | )
|Interest Expense                             |  |                          | (952    | ) |      |   |       |  
|                                             |  |                          |         |   |      |  
|Operating Loss                               |  | $                        | (1,181  | ) |      | $ | (938   | )
|                                             |  |                          |         |   |      |  

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Our Corporate-Other segment acquires and disposes of land and other assets
that are not identified with another specific business segment. Revenues and
cost of sales for the three and six months ended September 30, 2002 relate
primarily to the sale of residential lots to Centex Homes. Revenues and cost of
sales for the three and six months ended September 30, 2001 relate primarily to
sales of residential lots to Centex Homes and an unaffiliated third party.

Selling, general and administrative expenses increased 85.5% and 90.7% for
the three and six months ended September 30, 2002 compared to the same periods
last year, primarily due to the addition of internal legal and marketing personnel and increased real estate taxes related to
Corporate-Others real estate holdings. Interest expense for the three and six
months ended September 30, 2002 also relates to these residential lots.

LIQUIDITY AND CAPITAL RESOURCES

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

We typically finance properties under development through short-term
variable and fixed-rate secured construction loans, and to a limited extent
depending on the timing of the project construction, cash flow from operations.
Construction loans totaled $95.3 million at September 30, 2002. As properties
are completed, we either sell the properties or refinance the properties with
long-term fixed-rate debt. The proceeds from a sale or refinancing are used to
repay the construction financing. Under the terms of various construction loan
agreements, we are required to maintain certain minimum liquidity and net worth
levels. At September 30, 2002, we were in compliance with these covenants.

Permanent commercial project loans outstanding at September 30, 2002
totaled $75.7 million compared to $74.8 million at September 30, 2001. The
project loans are collateralized by completed commercial properties and have
original terms ranging from ten to twenty-two years with fixed interest rates
ranging from 6.92% to 8.72%.

No new seller-financed land loans were obtained during the quarters ended
September 30, 2002 and 2001. Outstanding balances on seller-financed loans at
September 30, 2002 totaled $38.9 million, with terms of up to three years and
fixed interest rates ranging from 8.00% to 9.50%.

The International Home Building segment has secured a revolving bank
credit facility of 100 million in British pounds sterling. This facility
expires in March 2004. Advances under this facility totaled £64.0 million, or
$99.9 million, at September 30, 2002. Under the terms of this facility, the
International Home Building segment is required to maintain certain leverage
and interest coverage ratios and a minimum tangible net worth. At September
30, 2002 the International Home Building segment was in compliance with all of
these covenants.

No new Class C units were issued during the quarter ended September 30,
2002.

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

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CERTAIN OFF-BALANCE-SHEET AND OTHER OBLIGATIONS

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

Joint Ventures

We conduct certain operations through our participation in joint ventures
in which we hold less than a majority interest. These non-consolidated joint
ventures had total debt outstanding of approximately $22.9 million as of
September 30, 2002 and $16.1 million as of March 31, 2002. Our liability for
the obligations of these non-consolidated joint ventures is limited to
approximately $3.1 million as of September 30, 2002.

Letters of Credit, Guarantees and Leases

At September 30, 2002 we had outstanding performance bonds and bank
guarantees of $31.5 million that relate to projects undertaken by International
Home Building and development obligations of International Home Building.

To obtain construction financing for commercial and multi-family projects
being developed by our subsidiaries, we are often required to guarantee, for
the benefit of the construction lender, the completion of the project. To
further guarantee the completion of the project and the payment of the
construction loan obligations, we, in some instances, also have issued demand
notes made payable to our subsidiaries of up to 20% of the construction loan
commitment amount. Our subsidiaries then pledge the demand notes to the
lenders as a form of additional collateral on the construction loans. The
demand notes are payable only in the event of default on the construction
loans. As of September 30, 2002 we had issued demand notes totaling $1.6
million. In some instances, we have also executed partial recourse payment
guarantees. At September 30, 2002 our subsidiaries had outstanding letters of
credit of $0.7 million that primarily relate to development obligations of
Multi-Family Communities.

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

We have no material capital or operating leases.



---

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

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| |  |  | general economic conditions and interest rates in the United States and the United Kingdom;               
| | - |  | ----------------------------------------------------------------------------------------------------------
|
| |  |  | the cyclical nature of the businesses of the Companies;                                                   
|
| |  |  | adverse weather;                                                                                          
|
| |  |  | changes in property taxes;                                                                                
|
| |  |  | changes in federal income tax laws;                                                                       
|
| |  |  | governmental regulation;                                                                                  
|
| |  |  | changes in governmental and public policy;                                                                
|
| |  |  | changes in economic conditions specific to any one or more of the
markets and businesses of the Companies;
|
| |  |  | competition;                                                                                              
|
| |  |  | availability of raw materials; and                                                                        
|
| |  |  | unexpected operations difficulties.                                                                       

Other risks and uncertainties may also affect the outcome of the actual
performance and results of operations of the Companies.




Item 3. Quantitative and Qualitative Disclosures About Market Risk

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




Item 4. Controls and Procedures

An evaluation has been performed under the supervision and with the
participation of the management of 3333 Holding Corporation and of Centex Development Company, L.P. (through its general partner, 3333 Holding Corporation), including the Chief
Executive Officer and Chief Financial Officer of both 3333 Holding Corporation and 3333 Development Corporation, of the effectiveness of the
design and operation of our disclosure controls and procedures as of September
30, 2002. Based on that evaluation, the management of 3333 Holding Corporation and of Centex Development Company, L.P. (through its general partner, 3333 Holding Corporation),
including the Chief Executive Officer and Chief Financial Officer of both 3333 Holding Corporation and 3333 Development Corporation, concluded
that our disclosure controls and procedures were effective as of September 30,
2002. There have been no significant changes in our internal controls or in
other factors that could significantly affect internal controls subsequent to
September 30, 2002.

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Part II. Other Information

Item 4. Submission of Matters to a Vote of Security Holders

On July 18, 2002, we held our Annual Meeting of Stockholders. At the
Annual Meeting, Josiah O. Low, III, David M. Sherer, Stephen M. Weinberg and
Roger O. West were elected as directors to serve for a one-year term until the
2003 Annual Meeting. Voting results for these nominees are summarized as
follows:

|                    |  |                  |     |  |         |  |   | 
|------------------- |  | ---------------- | --- |  | ------- |  | - | 
|                    |  | Number of Shares |    
|                    |  |                  |    
|                    |  | For              |     |  | Against | 
|                    |  |                  |     |  |         | 
|Josiah O. Low, III  |  |                  | 718 |  |         |  | 5 | 
|David M. Sherer     |  |                  | 718 |  |         |  | 5 | 
|Stephen M. Weinberg |  |                  | 718 |  |         |  | 5 | 
|Roger O. West       |  |                  | 718 |  |         |  | 5 | 




Item 6. Exhibits and Reports on Form 8-K

| |  |  |     |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                                                                                                                                                                                 
| |  |  | --- |  |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |  | (3) |  |  | Exhibits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |  |  |     |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  |  |     |  |  | 10.1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  | Supplemental
Agreement dated September 4, 2002, relating to a £100,000,000
Credit Agreement between Fairclough Homes Group Limited and related
companies and The Royal Bank of Scotland, PLC, as facility agent.
| |  |  |     |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  |  | (4) |  |  | Reports on Form 8-K                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |  |  |     |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  |  |     |  |  | Current Joint Report on Form 8-K of Centex Corporation, 3333
Holding Corporation and Centex Development Company, L.P. dated
August 13, 2002, furnishing the certification of the Chief
Executive Officer and the Chief Financial Officer of 3333
Holding Corporation and the certification of the Chief
Executive Officer and the Chief Financial Officer of 3333
Development Corporation, as the general partner of Centex
Development Company, L.P., pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

|                  |  |                                                                                                                                           
|----------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------
|                  |  | 3333 HOLDING CORPORATION                                                                                                                  
|                  |  |                                                                                                                                           
|                  |  | Registrant                                                                                                                                
|                  |  |                                                                                                                                           
|November 12, 2002 |  | /s/ Todd D. Newman                                                                                                                        
|                  |  |                                                                                                                                           
|                  |  | Todd D. Newman
Senior Vice President, Chief Financial
Officer and Treasurer
(principal financial officer and
principal accounting officer)

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Signatures

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

|                  |  |                                                                                                                                           
|----------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------
|                  |  | CENTEX DEVELOPMENT COMPANY, L.P.                                                                                                          
|                  |  |                                                                                                                                           
|                  |  | Registrant
By 3333 Development Corporation
General Partner                                                                                
|                  |  |                                                                                                                                           
|November 12, 2002 |  | /s/ Todd D. Newman                                                                                                                        
|                  |  |                                                                                                                                           
|                  |  | Todd D. Newman
Senior Vice President, Chief Financial
Officer and Treasurer
(principal financial officer and
principal accounting officer)

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Certifications

I, Stephen M. Weinberg, certify that:

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

2.     Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;

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

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

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

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

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

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

Date: November 12, 2002

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

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Certifications

I, Todd D. Newman, certify that:

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

2.     Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;

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

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

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

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

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

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

Date: November 12, 2002

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

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Certifications

I, Stephen M. Weinberg, certify that:

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

2.     Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;

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

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

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

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

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

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

Date: November 12, 2002

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

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Certifications

I, Todd D. Newman, certify that:

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

2.     Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;

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

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

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

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

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

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

Date: November 12, 2002

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

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EXHIBIT INDEX

| |  |               |  |  |  |                                                                                                                                                                                                                 
| |  | ------------- |  |  |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | ExhibitNumber |  |  |  | Description                                                                                                                                                                                                     
| |  |               |  |  |  |                                                                                                                                                                                                                 
| |  | 10.1          |  |  |  | Supplemental
Agreement dated September 4, 2002, relating to a £100,000,000
Credit Agreement between Fairclough Homes Group Limited and related
companies and The Royal Bank of Scotland, PLC, as facility agent.