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

JOINT ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended March 31, 2002

|                                                                                                                                                                |  |                                                                                                                                                                                              
|--------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Commission File No. 1-6776
CENTEX CORPORATION                                                                                                                   |  | Commission File Nos. 1-9624 and 1-9625, respectively
3333 HOLDING CORPORATION and
CENTEX DEVELOPMENT COMPANY, L.P.                                                                           
|(Exact name of registrant as specified in its charter)
Nevada
(State of incorporation)                                                                          |  | (Exact name of registrants as specified in their charters)
Nevada and Delaware, respectively
(States of incorporation or organization)                                                       
|75-0778259
(I.R.S. Employer Identification No.)
2728 N. Harwood, Dallas, Texas 75201
(Address of principal executive office, including zip code)
(214) 981-5000 |  | 75-2178860 and 75-2168471, respectively
(I.R.S. Employer Identification Nos.)
2728 N. Harwood, Dallas, Texas 75201
(Address of principal executive office, including zip code)
(214) 981-6770
|(Registrants telephone number)                                                                                                                                 |  | (Registrants telephone number)                                                                                                                                                              

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

|                    |  |                                           |  |                     |  |                                          
|------------------- |  | ----------------------------------------- |  | ------------------- |  | -----------------------------------------
|Title of each class |  | Name of each
exchange on which
registered |  | Title of each class |  | Name of each
exchange on which
registered
|                    |  |                                           |  |                     |  |                                          

|Centex Corporation |  | 3333 Holding Corporation
|------------------ |  | ------------------------

|Common Stock
($.25 par value) |  | New York Stock Exchange |  | Common Stock
($.01 par value) |  | New York Stock Exchange
|----------------------------- |  | ----------------------- |  | ----------------------------- |  | -----------------------
|                              |  | London Stock Exchange   |  |                               |  | London Stock Exchange  



| | Centex Development Company, L.P.
| | --------------------------------
| |                                 
| |                                 

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

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

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

The aggregate market value of the tandem traded Centex Corporation common
stock, 3333 Holding Corporation common stock and Centex Development Company,
L.P. warrants to purchase Class B units of limited partnership interest held by
non-affiliates of the registrants on May 31, 2002 was approximately $3.3
billion.

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 May 31, 2002:

|                                 |  |                                               |  |  |            |  |       
|-------------------------------- |  | --------------------------------------------- |  |  | ---------- |  | ------
|Centex Corporation               |  | Common Stock                                  |  |  | 61,543,403 |  | 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 

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the following documents are incorporated by reference in Parts
A.III and B.III of this Report:

(a)  Proxy statements for the annual meetings of stockholders of Centex
Corporation and 3333 Holding Corporation to be held on July 18, 2002.



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|                                                                                                      |                                                                                               |  |  |  |  |  |  | 
|----------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART A. CENTEX CORPORATION AND SUBSIDIARIES                                                          
|PART I                                                                                               
|                                                                                                      | ITEM 1. BUSINESS                                                                             
|                                                                                                      | ITEM 2. PROPERTIES                                                                           
|                                                                                                      | ITEM 3. LEGAL PROCEEDINGS                                                                    
|                                                                                                      | ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                  
|PART II                                                                                              
|                                                                                                      | ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS                
|                                                                                                      | ITEM 6. SELECTED FINANCIAL DATA                                                              
|                                                                                                      | ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                                                                                                      | ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                          
|                                                                                                      | ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                          
|                                                                                                      | ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 
|PART III                                                                                             
|                                                                                                      | ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                                  
|                                                                                                      | ITEM 11. EXECUTIVE COMPENSATION                                                              
|                                                                                                      | ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                      
|                                                                                                      | ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                      
|PART IV                                                                                              
|                                                                                                      | ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K                     
|SIGNATURES                                                                                           
|PART B. 3333 HOLDING CORPORATION AND SUBSIDIARY AND CENTEX DEVELOPMENT COMPANY, L.P. AND SUBSIDIARIES
|PART I                                                                                               
|                                                                                                      | ITEM 1. BUSINESS                                                                             
|                                                                                                      | ITEM 2. PROPERTIES                                                                           
|                                                                                                      | ITEM 3. LEGAL PROCEEDINGS                                                                    
|                                                                                                      | ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                  
|PART II                                                                                              
|                                                                                                      | ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS                
|                                                                                                      | ITEM 6. SELECTED FINANCIAL DATA                                                              
|                                                                                                      | ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                                                                                                      | ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                          
|                                                                                                      | ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                          
|                                                                                                      | ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 
|PART III                                                                                             
|                                                                                                      | ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTS                                 
|                                                                                                      | ITEM 11. EXECUTIVE COMPENSATION                                                              
|                                                                                                      | ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                      
|                                                                                                      | ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                      
|PART IV                                                                                              
|                                                                                                      | ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K                    
|SIGNATURES                                                                                           
|EX-3.2 By-laws of 3333 Development Corporation                                                       
|EX-10.1 Amended and Restated Services Agreement                                                      
|EX-10.2(A) Amended and Restated Services Agreement                                                   
|EX-10.2(B) Management Agreement                                                                      
|EX-10.3 Centex Corporation 2001 Stock Plan                                                           
|EX-10.10 Centex Corp. Long Term Incentive Plan                                                       
|EX-10.12 First Amendment of Credit Agreement                                                         
|EX-21 List of Subsidiaries                                                                           
|EX-23 Consent of Independent Public Accountants                                                      
|EX-24.1 Powers of Attorney - Centex Corporation                                                      
|EX-24.2 Powers of Attorney - 3333 Holding Corp.                                                      
|EX-24.3 Powers of Attorney - Centex Development Co                                                   



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JOINT ANNUAL REPORT ON
FORM 10-K
FOR THE FISCAL YEAR ENDED MARCH 31, 2002

CENTEX CORPORATION AND SUBSIDIARIES
AND
3333 HOLDING CORPORATION AND SUBSIDIARY
AND CENTEX DEVELOPMENT COMPANY, L.P. AND SUBSIDIARIES

JOINT EXPLANATORY STATEMENT

On November 30, 1987, Centex Corporation distributed as a dividend to its
stockholders, through a nominee, all of the 1,000 issued and outstanding shares
of common stock of 3333 Holding Corporation and 900 warrants to purchase Class
B Units of limited partnership interest in Centex Development Company, L.P.
Pursuant to an agreement with the nominee, the nominee is the recordholder of
the 3333 Holding Corporation common stock and warrants to purchase Class B
Units of Centex Development Company on behalf of and for the benefit of persons
who are from time to time the holders of the Centex Corporation common stock.
Each Centex Corporation stockholder owns a beneficial interest in that portion
of the common stock of 3333 Holding Corporation and the warrants to purchase
Class B Units of Centex Development Company that the total number of shares of
Centex Corporation common stock held by such stockholder bears to the total
number of shares of Centex Corporation common stock outstanding from time to
time. This beneficial interest is not represented by a separate certificate or
receipt. Instead, each stockholders beneficial interest in such pro rata
portion of the shares of 3333 Holding Corporation common stock and the Centex
Development Company warrants is represented by the certificate or certificates
evidencing his Centex Corporation common stock and is currently tradable only
in tandem with, and as a part of, each stockholders Centex Corporation common
stock. The tandem securities are listed and traded on the New York Stock
Exchange and the London Stock Exchange and are registered with the Securities
and Exchange Commission separately under Section 12(b) of the Securities
Exchange Act of 1934, or the Exchange Act. 3333 Holding Corporation and Centex
Development Company were each organized in 1987 in connection with the
distribution described above. 3333 Development Corporation, a wholly-owned
subsidiary of 3333 Holding Corporation, holds a 1% interest in, and is the sole
general partner of, Centex Development Company. Centex Corporation indirectly
owns 100% of the Class A Units and 100% of the Class C Units of limited
partnership interest in Centex Development Company. These units are
collectively convertible into 20% of the Class B Units of limited partnership
in Centex Development Company. Please refer to the ownership chart on page 3.

At present, Centex Corporation, 3333 Holding Corporation and Centex
Development Company have elected to satisfy their respective periodic reporting
obligations under the Exchange Act by preparing and filing joint periodic
reports. Part Aof this Annual Report on Form 10-K for the fiscal year ended
March 31, 2002, or fiscal 2002, relates to Centex Corporation and its
subsidiaries. Part Bof this Report relates to 3333 Holding and its
subsidiary, 3333 Development Corporation, and to Centex Development Company and
its subsidiaries.

You should read this Report together with the proxy statements of Centex
Corporation and 3333 Holding Corporation for their respective 2002 annual
meetings of stockholders, the Annual Report to Stockholders of Centex
Corporation for fiscal 2002 and the Annual Report to Stockholders of 3333
Holding Corporation and Centex Development Company for fiscal 2002. For a
complete understanding of the tandem-traded securities, you should read both
Part Aand Part Bof this Report.

We include information concerning the earnings and financial condition of
the three companies, on an aggregate basis, in Note (J) of the Notes to
Consolidated Financial Statements of Centex Corporation and subsidiaries on
pages 78-79 of this Report.

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For a description of this ownership chart, please see the Joint Explanatory
Statement on the previous page.

OWNERSHIP CHART

(FLOW CHART)

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TABLE OF CONTENTS

FORM 10-K

|                                                                                              |  |          |    |      |  | 
|--------------------------------------------------------------------------------------------- |  | -------- | -- | ---- |  | 
|                                                                                              |  |          |    | Page | 
|                                                                                              |  |          |    |      | 
|JOINT EXPLANATORY STATEMENT                                                                   |  |          | 2  |     
|Part A. CENTEX CORPORATION AND SUBSIDIARIES                                                   |  |          |    |     
|                                                                                              |  | PART I   |    |      |  | 
|Item 1. Business                                                                              |  |          | 6  |     
|Item 2. Properties                                                                            |  |          | 22 |     
|Item 3. Legal Proceedings                                                                     |  |          | 23 |     
|Item 4. Submission of Matters to a Vote of Security Holders                                   |  |          | 23 |     
|                                                                                              |  | PART II  |    |      |  | 
|Item 5. Market for Registrants Common Equity and Related Stockholder
Matters                 |  |          | 25 |     
|Item 6. Selected Financial Data                                                               |  |          | 26 |     
|Item 7. Managements Discussion and Analysis of Financial Condition and
Results of Operations |  |          | 27 |     
|Item 7A. Quantitative and Qualitative Disclosures about Market Risk                           |  |          | 48 |     
|Item 8. Financial Statements and Supplementary Data                                           |  |          | 51 |     
|Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure  |  |          | 87 |     
|                                                                                              |  | PART III |    |      |  | 
|Item 10. Directors and Executive Officers of the Registrant                                   |  |          | 87 |     
|Item 11. Executive Compensation                                                               |  |          | 88 |     
|Item 12. Security Ownership of Certain Beneficial Owners and Management                       |  |          | 88 |     
|Item 13. Certain Relationships and Related Transactions                                       |  |          | 88 |     
|                                                                                              |  | PART IV  |    |      |  | 
|Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K                      |  |          | 88 |     
|SIGNATURES                                                                                    |  |          | 90 |     

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TABLE OF CONTENTS (continued)

|                                                                                              |                                                                                               |                    |     |  |      |  | 
|--------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------- | ------------------ | --- |  | ---- |  | 
|                                                                                              |                                                                                               |                    |     |  | Page | 
|                                                                                              |                                                                                               |                    |     |  |      | 
|Part B.                                                                                       | 3333 HOLDING CORPORATION AND SUBSIDIARY AND CENTEX DEVELOPMENT
COMPANY, L.P. AND SUBSIDIARIES |                    |     |  |     
|                                                                                              |                                                                                               | PART I             |     |  |      | 
|Item 1. Business                                                                              |                                                                                               |                    | 91  | 
|Item 2. Properties                                                                            |                                                                                               |                    | 97  | 
|Item 3. Legal Proceedings                                                                     |                                                                                               |                    | 101 | 
|Item 4. Submission of Matters to a Vote of Security Holders                                   |                                                                                               |                    | 101 | 
|                                                                                              |                                                                                               | PART II            |     |  |      | 
|Item 5. Market for Registrants Common Equity and Related Stockholder
Matters                 |                                                                                               |                    | 103 | 
|Item 6. Selected Financial Data                                                               |                                                                                               |                    | 104 | 
|Item 7. Managements Discussion and Analysis of Financial Condition and
Results of Operations |                                                                                               |                    | 105 | 
|Item 7A. Quantitative and Qualitative Disclosures about Market Risk                           |                                                                                               |                    | 114 | 
|Item 8. Financial Statements and Supplementary Data                                           |                                                                                               |                    | 115 | 
|Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure  |                                                                                               |                    | 138 | 
|                                                                                              |                                                                                               | PART III           |     |  |      | 
|Item 10. Directors and Executive Officers of the Registrants                                  |                                                                                               |                    | 139 | 
|Item 11. Executive Compensation                                                               |                                                                                               |                    | 140 | 
|Item 12. Security Ownership of Certain Beneficial Owners and Management                       |                                                                                               |                    | 141 | 
|Item 13. Certain Relationships and Related Transactions                                       |                                                                                               |                    | 144 | 
|                                                                                              |                                                                                               | PART IV            |     |  |      | 
|Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K                      |                                                                                               |                    | 144 | 
|SIGNATURES                                                                                    |                                                                                               |                    | 146 | 
|                                                                                              |                                                                                               |                    |     |  |      |  | 
|                                                                                              |                                                                                               | __________________ |     |  |      | 
|                                                                                              |                                                                                               |                    |     |  |      |  | 
|INDICES TO EXHIBITS                                                                           |                                                                                               |                    |     | 
|CENTEX CORPORATION AND SUBSIDIARIES                                                           |                                                                                               |                    |     | 
|3333 HOLDING CORPORATION AND SUBSIDIARY                                                       |                                                                                               |                    |     | 
|CENTEX DEVELOPMENT COMPANY, L.P. AND SUBSIDIARIES                                             |                                                                                               |                    |     | 

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PART A.

CENTEX CORPORATION AND SUBSIDIARIES

PREFATORY STATEMENT

Part Aof this Report (pages 6 through 90) includes information relating
to Centex Corporation and its subsidiaries, SEC File No. 1-6776. See Joint
Explanatory Statement on page 2 of this Report. Part Bof this Report (pages
91 through 147) includes information relating separately to 3333 Holding
Corporation and its subsidiary, 3333 Development Corporation, and to Centex
Development Company, L.P. and subsidiaries.




PART I




ITEM 1. BUSINESS

General Development of Business

Centex Corporation is a Nevada corporation. Our common stock, par value
$.25 per share, began trading publicly in 1969. Our common stock is traded on
the New York Stock Exchange, or the NYSE, and the London Stock Exchange. As of
May 31, 2002, 61,543,403 shares of our common stock were outstanding. Any
reference herein to we, us or our includes Centex Corporation and its
subsidiary companies.

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

Our Home Building operations currently involve the purchase and
development of land or lots and the construction and sale of single-family
homes, townhomes and low-rise condominiums. We have participated in the
conventional homebuilding business since 1950. We currently rank as the
nations fourth largest homebuilder based on revenues.

Our Financial Services operations consist primarily of home financing,
sub-prime home equity lending and the sale of title insurance and various other
insurance coverages. These activities include mortgage origination, servicing
and other related services for purchasers of homes sold by our Home Building
operations and others. We have been in the mortgage banking business since
1973.

Our Construction Products operations involve the manufacture, production,
distribution and sale of cement, gypsum wallboard, recycled paperboard,
aggregates and readymix concrete. Our involvement in the construction products
business started in 1963 when we began construction of our first cement plant.
During the quarter ended June 30, 1994, our construction products subsidiary,
Centex Construction Products, Inc., completed an initial public offering of 51%
of its stock and began trading on the NYSE under the symbol CXP. Primarily
as a result of Construction Products repurchase of its own stock, our
ownership has increased to 65.2% as of March 31, 2002. Accordingly, we have
consolidated Construction

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Products financial statements with those of Centex Corporation for the years
ended March 31, 2002, 2001 and 2000, or fiscal 2002, 2001 and 2000.

Our 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. We
entered the Construction Services business in 1966 by acquiring a Dallas-based
contractor that had been in business since 1936. We also acquired significant
construction companies in 1978, 1982, 1987 and 1990. We currently rank among
the nations largest general building contractors based on construction
revenues.

Our Investment Real Estate operations involve the acquisition, development
and sale of land, primarily for industrial, office, multi-family, retail,
residential and mixed-use projects.

In fiscal 1988, we established Centex Development Company. Please refer
toPart Bof this Report for a discussion of the business of Centex Development
Company.

Financial Information about Industry Segments

Note (K) of the Notes to Consolidated Financial Statements of Centex
Corporation on pages 79-81 of this Report contains additional information about
our business segments for fiscal 2002, 2001 and 2000.

Narrative Description of Business

HOME BUILDING

Our conventional homebuilding subsidiary, Centex Homes, purchases and
develops land or lots and constructs and sells single-family homes, townhomes
and low-rise condominiums. As of March 31, 2002, Centex Homes operated in 474
neighborhoods in 88 different markets. Centex Homes is also the only company to
rank among the nations top 10 homebuilders for each of the past 34 years
according to Professional Buildermagazine. Centex Homes sells to both
first-time and move-up buyers. Over 86% of the homes we sold in fiscal 2002
were single-family detached homes, and the remainder were townhomes and
low-rise condominiums.

Markets

Centex Homes follows a strategy of reducing exposure to local market
volatility by diversifying operations across geographically and economically
diverse markets. As of March 31, 2002, Centex Homes was building in 88 market
areas in 23 states and in Washington, D.C. The markets are listed below by
geographic areas.

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|                |  |                |  |                                    
|--------------- |  | -------------- |  | -----------------------------------
|Region          |  | States         |  | Markets                            
|                |  |                |  |                                    
|Mid-Atlantic    |  | Maryland       |  | Baltimore                          
|                |  | New Jersey     |  | Atlantic/Cape May                  
|                |  |                |  | Middlesex/Somerset/Hunterdon       
|                |  |                |  | Monmouth/Ocean                     
|                |  |                |  | Trenton                            
|                |  | North Carolina |  | Charlotte/Gastonia/Rock Hill       
|                |  |                |  | Greensboro/Winston Salem/High Point
|                |  |                |  | Raleigh/Durham/Chapel Hill         
|                |  |                |  | Wilmington                         
|                |  | Pennsylvania   |  | Philadelphia                       
|                |  |                |  | Pittsburgh                         
|                |  | South Carolina |  | Charleston/North Charleston        
|                |  |                |  | Hilton Head                        
|                |  |                |  | Myrtle Beach                       
|                |  | Virginia       |  | Norfolk/Virginia Beach/Newport     
|                |  |                |  | Richmond/Petersburg                
|                |  |                |  | Washington, D.C.                   
|Midwest         |  | Colorado       |  | Boulder/Longmont                   
|                |  |                |  | Denver                             
|                |  |                |  | Fort Collins                       
|                |  | Indiana        |  | Indianapolis                       
|                |  |                |  | Fort Wayne                         
|                |  | Illinois       |  | Chicago                            
|                |  | Michigan       |  | Ann Arbor                          
|                |  |                |  | Detroit                            
|                |  |                |  | Grand Rapids/Muskegon              
|                |  |                |  | Kalamazoo/Battle Creek             
|                |  | Minnesota      |  | Minneapolis/St. Paul               
|                |  | Ohio           |  | Akron                              
|                |  |                |  | Canton/Massillon                   
|                |  |                |  | Cincinnati                         
|                |  |                |  | Cleveland/Lorain/Elyria            
|                |  |                |  | Columbus                           
|                |  |                |  | Dayton/Springfield                 
|                |  |                |  | Mansfield                          
|                |  |                |  | Toledo                             
|                |  |                |  | Youngstown/Warren                  
|Mountain States |  | Arizona        |  | Phoenix/Mesa                       
|                |  | Colorado       |  | Eagle County                       
|                |  | Nevada         |  | Las Vegas                          
|                |  |                |  | Reno                               
|                |  | New Mexico     |  | Albuquerque                        
|                |  |                |  | Santa Fe                           
|                |  | Oregon         |  | Eugene                             
|                |  |                |  | Portland/Vancouver                 
|                |  |                |  | Salem                              
|                |  | Utah           |  | Salt Lake City                     
|                |  | Washington     |  | Seattle/Bellevue/Everett           
|                |  |                |  | Tacoma                             

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|              |  |                |  |                                
|------------- |  | -------------- |  | -------------------------------
|Region        |  | States         |  | Markets                        
|              |  |                |  |                                
|South Central |  | Texas          |  | Austin/San Marcos              
|              |  |                |  | Brazoria                       
|              |  |                |  | Dallas                         
|              |  |                |  | Ft. Worth/Arlington            
|              |  |                |  | Galveston/Texas City           
|              |  |                |  | Houston                        
|              |  |                |  | Killeen/Temple                 
|              |  |                |  | San Antonio                    
|              |  | Tennessee      |  | Nashville                      
|Southeast     |  | Florida        |  | Daytona Beach                  
|              |  |                |  | Ft. Lauderdale                 
|              |  |                |  | Ft. Myers/Cape Coral           
|              |  |                |  | Ft. Pierce/St. Lucie           
|              |  |                |  | Ft. Walton Beach               
|              |  |                |  | Jacksonville                   
|              |  |                |  | Lakeland/Winter Haven          
|              |  |                |  | Melbourne/Titusville           
|              |  |                |  | Miami                          
|              |  |                |  | Naples                         
|              |  |                |  | Orlando                        
|              |  |                |  | Punta Gorda                    
|              |  |                |  | Sarasota/Bradenton             
|              |  |                |  | Tampa/St. Petersburg/Clearwater
|              |  |                |  | West Palm Beach/Boca Raton     
|              |  | Georgia        |  | Atlanta                        
|              |  | South Carolina |  | Columbia                       
|              |  |                |  | Greenville/Spartanburg/Anderson
|West Coast    |  | California     |  | Bakersfield                    
|              |  |                |  | Fresno                         
|              |  |                |  | Kings County                   
|              |  |                |  | Los Angeles/Long Beach         
|              |  |                |  | Oakland                        
|              |  |                |  | Orange County                  
|              |  |                |  | Riverside/San Bernardino       
|              |  |                |  | Sacramento/Yolo                
|              |  |                |  | San Diego                      
|              |  |                |  | San Luis Obispo                
|              |  |                |  | Ventura                        
|              |  |                |  | Visalia/Tulare/Porterville     

In fiscal 2002, Centex Homes closed 22,960 homes, including first-time,
move-up and, in some markets, custom homes, ranging in price from approximately
$63,000 to about $2.2 million. The average sale price in fiscal 2002 was
$213,738.

Our practice has been to acquire land, build homes on the land and sell
the homes within 24 to 36 months from the date of land acquisition. Generally,
this involves acquiring land that is properly zoned and is either ready for
development or, to some degree, already developed. The purchase of finished
lots generally allows us to shorten the lead time to commence construction and
reduces the risk of unforeseen improvement costs and volatile market
conditions. We have acquired a substantial amount of finished and partially
improved lots and land through option agreements that we exercise over
specified time periods or, in certain cases, as the lots are needed. At March
31, 2002, Centex Homes owned approximately 43,000

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lots and had rights to
purchase approximately 51,000 lots. In addition, Centex Homes enters into
joint ventures for land acquisition, development and other activities. Centex
Homes holds less than a majority interest in these joint ventures, and
therefore we do not consolidate these joint ventures in our financial
statements.

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

|                |  |                |  |                                                                                                 |  |  |  | 
|--------------- |  | -------------- |  | ----------------------------------------------------------------------------------------------- |  |  |  | 
|Company         |  | Date Acquired  |  | Description                                                                                     |  |  |  | 
|                |  |                |  |                                                                                                 |  |  |  | 
|Wayne Homes     |  | April 1998     |  | Builds single-family homes in the
build-on-owners lot market segment.                       
|Teal Homes      |  | May 1998       |  | Builds single-family homes for the
first-time and move-up buyer in the
Richmond, Virginia area.
|Calton Homes    |  | December 1998  |  | Builds single-family homes for the
first-time and move-up buyer in New
Jersey.                 
|Real Homes      |  | September 1999 |  | Builds single-family homes for the
first-time and move-up buyer in the
Las Vegas, Nevada area. 
|Selective Group |  | March 2001     |  | Builds single-family homes for the
first-time and move-up buyer in the
Detroit, Michigan area. 
|CityHomes       |  | March 2001     |  | Builds upscale urban townhomes and
condominiums in the Dallas, Texas
area.                     

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

The table below summarizes by geographic area Centex Homes home closings,
sales (orders) backlog and sales (orders) for the five most recent fiscal
years. Some of the prior year balances have been reclassified to be consistent
with the fiscal 2002 presentation.

Closings (in units):

|                               |                 |   |                               |       |  |      |        |       |      |   |        |       |  |   |        |       |  |   |        |       | 
|------------------------------ | --------------- | - | ----------------------------- | ----- |  | ---- | ------ | ----- | ---- | - | ------ | ----- |  | - | ------ | ----- |  | - | ------ | ----- | 
|                               |                 |   | For
the Years Ended March 31, |      
|                               |                 |   |                               |      
|                               |                 |   | 2002                          |       |  | 2001 |        |       | 2000 |   |        | 1999  |  |   | 1998   |      
|                               |                 |   |                               |       |  |      |        |       |      |   |        |       |  |   |        |      
|                               | Mid-Atlantic    |   |                               | 3,877 |  |      |        | 3,395 |      |   |        | 3,058 |  |   |        | 2,332 |  |   |        | 1,826 | 
|                               | Southeast       |   |                               | 4,280 |  |      |        | 3,991 |      |   |        | 4,012 |  |   |        | 3,426 |  |   |        | 3,064 | 
|                               | Midwest         |   |                               | 3,619 |  |      |        | 3,294 |      |   |        | 3,089 |  |   |        | 2,062 |  |   |        | 1,147 | 
|                               | South Central   |   |                               | 5,154 |  |      |        | 4,104 |      |   |        | 3,924 |  |   |        | 3,197 |  |   |        | 2,664 | 
|                               | Mountain States |   |                               | 2,697 |  |      |        | 2,338 |      |   |        | 1,812 |  |   |        | 1,350 |  |   |        | 1,336 | 
|                               | West Coast      |   |                               | 3,333 |  |      |        | 3,537 |      |   |        | 3,009 |  |   |        | 2,425 |  |   |        | 2,381 | 
|                               |                 |   |                               |       |  |      |        |       |      |   |        |       |  |   |       
|                               |                 |   | 22,960                        |       |  |      | 20,659 |       |      |   | 18,904 |       |  |   | 14,792 |       |  |   | 12,418 |      
|                               |                 |   |                               |       |  |      |        |       |      |   |        |       |  |   |       
|Average Sales Price (in 000s) |                 | $ | 214                           |       |  | $    | 206    |       |      | $ | 192    |       |  | $ | 186    |       |  | $ | 183    |      
|                               |                 |   |                               |       |  |      |        |       |      |   |        |       |  |   |       

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

|                |  |                               |       |  |      |  |       |      |  |  |       |  |  |      |       |  |  |  |       | 
|--------------- |  | ----------------------------- | ----- |  | ---- |  | ----- | ---- |  |  | ----- |  |  | ---- | ----- |  |  |  | ----- | 
|                |  | For
the Years Ended March 31, |      
|                |  |                               |      
|                |  | 2002                          |       |  | 2001 |  |       | 2000 |  |  | 1999  |  |  | 1998 |      
|                |  |                               |       |  |      |  |       |      |  |  |       |  |  |      |      
|Mid-Atlantic    |  |                               | 1,503 |  |      |  | 1,365 |      |  |  | 1,210 |  |  |      | 1,061 |  |  |  | 657   | 
|Southeast       |  |                               | 2,273 |  |      |  | 1,898 |      |  |  | 1,848 |  |  |      | 1,794 |  |  |  | 1,400 | 
|Midwest         |  |                               | 2,086 |  |      |  | 2,008 |      |  |  | 1,628 |  |  |      | 1,355 |  |  |  | 433   | 
|South Central   |  |                               | 1,962 |  |      |  | 2,064 |      |  |  | 1,462 |  |  |      | 1,410 |  |  |  | 1,174 | 
|Mountain States |  |                               | 646   |  |      |  | 803   |      |  |  | 579   |  |  |      | 502   |  |  |  | 456   | 
|West Coast      |  |                               | 901   |  |      |  | 1,127 |      |  |  | 852   |  |  |      | 670   |  |  |  | 796   | 
|                |  |                               |       |  |      |  |       |      |  |  |       |  |  |      |      
|                |  |                               | 9,371 |  |      |  | 9,265 |      |  |  | 7,579 |  |  |      | 6,792 |  |  |  | 4,916 | 
|                |  |                               |       |  |      |  |       |      |  |  |       |  |  |      |      

Sales (Orders) (in units):

|                |  |                               |        |  |      |  |        |      |  |  |        |  |  |      |        |  |  |  |        | 
|--------------- |  | ----------------------------- | ------ |  | ---- |  | ------ | ---- |  |  | ------ |  |  | ---- | ------ |  |  |  | ------ | 
|                |  | For
the Years Ended March 31, |       
|                |  |                               |       
|                |  | 2002                          |        |  | 2001 |  |        | 2000 |  |  | 1999   |  |  | 1998 |       
|                |  |                               |        |  |      |  |        |      |  |  |        |  |  |      |       
|Mid-Atlantic    |  |                               | 3,936  |  |      |  | 3,550  |      |  |  | 3,207  |  |  |      | 2,464  |  |  |  | 1,888  | 
|Southeast       |  |                               | 4,655  |  |      |  | 4,041  |      |  |  | 4,066  |  |  |      | 3,824  |  |  |  | 3,331  | 
|Midwest         |  |                               | 3,697  |  |      |  | 3,541  |      |  |  | 3,207  |  |  |      | 2,515  |  |  |  | 1,139  | 
|South Central   |  |                               | 5,052  |  |      |  | 4,685  |      |  |  | 3,976  |  |  |      | 3,433  |  |  |  | 2,879  | 
|Mountain States |  |                               | 2,540  |  |      |  | 2,562  |      |  |  | 1,760  |  |  |      | 1,396  |  |  |  | 1,369  | 
|West Coast      |  |                               | 3,107  |  |      |  | 3,812  |      |  |  | 3,191  |  |  |      | 2,299  |  |  |  | 2,420  | 
|                |  |                               |        |  |      |  |        |      |  |  |        |  |  |      |       
|                |  |                               | 22,987 |  |      |  | 22,191 |      |  |  | 19,407 |  |  |      | 15,931 |  |  |  | 13,026 | 
|                |  |                               |        |  |      |  |        |      |  |  |        |  |  |      |       

Competition and Other Factors

The conventional homebuilding industry is essentially a local business
and is highly competitive. We compete in each of Centex Homes market areas
with numerous other homebuilders, including national, large regional and local
builders. Centex Homes top ten competitors based on revenues for their most
recent year-end are as follows: Beazer Homes, D. R. Horton, Inc., KB Homes,
Lennar Corporation, MDC Holdings, NVR Inc., Pulte, Ryland, Standard Pacific and
Toll Brothers. Centex Homes operations accounted for approximately 1.5% of
the total for-sale housing starts in the United States for the twelve months
ended March 31, 2002. The main competitive factors affecting Centex Homes
operations are location, price, cost of providing mortgage financing for
customers, construction costs, design and quality of homes, customer service,
marketing expertise, availability of land, price of land and reputation. We
believe that Centex Homes competes effectively by maintaining geographic
diversity, being responsive to the specific demands of each market and managing
the operations at a local level.

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

The homebuilding industry is subject to extensive and complex regulations.
Centex Homes and its subcontractors must comply with various federal, state
and local laws and regulations, including worker

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

We purchase materials, services and land from numerous sources and believe
that we can deal effectively with the problems we may experience relating to
the supply or availability of materials, services and land.

FINANCIAL SERVICES

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

Conforming Mortgage Banking

We established CTX Mortgage Company, L.L.C., or CTX Mortgage, together with
its predecessors and affiliates, to provide mortgage financing for homes built
by Centex Homes. By opening CTX Mortgage offices in Centex Homes housing
markets, we have been able to provide mortgage financing for an average of 68%
of Centex Homes sales, other than cash sales, over the past five years. In
fiscal 2002, this capture ratio was 72%. In 1985, we expanded CTX Mortgages
operations to include mortgage loans that are not associated with the sale of
homes built by Centex Homes. We refer to mortgage financing for homes built by
Centex Homes as Builder loans and to mortgage financing for homes built by
others as Retail loans.

At March 31, 2002, CTX Mortgage had 217 offices located in 37 states. The
offices vary in size depending on loan volume.

The following table shows the unit breakdown of Builder and Retail loans
for CTX Mortgage for the five years ended March 31, 2002:

|                                             |         |   |                               |        |  |      |        |        |      |   |        |        |  |   |        |        |  |   |        |        | 
|-------------------------------------------- | ------- | - | ----------------------------- | ------ |  | ---- | ------ | ------ | ---- | - | ------ | ------ |  | - | ------ | ------ |  | - | ------ | ------ | 
|                                             |         |   | For
the Years Ended March 31, |       
|                                             |         |   |                               |       
|                                             |         |   | 2002                          |        |  | 2001 |        |        | 2000 |   |        | 1999   |  |   | 1998   |       
|                                             |         |   |                               |        |  |      |        |        |      |   |        |        |  |   |        |       
|Loan Types:                                  |         |   |                               |        |  |      |        |        |      |   |        |        |  |   |        |        |  |   |        |       
|                                             | Builder |   |                               | 15,435 |  |      |        | 12,506 |      |   |        | 10,958 |  |   |        | 9,882  |  |   |        | 8,748  | 
|                                             | Retail  |   |                               | 64,949 |  |      |        | 48,244 |      |   |        | 48,301 |  |   |        | 66,496 |  |   |        | 44,096 | 
|                                             |         |   |                               |        |  |      |        |        |      |   |        |        |  |   |       
|                                             |         |   | 80,384                        |        |  |      | 60,750 |        |      |   | 59,259 |        |  |   | 76,378 |        |  |   | 52,844 |       
|                                             |         |   |                               |        |  |      |        |        |      |   |        |        |  |   |       
|Origination Volume (in billions)             |         | $ | 12.5                          |        |  | $    | 8.9    |        |      | $ | 8.1    |        |  | $ | 10.1   |        |  | $ | 6.7    |       
|Percent of Centex Non-Cash
Closings Financed |         |   | 72                            | %      |  |      | 64     | %      |      |   | 61     | %      |  |   | 70     | %      |  |   | 75     | %     

We provide mortgage origination and other mortgage-related services for
the Federal Housing Administration, or FHA, the Department of Veterans
Affairs, or VA, and conventional loans on homes that Centex Homes or others
build and sell, as well as resale homes and refinancing of existing mortgages.
Our loans are generally first-lien mortgages secured by one- to four-family
residences. A majority of the loans qualify for inclusion in programs
sponsored by the Government National Mortgage Association, or GNMA,
the Federal National Mortgage Association, or FNMA, or the Federal Home Loan
Mortgage Corporation, or

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FHLMC. These loans are known in the industry as
conforming loans. The remainder of the loans are either pre-approved and
individually underwritten by CTX Mortgage or private investors who subsequently
purchase the loans or are funded by private investors who pay a broker fee to
CTX Mortgage for referring a loan.

CTX Mortgages principal sources of income consist of gains on the sale of
mortgage loans, inclusive of all service rights, and, to a lesser extent, net
interest income and other fees. Generally, we sell our right to service the
mortgage loans and, therefore, retain no mortgage servicing rights or other
residual interests.

We also participate in joint-venture agreements with third-party
homebuilders and other real estate professionals to provide mortgage
originations for their customers. These joint venture companies are fully
consolidated in CTX Mortgages financial statements. At March 31, 2002, CTX
Mortgage had 22 of these agreements, operating in 24 offices located in 10
states.

In fiscal 2000, CTX Mortgage entered into a mortgage loan purchase
agreement with Harwood Street Funding I, L.L.C., or HSF-I, that we refer to as the
HSF-I Purchase Agreement. HSF-I is an unaffiliated entity that is not
consolidated with Financial Services or Centex Corporation. 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. Under the terms of the sales
agreements, CTX Mortgage is the sole manager of HSF-I and, in that capacity,
arranges for the sale of these loans into the secondary market. For a
subservicing fee, CTX Mortgage also acts as servicer of these mortgage loans
for HSF-I until HSF-I sells the loans. At March 31, 2002, CTX Mortgage was
servicing approximately $1.3 billion of mortgage loans owned by HSF-I. For
further discussion of HSF-I, see Managements Discussion and Analysis of
Financial Condition and Results of Operations  Certain Off-Balance-Sheet and
Other Obligations below.

Sub-Prime Home Equity Lending

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

At March 31, 2002, Home Equity had 134 offices doing business in 48
states. Home Equity originates home equity loans through five major
origination sources:



| |  |  | a retail branch network;                                                 
| | - |  | -------------------------------------------------------------------------
|
| |  |  | a broker referral network;                                               
|
| |  |  | referrals from its conforming mortgage affiliate, CTX Mortgage;          
|
| |  |  | a correspondent mortgage banker network; and                             
|
| |  |  | Home Equitys direct sales unit that sources loans through telemarketing.

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The following table summarizes Home Equitys origination statistics for
the five-year period ended March 31, 2002:

|                                 |  |                               |        |  |      |   |        |      |  |   |        |  |  |      |        |  |  |   |       | 
|-------------------------------- |  | ----------------------------- | ------ |  | ---- | - | ------ | ---- |  | - | ------ |  |  | ---- | ------ |  |  | - | ----- | 
|                                 |  | For the Years Ended March 31, |       
|                                 |  |                               |       
|                                 |  | 2002                          |        |  | 2001 |   |        | 2000 |  |   | 1999   |  |  | 1998 |       
|                                 |  |                               |        |  |      |   |        |      |  |   |        |  |  |      |       
|Loans                            |  |                               | 26,955 |  |      |   | 26,418 |      |  |   | 20,568 |  |  |      | 15,582 |  |  |   | 7,982 | 
|Origination Volume (in billions) |  | $                             | 2.1    |  |      | $ | 1.7    |      |  | $ | 1.3    |  |  | $    | 1.0    |  |  | $ | 0.5   | 

We began servicing loans through Home Equity in fiscal 1997. Servicing
fees for sub-prime loans are significantly higher than for conforming loans.
Servicing encompasses, among other activities, the following processes:
billing, collection of payments, movement of cash to the payment clearing bank
accounts, investor reporting, customer help, recovery of delinquent payments,
instituting foreclosure and liquidation of the underlying collateral. As of
March 31, 2002, Home Equity was servicing a sub-prime loan portfolio of
approximately $4.4 billion.

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.
Between February 1998 and March 2000, Home Equity completed nine
securitizations totaling approximately $2.2 billion in loans under this
structure. As of March 31, 2002, Home Equity had a remaining MSRI of $125.3
million.

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. From April 1, 2000
to March 31, 2002, Home Equity completed eight securitizations totaling
approximately $3.6 billion in loans under this structure.

Home Equitys principal sources of income are from interest income, loan
origination fees and servicing fees.

Other Financial Services Operations

We offer title agent, title underwriting, closing, appraisal and other
settlement services in 23 states under the names of Commerce Title Company,
Commerce Title Agency and Commerce Title Insurance Company. Our Optima
Information Solutions subsidiary provides property information reports,
document recording and retrieval, due diligence reports and pre-foreclosure
information electronically in all 50 states. Through Westwood Insurance, a
multi-line property and casualty insurance agency, we market homeowners and
auto insurance to some of our customers and customers of approximately 53 other
homebuilders in 50 states. Westwood Insurance also provides coverage for some
commercial customers. Our Technologies Group, headquartered in Edmond,
Oklahoma, provides mortgage quality control services, owns and operates an
automated mortgage processing system and provides the mortgage industry with
regulations and guidelines in an electronic format.

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Competition and Other Factors

The financial services industry in the United States is highly
competitive. CTX Mortgage competes with commercial banks, other mortgage
banking companies and other financial institutions to supply mortgage financing
at attractive rates to purchasers of our homes, as well as to the general
public. Home Equity competes with commercial banks, other sub-prime lenders
and other financial institutions to supply sub-prime financing at attractive
rates. Our title and insurance operations compete with other providers of
title and insurance products to sell their products to purchasers of our homes,
as well as to the general public. During fiscal 2002, Financial Services
continued to operate in a very competitive environment.

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

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

CONSTRUCTION PRODUCTS

Construction Products operations include the manufacture, production,
distribution and sale of cement, gypsum wallboard, recycled paperboard,
aggregates and readymix concrete. As of March 31, 2002, our ownership in
Construction Products was approximately 65.2%.

Cement

Construction Products operates cement plants in or near Buda, Texas;
LaSalle, Illinois; Fernley, Nevada; and Laramie, Wyoming. The plants in Buda
and LaSalle are owned by separate partnerships in which Construction Products
has a 50% interest. Construction Products proportionally consolidates its pro
rata interest in the revenues, expenses, assets and liabilities of those
extractive industry joint ventures. The kiln start-up dates of the cement
plants were as follows: Buda, Texas, 1978 (expanded 1983); LaSalle,

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Illinois, 1974; Fernley, Nevada (2 kilns), 1964 and 1969; and Laramie, Wyoming
(2 kilns), 1988 and 1996. All four of the cement plants are fuel-efficient dry
process plants.

Construction Products net cement production, excluding the partners 50%
interest in the Buda and LaSalle plants, totaled approximately 2.2 million tons
in fiscal 2002 and 2.3 million tons in fiscal 2001. Total net cement sales
were 2.4 million tons in both fiscal 2002 and fiscal 2001, as all four cement
plants sold all of the product they produced. During the past four years,
Construction Products purchased cement from others to be resold. In fiscal
2002, 10.5% of the cement sold by Construction Products was acquired from
outside sources, compared to 6.6% in fiscal 2001.

Raw Materials and Fuel Supplies

The principal raw material used in the production of portland cement is
calcium carbonate in the form of limestone. Construction Products obtains
limestone principally through mining and extraction operations at quarries
owned or leased by Construction Products or its partnerships that are located
in close proximity to the plants. Construction Products management believes
that the estimated recoverable limestone reserves owned or leased by it or its
partnerships will permit each of its plants to operate at its present
production capacity for at least 30 years or, in the case of the Fernley plant,
at least 15 years. Construction Products management expects that additional
limestone reserves for the Fernley plant will be available when needed on an
economically feasible basis.

The cement plants use coal and coke as their primary fuel but are equipped
to burn natural gas as an alternative fuel. Electric power is a major cost
component in the manufacture of cement. Construction Products seeks to
diminish overall power costs by adopting interruptible power supply agreements,
which may expose the plants to some production interruptions during periods of
power curtailment. Although power and natural gas costs generally decreased
during fiscal 2002, we expect costs to increase in fiscal 2003, which could
negatively impact manufacturing costs in fiscal 2003.

Sales and Distribution

Demand for cement is highly cyclical and depends on the demand for
concrete products, which, in turn, depends on the demand for construction.
According to estimates of the Portland Cement Association, the primary
construction sectors that account for the largest shares of cement consumption
are public works construction, non-residential construction and residential
construction. These sectors comprised 50%, 21% and 21%, respectively, of U.S.
cement consumption in calendar year 2001. No single customer of Construction
Products accounted for as much as 10% of total cement sales during fiscal 2002.
The principal geographic markets for Construction Products cement are Texas
and western Louisiana, which are serviced by the Buda, Texas plant; Illinois
and southern Wisconsin, which are serviced by the LaSalle, Illinois plant;
Nevada, except Las Vegas, and northern California, which are serviced by the
Fernley, Nevada plant; and Wyoming, Utah, northern Colorado, western Nebraska
and eastern Nevada, which are serviced by the Laramie, Wyoming plant.

We generally distribute our cement by common carriers, customer pickup
and, to a lesser extent, by trucks owned and operated by Construction Products.
In addition, we transport our cement principally by rail to storage and
distribution terminals for further distribution, which expands each plants
selling area.

Competition and Other Factors

The cement business is extremely competitive. In every geographic area in
which Construction Products sells cement, one or more other domestic producers
compete. In addition, foreign companies compete in most sales areas by
importing cement into the United States. The number of principal

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competitors operating in the same geographic areas as Construction Products
cement plants are: six in Buda, six in LaSalle, six in Fernley and four in
Laramie. Construction Products competes by operating efficient cement plants,
merchandising a high quality product and providing good service and competitive
pricing.

Gypsum Wallboard

Construction Products owns and operates four gypsum wallboard
manufacturing facilities: two located in Albuquerque and nearby Bernalillo, New
Mexico, one located in Gypsum, Colorado (near Vail) and one located in Duke,
Oklahoma, acquired in November 2000.

Construction Products gypsum wallboard production totaled 1,890 million
square feet in fiscal 2002 and 1,649 million square feet in fiscal 2001. Total
gypsum wallboard sales were 1,930 million square feet in fiscal 2002 and 1,584
million square feet in fiscal 2001.

Raw Materials and Fuel Supplies

Construction Products mines and extracts natural gypsum rock, the
principal raw material used in the manufacture of gypsum wallboard, from mines
and quarries owned, leased or subject to claims owned by Construction Products
and located near its plants. Construction Products estimates that the New
Mexico, Colorado and Oklahoma mines and quarries contain approximately 50
million tons, 21 million tons and 15 million tons of proven and probable gypsum
reserves, respectively. Other gypsum deposits are located in the immediate
area of the Oklahoma plant and may be obtained at a reasonable cost. Based on
its current production capacity, Construction Products management estimates
that the life of its existing gypsum rock reserves is approximately 80 years in
New Mexico, 35 years in Colorado and 15 years in Oklahoma.

Prior to November 2000, Construction Products purchased paper used in
manufacturing gypsum wallboard from third-party suppliers. As a result of the
acquisition of paperboard manufacturing operations in November 2000,
Construction Products now manufactures all of the paper needed for its gypsum
wallboard productions.

Construction Products wallboard plants use large quantities of natural
gas and electrical power. Construction Products currently obtains a portion of
its natural gas requirements from three gas producers under gas supply
agreements expiring in January 2003 for Colorado, May 2003 for New Mexico and
November 2002 for Oklahoma. If the agreements are not renewed, Construction
Products management expects to be able to obtain its gas supplies from other
suppliers at competitive prices. Power for the Gypsum plant is supplied by the
cogeneration power facility that was acquired along with the gypsum wallboard
plant in 1997. Although power and natural gas costs generally decreased during
fiscal 2002, Construction Products expects natural gas costs to increase in
fiscal 2003, which could negatively impact manufacturing costs in fiscal 2003.

Sales and Distribution

The principal sources of demand for gypsum wallboard are residential and
non-residential construction, repair and remodeling. While the gypsum
wallboard industry remains highly cyclical, recent growth in the repair and
remodeling segment has partially mitigated the impact of fluctuations on
overall levels of new construction. Construction Products sells wallboard to
numerous building materials dealers, wallboard specialty distributors, home
center chains and other customers located throughout the United States.
Although wallboard is distributed principally in regional areas, Construction
Products and some other producers have the ability to ship wallboard by rail
outside their usual regional distribution areas to take advantage of other
regional increases in demand. Construction Products rail distribution
capabilities

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permit it to reach customers in all states west of the Mississippi River and
many eastern states. During fiscal 2002, approximately 20% of Construction
Products sales volume of gypsum wallboard was transported by rail.

Competition and Other Factors

There currently are eight manufacturers of wallboard in the United States
operating a total of 79 plants. Construction Products estimates that the three
largest producers, of which Construction Products is not one, accounted for
approximately 70% of wallboard sales in the United States in calendar year
2001. Competition among wallboard producers is primarily on a regional basis
with local producers benefiting from lower transportation costs and, to a
lesser extent, on a national basis. Because of the commodity nature of the
product, competition is based principally on price and, to a lesser extent, on
product quality and customer service.

Recycled Paperboard Operations

Construction Products conducts its recycled paperboard manufacturing
operations at a Lawton, Oklahoma mill and a Commerce City, Colorado mill.
Construction Products elected to idle the Commerce City mill in April 2001.
The Lawton mill commenced commercial operation in March 2000 and was acquired
by Construction Products, along with the Colorado mill, in November 2000.
Construction Products ultimately expects the Lawton mill to have the capacity
to produce approximately 11 billion square feet, or 220,000 tons, of
gypsum-grade recycled paperboard annually. In fiscal 2002, it produced
approximately 196,000 tons.

Construction Products produces all of the paperboard products manufactured
at the paperboard mills from 100% reclaimed paper fiber. These products are
classified by the industry as recycled paperboard. Recycled paperboard
products include the facing paper used in the manufacture of gypsum wallboard
and recycled paperboard used by manufacturers of consumer and industrial
paperboard products. The principal raw materials used by the recycled
paperboard mills are reclaimed paper fiber, chemicals and water. Construction
Products currently purchases reclaimed paper fiber from several sources,
including Construction Products own paper fiber recycling centers. The
recycled paperboard products are sold primarily to gypsum wallboard
manufacturers. During fiscal 2002, approximately 34% of the recycled
paperboard manufactured and shipped by Construction Products recycled
paperboard mills was consumed by its own gypsum wallboard manufacturing
operations and approximately 58% was shipped to two other gypsum wallboard
manufacturers.

The demand for recycled paperboard directly corresponds to the cyclical
gypsum wallboard market. Construction Products competes with approximately
seven other manufacturers of gypsum-grade paperboard, six of which have gypsum
wallboard manufacturing operations. Substantially all of these competitors
have greater financial resources. Price, quality, personal relationships and
timeliness of deliveries are the principal methods of competition among
paperboard producers.

Concrete and Aggregates

Construction Products concrete and aggregates operations are located in
and around Austin, Texas and northern California. The 10,000-acre aggregates
deposit in northern California contains sufficient estimated reserves to meet
current mining requirements for aggregates for a period of more than 100 years.
Construction Products sells aggregates from this deposit in the Sacramento,
California area and in nearby counties. No single customer accounted for as
much as 10% of Construction Products concrete and aggregates sales during
fiscal 2002. Competition among concrete producers within Construction
Products northern California and Austin markets is strong.

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Environmental Matters

The construction products industry, including the operations of
Construction Products, is subject to federal, state and local laws and
regulations pertaining to several areas, including human health and safety and
environmental compliance. The Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act of 1986, as well as similar laws in certain states,
create joint and several liability for the cost of cleaning up or correcting
releases to the environment of designated hazardous substances. None of
Construction Products sites are listed as a Superfund site.

Construction Products operations are also potentially affected by the
Resource Conservation and Recovery Act, or RCRA, which is the primary federal
statute governing the management of solid waste and which includes stringent
regulation of solid waste that is considered hazardous waste. These operations
generate non-hazardous solid waste, which may include cement kiln dust, or CKD.
Because of a RCRA exemption, known as the Bevill Amendment, CKD generated in
Construction Products operations is currently not considered a hazardous waste
under RCRA. Nevertheless, CKD is still considered a solid waste and is
regulated primarily under state environmental laws and regulations. The U. S.
Environmental Protection Agency completed its review of CKD and has proposed
regulations to govern the handling and disposal of CKD, which will supersede
the Bevill Amendment. The Bevill Amendment will remain in effect until the
final regulations are adopted.

In the past, Construction Products collected and stored CKD on-site at its
cement plants. Construction Products continues to store CKD at its Illinois,
Nevada and Wyoming cement plants and at a former plant site in Corpus Christi,
Texas, that is no longer in operation. Currently, substantially all CKD
related to present operations at all cement facilities is recycled. When the
U. S. Environmental Protection Agency removes the CKD exemption and develops
particular CKD management standards in the future, Construction Products may be
required to incur significant costs in connection with its CKD. CKD that comes
in contact with water might produce a leachate with an alkalinity high enough
to be classified as hazardous and might also leach certain hazardous trace
metals therein.

Another issue of potential significance is the possible imposition of
government requirements of greenhouse gas reduction measures for cement
producers. This is potentially significant because carbon dioxide is generated
from combustion of fuels such as coal and coke in order to generate the high
temperatures necessary to manufacture cement clinker, which is then ground with
gypsum to make cement. Any imposition of raw material or production
limitations or fuel-use or carbon taxes could have a significant impact on the
cement manufacturing industry. It will not be possible to determine the impact
on Construction Products until governmental requirements are defined.

The Clean Air Act Amendments of 1990 provided comprehensive federal
regulation of all sources of air pollution and established a new federal
operating permit and fee program for virtually all manufacturing operations.
These amendments will likely result in increased capital and operational
expenses for Construction Products in the future, the amounts of which are not
presently determinable. We have no reason to believe, however, the increased
capital and operational expenses would place Construction Products at a
competitive disadvantage.

We believe that Construction Products current procedures and practices in
its operations, including those for handling and managing materials, are
consistent with industry standards. Nevertheless, because of the complexity of
operations and compliance with environmental laws, there can be no assurance
that past or future operations will not result in operational errors,
violations, remediation or other liabilities or claims. Moreover, we cannot
predict what environmental laws will be enacted, adopted or amended in the
future or

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how they will be administered or interpreted. Compliance with more stringent
environmental laws or stricter interpretation of existing environmental laws
could necessitate significant capital outlays.

CONSTRUCTION SERVICES

Our Construction Services subsidiaries together rank as one of the largest
building contractors in the country, as well as one of the largest U. S.-owned
construction groups based on construction revenues. Construction Services is
made up of four principal operating companies with various geographic locations
and project niches. Healthcare facility construction has represented nearly
one-fourth of Construction Services business mix during recent years. New
contracts for the group for fiscal 2002 totaled $1.5 billion versus $1.9
billion for fiscal 2001. The backlog of uncompleted contracts at March 31,
2002 was $2.2 billion compared to $2.0 billion at March 31, 2001. Construction
Services principal subsidiaries are as follows:



| |                                                                                                                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Centex Construction Company, Inc.This subsidiary has operational
offices in Dallas, Houston and San Antonio, Texas; Fairfax, Virginia;
Charlotte, North Carolina; and Atlanta, Georgia. This company pursues
negotiated work in its regional market areas.



| |                                                                                                                                                                                                                                                                                      
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Centex Rodgers, Inc. This subsidiary is a nationwide healthcare
construction specialist and is headquartered in Nashville, Tennessee with
operational offices in Pasadena, California; Detroit, Michigan; West Palm
Beach, Florida; Rochester, Minnesota; and Indianapolis, Indiana.



| |                                                                                                                                                                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Centex-Rooney Construction Co., Inc. This subsidiary, based in
Plantation, Florida, performs all types of work, principally within the
state of Florida, and has operational offices in Miami, Orlando, Tampa,
Tallahassee, Jacksonville, Ft. Myers and West Palm Beach.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Centex Forcum Lannom, Inc. d/b/a Centex Engineering & Construction, Inc.
This subsidiary, that focuses on industrial client construction
projects, is located in Dyersburg, Tennessee and operates principally
within the state of Tennessee. The company has additional marketing
offices in Memphis, Tennessee; Lexington, Kentucky; and Dallas, Texas. We
are in the process of changing the name under which this company does
business in all jurisdictions to Centex Engineering and Construction, Inc.

As a general contractor or construction manager, Construction Services
provides supervisory personnel for the construction of facilities. In
addition, Construction Services may perform varying amounts of the actual
construction work on a project but will generally hire subcontractors to
perform the majority of the work.

Construction contracts primarily fit into one of two formats: negotiated
or competitive bid. In a negotiated format, the contractor bids a fee (fixed
or percentage) over the cost of the project and, in many instances, agrees that
the final cost will not exceed a designated amount. These contracts may
include a provision whereby the owner will pay a part of any savings from the
guaranteed amount to the contractor. In a competitive bid format, Construction
Services will bid a fixed amount to construct the project based on an
evaluation of detailed plans and specifications. At March 31, 2002,
approximately 86% of the outstanding projects were negotiated. Construction
Services projects include hospitals, hotels, office buildings, correctional
facilities, schools, shopping centers, airports, parking garages, sport
stadiums, post offices and convention and performing arts centers.

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Competition and Other Factors

The construction industry is very competitive, and Construction Services
competes with numerous other companies. With respect to competitively bid
projects and negotiated healthcare work, Construction Services generally
competes throughout the United States with local, regional and national
contractors, depending upon the nature of the project. For negotiated projects
other than healthcare, Construction Services generally competes in the
subsidiarys primary geographical area with other local, regional and national
contractors. Construction Services solicits new projects by attending project
bid meetings, by meeting with builders and owners and through existing
customers. Construction Services competes successfully on the basis of its
reputation, financial strength, knowledge and understanding of its clients
needs.

Construction Services operations are affected by federal, state and local
laws and regulations relating to worker health and safety, as well as
environmental laws. With respect to health and safety matters, we believe that
Construction Services has taken appropriate precautions to protect employees
and others from workplace hazards. Current environmental laws may require
Construction Services operating subsidiaries to work in concert with project
owners to acquire the necessary permits or other authorizations for certain
activities, including the construction of projects located in or near wetland
areas. Construction Services operations are also affected by environmental
laws regulating the use and disposal of hazardous materials encountered during
demolition operations.

We believe that Construction Services current procedures and practices
are consistent with industry standards and that compliance with the health and
safety laws and environmental laws does not constitute a material burden or
expense.

Construction Services operations obtain materials and services from
numerous sources. We believe that our construction companies can deal
effectively with any problems they may experience in the supply of materials
and services.

INVESTMENT REAL ESTATE

Investment Real Estate conducts its operations directly and through our
investment in Centex Development Company. As noted in Note (J) on pages 78-79
of this Report, our investment in Centex Development Company is not
consolidated and is accounted for on the equity method of accounting because
Investment Real Estate and Centex Corporation do not control Centex Development
Company. 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.

As of March 31, 2002, Investment Real Estates property portfolio
consisted of land located in four states. We have major conventional
homebuilding operations in most markets where Investment Real Estate owns
substantial property.

Investment Real Estates land portfolio, by state, at March 31, 2002 is
shown in the following table:

|           |  |       |     |  |        |                                         
|---------- |  | ----- | --- |  | ------ | ----------------------------------------
|State      |  | Acres |     |  | Zoning
|           |  |       |     |  |       
|Texas      |  |       | 316 |  |        | Industrial, Office, Retail & Residential
|California |  |       | 351 |  |        | Industrial, Office, & Residential       
|Florida    |  |       | 138 |  |        | Industrial, Office & Retail             
|Georgia    |  |       | 22  |  |        | Retail                                  

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At March 31, 2002, Investment Real Estate also owned, either directly or
through interests in joint ventures, approximately 231,000 square feet of
office and retail buildings located in Arizona and Texas and three
assisted-living facilities, which are licensed for 96 beds, located in Texas.

In addition, Investment Real Estate owns a limited partnership interest in
Centex Development Company. At March 31, 2002, Centex Development Company
owned or controlled: 4,720 plots in 112 residential developments located
throughout England; 201 homes in 53 residential developments located throughout
England; 665 acres of land located in California, Florida, Hawaii, Michigan,
Nevada, South Carolina and Texas; and 2.6 million square feet of industrial,
medical, office and retail buildings in Arizona, California, Florida,
Massachusetts, North Carolina and Texas. At March 31, 2002, Centex Development
Company had projects under development totaling approximately 542,000 square
feet of office, industrial and retail projects in California and Texas and 984
multi-family units in Florida and Texas.

EMPLOYEES

The following table presents the breakdown of employees in each line of
business as of March 31, 2002:

|                       |  |           |        | 
|---------------------- |  | --------- | ------ | 
|Line of Business       |  | Employees |       
|Home Building          |  |           | 5,075  | 
|Financial Services     |  |           | 4,931  | 
|Construction Products  |  |           | 1,552  | 
|Construction Services  |  |           | 1,679  | 
|Investment Real Estate |  |           | 41     | 
|Other Operations       |  |           | 2,827  | 
|Corporate              |  |           | 144    | 
|                       |  |           |       
|                       |  |           | 16,249 | 
|                       |  |           |       

The 144 corporate employees are employed by Centex Corporation; all others
are employees of our various subsidiaries. The 2,827 Other Operations
employees are employed by our manufactured homes and home services operations.




ITEM 2. PROPERTIES

Centex Homes owns property in Dallas, Texas. This property consists of
office and warehouse buildings situated on approximately 18 acres. Centex
Homes also owns smaller parcels of land in rural areas of Ohio, Indiana,
Pennsylvania and Florida. Situated on this land are sales offices for its
build-on-owners lot market segment.

Financial Services owns a 20-acre parcel of land in Edmond, Oklahoma.
Financial Services occupies an office building located on approximately six
acres and is constructing a second office building on an additional six acres
of the parcel. The remaining eight acres are being held for future development
or sale. Financial Services also owns two low-rise office buildings situated
on approximately 10 acres of land in Dallas, Texas in which Home Equity
conducts certain operations.

Construction Products operates cement plants, quarries and related
facilities at Buda, Texas; LaSalle, Illinois; Fernley, Nevada; and Laramie,
Wyoming. Construction Products owns the Fernley and Laramie facilities, and
the Buda and LaSalle plants are each owned by separate joint ventures or
partnerships in which Construction Products has a 50% interest. Construction
Products owns its principal aggregate plants and quarries, which are located
near Austin, Texas and Marysville, California. In addition, Construction
Products owns gypsum wallboard plants in Albuquerque and nearby Bernalillo, New
Mexico; Gypsum,

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Colorado; and Duke, Oklahoma. Construction Products owns two paperboard mills
in Commerce City, Colorado and Lawton, Oklahoma. The Commerce City, Colorado
paperboard mill was idled on April 23, 2001.

Our wholly-owned subsidiaries also own property in Round Rock, Texas;
League City, Texas; and Amarillo, Texas. All of these properties are
assisted-living care facilities. Other property owned includes an office
building and land located in Ocala, Florida.

See Item 1. Business on pages 6-22 of this Report for additional
information relating to the Companys properties.




ITEM 3. LEGAL PROCEEDINGS

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




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

Not applicable.

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

The following is an alphabetical listing of the Companys executive
officers, as such term is defined under the rules and regulations of the
Securities and Exchange Commission. All of these executive officers were
elected by the Board of Directors of the Company at its Annual Meeting on July
19, 2001 to serve until the next Annual Meeting of Directors or until the
respective successors are duly elected and qualified. There is no family
relationship between any of these officers.

|                   |  |     |    |  |                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|------------------ |  | --- | -- |  | -------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Name               |  | Age |    |  | Positions with Centex or Business Experience
|                   |  |     |    |  |                                             
|Leldon E. Echols   |  |     | 46 |  |                                              | Executive Vice President and Chief Financial Officer of
Centex Corporation since June 2000; Partner and
employee at Arthur Andersen LLP from December 1978 to
May 2000                                                                                                                                                                                                                                                                                                                                                   
|Timothy R. Eller   |  |     | 53 |  |                                              | President and Chief Operating Officer of Centex
Corporation since April 2002; Executive Vice President
of Centex Corporation since August 1998; Chairman of
the Board and Chief Executive Officer of Centex Real
Estate Corporation (Chairman of the Board since April
1998; Chief Executive Officer of Centex Real Estate
Corporation since July 1991; President and Chief
Operating Officer of Centex Real Estate Corporation
from January 1990 to March 1998; Executive Vice
President from July 1985 to January 1990)
|Laurence E. Hirsch |  |     | 56 |  |                                              | Chairman of the Board and Chief Executive Officer of
Centex Corporation (Chairman of the Board since July
1991; Chief Executive Officer since July 1988;
President from March 1985 until July 1991)                                                                                                                                                                                                                                                                                                                      
|Raymond G. Smerge  |  |     | 58 |  |                                              | Executive Vice President, Chief Legal Officer, General
Counsel and Secretary of Centex Corporation (Executive
Vice President since July 1997; Chief Legal Officer
since September 1985; General Counsel and Secretary
since April 1993; Vice President from September 1985 to
July 1997)                                                                                                                                                                                                                                 

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PART II




ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Stock Prices and Dividends

|        |  |                           |       |  |                           |   |       |  |           |  |  |      |       |  |     |  |  |   |           |  |  |   |       |  |  |  |  |   |     |  |  | 
|------- |  | ------------------------- | ----- |  | ------------------------- | - | ----- |  | --------- |  |  | ---- | ----- |  | --- |  |  | - | --------- |  |  | - | ----- |  |  |  |  | - | --- |  |  | 
|        |  | Year Ended March 31, 2002 |       |  | Year Ended March 31, 2001 |  
|        |  |                           |       |  |                           |  
|        |  | Price                     |       |  |                           |   |       |  |           |  |  |      | Price |  |     |  |  |   |           |  |  |  
|        |  |                           |       |  |                           |   |       |  |           |  |  |      |       |  |     |  |  |   |           |  |  |  
|        |  | High                      |       |  | Low                       |   |       |  | Dividends |  |  | High |       |  | Low |  |  |   | Dividends | 
|        |  |                           |       |  |                           |   |       |  |           |  |  |      |       |  |     |  |  |   |           | 
|Quarter |  |                           |       |  |                           |   |       |  |           |  |  |      |       |  |     |  |  |   |           |  |  |   |       |  |  |  |  |  
|First   |  | $                         | 45.98 |  |                           | $ | 34.00 |  |           |  |  | $    | .04   |  |     |  |  | $ | 25.81     |  |  | $ | 20.63 |  |  |  |  | $ | .04 | 
|Second  |  | $                         | 50.00 |  |                           | $ | 28.03 |  |           |  |  | $    | .04   |  |     |  |  | $ | 33.00     |  |  | $ | 22.38 |  |  |  |  | $ | .04 | 
|Third   |  | $                         | 58.80 |  |                           | $ | 32.56 |  |           |  |  | $    | .04   |  |     |  |  | $ | 40.00     |  |  | $ | 30.63 |  |  |  |  | $ | .04 | 
|Fourth  |  | $                         | 63.09 |  |                           | $ | 51.25 |  |           |  |  | $    | .04   |  |     |  |  | $ | 46.20     |  |  | $ | 35.38 |  |  |  |  | $ | .04 | 

Our common stock is traded on the New York Stock Exchange (ticker symbol CTX)
and the London Stock Exchange. The approximate number of record holders of our
common stock at May 31, 2002 was 3,344.

On November 30, 1987, we distributed as a dividend to our stockholders
securities relating to Centex Development Company, L.P. (see Note (J) on pages
78-79 of this Report). Since this distribution, these securities have traded
in tandem with, and as a part of, our common stock.

Amounts represent cash dividends per share paid by us on our common stock.
3333 Holding Corporation has paid no dividends on its common stock since its
incorporation.

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ITEM 6. SELECTED FINANCIAL DATA

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

|                                                                       |                                                                                  |   |                               |       |   |      |           |       |      |   |           |       |   |   |           |       |   |   |           |       |  
|---------------------------------------------------------------------- | -------------------------------------------------------------------------------- | - | ----------------------------- | ----- | - | ---- | --------- | ----- | ---- | - | --------- | ----- | - | - | --------- | ----- | - | - | --------- | ----- | -
|                                                                       |                                                                                  |   | For the Years Ended March 31, |      
|                                                                       |                                                                                  |   |                               |      
|                                                                       |                                                                                  |   | 2002                          |       |   | 2001 |           |       | 2000 |   |           | 1999  |   |   | 1998      |      
|                                                                       |                                                                                  |   |                               |       |   |      |           |       |      |   |           |       |   |   |           |      
|Revenues                                                               |                                                                                  | $ | 7,748,430                     |       |   | $    | 6,710,735 |       |      | $ | 6,008,136 |       |   | $ | 5,200,666 |       |   | $ | 4,022,392 |      
|Net Earnings                                                           |                                                                                  | $ | 382,226                       |       |   | $    | 281,977   |       |      | $ | 257,132   |       |   | $ | 231,962   |       |   | $ | 144,806   |      
|Total Assets                                                           |                                                                                  | $ | 8,985,455                     |       |   | $    | 6,649,043 |       |      | $ | 3,987,903 |       |   | $ | 4,267,909 |       |   | $ | 3,333,382 |      
|Total Long-term Debt, Consolidated                                     |                                                                                  | $ | 4,943,524                     |       |   | $    | 3,040,861 |       |      | $ | 751,160   |       |   | $ | 284,299   |       |   | $ | 237,715   |      
|Total Debt, Consolidated                                               |                                                                                  | $ | 5,276,779                     |       |   | $    | 3,519,891 |       |      | $ | 1,313,395 |       |   | $ | 1,910,899 |       |   | $ | 1,390,588 |      
|Total Debt (with Financial Services
reflected on the equity
method)(1) |                                                                                  | $ | 1,791,752                     |       |   | $    | 1,464,993 |       |      | $ | 898,068   |       |   | $ | 587,955   |       |   | $ | 311,538   |      
|Deferred Income Tax Asset                                              |                                                                                  | $ | 76,167                        |       |   | $    | 58,454    |       |      | $ | 49,907    |       |   | $ | 49,107    |       |   | $ | 147,607   |      
|Debt as a Percentage of
Capitalization(2)                              |                                                                                  |   |                               |       |   |      |           |       |      |   |           |       |   |   |           |       |   |   |           |      
|                                                                       | Total Debt, Consolidated                                                         |   |                               | 69.9  | % |      |           | 65.5  | %    |   |           | 45.1  | % |   |           | 57.6  | % |   |           | 53.1  | %
|                                                                       | Total Debt (with Financial Services
reflected on the equity
method)(1)           |   |                               | 44.1  | % |      |           | 44.1  | %    |   |           | 36.0  | % |   |           | 29.5  | % |   |           | 20.3  | %
|                                                                       | Total Debt, Adjusted (with
Financial Services reflected on
the equity method)(3) |   |                               | 41.4  | % |      |           | 43.3  | %    |   |           | 32.8  | % |   |           | 26.9  | % |   |           | 15.5  | %
|Stockholders Equity                                                   |                                                                                  | $ | 2,116,773                     |       |   | $    | 1,714,064 |       |      | $ | 1,419,349 |       |   | $ | 1,197,639 |       |   | $ | 991,172   |      
|Net Earnings as a Percentage of
Beginning Stockholders Equity         |                                                                                  |   | 22.3                          | %     |   |      | 19.9      | %     |      |   | 21.5      | %     |   |   | 23.4      | %     |   |   | 17.3      | %    
|Per Common Share                                                       |                                                                                  |   |                               |       |   |      |           |       |      |   |           |       |   |   |           |       |   |   |           |      
|                                                                       | Earnings Per Share  Basic                                                       |   | $                             | 6.31  |   |      | $         | 4.77  |      |   | $         | 4.34  |   |   | $         | 3.90  |   |   | $         | 2.45  |  
|                                                                       | Earnings Per Share  Diluted                                                     |   | $                             | 6.11  |   |      | $         | 4.65  |      |   | $         | 4.22  |   |   | $         | 3.75  |   |   | $         | 2.36  |  
|                                                                       | Cash Dividends                                                                   |   | $                             | .16   |   |      | $         | .16   |      |   | $         | .16   |   |   | $         | .16   |   |   | $         | .135  |  
|                                                                       | Book Value Based on Shares
Outstanding at Year End                               |   | $                             | 34.60 |   |      | $         | 28.60 |      |   | $         | 24.14 |   |   | $         | 20.17 |   |   | $         | 16.65 |  
|Stock Prices                                                           |                                                                                  |   |                               |       |   |      |           |       |      |   |           |       |   |   |           |       |   |   |           |      
|                                                                       | High                                                                             |   | $                             | 63.09 |   |      | $         | 46.20 |      |   | $         | 42.88 |   |   | $         | 45.75 |   |   | $         | 40.75 |  
|                                                                       | Low                                                                              |   | $                             | 28.03 |   |      | $         | 20.63 |      |   | $         | 17.50 |   |   | $         | 26.00 |   |   | $         | 16.75 |  

On November 30, 1987, we distributed as a dividend to our stockholders
securities relating to 3333 Holding Corporation and 3333 Development
Corporation (See Note (J) on pages 78-79 of this Report). Since this
distribution, those securities have traded in tandem with, and as a part of,
our common stock.



|(1) |  | Represents a supplemental presentation that reflects the financial
services segment as if accounted for under the equity method, which we
describe as the traditional business basis.     
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Capitalization is composed of Total Debt, Deferred Income Tax Liability,
Negative Goodwill, Minority Interest and
Stockholders Equity.                                                   
|   
|(3) |  | Represents supplemental information showing debt as a percentage of
capitalization on a traditional business basis, assuming traditional
unrestricted cash had been used to pay down debt.

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

FISCAL YEAR 2002 COMPARED TO FISCAL YEAR 2001

We reported consolidated revenues of $7.75 billion for fiscal 2002, 15%
above the $6.71 billion reported for fiscal 2001. Earnings before income taxes
were $618.8 million, 42% more than the $436.3 million of earnings before income
taxes reported last year. Net earnings for fiscal 2002 reached $382.2 million,
a historical high and a 36% improvement over net earnings of $282.0 million in
fiscal 2001. Earnings per share for fiscal 2002 were $6.31 and $6.11 for basic
and diluted, respectively, compared to $4.77 and $4.65 for the prior year.

HOME BUILDING

The following summarizes the results of our Home Building operations for
the two-year period ended March 31, 2002 (dollars in millions, except per unit
data):

|                                           |          |   |                               |      |   |      |       |    |  |   |          |      |   |  |       |    | 
|------------------------------------------ | -------- | - | ----------------------------- | ---- | - | ---- | ----- | -- |  | - | -------- | ---- | - |  | ----- | -- | 
|                                           |          |   | For the Years Ended March 31, |     
|                                           |          |   |                               |     
|                                           |          |   | 2002                          |      |   | 2001 |      
|                                           |          |   |                               |      |   |      |      
|Revenues                                   |          | $ | 4,984.8                       |      |   |      | 100.0 | %  |  | $ | 4,356.2  |      |   |  | 100.0 | % 
|Cost of Sales                              |          |   | (3,713.4                      | )    |   |      | (74.5 | %) |  |   | (3,304.9 | )    |   |  | (75.9 | %)
|Selling, General &
Administrative Expenses |          |   | (743.9                        | )    |   |      | (14.9 | %) |  |   | (625.9   | )    |   |  | (14.3 | %)
|                                           |          |   |                               |      |   |      |       |    |  |   |          |     
|Operating Earnings                         |          | $ | 527.5                         |      |   |      | 10.6  | %  |  | $ | 425.4    |      |   |  | 9.8   | % 
|                                           |          |   |                               |      |   |      |       |    |  |   |          |     
|Units Closed                               |          |   | 22,960                        |      |   |      |       |    |  |   | 20,659   |      |   |  |       |   
|                                           | % Change |   |                               | 11.1 | % |      |       |    |  |   |          | 9.3  | % |  |       |    | 
|Units Sales Price                          |          | $ | 213,738                       |      |   |      |       |    |  | $ | 205,913  |      |   |  |       |   
|                                           | % Change |   |                               | 3.8  | % |      |       |    |  |   |          | 7.5  | % |  |       |    | 
|Operating Earnings per Unit                |          | $ | 22,973                        |      |   |      |       |    |  | $ | 20,594   |      |   |  |       |   
|                                           | % Change |   |                               | 11.6 | % |      |       |    |  |   |          | 20.4 | % |  |       |    | 
|Backlog Units                              |          |   | 9,371                         |      |   |      |       |    |  |   | 9,265    |      |   |  |       |   
|                                           | % Change |   |                               | 1.1  | % |      |       |    |  |   |          | 22.2 | % |  |       |    | 

Revenues increased 14.4% versus prior year, primarily due to the 11%
increase in units closed, from 20,659 units to 22,960 units, and the 4%
increase in average unit sales price, from $205,913 to $213,738.

Selling, general and administrative expenses increased 19% to $743.9
million in fiscal 2002 compared to $625.9 million in fiscal 2001. The increase
primarily relates to higher compensation resulting from growth in Home
Buildings business and profitability.

Operating earnings for fiscal 2002 increased as a percentage of revenues
and on a per-unit basis in comparison to fiscal 2001 as a result of several
factors. Home Building continued to focus on reducing costs and improving
operating margins through the reduction of direct construction costs. Moderate
interest rates and softness in the prices of several key building materials,
including lumber, cement, and gypsum wallboard are some of the factors that
influenced the improved performance of the Home Building operation. Additional
factors that contributed to an improved operating margin include purchasing
efficiencies through regional and national programs, higher realized sales
prices for our homes and more efficient house designs.

Centex Homes responded to the events of September 11, 2001 through
increased marketing efforts, purchase incentives and price discounting. These
activities helped stimulate demand, increase traffic to our

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neighborhoods and minimize unsold housing inventory. After a brief slowdown,
the business has recovered and no long term impacts are anticipated.

FINANCIAL SERVICES

The Financial Services segment consists primarily of home financing,
sub-prime home equity lending and the sale of title and other insurance
coverages. The following summarizes Financial Services results for the
two-year period ended March 31, 2002 (dollars in millions):

|                           |                                    |                        |          |                               |        |   |          |        |        | 
|-------------------------- | ---------------------------------- | ---------------------- | -------- | ----------------------------- | ------ | - | -------- | ------ | ------ | 
|                           |                                    |                        |          | For the Years Ended March 31, |       
|                           |                                    |                        |          |                               |       
|                           |                                    |                        |          | 2002                          |        |   | 2001     |       
|                           |                                    |                        |          |                               |        |   |          |       
|Revenues                   |                                    | $                      | 699.8    |                               |        | $ | 463.6    |       
|                           |                                    |                        |          |                               |        |  
|Interest Margin            |                                    | $                      | 107.7    |                               |        | $ | 31.2     |       
|                           |                                    |                        |          |                               |        |  
|Operating Earnings         |                                    | $                      | 114.7    |                               |        | $ | 19.7     |       
|                           |                                    |                        |          |                               |        |  
|Origination Volume         |                                    | $                      | 14,537.9 |                               |        | $ | 10,598.5 |       
|                           |                                    |                        |          |                               |        |  
|Number of Loans Originated |                                    |                        |          |                               |        |   |          |       
|                           | CTX Mortgage Company, L.L.C.      |                        |          |                               |        |   |          |        |       
|                           |                                    | Centex-built Homes     |          |                               | 15,435 |   |          |        | 12,506 | 
|                           |                                    | Non-Centex-built Homes |          |                               | 64,949 |   |          |        | 48,244 | 
|                           |                                    |                        |          |                               |        |  
|                           |                                    |                        | 80,384   |                               |        |   | 60,750   |       
|                           | Centex Home Equity Company, L.L.C. |                        |          | 26,955                        |        |   |          | 26,418 |       
|                           |                                    |                        |          |                               |        |  
|                           |                                    |                        | 107,339  |                               |        |   | 87,168   |       
|                           |                                    |                        |          |                               |        |  

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

Conforming Mortgage Banking

The operating earnings of CTX Mortgage are derived primarily from the sale
of mortgage loans, inclusive of all service rights and, to a lesser extent, net
interest income and other fees. CTX Mortgage originates mortgage loans, holds
them for a short period and sells them to investors and 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 five-year extendable subordinated certificates. 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 on pages 43-45 of this Report.

CTX Mortgages operating earnings were $91.4 million for fiscal 2002, 169%
higher than earnings of $34.0 million for fiscal 2001. The increase in CTX
Mortgages operating earnings is primarily due to a significant increase in
mortgage origination volume, including substantial mortgage refinancing
activity, that was the result of lower mortgage rates in the first, second and
third quarters of fiscal 2002 compared to the same periods last year. For the
year ended March 31, 2002, originations totaled 80,384 compared to 60,750
originations last fiscal year; loan volume was $12.45 billion compared to $8.88
billion for last fiscal year; the per-loan profit was $1,137, an increase of
103% compared to $560 for last fiscal year; and total mortgage applications
increased 8% to 76,532 from 70,642 applications for last fiscal year. 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.

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In the normal course of its activities, CTX Mortgage carries inventories
of loans pending sale to investors other than HSF-I and earns an interest
margin, that we define as the difference between interest revenue on mortgage
loans held for sale or investment and interest expense on debt used to fund the
mortgage loans. CTX Mortgage uses short-term mortgage warehouse facilities to
finance these inventories of loans. CTX Mortgages interest income increased
9% in fiscal 2002 to $20.6 million from $18.9 million for last fiscal year.
CTX Mortgages interest expense for fiscal 2002 was $14.2 million, a 22%
decrease from $18.1 million for last year. The increase in CTX Mortgages
interest margin from $0.8 million to $6.4 million was primarily due to
increased origination volume resulting from an increase in refinancing
activities and lower interest rates on borrowings.

Sub-Prime Home Equity Lending

Home Equity returned to profitability after having begun to account for
its securitizations completed subsequent to March 31, 2000 as borrowings rather
than as sales, as discussed further below. Home Equity reported operating
earnings of $25.1 million for fiscal 2002, as compared to an operating loss of
$14.3 million for fiscal 2001. The increase in Home Equitys operating
earnings is primarily the result of an increase in interest margin to $101.3
million in fiscal 2002 from $30.3 million in fiscal 2001. Interest margin
increased primarily as a result of an increase in the portfolio of 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. 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. At March 31, 2002, the
average life of these loans was 8 years. 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 fiscal year ended March 31, 2002,
originations totaled 26,955 compared to 26,418 originations for last fiscal
year; loan volume was $2.09 billion compared to $1.72 billion for last fiscal
year; and total applications increased 16% to 172,498 from 148,702 applications
for last fiscal year.

At March 31, 2002, Home Equitys total servicing portfolio consisted of
62,833 loans totaling $4.37 billion compared to 49,717 loans totaling $3.27
billion at March 31, 2001. For fiscal 2002, service fee income related to this
long-term servicing, which is not included in interest income, was $38.2
million compared to $25.9 million for fiscal 2001.

Allowance for Losses

Home Equity maintains an allowance for losses at an amount that it
believes is sufficient to provide for 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.

We establish an allowance for losses when we believe the event causing the
loss has occurred by charging the provision for losses in the statement of
consolidated earnings. When we determine that a residential mortgage loan held
for investment is uncollectible, it is charged against the allowance for
losses.

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Recoveries on losses previously charged to the allowance are credited to
the allowance at the time the recovery is collected.

Although we consider the allowance for losses on residential mortgage
loans held for investment reflected in our consolidated balance sheet at March
31, 2002 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 Years Ended March 31, |       
|                                                   |                                 |   |                               |       
|                                                   |                                 |   | 2002                          |        |   | 2001 |      
|                                                   |                                 |   |                               |        |   |      |      
|Balance at Beginning of Period                     |                                 | $ | 2,814                         |        |   | $    |      |       
|                                                   | Provision for Losses            |   |                               | 17,415 |   |      |       | 4,453  |  
|                                                   | Recoveries on Loans Charged Off |   |                               | 259    |   |      |       | 11     |  
|                                                   | Losses Sustained                |   |                               | (6,382 | ) |      |       | (1,650 | )
|                                                   |                                 |   |                               |        |   |     
|Balance at End of Period                           |                                 | $ | 14,106                        |        |   | $    | 2,814 |       
|                                                   |                                 |   |                               |        |   |     
|Allowance for Losses to Residential
Mortgage Loans |                                 |   |                               |        |   |      |       |       
|                                                   | Held for Investment             |   |                               | 0.4    | % |      |       | 0.2    | %
|90+ Days Contractual Delinquency                   |                                 |   |                               |        |   |      |       |       
|                                                   | Total Dollars Delinquent        |   | $                             | 83,490 |   |      | $     | 28,013 |  
|                                                   | % Delinquent                    |   |                               | 2.55   | % |      |       | 1.58   | %

The allowance for losses on residential mortgage loans held for investment
has increased to $14.1 million at March 31, 2002 from $2.8 million at March 31,
2001. In addition, the ratio of allowance for losses to residential mortgage
loans held for investment, or the allowance ratio, increased to 0.4% at March
31, 2002 from 0.2% at March 31, 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.

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CONSTRUCTION PRODUCTS

The following summarizes Construction Products results for the two-year
period ended March 31, 2002 (dollars in millions):

|                                           |  |                               |        |   |      |   |        |  
|------------------------------------------ |  | ----------------------------- | ------ | - | ---- | - | ------ | -
|                                           |  | For the Years Ended March 31, |       
|                                           |  |                               |       
|                                           |  | 2002                          |        |   | 2001 |  
|                                           |  |                               |        |   |      |  
|Revenues                                   |  | $                             | 471.1  |   |      | $ | 441.1  |  
|Interest Income                            |  |                               | 2.5    |   |      |   | 6.7    |  
|Cost of Sales and Expenses                 |  |                               | (392.2 | ) |      |   | (341.8 | )
|Selling, General & Administrative Expenses |  |                               | (5.5   | ) |      |   | (6.6   | )
|                                           |  |                               |        |   |      |  
|Operating Earnings *                       |  | $                             | 75.9   |   |      | $ | 99.4   |  
|                                           |  |                               |        |   |      |  

* Before Minority Interest of $20.8 million and $32.4 million for fiscal 2002 and 2001, respectively.

Construction Products revenues were 7% higher than the same period last
year. This increase was primarily the result of an increase in cement and
paperboard revenues and from a full year of sales at the Oklahoma wallboard
plant that was acquired in November 2000 as discussed below. Sales volume
improved for every product except concrete. However, pricing for gypsum
wallboard fell 20% compared to the prior year. For the current year,
Construction Products operating earnings, net of minority interest,
represented a 24% decrease from results for the same period a year ago.
Operating earnings declined primarily as a result of an 83% decrease in gypsum
wallboard earnings resulting from the previously discussed decline in gypsum
wallboard prices. During the first two quarters of fiscal 2002, gypsum
wallboard pricing declined primarily as a result of excess supply. However,
gypsum wallboard prices rebounded in the third and fourth quarters of fiscal
2002, softening the negative impact on earnings.

During November 2000, Construction Products purchased selected strategic
assets summarized below, and assumed certain liabilities. The purchase price,
including the assumption of debt, was approximately $442 million. Funding came
from cash on hand and borrowings under Construction Products $325 million
senior credit facility. The acquisition was accounted for as a purchase, and
accordingly, the purchase price was allocated to the underlying assets acquired
and liabilities assumed based on their fair market values at the date of the
acquisition. The results of operations of the asset purchase since November
10, 2000 are included in Construction Products financial information.

The principal assets Construction Products acquired in November 2000 were:
a gypsum wallboard plant located in Duke, Oklahoma with a production capacity
of 1.1 billion square feet of wallboard; a short line railroad and railcars
linking the Duke plant to adjacent railroads; a recently completed 220,000
ton-per-year lightweight recycled paper mill in Lawton, Oklahoma; a 50,000
ton-per-year Commerce City (Denver), Colorado recycled paper mill; and three
recycled paper fiber collection sites. The Commerce City, Colorado paperboard
mill was idled on April 23, 2001. The idled facility was recorded at its
estimated net realizable value of $5.0 million at the purchase date, which
approximates current fair market value. The paper operations are headquartered
in Lawton, Oklahoma and focus primarily on the gypsum wallboard paper business.

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CONSTRUCTION SERVICES

The following summarizes Construction Services results for the two-year
period ended March 31, 2002 (dollars in millions):

|                                 |  |                               |         |  |      |   |         | 
|-------------------------------- |  | ----------------------------- | ------- |  | ---- | - | ------- | 
|                                 |  | For the Years Ended March 31, |        
|                                 |  |                               |        
|                                 |  | 2002                          |         |  | 2001 |  
|                                 |  |                               |         |  |      |  
|Revenues                         |  | $                             | 1,296.0 |  |      | $ | 1,290.4 | 
|                                 |  |                               |         |  |      |  
|Operating Earnings               |  | $                             | 36.2    |  |      | $ | 30.9    | 
|                                 |  |                               |         |  |      |  
|New Contracts Executed           |  | $                             | 1,455.0 |  |      | $ | 1,930.1 | 
|                                 |  |                               |         |  |      |  
|Backlog of Uncompleted Contracts |  | $                             | 2,180.3 |  |      | $ | 2,021.7 | 
|                                 |  |                               |         |  |      |  

Construction Services revenues for fiscal 2002 were 0.4% higher than last
years revenues. Operating earnings for the group improved in fiscal 2002 as a
result of a continuing shift in recent years to higher-margin negotiated
projects from lower-margin bid work. New Contracts Executed decreased 25% from
prior year and Backlog of Uncompleted Contracts increased 8% in fiscal 2002,
primarily due to uncertainties in the marketplace following the events of
September 11, 2001. We do not anticipate any long term impact from these
events.

The Construction Services segment provided a positive average annual net
cash flow in excess of our investment in the segment of $121.5 million in
fiscal 2002 and $97.8 million in fiscal 2001.

INVESTMENT REAL ESTATE

The following summarizes Investment Real Estates results for the two-year
period ended March 31, 2002 (dollars in millions):

|                   |  |                               |      |  |      |   |      | 
|------------------ |  | ----------------------------- | ---- |  | ---- | - | ---- | 
|                   |  | For the Years Ended March 31, |     
|                   |  |                               |     
|                   |  | 2002                          |      |  | 2001 |  
|                   |  |                               |      |  |      |  
|Revenues           |  | $                             | 72.4 |  |      | $ | 33.0 | 
|                   |  |                               |      |  |      |  
|Operating Earnings |  | $                             | 48.1 |  |      | $ | 50.9 | 
|                   |  |                               |      |  |      |  

Included in Investment Real Estates fiscal 2002 revenues and operating
earnings was $18.7 million derived from its investment in Centex Development
Company compared to $4.6 million in fiscal 2001. As noted in Note (J) on pages
78-79 of this Report, the investment in Centex Development Company is not
consolidated and is accounted for on the equity method of accounting because we
do not control Centex Development Company. Property sales related to
Investment Real Estates nominally-valued assets contributed revenues and
operating earnings of $47.9 million and $35.8 million, respectively, in fiscal
2002 and $24.6 million and $13.6 million, respectively, in fiscal 2001. These
nominally-valued assets resulted from the acquisition of Vista Properties,
Inc., or Vista, and 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.

Fiscal 2002 operating earnings from Investment Real Estate totaled $48.1
million compared to $50.9 million in the prior year. During fiscal 2001, we
disposed of virtually all of the remaining Vista portfolio. As a result, the
remaining negative goodwill was fully accreted in fiscal 2001.

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The largest component of Centex Development Company is its International
Home Building segment, which operates through Fairclough Homes Group Limited,
or Fairclough, a London, England-based homebuilder. Investment Real Estates
investment in Fairclough, through Centex Development Company, resulted in
revenues and operating earnings of $12.3 million in fiscal 2002 and an
operating loss of $34,000 in fiscal 2001. The increase in Faircloughs
operating earnings was primarily due to the fact that the obligation to pay a
preferred distribution on certain preference shares, issued when Centex
Development Company acquired Fairclough, ended at the end of fiscal 2001. For
fiscal 2002 and 2001, Fairclough closed 1,387 units at an average sales price
per unit of $204,251 and 1,243 units at an average sales price per unit of
$203,587, respectively. Operating earnings per unit, before interest, were
$10,358 and $6,339 for fiscal 2002 and 2001, respectively.

OTHER

Our manufactured homes 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 homes operations had an operating loss of $0.9 million
for fiscal 2002 versus a loss of $26.1 million for fiscal 2001. The fiscal
2001 loss is primarily due to a noncash charge of $19.2 million. This charge
primarily was comprised of $9.5 million for the impairment of goodwill related
to the manufactured homes retail operations and $6.5 million related to the
idling of two manufacturing facilities. The charge for impairment was the
result of continued losses in the retail division which are consistent with
trends of losses recognized throughout this industry. We plan to keep these
plants idled until the return of more favorable market conditions.

Our home services operations reported operating earnings of $4.0 million
for fiscal 2002 compared to operating earnings of $1.1 million for fiscal 2001.
The increase in operating earnings primarily relates to growth in the pest and
lawn operations.

Corporate general and administrative expense increased 36% to $50.2
million in fiscal 2002 compared to $36.9 million in fiscal 2001. The increase
primarily relates to higher compensation resulting from growth in our
profitability. Corporate general and administrative expenses represent
compensation and other costs not identifiable with a specific segment.

Interest expense increased 17% to $115.8 million in fiscal 2002 compared
to $99.1 million in fiscal 2001. Higher average debt levels, partially offset
by lower interest rates, caused most of the increase in interest expense.

Our effective tax rate increased to 38% in fiscal 2002 from 35% in fiscal
2001. The increase in state income taxes and the absence of negative goodwill
accretion in fiscal 2002 primarily caused this increase.

FISCAL YEAR 2001 COMPARED TO FISCAL YEAR 2000

We reported consolidated revenues of $6.7 billion for fiscal 2001, 12%
above the $6.0 billion for fiscal 2000. Earnings before income taxes were
$436.3 million, 5% more than the $416.9 million of earnings before income taxes
reported last year. Net earnings for fiscal 2001 reached $282.0 million, a
historical high and a 10% improvement over net earnings of $257.1 million in
fiscal 2000. Earnings per share for fiscal year 2001 were $4.77 and $4.65 for
basic and diluted, respectively, compared to $4.34 and $4.22 for the prior
year.

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HOME BUILDING

The following summarizes Home Buildings results for the two-year period
ended March 31, 2001 (dollars in millions, except per unit data):

|                                           |          |   |                               |      |   |      |       |    |  |   |          |      |   |  |       |    | 
|------------------------------------------ | -------- | - | ----------------------------- | ---- | - | ---- | ----- | -- |  | - | -------- | ---- | - |  | ----- | -- | 
|                                           |          |   | For the Years Ended March 31, |     
|                                           |          |   |                               |     
|                                           |          |   | 2001                          |      |   | 2000 |      
|                                           |          |   |                               |      |   |      |      
|Revenues                                   |          | $ | 4,356.2                       |      |   |      | 100.0 | %  |  | $ | 3,686.8  |      |   |  | 100.0 | % 
|Cost of Sales                              |          |   | (3,304.9                      | )    |   |      | (75.9 | %) |  |   | (2,852.3 | )    |   |  | (77.3 | %)
|Selling, General &
Administrative Expenses |          |   | (625.9                        | )    |   |      | (14.3 | %) |  |   | (511.3   | )    |   |  | (13.9 | %)
|                                           |          |   |                               |      |   |      |       |    |  |   |          |     
|Operating Earnings                         |          | $ | 425.4                         |      |   |      | 9.8   | %  |  | $ | 323.2    |      |   |  | 8.8   | % 
|                                           |          |   |                               |      |   |      |       |    |  |   |          |     
|Units Closed                               |          |   | 20,659                        |      |   |      |       |    |  |   | 18,904   |      |   |  |       |   
|                                           | % Change |   |                               | 9.3  | % |      |       |    |  |   |          | 27.8 | % |  |       |    | 
|Unit Sales Price                           |          | $ | 205,913                       |      |   |      |       |    |  | $ | 191,568  |      |   |  |       |   
|                                           | % Change |   |                               | 7.5  | % |      |       |    |  |   |          | 3.2  | % |  |       |    | 
|Operating Earnings per Unit                |          | $ | 20,594                        |      |   |      |       |    |  | $ | 17,098   |      |   |  |       |   
|                                           | % Change |   |                               | 20.4 | % |      |       |    |  |   |          | 4.4  | % |  |       |    | 
|Backlog Units                              |          |   | 9,265                         |      |   |      |       |    |  |   | 7,579    |      |   |  |       |   
|                                           | % Change |   |                               | 22.2 | % |      |       |    |  |   |          | 12.0 | % |  |       |    | 

Revenues increased 18.2% versus prior year, primarily due to the 9%
increase in units closed, from 18,904 units to 20,659 units, and the 7%
increase in average unit sales price, from $191,568 to $205,913.

Selling, general and administrative expense increased 22% to $625.9
million in fiscal 2001 compared to $511.3 million in fiscal 2000. The increase
primarily relates to higher compensation resulting from growth in Home
Buildings business and profitability.

Operating earnings for fiscal 2001 increased as a percentage of revenues
and on a per-unit basis in comparison to fiscal 2000 as a result of the
divisions continued focus on improving operating margins. Moderate interest
rates and softness in the prices of several key building materials, including
lumber, cement, and gypsum wallboard are some of the major factors that
influenced the improved performance of the Home Building operation. Additional
factors that contributed to an improved operating margin include purchasing
efficiencies, higher organizational and operating productivity, higher realized
sales prices for our homes and more efficient house designs.

The increase in average unit sales price of $14,345 to $205,913 was due
primarily to a higher proportion of sales in California, Colorado and South
Carolina.

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FINANCIAL SERVICES

The following summarizes Financial Services results for the two-year
period ended March 31, 2001 (dollars in millions):

|                           |                                                    |   |          |                               |  |   |         |        |  | 
|-------------------------- | -------------------------------------------------- | - | -------- | ----------------------------- |  | - | ------- | ------ |  | 
|                           |                                                    |   |          | For the Years Ended March 31, | 
|                           |                                                    |   |          |                               | 
|                           |                                                    |   |          | 2001                          |  |   | 2000    |       
|                           |                                                    |   |          |                               |  |   |         |       
|Revenues                   |                                                    | $ | 463.6    |                               |  | $ | 430.6   |       
|                           |                                                    |   |          |                               |  |  
|Interest Margin            |                                                    | $ | 31.2     |                               |  | $ | 21.7    |       
|                           |                                                    |   |          |                               |  |  
|Operating Earnings         |                                                    | $ | 19.7     |                               |  | $ | 32.5    |       
|                           |                                                    |   |          |                               |  |  
|Origination Volume         |                                                    | $ | 10,598.5 |                               |  | $ | 9,459.7 |       
|                           |                                                    |   |          |                               |  |  
|Number of Loans Originated |                                                    |   |          |                               |  |   |         |       
|                           | CTX
Mortgage Company, L.L.C.                      |   |          |                               |  |   |         |        | 
|                           | Centex-built Homes                                 |   |          | 12,506                        |  |   |         | 10,958 | 
|                           | Non-Centex-built Homes                             |   |          | 48,244                        |  |   |         | 48,301 | 
|                           |                                                    |   |          |                               |  |  
|                           |                                                    |   | 60,750   |                               |  |   | 59,259  |       
|                           | Centex Home Equity Company, L.L.C.                 |   |          | 26,418                        |  |   |         | 20,568 | 
|                           | Centex Finance Company (closed during fiscal 2000) |   |          |                              |  |   |         | 681    | 
|                           |                                                    |   |          |                               |  |  
|                           |                                                    |   | 87,168   |                               |  |   | 80,508  |       
|                           |                                                    |   |          |                               |  |  

Financial Services revenues for fiscal 2001 increased $33.0 million from
the prior year. Gains on sales of mortgage loans receivable, a component of
Financial Services revenues, decreased to $180.8 million, or 28%, for fiscal
2001 from $249.6 million for fiscal 2000. This decline is primarily due to the
change in the structure of securitizations completed by Home Equity.

Conforming Mortgage Banking

CTX Mortgages operating earnings totaled $34.0 million for fiscal 2001,
slightly higher than the $33.9 million reported for fiscal 2000. Operating
earnings were unchanged primarily as a result of increased mortgage
originations in the fourth quarter, which offset lower origination volume
earlier in the year. CTX Mortgage generally will experience increased mortgage
origination volume with decreased prevailing mortgage rates. Mortgage
originations for fiscal 2001 totaled 60,750 compared to 59,259 originations for
fiscal 2000. The per-loan profit for fiscal 2001 was $560, slightly lower than
$573 for fiscal 2000. CTX Mortgages total mortgage applications for fiscal
2001 increased 20% to 70,642 from 59,094 applications for fiscal 2000.

Until the third quarter of fiscal 2000, substantially all of the mortgage
loans generated by CTX Mortgage were sold forward upon closing and subsequently
delivered to third-party purchasers within approximately 60 days thereafter.
In mid-March 2000, CTX Mortgage began to sell the majority of its mortgage
loans to HSF-I. This arrangement is discussed in more detail in the Financial
Condition and Liquidity section below.

In the normal course of its activities, CTX Mortgage carries inventories
of loans pending sale and earns an interest margin on those loans. CTX
Mortgages interest income decreased 65% in fiscal 2001 to $18.9 million from
$54.7 million for fiscal 2000. CTX Mortgages interest expense for fiscal 2001
was $18.1 million, a 58% decrease from $43.5 million for fiscal 2000. The
decrease in CTX Mortgages net interest income was primarily due to the
reduction in its inventory of loans because of the sales arrangement with
HSF-I.

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Sub-Prime Home Equity Lending

Home Equity reported an operating loss of $14.3 million for fiscal 2001,
compared to operating earnings of $2.7 million for fiscal 2000. As discussed
below, this decline primarily resulted from accounting for the $1.6 billion in
securitizations in fiscal 2001 as borrowings rather than as sales.

Home Equitys mortgage originations for fiscal 2001 were 26,418, a 28%
increase over 20,568 originations for fiscal 2000. Loan volume for fiscal 2001
was $1.72 billion, a 30% improvement over fiscal 2000s volume of $1.32
billion. Loan volume for fiscal 2001 was favorably impacted by the opening of
new operating locations during the last quarters of fiscal 2000, the addition
of the correspondent channel, and increased efficiency and overall activity.
Home Equitys mortgage applications totaled 148,702 for fiscal 2001, an
increase of 17% over the 127,450 applications for fiscal 2000.

Substantially all of the mortgage loans produced by Home Equity are
securitized, generally on a quarterly basis. During fiscal 2001, Home Equity
completed securitizations totaling $1.6 billion, compared to $1.3 billion for
the prior year. Home Equity retains the servicing rights associated with these
securitized loans and is the long-term servicer of these loans. For fiscal
2001, servicing fee revenue was $25.9 million, an increase of $11.4 million, or
79%, over fiscal 2000s service fee revenue of $14.5 million. At March 31,
2001, Home Equitys servicing portfolio was $3.3 billion.

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. 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 resulting in the transaction
being accounted for as borrowings will have no effect on the profit recognized
over the life of the mortgages, the change does affect the timing of profit
recognition. The impact was to reduce Home Equitys fiscal 2001 pretax
earnings by $45.6 million from the amount it would have reported if the
securitizations had been accounted for as sales. Home Equity intends to
continue to utilize transaction structures that require that its future loan
originations be reflected as loans receivable on our balance sheet and the
interest income and interest expense associated with this loan portfolio be
reflected on our income statement. Consequently, net interest income, rather
than gain on sale of loans, as in past years, will be Home Equitys primary
source of operating income. Primarily as a result of this change, Home
Equitys interest income increased 266% in fiscal 2001 to $104.9 million from
$28.7 million for fiscal 2000, and interest expense for fiscal 2001 was $74.5
million, a 312% increase from $18.1 million for fiscal 2000. Therefore, Home
Equitys net interest income increased 187% in fiscal 2001 to $30.4 million
from $10.6 million for the prior year.

Allowance for Losses

Home Equity maintains an allowance for losses at an amount that it
believes is sufficient to provide for 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.

We establish an allowance for losses when we believe the event causing the
loss has occurred by charging the provision for losses in the statement of
consolidated earnings. When we determine that a

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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.

Although we consider the allowance for losses on residential mortgage
loans held for investment reflected in our consolidated balance sheet at March
31, 2001 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.

Prior to April 1, 2000, Home Equitys residential mortgage loans were
recorded as sales and anticipated future credit losses were included in the
securitization transaction. As a result, no allowance for loss was necessary.
After April 2000, we began originating residential mortgage loans held for
investment and, accordingly, began recording an allowance for losses based on
managements judgment of loss exposure. During fiscal 2001 we recorded a
provision for losses of $4.5 million, recoveries on loans charged off of
$11,000 and losses sustained of $1.7 million. The allowance for losses on
mortgage loans held for investment at March 31, 2001 was $2.8 million.

CONSTRUCTION PRODUCTS

The following summarizes Construction Products results for the two-year
period ended March 31, 2001 (dollars in millions):

|                                           |  |                               |        |   |      |   |        |  
|------------------------------------------ |  | ----------------------------- | ------ | - | ---- | - | ------ | -
|                                           |  | For the Years Ended March 31, |       
|                                           |  |                               |       
|                                           |  | 2001                          |        |   | 2000 |  
|                                           |  |                               |        |   |      |  
|Revenues                                   |  | $                             | 441.1  |   |      | $ | 470.5  |  
|Interest Income                            |  |                               | 6.7    |   |      |   | 3.7    |  
|Cost of Sales and Expenses                 |  |                               | (341.8 | ) |      |   | (299.3 | )
|Selling, General & Administrative Expenses |  |                               | (6.6   | ) |      |   | (6.2   | )
|                                           |  |                               |        |   |      |  
|Operating Earnings *                       |  | $                             | 99.4   |   |      | $ | 168.7  |  
|                                           |  |                               |        |   |      |  

* Before Minority Interest of $32.4 million and $63.8 million in fiscal 2001 and
2000, respectively.

Construction Products revenues were 6% lower than the same period last
year. This decline is primarily the result of a decrease in wallboard prices,
which was somewhat offset by the acquisition discussed below. For the current
year, Construction Products operating earnings, excluding minority interest,
represented a 41% decrease from results for the same period a year ago.
Operating earnings declined as a result of a 75% decrease in gypsum wallboard
earnings. Sales volume improved for every product; however, pricing for gypsum
wallboard fell 41% compared to the prior year. During fiscal 2001, pricing
continued to decline primarily as a result of excess supply. If these market
conditions persist, management expects it would negatively impact future
results.

During November 2000, Construction Products purchased selected strategic
assets summarized below, and assumed certain liabilities. The purchase price,
including the assumption of debt, was approximately $442 million. Funding came
from cash on hand and borrowings under Construction Products new $325 million
senior credit facility. The acquisition has been accounted for as a purchase,
and accordingly, the purchase price was allocated to the underlying assets
acquired and liabilities assumed based on their fair market values at the date
of the acquisition. The results of operations of the asset purchase since
November 10, 2000 are included in Construction Products financial information.

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The principal assets Construction Products acquired in November 2000 were:
a gypsum wallboard plant located in Duke, Oklahoma with a production capacity
of 1.1 billion square feet of wallboard; a short line railroad and railcars
linking the Duke plant to adjacent railroads; a recently completed 220,000
ton-per-year lightweight recycled paper mill in Lawton, Oklahoma; a 50,000
ton-per-year Commerce City (Denver), Colorado recycled paper mill; and three
recycled paper fiber collection sites. The Commerce City, Colorado paperboard
mill was idled on April 23, 2001. The idled facility was recorded at its
estimated net realizable value of $5.0 million at the purchase date. The paper
operations are headquartered in Lawton, Oklahoma and focus primarily on the
gypsum wallboard paper business.

CONSTRUCTION SERVICES

The following summarizes Construction Services results for the two-year
period ended March 31, 2001 (dollars in millions):

|                                 |  |                               |         |  |      |   |         | 
|-------------------------------- |  | ----------------------------- | ------- |  | ---- | - | ------- | 
|                                 |  | For the Years Ended March 31, |        
|                                 |  |                               |        
|                                 |  | 2001                          |         |  | 2000 |  
|                                 |  |                               |         |  |      |  
|Revenues                         |  | $                             | 1,290.4 |  |      | $ | 1,205.8 | 
|                                 |  |                               |         |  |      |  
|Operating Earnings               |  | $                             | 30.9    |  |      | $ | 23.5    | 
|                                 |  |                               |         |  |      |  
|New Contracts Executed           |  | $                             | 1,930.1 |  |      | $ | 1,650.9 | 
|                                 |  |                               |         |  |      |  
|Backlog of Uncompleted Contracts |  | $                             | 2,021.7 |  |      | $ | 1,382.0 | 
|                                 |  |                               |         |  |      |  

Construction Services revenues for fiscal 2001 were 7% higher than last
years revenues. Operating earnings for the group improved in fiscal 2001 as a
result of a continuing shift in recent years to higher-margin negotiated
projects from lower-margin bid work. The increase in New Contracts Executed
and Backlog of Uncompleted Contracts was primarily the result of a $320 million
contract awarded in the fourth quarter of fiscal 2001.

The Construction Services segment provided a positive average annual net
cash flow in excess of our investment in the segment of $97.8 million in fiscal
2001 and $102.2 million in fiscal 2000.

INVESTMENT REAL ESTATE

The following summarizes Investment Real Estates results for the two-year
period ended March 31, 2001 (dollars in millions):

|                   |  |                               |      |  |      |   |      | 
|------------------ |  | ----------------------------- | ---- |  | ---- | - | ---- | 
|                   |  | For the Years Ended March 31, |     
|                   |  |                               |     
|                   |  | 2001                          |      |  | 2000 |  
|                   |  |                               |      |  |      |  
|Revenues           |  | $                             | 33.0 |  |      | $ | 30.9 | 
|                   |  |                               |      |  |      |  
|Operating Earnings |  | $                             | 50.9 |  |      | $ | 30.1 | 
|                   |  |                               |      |  |      |  

Fiscal 2001 operating earnings from Investment Real Estate totaled $50.9
million compared to $30.1 million in the prior year. Property sales related to
Investment Real Estates nominally-valued assets contributed operating margins
of $13.6 million in fiscal 2001 and $19.6 million in fiscal 2000. The timing
of land sales is uncertain and can vary significantly from period to period.

During fiscal 2001, we disposed of virtually all the remaining Vista
portfolio. As a result, negative goodwill was fully accreted. For fiscal 2001
and 2000, we recorded total negative goodwill accretion of $50.8 million and
$16 million, respectively.

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Included in Investment Real Estates fiscal 2001 revenues and operating
earnings was $4.6 million derived from its investment in Centex Development
Company. Fiscal 2000 revenues and operating earnings included $456,000 derived
from its investment in Centex Development Company. Investment Real Estates
investment in Fairclough, through Centex Development Company, resulted in an
operating loss of $34,000 in fiscal 2001 compared to operating earnings of $3.7
million in fiscal 2000. The decrease in operating earnings occurred primarily
because of a decline in unit completions resulting principally from the
repositioning of Faircloughs land inventory and the buildout of communities
that were developed under previous ownership, offset slightly by higher sales
prices. For fiscal 2001 and 2000, Fairclough closed 1,243 units at an average
sales price per unit of $203,587 and 1,707 units at an average sales price per
unit of $192,763, respectively. Operating earnings per unit (before interest)
were $6,339 and $12,910 for fiscal 2001 and 2000, respectively.

OTHER

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

The operating earnings of our manufactured homes operations decreased
$33.4 million, primarily due to a $19.2 million noncash charge recorded in
fiscal 2001. This charge primarily was comprised of $9.5 million for the
impairment of goodwill related to the retail operations and $6.5 million
related to the idling of two manufacturing facilities. The charge for the
impairment of goodwill was the result of continued losses in the retail
division that are consistent with trends of losses recognized throughout this
industry.

Our home services operations reported operating earnings of $1.1 million
for fiscal 2001 compared to an operating loss of $2.3 million in fiscal 2000.
The increase in operating earnings from fiscal 2000 to fiscal 2001 primarily
relates to growth in the pest division.

Corporate general and administrative expense increased 12% to $36.9
million in fiscal 2001 compared to $33.0 million in fiscal 2000. This increase
primarily relates to higher compensation resulting from growth in our
profitability. Corporate general and administrative expenses represent
compensation and other costs not identifiable with a specific segment.

Interest expense increased 48% to $99.1 million in fiscal 2001 compared to
$66.8 million in fiscal 2000. Higher average debt levels primarily caused the
increase in interest expense.

Our effective tax rate decreased to 35% in fiscal 2001 from 38% in fiscal
2000. The increase in negative goodwill accretion primarily caused this
decrease.

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FINANCIAL CONDITION AND LIQUIDITY

At March 31, 2002 we had cash and cash equivalents of $219.7 million,
including $27.1 million in Financial Services and $8.6 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 fiscal years ended
March 31, 2002, 2001 and 2000 is summarized below (dollars in thousands):

|                                |                          |                      |         |                               |            |   |         |   |            |      |         |   |          |  
|------------------------------- | ------------------------ | -------------------- | ------- | ----------------------------- | ---------- | - | ------- | - | ---------- | ---- | ------- | - | -------- | -
|                                |                          |                      |         | For the Years Ended March 31, |           
|                                |                          |                      |         |                               |           
|                                |                          |                      |         | 2002                          |            |   | 2001    |   |            | 2000 |        
|                                |                          |                      |         |                               |            |   |         |   |            |      |        
|Net cash provided by (used in): |                          |                      |         |                               |            |   |         |   |            |      |         |  
|                                | Non-Financial Services * |                      |         |                               |            |   |         |   |            |      |         |   |         
|                                |                          | Operating activities |         | $                             | (104,692   | ) |         | $ | 116,365    |      |         | $ | 13,644   |  
|                                |                          | Investing activities |         |                               | (129,725   | ) |         |   | (623,591   | )    |         |   | (164,894 | )
|                                |                          | Financing activities |         |                               | 381,021    |   |         |   | 433,512    |      |         |   | 204,260  |  
|                                |                          |                      |         |                               |            |   |         |   |           
|                                |                          |                      | 146,604 |                               |            |   | (73,714 | ) |            |      | 53,010  |  
|                                |                          |                      |         |                               |            |   |         |   |           
|                                | Financial Services       |                      |         |                               |            |   |         |   |            |      |         |   |         
|                                |                          | Operating activities |         |                               | 185,678    |   |         |   | 107,320    |      |         |   | 847,987  |  
|                                |                          | Investing activities |         |                               | (1,506,994 | ) |         |   | (1,801,278 | )    |         |   | (27,730  | )
|                                |                          | Financing activities |         |                               | 1,336,676  |   |         |   | 1,689,571  |      |         |   | (843,094 | )
|                                |                          |                      |         |                               |            |   |         |   |           
|                                |                          |                      | 15,360  |                               |            |   | (4,387  | ) |            |      | (22,837 | )
|                                |                          |                      |         |                               |            |   |         |   |           
|Net increase (decrease) in cash |                          | $                    | 161,964 |                               |            | $ | (78,101 | ) |            | $    | 30,173  |  
|                                |                          |                      |         |                               |            |   |         |   |           



|* | Non-Financial Services is the combination 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 fiscal 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 included 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 fiscal 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
included 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
existing committed backup facilities, which exceed our commercial paper program
size.

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Our existing credit facilities and available capacity as of March 31, 2002
are summarized below (dollars in thousands):

|                       |                                             |   |                 |           |  |           |           |         |     |     | 
|---------------------- | ------------------------------------------- | - | --------------- | --------- |  | --------- | --------- | ------- | --- | --- | 
|                       |                                             |   | Existing Credit |           |  | Available |           |         |    
|                       |                                             |   | Facilities      |           |  | Capacity  |           |         |    
|                       |                                             |   |                 |           |  |           |           |         |    
|Non-Financial Services |                                             |   |                 |           |  |           |           |         |     |    
|                       | Centex
Corporation                          |   |                 |           |  |           |           |         |     |     | 
|                       | Multi-Bank Revolving Credit Facility        |   | $               | 600,000   |  |           | $         | 600,000 |     | (1) | 
|                       | Uncommitted Bank Lines                      |   |                 | 60,000    |  |           |           | 60,000  |     |     | 
|                       | Construction
Products                       |   |                 |           |  |           |           |         |     |     | 
|                       | Senior Revolving Credit Facility            |   |                 | 275,000   |  |           |           | 112,000 |     | (2) | 
|                       | Annually Renewable Commercial Paper
Conduit |   |                 | 50,000    |  |           |           | 31,370  |     | (2) | 
|                       |                                             |   |                 |           |  |           |           |        
|                       |                                             |   | 985,000         |           |  |           | 803,370   |         |     |    
|                       |                                             |   |                 |           |  |           |           |        
|Financial Services     |                                             |   |                 |           |  |           |           |         |     |    
|                       | Unsecured Credit Facilities                 |   |                 | 145,000   |  |           |           | 125,000 |     | (3) | 
|                       | Secured Credit Facilities                   |   |                 | 547,000   |  |           |           | 364,312 |     | (4) | 
|                       | Harwood Street Funding II, L.L.C. Facility  |   |                 | 1,000,000 |  |           |           | 897,417 |     |     | 
|                       | Line of Credit                              |   |                 | 14,250    |  |           |           | 4,896   |     | (5) | 
|                       |                                             |   |                 |           |  |           |          
|                       |                                             |   | 1,706,250       |           |  |           | 1,391,625 |         |     |    
|                       |                                             |   |                 |           |  |           |          
|                       |                                             | $ | 2,691,250       |           |  | $         | 2,194,995 |         | (6) |    
|                       |                                             |   |                 |           |  |           |           |        



|(1) |  | This is a committed, multi-bank revolving credit facility, maturing in
August 2005, which serves as backup for commercial paper borrowings. As
of March 31, 2002, there were no borrowings under this facility, and our
$500 million commercial paper program had no outstanding borrowings.
Beginning May 31, 2002, this facility increased to $700 million. 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 2002.                                                                                                                                                                  
|   
|(3) |  | Financial Services maintains a $20 million uncommitted facility, which is
allocated evenly between CTX Mortgage and Home Equity. All borrowings
under this facility are guaranteed by Centex Corporation. 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 $200 million of committed and $242
million of uncommitted secured credit facilities to finance mortgage
inventory. CTX Mortgage maintains $105 million of committed secured
mortgage warehouse facilities maturing in October 2002 to finance
mortgages not sold to HSF-I. Centex Corporation has guaranteed $11.5
million of these facilities.                                      
|   
|(5) |  | The United Kingdom mortgage operation maintains a £10 million uncommitted
unsecured line of credit guaranteed by Centex Corporation.                                                                                                                                                                                                                                                                                       
|   
|(6) |  | The amount of available capacity includes $342 million of uncommitted
borrowings. 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

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it and to improve its liquidity. For additional information regarding HSF-I,
see Certain Off-Balance-Sheet and Other Obligations on pages 43-45 of this
Report.

Home Equity finances its inventory of mortgage loans through HSF-II, a
wholly-owned, consolidated entity, under a revolving sales agreement that
expires February 2006 with certain renewal options. 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
on the financial statements of Financial Services and Centex Corporation.

Under our debt covenants, we are required to maintain certain leverage and
interest coverage ratios and a minimum tangible net worth. At March 31, 2002,
we were in compliance with all of these covenants.

As of March 31, 2002 our short-term debt was $333.2 million, approximately
$314.6 million of which was applicable to Financial Services and $18.6 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 March 31, 2002 was as follows (dollars in thousands)
(1):

|                        |                                                                                      |                                                              |           |           |         | 
|----------------------- | ------------------------------------------------------------------------------------ | ------------------------------------------------------------ | --------- | --------- | ------- | 
|Non-Financial Services: |                                                                                      |                                                              |           |          
|                        | Short-Term Notes Payable                                                             |                                                              | $         | 18,630    |        
|                        | Senior Debt:                                                                         |                                                              |           |           |        
|                        |                                                                                      | Medium-Term Note Programs, 2.45% to 7.95%, due through 2007  |           |           | 418,000 | 
|                        |                                                                                      | Long-Term Notes, 6.40% to 9.75%, due through 2012            |           |           | 962,892 | 
|                        |                                                                                      | Other Indebtedness, weighted-average 3.98%, due through 2027 |           |           | 192,753 | 
|                        | Subordinated Debt:                                                                   |                                                              |           |           |        
|                        |                                                                                      | Subordinated Debentures, 7.38%, due in 2006                  |           |           | 99,845  | 
|                        |                                                                                      | Subordinated Debentures, 8.75%, due in 2007                  |           |           | 99,632  | 
|                        |                                                                                      |                                                              |          
|                        |                                                                                      |                                                              | 1,791,752 |          
|                        |                                                                                      |                                                              |          
|Financial Services:     |                                                                                      |                                                              |           |          
|                        | Short-Term Debt:                                                                     |                                                              |           |           |        
|                        |                                                                                      | Short-Term Bank Notes Payable                                |           |           | 92,109  | 
|                        |                                                                                      | Harwood Street Funding II, L.L.C. Secured Liquidity Notes    |           |           | 102,583 | 
|                        |                                                                                      | Other Short-Term Debt                                        |           |           | 119,933 | 
|                        | Home Equity Loans Asset-Backed Certificates, 2.91% to 8.48%, due through 2033        |                                                              |           | 3,120,402 |        
|                        | Harwood Street Funding II, L.L.C. Variable Rate Subordinated Notes, due through
2007 |                                                              |           | 50,000    |        
|                        |                                                                                      |                                                              |          
|                        |                                                                                      |                                                              | 3,485,027 |          
|                        |                                                                                      |                                                              |          
|Total                   |                                                                                      | $                                                            | 5,276,779 |          
|                        |                                                                                      |                                                              |          



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

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Financial Services debt related to securitized residential mortgage loans
structured as collateralized borrowings (Home Equity Loans Asset-Backed
Certificates) was $3.1 billion at March 31, 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. Maturities of
Non-Financial Services and Financial Services long-term debt (in thousands)
during the next five fiscal years are:

|           |      |   |               |         |  |           |           |         |       |   |           |         | 
|---------- | ---- | - | ------------- | ------- |  | --------- | --------- | ------- | ----- | - | --------- | ------- | 
|           |      |   | Non-Financial |         |  | Financial |           |         |       |   |          
|           |      |   | Services      |         |  | Services  |           |         | Total |  
|           |      |   |               |         |  |           |           |         |       |  
|           | 2003 |   | $             | 179,831 |  |           | $         | 747,361 |       |   | $         | 927,192 | 
|           | 2004 |   |               | 193,605 |  |           |           | 636,472 |       |   |           | 830,077 | 
|           | 2005 |   |               | 30,474  |  |           |           | 452,745 |       |   |           | 483,219 | 
|           | 2006 |   |               | 325,249 |  |           |           | 407,717 |       |   |           | 732,966 | 
|           | 2007 |   |               | 290,541 |  |           |           | 379,622 |       |   |           | 670,163 | 
|Thereafter |      |   | 753,422       |         |  |           | 546,485   |         |       |   | 1,299,907 |        
|           |      |   |               |         |  |           |           |         |      
|           |      | $ | 1,773,122     |         |  | $         | 3,170,402 |         |       | $ | 4,943,524 |        
|           |      |   |               |         |  |           |           |         |      

We lease certain office facilities and other equipment under operating
leases. Future minimum payments under the noncancelable leases are as follows:
2003  $50.2 million; 2004  $42.3 million; 2005  $34.0 million; 2006  $25.5
million; 2007  $20.3 million and thereafter  $68.6 million.

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
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) five year extendable subordinated certificates maturing
in November 2004 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

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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 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 and
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 and payment of obligations
of CTX Mortgage, in its capacity as servicer, are 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, non-credit related market risks and prepayment risks related to the
mortgage loans held by HSF-I. The purpose of this arrangement is to provide
credit enhancement to HSF-I by permitting it to hedge these risks with a
counterparty having a short-term credit rating of A1+ from S&P and 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, non-credit related market risks and prepayment 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 March 31, 2002 HSF-I owned $1.34 billion in securitized residential
mortgage loans sold to it by CTX Mortgage and had $1.25 billion of outstanding
securitized term debt and $93.0 million of outstanding subordinated
certificates. We do not guarantee the payment of any debt or subordinated
certificates of HSF-I, and we are not liable for credit losses relating to
securitized residential mortgage loans sold to HSF-I. However, we do retain
certain risks related to the portfolio of mortgage loans held by HSF-I. In
particular, CTX Mortgage makes representations and warranties to HSF-I to the
effect that each mortgage loan sold to HSF-I satisfies the eligibility criteria
and portfolio requirements discussed above. CTX Mortgage may be required to
repurchase mortgage loans sold to HSF-I if such mortgage loans are determined
to be ineligible loans or there occur certain other breaches of representations
and warranties of CTX Mortgage, as seller or servicer. During fiscal 2002, CTX
Mortgage sold $10.2 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 Centex
Development Company 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 through
longer-term real estate investments, real estate developments and the

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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 Centex Development Company, an
independent, publicly-traded entity that is not consolidated with us. Centex
Development Company 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 Centex Development Company. However, as of March
31, 2002, we guaranteed approximately $1.1 million of indebtedness of Centex
Development Company. In addition, we enter into certain land purchase and
other transactions with Centex Development Company. For additional information
regarding these entities, see the Joint Explanatory Note at the beginning of
this Report and Part B of this Report. In addition, for information regarding
these entities and Centex Corporation, on an aggregate basis, see Note (J) 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 $94.6
million and $72.0 million at March 31, 2002 and 2001, respectively. These
joint ventures had total outstanding secured construction debt of approximately
$144.6 million at March 31, 2002 and $137.5 million at March 31, 2001. Our pro
rata limited liability with respect to this debt is limited to approximately
$27.9 million and $33.0 million at March 31, 2002 and 2001, respectively.
Under the structure of this debt, we become liable up to these amounts only to
the extent that the construction debt exceeds a certain percentage of the value
of the project. At March 31, 2002 and 2001, we were not liable for any of this
debt.

Letters of Credit and Guarantees

At March 31, 2002 we had outstanding letters of credit of $98.6 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.

CRITICAL ACCOUNTING POLICIES

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

Impairment of Long-Lived Assets

Housing projects and land held for development and sale are stated at the
lower of cost (including direct construction costs, capitalized interest and
real estate taxes) or fair value less cost to sell. Property and equipment is
carried at cost less accumulated depreciation. We assess these assets for
recoverability in accordance with the provisions of Statement of Financial
Accounting Standards No. 121, Accounting for

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the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of, or SFAS No. 121. SFAS No. 121 requires that long-lived assets be
reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. Recoverability of
assets is measured by comparing the carrying amount of an asset to future
undiscounted net cash flows expected to be generated by the asset. These
evaluations for impairment are significantly impacted by estimates of revenues,
costs and expenses and other factors. If these assets are considered to be
impaired, the impairment to be recognized is measured by the amount by which
the carrying amount of the assets exceeds the fair value of the assets.

Goodwill

We adopted the provisions of Statement of Financial Accounting Standards
No. 142, Goodwill and Other Intangible Assets, or SFAS No. 142, effective
April 1, 2001. Upon the adoption of SFAS No. 142, goodwill is no longer
subject to amortization. Rather, goodwill will be subject to at least an
annual assessment for impairment by applying a fair value-based test. If the
carrying amount exceeds the fair value, an impairment would occur. We
continually evaluate whether events and circumstances have occurred that
indicate the remaining balance of goodwill may not be recoverable. In
evaluating impairment, we estimate the sum of the expected future cash flows
derived from such goodwill. Such evaluations for impairment are significantly
impacted by estimates of future revenues, costs and expenses and other factors.
If the goodwill is considered to be impaired, the impairment to be recognized
is measured by the amount by which the carrying amount of the goodwill exceeds
the fair value of the future cash flows.

Valuation of Residential Mortgage Loans Held for Investment

We maintain an allowance for losses on residential mortgage loans held for
investment at an amount that we believe is sufficient to provide for losses in
our existing portfolio of 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 at March
31, 2002 to be adequate, there can be no assurance that this allowance will
prove to be adequate over time to cover ultimate losses in connection with our
residential mortgage loans held for investment. This allowance may prove to be
inadequate due to unanticipated adverse changes in the economy or discrete
events adversely affecting specific customers or industries.

Mortgage Securitization Residual Interest

We use mortgage securitizations to finance our mortgage loan portfolio.
For securitizations prior to April 2000, which we accounted for as sales, we
retained a mortgage securitization residual interest, or MSRI. The MSRI
represents the present value of our right to receive, over the life of the
securitization, the excess of the weighted average coupon on the loans
securitized over the interest rates on the securities sold, a normal servicing
fee, a trustee fee and an insurance fee, where applicable, net of the credit
losses relating to the loans securitized. We estimate the fair value of MSRI
through the application of discounted cash flow analysis. This analysis
requires the use of various assumptions, which may significantly impact the
fair value of the MSRI. See Note (A) of the Notes to Consolidated Financial
Statements of Centex Corporation for a discussion of the sensitivity of the
MSRI to changes in the assumptions.

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STOCK REPURCHASE PROGRAM

During fiscal 2002, we repurchased a total of 225,000 shares of common
stock under our stock option-related repurchase program, which we retained as
treasury stock. At March 31, 2002, we had repurchased a total of 1.6 million
shares out of 2.0 million shares authorized for repurchase by our Board of
Directors and retired approximately 1.4 million shares.



---

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



| |  | Our residential Home Building and Construction Services operations are
cyclical and highly 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 operation or third party lenders. In
general, our Home Building and mortgage lending operations are
adversely affected by increases in interest rates. 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.
| 
| |  | Our businesses may be affected by the impact and uncertainties created
by the events of September 11, 2001 and the consequences of any future
attacks as well as other events affecting national and international
economic and other conditions.                                                                                                                                                                                                                                                                                                                                                                                              
| 
| |  | 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.                                                                                                                                                                                                                                                                                                                                                                                      

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| |  | 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 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risks related to fluctuations in interest rates
on our direct debt obligations, mortgage loans receivable and residual interest
in mortgage securitizations. The following analysis provides a framework to
understand our sensitivity to hypothetical changes in interest rates as of
March 31, 2002.

We have utilized derivative instruments, including interest rate swaps and
interest rate caps, in conjunction with our overall strategy to manage the
amount of debt outstanding that is subject to changes in interest rates. We
recognize amounts paid or received under interest rate swap or cap agreements
as adjustments to interest expense. As of March 31, 2002, we had interest rate
swap agreements that converted $160 million of our variable-rate senior debt
outstanding into fixed-rate debt.

Financial Services originates, sells and securitizes conforming and
nonconforming A mortgages, sub-prime first and second mortgages and home
equity loans. Since December 1999 substantially all conforming, Jumbo A and
GNMA-eligible mortgages have been sold to HSF-I at or near the date on which
the loans were funded. As a result of the Harwood Swap and related swap
agreements, as previously described in Certain Off-Balance Sheet and Other
Obligations, we effectively bear all interest rate risk, non-credit related
market risk and prepayment risk related to the Harwood Swap. Financial
Services executes the forward sales of CTX Mortgages loans to hedge the risk
of reductions in value of mortgages sold to HSF-I or maintained under secured
financing agreements. This offsets most of our risk as the counterparty to the
swap supporting the payment requirements of HSF-I. CTX Mortgage, acting as
manager of HSF-I, delivers mortgages held by HSF-I to third party purchasers
generally within 60 days of origination. Due to the high degree of liquidity
in the A mortgage market and the frequency of loan sales and securitizations,
the use of forward sales is an effective hedge against changes in market value
that result from changes in interest rates.

Home Equity uses interest rate swaps to hedge the market risk associated
with the carrying of mortgages in anticipation of issuance of securitization
debt to finance sub-prime mortgages. Home Equity will generally hold mortgages
in anticipation of securitization for up to 120 days.

Prior to fiscal 2001, Home Equity retained the MSRI from its securitized
pools of mortgages. As of March 31, 2002, the MSRI was $125.3 million. We
continually monitor the fair value of the MSRI and review the factors expected
to influence the future constant prepayment rate, or CPR, discount rates and
credit losses. In developing assumptions regarding expected future CPR, we
consider a variety of factors, many of which are interrelated. These factors
include historical performance, origination channels, characteristics of
borrowers, such as credit quality and loan-to-value relationships, and market
factors that influence competition. If changes in assumptions regarding future
CPR, discount rates or credit losses are necessary, the MSRI fair value is
adjusted accordingly.

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

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market value should not have a significant impact on the fixed-rate debt until
we are required to refinance such debt.

As of March 31, 2002 short-term debt was $333.2 million, approximately
$314.6 million of which was applicable to Financial Services and $18.6 million
of which was applicable to Construction Products. The majority of Financial
Services debt is collateralized by residential mortgage loans. We borrow on a
short-term basis in the commercial paper market under a $500 million program
size supported by a $600 million revolving credit facility due in 2005 and from
banks under uncommitted lines that bear interest at prevailing market rates.
The weighted-average interest rate on borrowings outstanding at March 31, 2002
was 2.4%.

The maturities of non-financial services long-term debt outstanding at
March 31, 2002 were as follows (in thousands):

|                       |                       |                       |   |                              |        |   |      |        |         |      |   |        |      |   |   |         |        |   |            |         |      |       |   |         |            |   |   |           |         |   |   |           |        
|---------------------- | --------------------- | --------------------- | - | ---------------------------- | ------ | - | ---- | ------ | ------- | ---- | - | ------ | ---- | - | - | ------- | ------ | - | ---------- | ------- | ---- | ----- | - | ------- | ---------- | - | - | --------- | ------- | - | - | --------- | -------
|                       |                       |                       |   | Maturities through March 31, |        |   |      |        |         |      |   |        |      |   |   |         |       
|                       |                       |                       |   |                              |        |   |      |        |         |      |   |        |      |   |   |         |       
|                       |                       |                       |   | 2003                         |        |   | 2004 |        |         | 2005 |   |        | 2006 |   |   | 2007    |        |   | Thereafter |         |      | Total |   |         | Fair Value |  
|                       |                       |                       |   |                              |        |   |      |        |         |      |   |        |      |   |   |         |        |   |            |         |      |       |   |         |            |  
|Non-Financial Services |                       |                       |   |                              |        |   |      |        |         |      |   |        |      |   |   |         |        |   |            |         |      |       |   |         |            |   |   |           |         |   |   |          
|                       | Fixed Rate Debt       |                       | $ | 27,716                       |        |   | $    | 16,480 |         |      | $ | 339    |      |   | $ | 300,099 |        |   | $          | 202,376 |      |       | $ | 748,437 |            |   | $ | 1,295,447 |         |   | $ | 1,335,275 |        
|                       |                       | Average Interest Rate |   |                              | 6.13   | % |      |        | 7.03    | %    |   |        | 5.86 | % |   |         | 8.96   | % |            |         | 8.01 | %     |   |         | 7.70       | % |   |           | 8.00    | % |   |           |        
|                       | Variable Rated Hedged |                       |   |                              |        |   |      |        |         |      |   |        |      |  
|                       |                       | Debt(1)               |   | $                            | 35,000 |   |      | $      | 100,000 |      |   | $      |     |   |   | $       | 25,000 |   |            | $       |     |       |   | $       |           |   |   | $         | 160,000 |   |   | $         | 157,667
|                       |                       | Average Interest Rate |   |                              | 7.60   | % |      |        | 5.24    | %    |   |        |     | % |   |         | 7.99   | % |            |         |     | %     |   |         |           | % |   |           | 6.19    | % |   |           |        
|                       | Variable Rate Debt    |                       | $ | 117,115                      |        |   | $    | 77,125 |         |      | $ | 30,135 |      |   | $ | 150     |        |   | $          | 88,165  |      |       | $ | 4,985   |            |   | $ | 317,675   |         |   | $ | 317,177   |        
|                       |                       | Average Interest Rate |   |                              | 3.45   | % |      |        | 3.56    | %    |   |        | 3.89 | % |   |         | 1.49   | % |            |         | 4.60 | %     |   |         | 1.49       | % |   |           | 3.80    | % |   |           |        



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

The maturities of non-financial services long-term debt outstanding at
March 31, 2001 were as follows (in thousands):

|                       |                       |                       |   |                              |         |   |      |        |        |      |   |         |      |   |   |      |      |   |            |         |        |       |   |         |            |   |   |         |         |   |   |         |        
|---------------------- | --------------------- | --------------------- | - | ---------------------------- | ------- | - | ---- | ------ | ------ | ---- | - | ------- | ---- | - | - | ---- | ---- | - | ---------- | ------- | ------ | ----- | - | ------- | ---------- | - | - | ------- | ------- | - | - | ------- | -------
|                       |                       |                       |   | Maturities through March 31, |         |   |      |        |        |      |   |         |      |   |   |      |     
|                       |                       |                       |   |                              |         |   |      |        |        |      |   |         |      |   |   |      |     
|                       |                       |                       |   | 2002                         |         |   | 2003 |        |        | 2004 |   |         | 2005 |   |   | 2006 |      |   | Thereafter |         |        | Total |   |         | Fair Value |  
|                       |                       |                       |   |                              |         |   |      |        |        |      |   |         |      |   |   |      |      |   |            |         |        |       |   |         |            |  
|Non-Financial Services |                       |                       |   |                              |         |   |      |        |        |      |   |         |      |   |   |      |      |   |            |         |        |       |   |         |            |   |   |         |         |   |   |        
|                       | Fixed Rate Debt       |                       | $ | 30,853                       |         |   | $    | 28,567 |        |      | $ | 9,135   |      |   | $ | 80   |      |   | $          | 299,793 |        |       | $ | 359,582 |            |   | $ | 728,010 |         |   | $ | 759,218 |        
|                       |                       | Average Interest Rate |   |                              | 7.67    | % |      |        | 6.19   | %    |   |         | 7.93 | % |   |      | 7.00 | % |            |         | 8.96   | %     |   |         | 8.16       | % |   |         | 8.39    | % |   |         |        
|                       | Variable Rated Hedged |                       |   |                              |         |   |      |        |        |      |   |        
|                       |                       | Debt(1)               |   | $                            | 377,995 |   |      | $      | 35,000 |      |   | $       |     |   |   | $    |     |   |            | $       | 25,000 |       |   | $       |           |   |   | $       | 437,995 |   |   | $       | 437,449
|                       |                       | Average Interest Rate |   |                              | 7.37    | % |      |        | 7.60   | %    |   |         |     | % |   |      |     | % |            |         | 7.99   | %     |   |         |           | % |   |         | 7.42    | % |   |         |        
|                       | Variable Rate Debt    |                       | $ | 19,813                       |         |   | $    | 5,115  |        |      | $ | 268,625 |      |   | $ | 135  |      |   | $          | 150     |        |       | $ | 5,150   |            |   | $ | 298,988 |         |   | $ | 298,858 |        
|                       |                       | Average Interest Rate |   |                              | 6.69    | % |      |        | 6.08   | %    |   |         | 6.56 | % |   |      | 4.62 | % |            |         | 4.62   | %     |   |         | 5.41       | % |   |         | 6.44    | % |   |         |        



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

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The following table sets forth the estimated maturity or repricing of
borrowings collateralized by securitized residential mortgage loans structured
as borrowings outstanding at March 31, 2002. The principal and interest on
this debt is paid using the cash flows from the underlying mortgage
receivables, which serve as collateral for this debt. Accordingly, the timing
of the principal payments on this debt is dependent on the payments received on
the underlying mortgage receivables. The amounts shown within a particular
period were determined in accordance with the contractual terms of the debt,
except (1) fixed-rate mortgage securities reflect estimated prepayments, that
were estimated based on the results of a prepayment model we utilize, and
empirical data, and (2) adjustable-rate debt is included in the period in which
it is first scheduled to adjust and not in the period in which it matures. We
believe that these assumptions approximate actual experience and consider them
reasonable. However, the interest rate sensitivity could vary substantially if
different assumptions were used or actual experience differs from the
historical experience on which we base the assumptions.

|                   |                    |                       |   |                              |      |   |      |         |      |      |   |         |      |   |   |         |      |   |            |         |      |       |   |         |            |   |   |           |      |   |   |           | 
|------------------ | ------------------ | --------------------- | - | ---------------------------- | ---- | - | ---- | ------- | ---- | ---- | - | ------- | ---- | - | - | ------- | ---- | - | ---------- | ------- | ---- | ----- | - | ------- | ---------- | - | - | --------- | ---- | - | - | --------- | 
|                   |                    |                       |   | Maturities through March 31, |      |   |      |         |      |      |   |         |      |   |   |         |     
|                   |                    |                       |   |                              |      |   |      |         |      |      |   |         |      |   |   |         |     
|                   |                    |                       |   | 2003                         |      |   | 2004 |         |      | 2005 |   |         | 2006 |   |   | 2007    |      |   | Thereafter |         |      | Total |   |         | Fair Value |  
|                   |                    |                       |   |                              |      |   |      |         |      |      |   |         |      |   |   |         |      |   |            |         |      |       |   |         |            |  
|Financial Services |                    |                       |   |                              |      |   |      |         |      |      |   |         |      |   |   |         |      |   |            |         |      |       |   |         |            |   |   |           |      |   |   |          
|                   | Fixed Rate Debt    |                       | $ | 489,230                      |      |   | $    | 408,526 |      |      | $ | 307,484 |      |   | $ | 281,425 |      |   | $          | 292,611 |      |       | $ | 438,505 |            |   | $ | 2,217,781 |      |   | $ | 2,246,446 | 
|                   |                    | Average Interest Rate |   |                              | 4.41 | % |      |         | 5.29 | %    |   |         | 5.99 | % |   |         | 6.70 | % |            |         | 6.85 | %     |   |         | 6.34       | % |   |           | 5.67 | % |   |           | 
|                   | Variable Rate Debt |                       | $ | 258,131                      |      |   | $    | 227,946 |      |      | $ | 145,261 |      |   | $ | 126,292 |      |   | $          | 87,011  |      |       | $ | 107,980 |            |   | $ | 952,621   |      |   | $ | 952,704   | 
|                   |                    | Average Interest Rate |   |                              | 2.39 | % |      |         | 2.49 | %    |   |         | 2.63 | % |   |         | 2.54 | % |            |         | 2.42 | %     |   |         | 2.42       | % |   |           | 2.47 | % |   |           | 

The following table sets forth the estimated maturity or repricing of
borrowings collateralized by securitized residual mortgage loans structured as
borrowings outstanding at March 31, 2001.

|                   |                    |                       |   |                              |      |   |      |         |      |      |   |         |      |   |   |         |      |   |            |         |      |       |   |         |            |   |   |           |      |   |   |           | 
|------------------ | ------------------ | --------------------- | - | ---------------------------- | ---- | - | ---- | ------- | ---- | ---- | - | ------- | ---- | - | - | ------- | ---- | - | ---------- | ------- | ---- | ----- | - | ------- | ---------- | - | - | --------- | ---- | - | - | --------- | 
|                   |                    |                       |   | Maturities through March 31, |      |   |      |         |      |      |   |         |      |   |   |         |     
|                   |                    |                       |   |                              |      |   |      |         |      |      |   |         |      |   |   |         |     
|                   |                    |                       |   | 2002                         |      |   | 2003 |         |      | 2004 |   |         | 2005 |   |   | 2006    |      |   | Thereafter |         |      | Total |   |         | Fair Value |  
|                   |                    |                       |   |                              |      |   |      |         |      |      |   |         |      |   |   |         |      |   |            |         |      |       |   |         |            |  
|Financial Services |                    |                       |   |                              |      |   |      |         |      |      |   |         |      |   |   |         |      |   |            |         |      |       |   |         |            |   |   |           |      |   |   |          
|                   | Fixed Rate Debt    |                       | $ | 243,537                      |      |   | $    | 227,777 |      |      | $ | 178,133 |      |   | $ | 137,892 |      |   | $          | 105,823 |      |       | $ | 353,278 |            |   | $ | 1,246,440 |      |   | $ | 1,269,501 | 
|                   |                    | Average Interest Rate |   |                              | 6.99 | % |      |         | 6.80 | %    |   |         | 6.77 | % |   |         | 6.92 | % |            |         | 7.12 | %     |   |         | 7.13       | % |   |           | 6.97 | % |   |           | 
|                   | Variable Rate Debt |                       | $ | 301,928                      |      |   | $    |        |      |      | $ |        |      |   | $ |        |      |   | $          | 27,500  |      |       | $ |        |            |   | $ | 329,428   |      |   | $ | 329,449   | 
|                   |                    | Average Interest Rate |   |                              | 5.77 | % |      |         |     | %    |   |         |     | % |   |         |     | % |            |         | 6.75 | %     |   |         |           | % |   |           | 5.85 | % |   |           | 

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Financial Information

Centex Corporation and Subsidiaries

|                                                                 |  |  |    | 
|---------------------------------------------------------------- |  |  | -- | 
|Consolidated Revenues and Operating Earnings by Line of Business |  |  | 52 | 
|                                                                
|Statements of Consolidated Earnings                              |  |  | 53 | 
|                                                                
|Consolidated Balance Sheets with Consolidating Details           |  |  | 54 | 
|                                                                
|Statements of Consolidated Cash Flows with Consolidating Details |  |  | 56 | 
|                                                                
|Statements of Consolidated Stockholders Equity                  |  |  | 58 | 
|                                                                
|Notes to Consolidated Financial Statements                       |  |  | 60 | 
|                                                                
|Report of Independent Auditors                                   |  |  | 85 | 
|                                                                
|Quarterly Results                                                |  |  | 86 | 

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

|                   |                                            |                              |           |           |         |   |           |                               |         |      |           |           |         |   |           |           |         |   |           |           |         | 
|------------------ | ------------------------------------------ | ---------------------------- | --------- | --------- | ------- | - | --------- | ----------------------------- | ------- | ---- | --------- | --------- | ------- | - | --------- | --------- | ------- | - | --------- | --------- | ------- | 
|                   |                                            |                              |           |           |         |   |           | For the Years Ended March 31, |         |      |           |           |        
|                   |                                            |                              |           |           |        
|                   |                                            |                              |           | 2002      |         |   | 2001      |                               |         | 2000 |           |           | 1999    |   |           | 1998      |        
|                   |                                            |                              |           |           |         |   |           |                               |         |      |           |           |         |   |           |           |        
|Revenues           |                                            |                              |           |           |         |   |           |                               |         |      |           |           |         |   |           |           |         |   |           |          
|                   | Home Building                              |                              | $         | 4,984,817 |         |   | $         | 4,356,172                     |         |      | $         | 3,686,844 |         |   | $         | 2,819,442 |         |   | $         | 2,312,045 |        
|                   |                                            |                              | 64        | %         |         |   | 65        | %                             |         |      | 61        | %         |         |   | 54        | %         |         |   | 57        | %        
|                   | Financial Services                         |                              |           | 699,760   |         |   |           | 463,646                       |         |      |           | 430,611   |         |   |           | 436,299   |         |   |           | 246,278   |        
|                   |                                            |                              | 9         | %         |         |   | 7         | %                             |         |      | 7         | %         |         |   | 8         | %         |         |   | 6         | %        
|                   | Construction Products                      |                              |           | 471,083   |         |   |           | 441,127                       |         |      |           | 470,465   |         |   |           | 381,899   |         |   |           | 344,264   |        
|                   |                                            |                              | 6         | %         |         |   | 7         | %                             |         |      | 8         | %         |         |   | 7         | %         |         |   | 8         | %        
|                   | Construction Services                      |                              |           | 1,296,024 |         |   |           | 1,290,382                     |         |      |           | 1,205,762 |         |   |           | 1,350,776 |         |   |           | 953,781   |        
|                   |                                            |                              | 17        | %         |         |   | 19        | %                             |         |      | 20        | %         |         |   | 26        | %         |         |   | 24        | %        
|                   | Investment Real Estate                     |                              |           | 72,416    |         |   |           | 33,042                        |         |      |           | 30,928    |         |   |           | 33,694    |         |   |           | 25,403    |        
|                   |                                            |                              | 1         | %         |         |   |          | %                             |         |      | 1         | %         |         |   | 1         | %         |         |   | 1         | %        
|                   | Other                                      |                              |           | 224,330   |         |   |           | 126,366                       |         |      |           | 183,526   |         |   |           | 178,556   |         |   |           | 140,621   |        
|                   |                                            |                              | 3         | %         |         |   | 2         | %                             |         |      | 3         | %         |         |   | 4         | %         |         |   | 4         | %        
|                   |                                            |                              |           |           |         |   |           |                               |         |      |           |           |         |   |          
|                   |                                            | $                            | 7,748,430 |           |         | $ | 6,710,735 |                               |         | $    | 6,008,136 |           |         | $ | 5,200,666 |           |         | $ | 4,022,392 |          
|                   |                                            |                              |           |           |         |   |           |                               |         |      |           |           |         |   |          
|                   |                                            |                              | 100       | %         |         |   | 100       | %                             |         |      | 100       | %         |         |   | 100       | %         |         |   | 100       | %        
|Operating Earnings |                                            |                              |           |           |         |   |           |                               |         |      |           |           |         |   |           |           |         |   |           |          
|                   | Home Building                              |                              | $         | 527,462   |         |   | $         | 425,450                       |         |      | $         | 323,220   |         |   | $         | 242,223   |         |   | $         | 170,531   |        
|                   |                                            |                              | 66        | %         |         |   | 70        | %                             |         |      | 56        | %         |         |   | 49        | %         |         |   | 52        | %        
|                   | Financial Services                         |                              |           | 114,733   |         |   |           | 19,667                        |         |      |           | 32,474    |         |   |           | 92,309    |         |   |           | 31,371    |        
|                   |                                            |                              | 14        | %         |         |   | 3         | %                             |         |      | 6         | %         |         |   | 19        | %         |         |   | 9         | %        
|                   | Construction Products                      |                              |           | 75,868    |         |   |           | 99,441                        |         |      |           | 168,611   |         |   |           | 120,310   |         |   |           | 88,333    |        
|                   |                                            |                              | 9         | %         |         |   | 17        | %                             |         |      | 29        | %         |         |   | 24        | %         |         |   | 27        | %        
|                   | Construction Services                      |                              |           | 36,225    |         |   |           | 30,886                        |         |      |           | 23,471    |         |   |           | 15,209    |         |   |           | 7,152     |        
|                   |                                            |                              | 5         | %         |         |   | 5         | %                             |         |      | 4         | %         |         |   | 3         | %         |         |   | 2         | %        
|                   | Investment Real Estate                     |                              |           | 48,068    |         |   |           | 50,908                        |         |      |           | 30,122    |         |   |           | 29,420    |         |   |           | 28,231    |        
|                   |                                            |                              | 6         | %         |         |   | 8         | %                             |         |      | 5         | %         |         |   | 6         | %         |         |   | 9         | %        
|                   | Other                                      |                              |           | 3,140     |         |   |           | (21,613                       | )       |      |           | 2,580     |         |   |           | (5,371    | )       |   |           | 1,120     |        
|                   |                                            |                              |          | %         |         |   | (3        | %)                            |         |      |          | %         |         |   | (1        | %)        |         |   | 1         | %        
|                   |                                            |                              |           |           |         |   |           |                               |         |      |           |           |         |   |          
|                   |                                            | Operating Earnings(1)        |           |           | 805,496 |   |           |                               | 604,739 |      |           |           | 580,478 |   |           |           | 494,100 |   |           |           | 326,738 | 
|                   |                                            |                              | 100       | %         |         |   | 100       | %                             |         |      | 100       | %         |         |   | 100       | %         |         |   | 100       | %        
|                   | Corporate General and Administrative       |                              |           | 50,189    |         |   |           | 36,924                        |         |      |           | 33,015    |         |   |           | 28,104    |         |   |           | 21,261    |        
|                   | Interest                                   |                              |           | 115,766   |         |   |           | 99,069                        |         |      |           | 66,844    |         |   |           | 41,581    |         |   |           | 33,256    |        
|                   | Minority Interest in Construction
Products |                              |           | 20,776    |         |   |           | 32,415                        |         |      |           | 63,758    |         |   |           | 51,121    |         |   |           | 40,587    |        
|                   |                                            |                              |           |           |         |   |           |                               |         |      |           |           |         |   |          
|                   |                                            | Earnings Before Income Taxes |           | $         | 618,765 |   |           | $                             | 436,331 |      |           | $         | 416,861 |   |           | $         | 373,294 |   |           | $         | 231,634 | 
|                   |                                            |                              |           |           |         |   |           |                               |         |      |           |           |         |   |          

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



| | (1) |  | Operating Earnings excludes corporate general and administrative
expenses and non-financial services interest expense.
| | --- |  | ----------------------------------------------------------------------------------------------------------------------

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

|                           |                                      |                                            |           |                               |           |   |           |            |           |      |           |            |           | 
|-------------------------- | ------------------------------------ | ------------------------------------------ | --------- | ----------------------------- | --------- | - | --------- | ---------- | --------- | ---- | --------- | ---------- | --------- | 
|                           |                                      |                                            |           | For the Years Ended March 31, |          
|                           |                                      |                                            |           |                               |          
|                           |                                      |                                            |           | 2002                          |           |   | 2001      |            |           | 2000 |          
|                           |                                      |                                            |           |                               |           |   |           |            |           |      |          
|Revenues                   |                                      |                                            |           |                               |           |   |           |            |           |      |           |           
|                           | Home Building                        |                                            | $         | 4,984,817                     |           |   | $         | 4,356,172  |           |      | $         | 3,686,844  |          
|                           | Financial Services                   |                                            |           | 699,760                       |           |   |           | 463,646    |           |      |           | 430,611    |          
|                           | Construction Products                |                                            |           | 471,083                       |           |   |           | 441,127    |           |      |           | 470,465    |          
|                           | Construction Services                |                                            |           | 1,296,024                     |           |   |           | 1,290,382  |           |      |           | 1,205,762  |          
|                           | Investment Real Estate               |                                            |           | 72,416                        |           |   |           | 33,042     |           |      |           | 30,928     |          
|                           | Other                                |                                            |           | 224,330                       |           |   |           | 126,366    |           |      |           | 183,526    |          
|                           |                                      |                                            |           |                               |           |   |           |            |          
|                           |                                      |                                            | 7,748,430 |                               |           |   | 6,710,735 |            |           |      | 6,008,136 |           
|                           |                                      |                                            |           |                               |           |   |           |            |          
|Costs and Expenses         |                                      |                                            |           |                               |           |   |           |            |           |      |           |           
|                           | Home Building                        |                                            |           | 4,457,355                     |           |   |           | 3,930,722  |           |      |           | 3,363,624  |          
|                           | Financial Services                   |                                            |           | 585,027                       |           |   |           | 443,979    |           |      |           | 398,137    |          
|                           | Construction Products                |                                            |           | 395,215                       |           |   |           | 341,686    |           |      |           | 301,854    |          
|                           | Construction Services                |                                            |           | 1,259,799                     |           |   |           | 1,259,496  |           |      |           | 1,182,291  |          
|                           | Investment Real Estate               |                                            |           | 24,348                        |           |   |           | (17,866    | )         |      |           | 806        |          
|                           | Other                                |                                            |           | 221,190                       |           |   |           | 147,979    |           |      |           | 179,932    |          
|                           | Corporate General and Administrative |                                            |           | 50,189                        |           |   |           | 36,924     |           |      |           | 33,015     |          
|                           | Interest                             |                                            |           | 115,766                       |           |   |           | 99,069     |           |      |           | 66,844     |          
|                           | Minority Interest                    |                                            |           | 20,776                        |           |   |           | 32,415     |           |      |           | 64,772     |          
|                           |                                      |                                            |           |                               |           |   |           |            |          
|                           |                                      |                                            | 7,129,665 |                               |           |   | 6,274,404 |            |           |      | 5,591,275 |           
|                           |                                      |                                            |           |                               |           |   |           |            |          
|Earnings Before Income Tax |                                      |                                            | 618,765   |                               |           |   | 436,331   |            |           |      | 416,861   |           
|                           | Income Taxes                         |                                            |           | 236,539                       |           |   |           | 154,354    |           |      |           | 159,729    |          
|                           |                                      |                                            |           |                               |           |   |           |            |          
|Net Earnings               |                                      | $                                          | 382,226   |                               |           | $ | 281,977   |            |           | $    | 257,132   |           
|                           |                                      |                                            |           |                               |           |   |           |            |          
|Earnings Per Share         |                                      |                                            |           |                               |           |   |           |            |           |      |           |           
|                           | Basic                                |                                            | $         | 6.31                          |           |   | $         | 4.77       |           |      | $         | 4.34       |          
|                           |                                      |                                            |           |                               |           |   |           |            |          
|                           | Diluted                              |                                            | $         | 6.11                          |           |   | $         | 4.65       |           |      | $         | 4.22       |          
|                           |                                      |                                            |           |                               |           |   |           |            |          
|Average Shares Outstanding |                                      |                                            |           |                               |           |   |           |            |           |      |           |           
|                           | Basic                                |                                            |           | 60,560,788                    |           |   |           | 59,095,403 |           |      |           | 59,308,158 |          
|                           | Dilutive Securities:                 |                                            |           |                               |           |   |           |            |           |      |           |            |          
|                           |                                      | Options                                    |           |                               | 1,554,501 |   |           |            | 1,165,482 |      |           |            | 1,220,822 | 
|                           |                                      | Convertible Debenture and Restricted Stock |           |                               | 413,858   |   |           |            | 400,000   |      |           |            | 400,000   | 
|                           |                                      |                                            |           |                               |           |   |           |            |          
|                           | Diluted                              |                                            |           | 62,529,147                    |           |   |           | 60,660,885 |           |      |           | 60,928,980 |          
|                           |                                      |                                            |           |                               |           |   |           |            |          

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 |          
|                                                |                                          |                                                                                                           |           |                                     |          
|                                                |                                          |                                                                                                           |           | March 31,                           |          
|                                                |                                          |                                                                                                           |           |                                     |          
|                                                |                                          |                                                                                                           |           | 2002                                |           |   | 2001      |          
|                                                |                                          |                                                                                                           |           |                                     |           |   |           |          
|Assets                                          |                                          |                                                                                                           |           |                                     |           |   |           |          
|                                                | Cash and Cash Equivalents                |                                                                                                           | $         | 219,716                             |           |   | $         | 57,752    |          
|                                                | Restricted Cash                          |                                                                                                           |           | 106,270                             |           |   |           | 57,428    |          
|                                                | Receivables                             |                                                                                                           |           |                                     |           |   |           |           |          
|                                                |                                          | Residential Mortgage Loans Held for Investment                                                            |           |                                     | 3,254,017 |   |           |           | 1,771,831 |  
|                                                |                                          | Residential Mortgage Loans Held for Sale                                                                  |           |                                     | 241,793   |   |           |           | 224,915   |  
|                                                |                                          | Construction Contracts                                                                                    |           |                                     | 221,705   |   |           |           | 212,904   |  
|                                                |                                          | Trade, including Notes of $30,908 and $67,085                                                             |           |                                     | 345,311   |   |           |           | 393,165   |  
|                                                | Inventories                             |                                                                                                           |           |                                     |           |   |           |           |          
|                                                |                                          | Housing Projects                                                                                          |           |                                     | 2,513,168 |   |           |           | 2,047,619 |  
|                                                |                                          | Land Held for Development and Sale                                                                        |           |                                     | 85,997    |   |           |           | 72,610    |  
|                                                |                                          | Construction Products                                                                                     |           |                                     | 54,220    |   |           |           | 56,008    |  
|                                                |                                          | Other                                                                                                     |           |                                     | 51,059    |   |           |           | 26,058    |  
|                                                | Investments                             |                                                                                                           |           |                                     |           |   |           |           |          
|                                                |                                          | Centex Development Company, L.P.                                                                          |           |                                     | 269,178   |   |           |           | 210,807   |  
|                                                |                                          | Joint Ventures and Other                                                                                  |           |                                     | 94,609    |   |           |           | 72,035    |  
|                                                |                                          | Unconsolidated Subsidiaries                                                                               |           |                                     |          |   |           |           |          |  
|                                                | Property and Equipment, net              |                                                                                                           |           | 720,285                             |           |   |           | 729,099   |          
|                                                | Other Assets                            |                                                                                                           |           |                                     |           |   |           |           |          
|                                                |                                          | Deferred Income Taxes                                                                                     |           |                                     | 76,167    |   |           |           | 58,454    |  
|                                                |                                          | Goodwill                                                                                                  |           |                                     | 349,712   |   |           |           | 310,738   |  
|                                                |                                          | Mortgage Securitization Residual Interest                                                                 |           |                                     | 125,272   |   |           |           | 146,394   |  
|                                                |                                          | Deferred Charges and Other                                                                                |           |                                     | 256,976   |   |           |           | 201,226   |  
|                                                |                                          |                                                                                                           |           |                                     |           |  
|                                                |                                          | $                                                                                                         | 8,985,455 |                                     |           | $ | 6,649,043 |          
|                                                |                                          |                                                                                                           |           |                                     |           |  
|Liabilities and Stockholders Equity            |                                          |                                                                                                           |           |                                     |           |   |           |          
|                                                | Accounts Payable and Accrued Liabilities |                                                                                                           | $         | 1,438,613                           |           |   | $         | 1,271,464 |          
|                                                | Debt                                    |                                                                                                           |           |                                     |           |   |           |           |          
|                                                |                                          | Non-Financial Services                                                                                    |           |                                     | 1,791,752 |   |           |           | 1,464,993 |  
|                                                |                                          | Financial Services                                                                                        |           |                                     | 3,485,027 |   |           |           | 2,054,898 |  
|                                                | Payables to Affiliates                   |                                                                                                           |           |                                    |           |   |           |          |          
|                                                | Minority Stockholders Interest          |                                                                                                           |           | 153,290                             |           |   |           | 143,624   |          
|                                                | Stockholders Equity                    |                                                                                                           |           |                                     |           |   |           |           |          
|                                                |                                          | Preferred Stock, Authorized 5,000,000 Shares, None Issued                                                 |           |                                     |          |   |           |           |          |  
|                                                |                                          | Common Stock, $.25 Par Value; Authorized 100,000,000 Shares;
Outstanding 61,171,149 and 59,929,344 Shares |           |                                     | 15,348    |   |           |           | 14,982    |  
|                                                |                                          | Capital in Excess of Par Value                                                                            |           |                                     | 72,446    |   |           |           | 25,779    |  
|                                                |                                          | Unamortized Value of Restricted Stock                                                                     |           |                                     | (2,408    | ) |           |           |          |  
|                                                |                                          | Retained Earnings                                                                                         |           |                                     | 2,050,902 |   |           |           | 1,678,400 |  
|                                                |                                          | Treasury Stock, at cost; 221,854 and 0 Shares                                                             |           |                                     | (6,559    | ) |           |           |          |  
|                                                |                                          | Accumulated Other Comprehensive Loss                                                                      |           |                                     | (12,956   | ) |           |           | (5,097    | )
|                                                |                                          |                                                                                                           |           |                                     |           |  
|                                                | Total Stockholders Equity               |                                                                                                           |           | 2,116,773                           |           |   |           | 1,714,064 |          
|                                                |                                          |                                                                                                           |           |                                     |           |  
|                                                |                                          | $                                                                                                         | 8,985,455 |                                     |           | $ | 6,649,043 |          
|                                                |                                          |                                                                                                           |           |                                     |           |  
|See Notes to Consolidated Financial Statements. |                                          |                                                                                                           |           |                                     |           |   |           |          

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

|                   |           |                    |   |           |   |      |           |   |   |          
|------------------ | --------- | ------------------ | - | --------- | - | ---- | --------- | - | - | ---------
|Centex Corporation |           | Financial Services
|                   |           |                   
|March 31,          |           | March 31,         
|                   |           |                   
|2002               |           | 2001               |   | 2002      |   | 2001
|                   |           |                    |   |           |   |     
|                   |           |                    |   |           |   |      |           |   |  
|$                  | 192,591   |                    | $ | 45,987    |   | $    | 27,125    |   | $ | 11,765   
|                   | 4,760     |                    |   | 5,442     |   |      | 101,510   |   |   | 51,986   
|                   |           |                    |   |           |   |      |           |   |  
|                   |          |                    |   |          |   |      | 3,254,017 |   |   | 1,771,831
|                   |          |                    |   |          |   |      | 241,793   |   |   | 224,915  
|                   | 221,705   |                    |   | 212,904   |   |      |          |   |   |         
|                   | 197,613   |                    |   | 273,912   |   |      | 147,698   |   |   | 119,253  
|                   |           |                    |   |           |   |      |           |   |  
|                   | 2,513,168 |                    |   | 2,047,619 |   |      |          |   |   |         
|                   | 85,997    |                    |   | 72,610    |   |      |          |   |   |         
|                   | 54,220    |                    |   | 56,008    |   |      |          |   |   |         
|                   | 22,186    |                    |   | 17,601    |   |      | 28,873    |   |   | 8,457    
|                   |           |                    |   |           |   |      |           |   |  
|                   | 269,178   |                    |   | 210,807   |   |      |          |   |   |         
|                   | 94,609    |                    |   | 72,035    |   |      |          |   |   |         
|                   | 498,117   |                    |   | 314,868   |   |      |          |   |   |         
|                   | 672,165   |                    |   | 673,846   |   |      | 48,120    |   |   | 55,253   
|                   |           |                    |   |           |   |      |           |   |  
|                   | (3,456    | )                  |   | 28,176    |   |      | 79,623    |   |   | 30,278   
|                   | 332,897   |                    |   | 294,136   |   |      | 16,815    |   |   | 16,602   
|                   |          |                    |   |          |   |      | 125,272   |   |   | 146,394  
|                   | 179,810   |                    |   | 147,812   |   |      | 77,166    |   |   | 53,414   
|                   |           |                    |   |           |   |     
|$                  | 5,335,560 |                    | $ | 4,473,763 |   | $    | 4,148,012 |   | $ | 2,490,148
|                   |           |                    |   |           |   |     
|                   |           |                    |   |           |   |      |           |   |  
|$                  | 1,275,720 |                    | $ | 1,153,215 |   | $    | 162,893   |   | $ | 118,249  
|                   |           |                    |   |           |   |      |           |   |  
|                   | 1,791,752 |                    |   | 1,464,993 |   |      |          |   |   |         
|                   |          |                    |   |          |   |      | 3,485,027 |   |   | 2,054,898
|                   |          |                    |   |          |   |      | 187,764   |   |   | 50,072   
|                   | 151,315   |                    |   | 141,491   |   |      | 1,975     |   |   | 2,133    
|                   |           |                    |   |           |   |      |           |   |  
|                   |          |                    |   |          |   |      |          |   |   |         
|                   |           |                    |   |           |   |      |           |   |  
|                   | 15,348    |                    |   | 14,982    |   |      | 1         |   |   | 1        
|                   | 72,446    |                    |   | 25,779    |   |      | 202,671   |   |   | 200,467  
|                   | (2,408    | )                  |   |          |   |      |          |   |   |         
|                   | 2,050,902 |                    |   | 1,678,400 |   |      | 116,748   |   |   | 64,328   
|                   | (6,559    | )                  |   |          |   |      |          |   |   |         
|                   | (12,956   | )                  |   | (5,097    | ) |      | (9,067    | ) |   |         
|                   |           |                    |   |           |   |     
|                   | 2,116,773 |                    |   | 1,714,064 |   |      | 310,353   |   |   | 264,796  
|                   |           |                    |   |           |   |     
|$                  | 5,335,560 |                    | $ | 4,473,763 |   | $    | 4,148,012 |   | $ | 2,490,148
|                   |           |                    |   |           |   |     

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

55



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

|                                                     |                                                                                            |                                                                           |            |                                     |          |   |            |            |          |      |          |            |         |  
|---------------------------------------------------- | ------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------- | ---------- | ----------------------------------- | -------- | - | ---------- | ---------- | -------- | ---- | -------- | ---------- | ------- | -
|                                                     |                                                                                            |                                                                           |            | Centex Corporation and Subsidiaries |         
|                                                     |                                                                                            |                                                                           |            |                                     |         
|                                                     |                                                                                            |                                                                           |            | For the Years Ended March 31,       |         
|                                                     |                                                                                            |                                                                           |            |                                     |         
|                                                     |                                                                                            |                                                                           |            | 2002                                |          |   | 2001       |            |          | 2000 |         
|                                                     |                                                                                            |                                                                           |            |                                     |          |   |            |            |          |      |         
|Cash Flows  Operating Activities                    |                                                                                            |                                                                           |            |                                     |          |   |            |            |          |      |          |           
|                                                     | Net Earnings                                                                               |                                                                           | $          | 382,226                             |          |   | $          | 281,977    |          |      | $        | 257,132    |        
|                                                     | Adjustments, net of Acquisitions
Depreciation, Depletion and Amortization                  |                                                                           |            | 90,659                              |          |   |            | 40,509     |          |      |          | 48,971     |        
|                                                     |                                                                                            | Provision for Losses on Residential Mortgage Loans Held for
Investment    |            |                                     | 17,415   |   |            |            | 4,453    |      |          |            |        |  
|                                                     |                                                                                            | Deferred Income Taxes (Benefit) Provision                                 |            |                                     | (16,307  | ) |            |            | 8,019    |      |          |            | (5,600  | )
|                                                     |                                                                                            | Equity in Earnings of Centex Development
Company, L.P. and Joint Ventures |            |                                     | (29,918  | ) |            |            | (4,958   | )    |          |            | (946    | )
|                                                     |                                                                                            | Minority Interest, Net of Taxes                                           |            |                                     | 13,818   |   |            |            | 20,881   |      |          |            | 41,564  |  
|                                                     | (Increase) Decrease in Restricted Cash                                                     |                                                                           |            | (44,618                             | )        |   |            | (53,718    | )        |      |          | 1,878      |        
|                                                     | Decrease (Increase) in Receivables                                                         |                                                                           |            | 39,561                              |          |   |            | (61,116    | )        |      |          | (21,236    | )      
|                                                     | Decrease in Residential Mortgage Loans Held for Sale                                       |                                                                           |            | 40,197                              |          |   |            | 184,782    |          |      |          | 984,687    |        
|                                                     | Increase in Housing Projects and Land Held for Development
and Sale Inventories            |                                                                           |            | (484,157                            | )        |   |            | (159,858   | )        |      |          | (324,014   | )      
|                                                     | Increase in Construction Products and Other Inventories                                    |                                                                           |            | (23,213                             | )        |   |            | (978       | )        |      |          | (19,416    | )      
|                                                     | Increase (Decrease) in Payables and Accruals                                               |                                                                           |            | 151,677                             |          |   |            | 119,291    |          |      |          | 96,609     |        
|                                                     | (Increase) Decrease in Other Assets, net                                                   |                                                                           |            | (52,202                             | )        |   |            | (151,490   | )        |      |          | (145,065   | )      
|                                                     | Increase in Payables to Affiliates                                                         |                                                                           |            |                                    |          |   |            |           |          |      |          |           |        
|                                                     | Other, net                                                                                 |                                                                           |            | (4,152                              | )        |   |            | (4,109     | )        |      |          | (52,933    | )      
|                                                     |                                                                                            |                                                                           |            |                                     |          |   |            |            |         
|                                                     |                                                                                            |                                                                           | 80,986     |                                     |          |   | 223,685    |            |          |      | 861,631  |           
|                                                     |                                                                                            |                                                                           |            |                                     |          |   |            |            |         
|Cash Flows  Investing Activities                    |                                                                                            |                                                                           |            |                                     |          |   |            |            |          |      |          |           
|                                                     | Increase in Residential Mortgage Loans Held for Investment                                 |                                                                           |            | (1,499,601                          | )        |   |            | (1,776,284 | )        |      |          |           |        
|                                                     | Increase in Investment and Advances to
Centex Development Company, L.P. and Joint Ventures |                                                                           |            | (37,327                             | )        |   |            | (153,846   | )        |      |          | (15,578    | )      
|                                                     | Acquisitions, net of Cash Acquired
Construction Products Operations                        |                                                                           |            |                                    |          |   |            | (342,200   | )        |      |          |           |        
|                                                     |                                                                                            | Home Building Operations                                                  |            |                                     |         |   |            |            | (100,097 | )    |          |            | (74,119 | )
|                                                     |                                                                                            | Other                                                                     |            |                                     | (39,411  | ) |            |            |         |      |          |            | (15,161 | )
|                                                     | Property and Equipment Additions, net                                                      |                                                                           |            | (60,380                             | )        |   |            | (52,442    | )        |      |          | (87,766    | )      
|                                                     |                                                                                            |                                                                           |            |                                     |          |   |            |            |         
|                                                     |                                                                                            |                                                                           | (1,636,719 | )                                   |          |   | (2,424,869 | )          |          |      | (192,624 | )         
|                                                     |                                                                                            |                                                                           |            |                                     |          |   |            |            |         
|Cash Flows  Financing Activities                    |                                                                                            |                                                                           |            |                                     |          |   |            |            |          |      |          |           
|                                                     | (Decrease) Increase in Short-Term Debt, net                                                |                                                                           |            | (213,308                            | )        |   |            | (83,205    | )        |      |          | (1,071,521 | )      
|                                                     | Non-Financial Services
Issuance of Long-Term Debt                                          |                                                                           |            | 1,007,699                           |          |   |            | 943,491    |          |      |          | 470,107    |        
|                                                     |                                                                                            | Repayment of Long-Term Debt                                               |            |                                     | (699,570 | ) |            |            | (329,658 | )    |          |            | (3,246  | )
|                                                     | Financial Services
Issuance of Long-Term Debt                                              |                                                                           |            | 2,053,238                           |          |   |            | 1,652,500  |          |      |          |           |        
|                                                     |                                                                                            | Repayment of Long-Term Debt                                               |            |                                     | (458,704 | ) |            |            | (76,632  | )    |          |            |        |  
|                                                     | Retirement of Common Stock                                                                 |                                                                           |            |                                    |          |   |            | (784       | )        |      |          | (44,301    | )      
|                                                     | Proceeds from Stock Option Exercises and
Restricted Stock Activity                         |                                                                           |            | 44,625                              |          |   |            | 26,843     |          |      |          | 19,613     |        
|                                                     | Purchase of Treasury Stock                                                                 |                                                                           |            | (6,559                              | )        |   |            |           |          |      |          |           |        
|                                                     | Dividends Paid                                                                             |                                                                           |            | (9,724                              | )        |   |            | (9,472     | )        |      |          | (9,486     | )      
|                                                     |                                                                                            |                                                                           |            |                                     |          |   |            |            |         
|                                                     |                                                                                            |                                                                           | 1,717,697  |                                     |          |   | 2,123,083  |            |          |      | (638,834 | )         
|                                                     |                                                                                            |                                                                           |            |                                     |          |   |            |            |         
|Net Increase (Decrease) in Cash and Cash Equivalents |                                                                                            |                                                                           | 161,964    |                                     |          |   | (78,101    | )          |          |      | 30,173   |           
|Cash and Cash Equivalents at Beginning of Year       |                                                                                            |                                                                           | 57,752     |                                     |          |   | 135,853    |            |          |      | 105,680  |           
|                                                     |                                                                                            |                                                                           |            |                                     |          |   |            |            |         
|Cash and Cash Equivalents at End of Year             |                                                                                            | $                                                                         | 219,716    |                                     |          | $ | 57,752     |            |          | $    | 135,853  |           
|                                                     |                                                                                            |                                                                           |            |                                     |          |   |            |            |         

See Notes to Consolidated Financial
Statements.

56



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##### Table of Contents



Centex Corporation and Subsidiaries
Statements of Consolidated Cash Flows with Consolidating Details

(Dollars in thousands)

| |                           |           |  |                           |   |          |      |  |   |          |   |  |      |            |   |      |   |            |   |  |   |         
| | ------------------------- | --------- |  | ------------------------- | - | -------- | ---- |  | - | -------- | - |  | ---- | ---------- | - | ---- | - | ---------- | - |  | - | --------
| | Centex Corporation        |           |  | Financial Services        |  
| |                           |           |  |                           |  
| | For Years Ended March 31, |           |  | For Years Ended March 31, |  
| |                           |           |  |                           |  
| | 2002                      |           |  | 2001                      |   |          | 2000 |  |   | 2002     |   |  | 2001 |            |   | 2000 |  
| |                           |           |  |                           |   |          |      |  |   |          |   |  |      |            |   |      |  
|
| | $                         | 301,714   |  |                           | $ | 270,112  |      |  | $ | 237,816  |   |  | $    | 80,512     |   |      | $ | 11,865     |   |  | $ | 19,316  
|
| |                           | 74,816    |  |                           |   | 25,220   |      |  |   | 34,886   |   |  |      | 15,843     |   |      |   | 15,289     |   |  |   | 14,085  
|
| |                           |          |  |                           |   |         |      |  |   |         |   |  |      | 17,415     |   |      |   | 4,453      |   |  |   |        
| |                           | 24,986    |  |                           |   | 11,877   |      |  |   | 7,922    |   |  |      | (41,293    | ) |      |   | (3,858     | ) |  |   | (13,522 
|
| |                           | (29,918)  |  |                           |   | (4,958   | )    |  |   | (946     | ) |  |      |           |   |      |   |           |   |  |   |        
| |                           | 13,818    |  |                           |   | 20,881   |      |  |   | 41,564   |   |  |      |           |   |      |   |           |   |  |   |        
| |                           | 682       |  |                           |   | (1,732   | )    |  |   | 1,878    |   |  |      | (45,300    | ) |      |   | (51,986    | ) |  |   |        
| |                           | 67,482    |  |                           |   | (7,002   | )    |  |   | (13,128  | ) |  |      | (27,921    | ) |      |   | (54,114    | ) |  |   | (8,108  
| |                           |          |  |                           |   |         |      |  |   |         |   |  |      | 40,197     |   |      |   | 184,782    |   |  |   | 984,687 
|
| |                           | (484,157) |  |                           |   | (159,858 | )    |  |   | (324,014 | ) |  |      |           |   |      |   |           |   |  |   |        
| |                           | (2,797)   |  |                           |   | (659     | )    |  |   | (11,278  | ) |  |      | (20,416    | ) |      |   | (319       | ) |  |   | (8,138  
| |                           | 120,709   |  |                           |   | 82,972   |      |  |   | 110,432  |   |  |      | 30,968     |   |      |   | 36,319     |   |  |   | (13,823 
| |                           | (52,341)  |  |                           |   | (119,614 | )    |  |   | (67,079  | ) |  |      | 139        |   |      |   | (31,876    | ) |  |   | (77,986 
| |                           | (135,692) |  |                           |   | 3,546    |      |  |   | 48,492   |   |  |      | 135,692    |   |      |   | (3,546     | ) |  |   | (48,492 
| |                           | (3,994)   |  |                           |   | (4,420   | )    |  |   | (52,901  | ) |  |      | (158       | ) |      |   | 311        |   |  |   | (32     
| |                           |           |  |                           |   |          |      |  |   |          |   |  |      |            |   |      |  
| |                           | (104,692) |  |                           |   | 116,365  |      |  |   | 13,644   |   |  |      | 185,678    |   |      |   | 107,320    |   |  |   | 847,987 
| |                           |           |  |                           |   |          |      |  |   |          |   |  |      |            |   |      |  
|
| |                           |          |  |                           |   |         |      |  |   |         |   |  |      | (1,499,601 | ) |      |   | (1,776,284 | ) |  |   |        
|
| |                           | (37,327)  |  |                           |   | (153,846 | )    |  |   | (15,578  | ) |  |      |           |   |      |   |           |   |  |   |        
| |                           |          |  |                           |   | (342,200 | )    |  |   |         |   |  |      |           |   |      |   |           |   |  |   |        
| |                           |          |  |                           |   | (100,097 | )    |  |   | (74,119  | ) |  |      |           |   |      |   |           |   |  |   |        
| |                           | (38,904)  |  |                           |   |         |      |  |   | (9,349   | ) |  |      | (507       | ) |      |   |           |   |  |   | (5,812  
| |                           | (53,494)  |  |                           |   | (27,448  | )    |  |   | (65,848  | ) |  |      | (6,886     | ) |      |   | (24,994    | ) |  |   | (21,918 
| |                           |           |  |                           |   |          |      |  |   |          |   |  |      |            |   |      |  
| |                           | (129,725) |  |                           |   | (623,591 | )    |  |   | (164,894 | ) |  |      | (1,506,994 | ) |      |   | (1,801,278 | ) |  |   | (27,730 
| |                           |           |  |                           |   |          |      |  |   |          |   |  |      |            |   |      |  
|
| |                           | 18,630    |  |                           |   | (146,908 | )    |  |   | (163,904 | ) |  |      | (231,938   | ) |      |   | 63,703     |   |  |   | (907,617
| |                           | 1,007,699 |  |                           |   | 943,491  |      |  |   | 470,107  |   |  |      |           |   |      |   |           |   |  |   |        
| |                           | (699,570) |  |                           |   | (329,658 | )    |  |   | (3,246   | ) |  |      |           |   |      |   |           |   |  |   |        
| |                           |          |  |                           |   |         |      |  |   |         |   |  |      | 2,053,238  |   |      |   | 1,652,500  |   |  |   |        
| |                           |          |  |                           |   |         |      |  |   |         |   |  |      | (458,704   | ) |      |   | (76,632    | ) |  |   |        
| |                           |          |  |                           |   | (784     | )    |  |   | (44,301  | ) |  |      |           |   |      |   |           |   |  |   |        
| |                           | 42,545    |  |                           |   | (23,157  | )    |  |   | (54,910  | ) |  |      | 2,080      |   |      |   | 50,000     |   |  |   | 74,523  
| |                           | (6,559)   |  |                           |   |         |      |  |   |         |   |  |      |           |   |      |   |           |   |  |   |        
| |                           | 18,276    |  |                           |   | (9,472   | )    |  |   | 514      |   |  |      | (28,000    | ) |      |   |           |   |  |   | (10,000 
| |                           |           |  |                           |   |          |      |  |   |          |   |  |      |            |   |      |  
| |                           | 381,021   |  |                           |   | 433,512  |      |  |   | 204,260  |   |  |      | 1,336,676  |   |      |   | 1,689,571  |   |  |   | (843,094
| |                           |           |  |                           |   |          |      |  |   |          |   |  |      |            |   |      |  
| |                           | 146,604   |  |                           |   | (73,714  | )    |  |   | 53,010   |   |  |      | 15,360     |   |      |   | (4,387     | ) |  |   | (22,837 
| |                           | 45,987    |  |                           |   | 119,701  |      |  |   | 66,691   |   |  |      | 11,765     |   |      |   | 16,152     |   |  |   | 38,989  
| |                           |           |  |                           |   |          |      |  |   |          |   |  |      |            |   |      |  
| | $                         | 192,591   |  |                           | $ | 45,987   |      |  | $ | 119,701  |   |  | $    | 27,125     |   |      | $ | 11,765     |   |  | $ | 16,152  
| |                           |           |  |                           |   |          |      |  |   |          |   |  |      |            |   |      |  

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

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

|                        |                                          |  |              |        |   |           |        |      |            |   |            |         |   |          |             |        |  
|----------------------- | ---------------------------------------- |  | ------------ | ------ | - | --------- | ------ | ---- | ---------- | - | ---------- | ------- | - | -------- | ----------- | ------ | -
|                        |                                          |  |              |        |   |           |        |      |            |   |            |         |   |          | Unamortized |       
|                        |                                          |  |              |        |   |           |        |      |            |   | Capital in |         |   | Value of |            
|                        |                                          |  | Common Stock |        |   | Excess of |        |      | Restricted |  
|                        |                                          |  | Shares       |        |   | Amount    |        |      | Par Value  |   |            | Stock   |  
|                        |                                          |  |              |        |   |           |        |      |            |   |            |         |  
|Balance, March 31, 1999 |                                          |  | 59,388       |        |   | $         | 14,847 |      |            | $ | 20,822     |         |   | $        |            |       
|                        | Exercise of Stock Options                |  |              | 1,250  |   |           |        | 313  |            |   |            | 19,300  |   |          |             |       |  
|                        | Retirement of Shares                     |  |              | (1,832 | ) |           |        | (458 | )          |   |            | (40,122 | ) |          |             |       |  
|                        | Cash Dividends                           |  |              |       |   |           |        |     |            |   |            |        |   |          |             |       |  
|                        | Net Earnings                             |  |              |       |   |           |        |     |            |   |            |        |   |          |             |       |  
|                        | Unrealized Loss on Investments           |  |              |       |   |           |        |     |            |   |            |        |   |          |             |       |  
|                        | Foreign Currency Translation Adjustments |  |              |       |   |           |        |     |            |   |            |        |   |          |             |       |  
|                        |                                          |  |              |        |   |           |        |      |            |   |            |         |   |          |             |       
|                        | Comprehensive Income                     |  |              |        |   |           |        |      |            |   |            |         |   |          |             |        |  
|                        |                                          |  |              |        |   |           |        |      |            |   |            |        
|Balance, March 31, 2000 |                                          |  | 58,806       |        |   |           | 14,702 |      |            |   |           |         |   |          |            |       
|                        | Exercise of Stock Options                |  |              | 1,158  |   |           |        | 289  |            |   |            | 26,554  |   |          |             |       |  
|                        | Retirement of Shares                     |  |              | (35    | ) |           |        | (9   | )          |   |            | (775    | ) |          |             |       |  
|                        | Cash Dividends                           |  |              |       |   |           |        |     |            |   |            |        |   |          |             |       |  
|                        | Net Earnings                             |  |              |       |   |           |        |     |            |   |            |        |   |          |             |       |  
|                        | Unrealized Gain on Investments           |  |              |       |   |           |        |     |            |   |            |        |   |          |             |       |  
|                        | Foreign Currency Translation Adjustments |  |              |       |   |           |        |     |            |   |            |        |   |          |             |       |  
|                        |                                          |  |              |        |   |           |        |      |            |   |            |         |   |          |             |       
|                        | Comprehensive Income                     |  |              |        |   |           |        |      |            |   |            |         |   |          |             |        |  
|                        |                                          |  |              |        |   |           |        |      |            |   |            |        
|Balance, March 31, 2001 |                                          |  | 59,929       |        |   |           | 14,982 |      |            |   | 25,779     |         |   |          |            |       
|                        |                                          |  |              |        |   |           |        |      |            |   |            |         |   |          |             |       
|                        | Issuance of Restricted Stock             |  |              | 78     |   |           |        | 19   |            |   |            | 3,133   |   |          |             | (3,152 | )
|                        | Amortization of Restricted Stock         |  |              |       |   |           |        |     |            |   |            |        |   |          |             | 744    |  
|                        | Exercise of Stock Options                |  |              | 1,386  |   |           |        | 347  |            |   |            | 43,534  |   |          |             |       |  
|                        | Cash Dividends                           |  |              |       |   |           |        |     |            |   |            |        |   |          |             |       |  
|                        | Purchases of Common Stock for Treasury   |  |              | (222   | ) |           |        |     |            |   |            |        |   |          |             |       |  
|                        | Net Earnings                             |  |              |       |   |           |        |     |            |   |            |        |   |          |             |       |  
|                        | Unrealized Loss on Hedging Instruments   |  |              |       |   |           |        |     |            |   |            |        |   |          |             |       |  
|                        | Foreign Currency Translation Adjustments |  |              |       |   |           |        |     |            |   |            |        |   |          |             |       |  
|                        | Unrealized Gain on Investments           |  |              |       |   |           |        |     |            |   |            |        |   |          |             |       |  
|                        |                                          |  |              |        |   |           |        |      |            |   |            |         |   |          |             |       
|                        | Comprehensive Income                     |  |              |        |   |           |        |      |            |   |            |         |   |          |             |        |  
|                        |                                          |  |              |        |   |           |        |      |            |   |            |        
|Balance, March 31, 2002 |                                          |  | 61,171       |        |   | $         | 15,348 |      |            | $ | 72,446     |         |   | $        | (2,408      | )     
|                        |                                          |  |              |        |   |           |        |      |            |   |            |        

See Notes to Consolidated Financial Statements.

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

|           |  |          |        |   |               |             |         |       |  |   |           |  
|---------- |  | -------- | ------ | - | ------------- | ----------- | ------- | ----- |  | - | --------- | -
|           |  |          |        |   |               | Accumulated |         |       |  |   |          
|           |  | Treasury |        |   | Other         |             |         |       |  |  
|Retained   |  | Stock    |        |   | Comprehensive |             |         |       |  |  
|Earnings   |  | at Cost  |        |   | Income (Loss) |             |         | Total | 
|           |  |          |        |   |               |             |         |       | 
|$1,161,970 |  | $        |       |   |               | $           |        |       |  | $ | 1,197,639 |  
|          |  |          |       |   |               |             |        |       |  |   | 19,613    |  
|(3,721)    |  |          |       |   |               |             |        |       |  |   | (44,301   | )
|(9,486)    |  |          |       |   |               |             |        |       |  |   | (9,486    | )
|257,132    |  |          |       |   |               |             |        |       |  |   | 257,132   |  
|          |  |          |       |   |               |             | (1,152  | )     |  |   | (1,152    | )
|          |  |          |       |   |               |             | (96     | )     |  |   | (96       | )
|           |  |          |        |   |               |             |         |       |  |   |          
|           |  |          |        |   |               |             |         |       |  |   | 255,884   |  
|           |  |          |        |   |               |             |         |       | 
|1,405,895  |  |          |       |   |               |             | (1,248  | )     |  |   | 1,419,349 |  
|          |  |          |       |   |               |             |        |       |  |   | 26,843    |  
|          |  |          |       |   |               |             |        |       |  |   | (784      | )
|(9,472)    |  |          |       |   |               |             |        |       |  |   | (9,472    | )
|281,977    |  |          |       |   |               |             |        |       |  |   | 281,977   |  
|          |  |          |       |   |               |             | 1,152   |       |  |   | 1,152     |  
|          |  |          |       |   |               |             | (5,001  | )     |  |   | (5,001    | )
|           |  |          |        |   |               |             |         |       |  |   |          
|           |  |          |        |   |               |             |         |       |  |   | 278,128   |  
|           |  |          |        |   |               |             |         |       | 
|1,678,400  |  |          |       |   |               |             | (5,097  | )     |  |   | 1,714,064 |  
|          
|          |  |          |       |   |               |             |        |       |  |   |          |  
|          |  |          |       |   |               |             |        |       |  |   | 744       |  
|          |  |          |       |   |               |             |        |       |  |   | 43,881    |  
|(9,724)    |  |          |       |   |               |             |        |       |  |   | (9,724    | )
|          |  |          | (6,559 | ) |               |             |        |       |  |   | (6,559    | )
|382,226    |  |          |       |   |               |             |        |       |  |   | 382,226   |  
|          |  |          |       |   |               |             | (11,033 | )     |  |   | (11,033   | )
|          |  |          |       |   |               |             | 2,622   |       |  |   | 2,622     |  
|          |  |          |       |   |               |             | 552     |       |  |   | 552       |  
|           |  |          |        |   |               |             |         |       |  |   |          
|           |  |          |        |   |               |             |         |       |  |   | 374,367   |  
|           |  |          |        |   |               |             |         |       | 
|$2,050,902 |  | $        | (6,559 | ) |               | $           | (12,956 | )     |  | $ | 2,116,773 |  
|           |  |          |        |   |               |             |         |       | 

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

(A) SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

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

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



| |  |  | Centex Corporation and Subsidiaries.This represents the
consolidation of Centex Corporation, Financial Services and all of
their consolidated subsidiaries. The effects of transactions
among related companies within the consolidated group have been
eliminated.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Centex Corporation.This information is presented as
supplemental information and represents the consolidation of all
subsidiaries other than those included in Financial Services,
which are presented on an equity basis of accounting.                           
|
| |  |  | Financial Services.This information is presented as
supplemental information and represents Centex Financial Services
and its subsidiaries.                                                                                                                        

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

Revenue Recognition

Revenues from Home Building projects and Investment Real Estate are
recognized when homes and properties are sold and title passes.

Revenues from the sale of mortgage loans, mortgage servicing rights and
loan origination fees are recognized when the related loan is sold and
delivered to a third-party purchaser.

Interest revenues on residential mortgage loans receivable are recognized
as revenue using the interest (actuarial) method. Revenue accruals are
generally suspended when the residential mortgage loan becomes contractually
delinquent for 90 days or more. The accrual is resumed when the residential
mortgage loan becomes less than 90 days contractually delinquent. At March 31,
2002 and 2001, residential mortgage loans, on which revenue was not being
accrued, were approximately $83.5 million and $28.0 million, respectively.

Long-term construction contract revenues are recognized on the
percentage-of-completion method based on the costs incurred relative to total
estimated costs. Full provision is made for any anticipated losses. Billings
for long-term construction contracts are rendered monthly, including the amount
of retainage withheld by the customer until contract completion. As a general
contractor, the Company withholds similar retainages from each subcontractor.
Retainages of $72.9 million included in construction

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contracts receivable and $76.1 million included in accounts payable at March
31, 2002 are generally receivable and payable within one year.

Claims related to long-term construction contracts are recognized as
revenue only after management has determined that the collection is probable
and the amount can be reliably estimated. Claims of $1.8 million, $0 and $3.7
million are included in revenues for the fiscal years ended March 31, 2002,
2001 and 2000 (fiscal 2002, fiscal 2001 and fiscal 2000), respectively.

Earnings Per Share

Basic earnings per share are computed based on the weighted-average number
of shares of common stock, par value $.25 per share (Common Stock),
outstanding. Diluted earnings per share are computed based upon the basic
weighted-average number of shares plus the dilution of the stock options and
the convertible debenture.

The computation of diluted earnings per share excludes anti-dilutive
options to purchase 1,700 shares of Common Stock at an average price of $46.07
for the year ended March 31, 2002. The computation of diluted earnings per
share excludes anti-dilutive options to purchase 3,312,000 shares of Common
Stock at an average price of $35.24 for the year ended March 31, 2001. The
computation of diluted earnings per share excludes anti-dilutive options to
purchase 3,843,000 shares of Common Stock at an average price of $37.25 for the
year ended March 31, 2000. All anti-dilutive options at March 31, 2002, have
an expiration date of July 2011.

Cash and Cash Equivalents

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

Restricted Cash

Restricted cash primarily represents cash in principal and interest
accounts pending remittance into the securitization trusts related to
securitizations by Centex Home Equity Company, L.L.C. (Home Equity).

Residential Mortgage Loans

Residential mortgage loans held for investment represent mortgage loans
originated by Home Equity, which have been securitized and recorded as secured
borrowings in the financial statements using the portfolio method. These
mortgage loans are stated at cost less an allowance for losses. Residential
mortgage loans held for sale represent mortgage loans originated by CTX
Mortgage Company, L.L.C. (CTX Mortgage), which will be sold to third parties and
recorded as sales. These mortgage loans are stated at the lower of cost or
market. Market is determined by forward sale commitments, current investor
yield requirements and current market conditions. Substantially all of the
mortgage loans are delivered to third-party purchasers and/or subjected to
securitization within three months after origination. These loans are subject
to hedge instruments during the time they are held in inventory. Substantially
all of the mortgage loans are pledged as collateral for secured financings.

The Company maintains an allowance for losses at an amount that it
believes is sufficient to provide for losses in its existing portfolio of
residential mortgage loans held for investment. The Company evaluates the
allowance on an aggregate basis considering, among other things, the
relationship of the

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allowance to residential mortgage loans held for investment and historical
credit losses. The allowance reflects managements judgment of the present
loss exposure at the end of the reporting period.

The Company establishes an allowance for losses when it believes the event
causing the loss has occurred by charging the provision for losses in the
Statements of Consolidated Earnings. When we determine that a residential
mortgage loan held for investment is uncollectible, it is charged to the
allowance for losses. Recoveries on losses previously charged to the allowance
are credited to the allowance at the time the recovery is collected.

Although the Company considers the allowance for losses on residential
mortgage loans held for investment reflected in the consolidated balance sheet
at March 31, 2002 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.

Notes Receivable

Notes receivable at March 31, 2002 are collectible primarily over 3 years
with $15.9 million being due within one year. The weighted-average interest
rate at March 31, 2002 was 4.35%.

Inventory, Capitalization and Segment Expenses

Housing projects and land held for development and sale are stated at the
lower of cost (including direct construction costs, capitalized interest and
real estate taxes) or fair value less cost to sell. The capitalized costs,
other than interest, are included in the Home Building and Investment Real
Estate costs and expenses in the Statement of Consolidated Earnings when
related revenues are recognized. Interest costs relieved from inventories are
included as interest expense. The Company reviews the recoverability of its
Home Building inventories on an individual project basis in accordance with the
provisions of Statement of Financial Accounting Standards No. 121, Accounting
for Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of (SFAS No. 121).

Construction Products inventories are stated at the lower of average cost
(including applicable material, labor and plant overhead) or market.

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

Investments

The Company maintains an investment in Centex Development Company, L.P.
and subsidiaries (the Partnership). The investment is not consolidated and
is accounted for on the equity method of accounting because the Company does
not control the Partnership. See Note (J) for additional information regarding
the Partnership.

The Company is a participant in certain joint ventures with interests
ranging from 20% to 50%. The investments in these joint ventures are carried
on the equity method in the consolidated financial statements, except for
Construction Products 50% joint venture interests in its cement operations in
Illinois and Texas. Construction Products has proportionately consolidated its
pro rata interest in the revenues, expenses, assets and liabilities of those
extractive industry ventures. The earnings or losses of the Companys other
joint ventures are not significant and are included in the appropriate business
segment.

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Property and Equipment, net

Property and equipment is carried at cost less accumulated depreciation.
Depreciation is recorded using the straight-line method over the estimated
useful lives of the assets. Depreciable lives for Buildings and Improvements
typically range from 7 to 40 years; depreciable lives for Machinery, Equipment
and Other typically range from 2 to 10 years; and depreciable lives for Plants
typically range from 20 to 30 years. Major renewals and improvements are
capitalized and depreciated. Repairs and maintenance are expensed as incurred.
Costs and accumulated depreciation applicable to assets retired or sold are
eliminated from the accounts and any resulting gains or losses are recognized
at such time. The Company monitors its property and equipment carrying values
for recoverability and, where appropriate, provides for write-downs to
estimated fair values.

Goodwill

Goodwill represents the excess of purchase price over net assets of
businesses acquired. In accordance with Statement of Financial Accounting
Standards No. 142, Goodwill and Other Intangible Assets (SFAS No. 142),
goodwill and certain identifiable intangible assets are no longer amortized
over their expected lives. Instead, these assets are tested for impairment
annually at the reporting unit level using a two step impairment assessment.
See further discussion of goodwill at Note (E).

Negative goodwill arose in conjunction with the combination of Centex Real
Estate Corporation with Vista Properties, Inc. (Vista) in the fiscal year
ended March 31, 1997. The Vista portfolio of properties was reduced to a
nominal book basis after recording certain deferred tax benefits related to
the combination. Negative goodwill was accreted to earnings as a reduction of
costs and expenses over the estimated period during which Vistas land was
developed and/or sold. During fiscal 2001, the Company disposed of virtually
all of the remaining Vista portfolio and negative goodwill was fully accreted.

Mortgage Securitization Residual Interest

Home Equity uses mortgage securitizations to finance its mortgage loan
portfolio. Securitizations entered into prior to March 31, 2000 were accounted
for as sales, and the resulting gains on such sales were reported in operating
results during the period in which the securitizations closed. Home Equity
changed the legal and economic structure of securitizations subsequent to March
31, 2000, causing securitizations after that date to be accounted for as
secured borrowings.

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

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

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

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Home Equity uses the following assumptions in monitoring the fair value of
the MSRI: cumulative credit losses of 3.75% to 4.50%; Constant Prepayment Rate
(CPR) for fixed rate loans of 19% to 21% per annum (life to date); a CPR of
29% to 31% per annum (life to date) for variable rate loans; and a discount
rate of 15% simple interest.

At March 31, 2002, the sensitivity of the current fair value of the MSRI
to an immediate 10 percent and 20 percent unfavorable change in assumptions is
presented in the table below. These sensitivities are based on assumptions
used to value our MSRI at March 31, 2002.

|                         |  |                                           |       |  |     |   |        | 
|------------------------ |  | ----------------------------------------- | ----- |  | --- | - | ------ | 
|                         |  | Impact on fair value of an adverse change |      
|                         |  |                                           |      
|Assumption               |  | 10%                                       |       |  | 20% |  
|                         |  |                                           |       |  |     |  
|Credit Losses            |  | $                                         | 5,334 |  |     | $ | 10,705 | 
|Constant Prepayment Rate |  | $                                         | 4,412 |  |     | $ | 8,120  | 
|Discount Rate            |  | $                                         | 4,682 |  |     | $ | 9,100  | 

These sensitivities are hypothetical and should not be considered to be
predictive of future performance. As the figures indicate, the change in fair
value based on a 10 percent variation in assumptions cannot necessarily be
extrapolated because the relationship of the change in assumption to the change
in fair value may not be linear. Also, in this table, the effect of a
variation in a particular assumption on the fair value of the residual cash
flow is calculated independently from any change in another assumption. In
reality, changes in one factor may contribute to changes in another (for
example, increases in market interest rates may result in lower prepayments),
which might magnify or counteract the sensitivities. Furthermore, the
estimated fair values as disclosed should not be considered indicative of
future earnings on these assets.

Deferred Charges and Other

Deferred charges and other are primarily composed of deferred home
security system installation costs, loan fees, securitization costs and other
financing costs, prepaid expenses, deposits and investments.

Advertising Costs

Advertising costs are expensed as incurred. The advertising costs for
fiscal 2002, 2001 and 2000 were $78.9 million, $67.0 million and $57.1 million,
respectively.

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 in Notes (F) and (N).

Statements of Consolidated Cash Flows  Supplemental Disclosures

Interest expense relating to the Financial Services segment is included in
its operating costs and expenses. Interest related to segments other than
Financial Services is shown as interest expense. During fiscal 2002, $60.9
million of interest costs were capitalized to qualifying assets, principally
within the Home Building segment, and $48.2 million of previously capitalized
interest was charged to interest expense. During fiscal 2001, $52.6 million of
interest costs were capitalized to qualifying assets, principally within

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the Home Building segment, and $46.6 million of previously capitalized interest
was charged to interest expense.

|                          |  |                               |          |   |      |   |         |      |  |   |         |  
|------------------------- |  | ----------------------------- | -------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                          |  | For the Years Ended March 31, |         
|                          |  |                               |         
|                          |  | 2002                          |          |   | 2001 |   |         | 2000 | 
|                          |  |                               |          |   |      |   |         |      | 
|Total Interest Incurred   |  | $                             | 287,628  |   |      | $ | 197,679 |      |  | $ | 128,520 |  
|Capitalized Interest, net |  |                               | (12,717  | ) |      |   | (6,038  | )    |  |   |        |  
|Less  Financial Services |  |                               | (159,145 | ) |      |   | (92,572 | )    |  |   | (61,676 | )
|                          |  |                               |          |   |      |   |         |      | 
|Interest Expense          |  | $                             | 115,766  |   |      | $ | 99,069  |      |  | $ | 66,844  |  
|                          |  |                               |          |   |      |   |         |      | 

Cash payments made for interest, excluding financial services, were $118.9
million, $100.5 million and $59.0 million for fiscal 2002, 2001 and 2000,
respectively. Net payments made for federal, state and foreign income taxes
during fiscal 2002, 2001 and 2000 were $199.4 million, $172.1 million and $98.9
million, respectively.

Statements of Financial Accounting Standards

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

Statement of Financial Accounting Standards No. 140, Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities
(SFAS No. 140), was issued in September 2000 to replace Statement of
Financial Accounting Standards No. 125 (SFAS No. 125). SFAS No. 140 revises
the standards for accounting for securitizations and other transfers of
financial assets and collateral and requires certain disclosures, but it
carries forward most of SFAS No. 125s provisions without reconsideration. The
implementation of SFAS No. 140 on April 1, 2001 did not have a material impact
on the Companys results of operations or financial position.

The Company adopted, effective April 1, 2001, Statement of Financial
Accounting Standards No. 141, Business Combinations (SFAS No. 141). This
statement had no material impact on the Company.

The Company has adopted, effective April 1, 2001, SFAS No. 142 that
provides that intangible assets, including goodwill, that are not subject to
amortization must be tested for impairment as of the beginning of the fiscal
year in which this statement is initially applied and annually thereafter at
the reporting unit level using a two-step impairment assessment. Impairment
testing must be performed more frequently if events or changes in circumstances
indicate that the asset might be impaired. See Note (E) for additional
information on the impact of SFAS No. 142 on the Companys results of
operations and financial position.

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, 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. Management
does not believe that adoption of this statement in fiscal 2003 will have a
material effect on the interim or annual financial statements. However, the
financial statement presentation will be modified in fiscal 2003 to report the
results of operations and financial position of certain Investment Real Estate
operations that either have been disposed of or classified as held for sale as
discontinued operations. As a result, beginning in fiscal 2003 the Company
will reclassify certain amounts in prior period financial statements to conform
to the new presentation requirements.

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Reclassifications

Certain prior year balances have been reclassified to conform to the
fiscal 2002 presentation.

(B) RESIDENTIAL MORTGAGE LOANS HELD FOR INVESTMENT

Residential mortgage loans held for investment consisted of the following:

|                                                                                       |  |           |           |   |      |   |           |  
|-------------------------------------------------------------------------------------- |  | --------- | --------- | - | ---- | - | --------- | -
|                                                                                       |  | March 31, |          
|                                                                                       |  |           |          
|                                                                                       |  | 2002      |           |   | 2001 |  
|                                                                                       |  |           |           |   |      |  
|Residential Mortgage Loans Held for Investment                                         |  | $         | 3,268,123 |   |      | $ | 1,774,645 |  
|Allowance for Losses on Residential Mortgage Loans
Held for Investment                 |  |           | (14,106   | ) |      |   | (2,814    | )
|                                                                                       |  |           |           |   |      |  
|Residential Mortgage Loans Receivable Held for Investment,
net of Allowance for Losses |  | $         | 3,254,017 |   |      | $ | 1,771,831 |  
|                                                                                       |  |           |           |   |      |  

At March 31, 2002, contractual maturities of residential mortgage loans
held for investment were as follows:

|                    |  |   |           | 
|------------------- |  | - | --------- | 
|2003                |  | $ | 35,949    | 
|2004                |  |   | 39,217    | 
|2005                |  |   | 42,486    | 
|2006                |  |   | 45,754    | 
|2007 and thereafter |  |   | 3,104,717 | 
|                    |  |   |          
|                    |  | $ | 3,268,123 | 
|                    |  |   |          

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

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

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

|                               |                                 |   |                               |        |   |      |       |        |  
|------------------------------ | ------------------------------- | - | ----------------------------- | ------ | - | ---- | ----- | ------ | -
|                               |                                 |   | For the Years Ended March 31, |       
|                               |                                 |   |                               |       
|                               |                                 |   | 2002                          |        |   | 2001 |      
|                               |                                 |   |                               |        |   |      |      
|Balance at Beginning of Period |                                 | $ | 2,814                         |        |   | $    |      |       
|                               | Provision for Losses            |   |                               | 17,415 |   |      |       | 4,453  |  
|                               | Recoveries on Loans Charged Off |   |                               | 259    |   |      |       | 11     |  
|                               | Losses Sustained                |   |                               | (6,382 | ) |      |       | (1,650 | )
|                               |                                 |   |                               |        |   |     
|Balance at End of Period       |                                 | $ | 14,106                        |        |   | $    | 2,814 |       
|                               |                                 |   |                               |        |   |     

Prior to April 1, 2000, residential mortgage loans were securitized as
sales and anticipated future credit losses were included in the securitization
transaction. As a result, no allowance for losses was necessary.

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(D) PROPERTY AND EQUIPMENT

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

|                                 |  |           |           |   |      |   |           |  
|-------------------------------- |  | --------- | --------- | - | ---- | - | --------- | -
|                                 |  | March 31, |          
|                                 |  |           |          
|                                 |  | 2002      |           |   | 2001 |  
|                                 |  |           |           |   |      |  
|Land, Buildings and Improvements |  | $         | 144,515   |   |      | $ | 85,039    |  
|Machinery, Equipment and Other   |  |           | 239,064   |   |      |   | 267,950   |  
|Plants                           |  |           | 701,514   |   |      |   | 688,873   |  
|                                 |  |           |           |   |      |  
|                                 |  |           | 1,085,093 |   |      |   | 1,041,862 |  
|Accumulated Depreciation         |  |           | (364,808  | ) |      |   | (312,763  | )
|                                 |  |           |           |   |      |  
|                                 |  | $         | 720,285   |   |      | $ | 729,099   |  
|                                 |  |           |           |   |      |  

(E) GOODWILL  ADOPTION OF STATEMENT 142

The Company adopted SFAS No. 142 effective April 1, 2001. SFAS No. 142
provides guidance on accounting for intangible assets and eliminates the
amortization of goodwill and certain identifiable intangible assets. Under the
provisions of SFAS No. 142, intangible assets, including goodwill, that are not
subject to amortization will be tested for impairment annually at the reporting
unit level using a two-step impairment assessment. Impairment testing must be
performed more frequently if events or changes in circumstances indicate that
the asset might be impaired. The Company tested for potential impairment, both
upon adoption of SFAS No. 142 and annually as of January 1, 2002, by
determining whether the carrying amount of a reporting unit exceeds its fair
value. The Company had no impairment of goodwill in fiscal 2002. Identifiable
intangible assets, other than goodwill, are immaterial. The changes in the
carrying amount of goodwill by segment for the year ended March 31, 2002 are as
follows:

|                                  |  |          |        |  |           |   |        |              |  |   |              |   |  |       |       |  |       |   |         |   |  |   |         |  
|--------------------------------- |  | -------- | ------ |  | --------- | - | ------ | ------------ |  | - | ------------ | - |  | ----- | ----- |  | ----- | - | ------- | - |  | - | ------- | -
|                                  |  | Home     |        |  | Financial |   |        | Construction |  |   | Construction |   |  |       |       |  |       |   |         |  
|                                  |  | Building |        |  | Services  |   |        | Products     |  |   | Services     |   |  | Other |       |  | Total |  
|                                  |  |          |        |  |           |   |        |              |  |   |              |   |  |       |       |  |       |  
|Balance as of March 31, 2001      |  | $        | 80,958 |  |           | $ | 16,602 |              |  | $ | 41,792       |   |  | $     | 1,007 |  |       | $ | 170,379 |   |  | $ | 310,738 |  
|Goodwill Acquired During Year     |  |          |       |  |           |   |       |              |  |   |             |   |  |       |      |  |       |   | 39,429  |   |  |   | 39,429  |  
|Adjustment to Purchase
Allocation |  |          | 3,193  |  |           |   |       |              |  |   |             |   |  |       |      |  |       |   |        |   |  |   | 3,193   |  
|Other                             |  |          |       |  |           |   | 213    |              |  |   | (704         | ) |  |       |      |  |       |   | (3,157  | ) |  |   | (3,648  | )
|                                  |  |          |        |  |           |   |        |              |  |   |              |   |  |       |       |  |       |  
|Balance as of March 31, 2002      |  | $        | 84,151 |  |           | $ | 16,815 |              |  | $ | 41,088       |   |  | $     | 1,007 |  |       | $ | 206,651 |   |  | $ | 349,712 |  
|                                  |  |          |        |  |           |   |        |              |  |   |              |   |  |       |       |  |       |  

The Company made several acquisitions during fiscal 2002 that resulted in
an increase to goodwill. However, Centex pro-forma financial information was
not presented as the impact of the acquisitions on the results of operations
was not significant.

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Net income and basic and diluted earnings per share excluding goodwill
amortization for the years ended March 31, 2001 and 2000 are as follows:

|                            |                        |   |                               |       |   |      |         |       |  
|--------------------------- | ---------------------- | - | ----------------------------- | ----- | - | ---- | ------- | ----- | -
|                            |                        |   | For the Years Ended March 31, |      
|                            |                        |   |                               |      
|                            |                        |   | 2001                          |       |   | 2000 |        
|                            |                        |   |                               |       |   |      |        
|Reported Net Earnings       |                        | $ | 281,977                       |       |   | $    | 257,132 |      
|Goodwill Amortization       |                        |   | 26,799                        |       |   |      | 14,159  |      
|Negative Goodwill Accretion |                        |   | (50,837                       | )     |   |      | (16,000 | )    
|                            |                        |   |                               |       |   |     
|Adjusted Net Earnings       |                        | $ | 257,939                       |       |   | $    | 255,291 |      
|                            |                        |   |                               |       |   |     
|Basic Earnings Per Share:   |                        |   |                               |       |   |      |         |      
|                            | Reported Net Earnings  |   | $                             | 4.77  |   |      | $       | 4.34  |  
|                            | Net Goodwill Accretion |   |                               | (0.41 | ) |      |         | (0.03 | )
|                            |                        |   |                               |       |   |     
|                            | Adjusted Net Earnings  |   | $                             | 4.36  |   |      | $       | 4.31  |  
|                            |                        |   |                               |       |   |     
|Diluted Earnings Per Share: |                        |   |                               |       |   |      |         |      
|                            | Reported Net Earnings  |   | $                             | 4.65  |   |      | $       | 4.22  |  
|                            | Net Goodwill Accretion |   |                               | (0.40 | ) |      |         | (0.03 | )
|                            |                        |   |                               |       |   |     
|                            | Adjusted Net Earnings  |   | $                             | 4.25  |   |      | $       | 4.19  |  
|                            |                        |   |                               |       |   |     

(F) INDEBTEDNESS

Short-term Debt

Balances of short-term debt were:

|                             |  |             |        |   |           |           |         |             |  |   |           |   |         |   |         | 
|---------------------------- |  | ----------- | ------ | - | --------- | --------- | ------- | ----------- |  | - | --------- | - | ------- | - | ------- | 
|                             |  |             |        |   |           | March 31, |         |             |  |   |          
|                             |  |             |       
|                             |  | 2002        |        |   | 2001      |          
|                             |  |             |        |   |           |          
|                             |  | Centex      |        |   | Financial |           |         | Centex      |  |   | Financial |  
|                             |  | Corporation |        |   | Services  |           |         | Corporation |  |   | Services  |  
|                             |  |             |        |   |           |           |         |             |  |   |           |  
|Banks                        |  | $           | 18,630 | * |           | $         | 92,109  |             |  | $ |          |   |         | $ | 192,380 | 
|Commercial Paper             |  |             |       |   |           |           |        |             |  |   |          |   |         |   |        | 
|Secured Liquidity Notes      |  |             |       |   |           |           | 102,583 |             |  |   |          |   |         |   | 117,950 | 
|Other Financial Institutions |  |             |       |   |           |           | 119,933 |             |  |   |          |   |         |   | 168,700 | 
|                             |  |             |        |   |           |           |         |             |  |   |           |  
|                             |  | $           | 18,630 |   |           | $         | 314,625 |             |  | $ |          |   |         | $ | 479,030 | 
|                             |  |             |        |   |           |           |         |             |  |   |           |  
|Consolidated Short-term Debt |  |             |        | $ | 333,255   |           |         |             |  |   |           | $ | 479,030 |   |         | 
|                             |  |             |        |   |           |           |         |             |  |   |           |   |         |  

*   Debt relates entirely to Construction Products.

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 the short-term borrowings during fiscal 2002 and 2001 were
3.6% and 6.9%, respectively. The weighted-average interest rates of balances
at fiscal year end 2002 and 2001 were 2.4% and 5.8%, respectively.

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Long-term Debt

Balances of long-term debt were:

|                        |                                                                                      |                                             |           |           |        |   |           |           |        | 
|----------------------- | ------------------------------------------------------------------------------------ | ------------------------------------------- | --------- | --------- | ------ | - | --------- | --------- | ------ | 
|                        |                                                                                      |                                             |           | March 31, |       
|                        |                                                                                      |                                             |           |           |       
|                        |                                                                                      |                                             |           | 2002      |        |   | 2001      |          
|                        |                                                                                      |                                             |           |           |        |   |           |          
|Non-Financial Services: |                                                                                      |                                             |           |           |        |   |           |          
|                        | Medium-Term Note Programs, 2.45% to 7.95%, due through 2007                          |                                             | $         | 418,000   |        |   | $         | 486,995   |       
|                        | Long-Term Notes, 6.40% to 9.75%, due through 2012                                    |                                             |           | 962,892   |        |   |           | 464,970   |       
|                        | Other Indebtedness, weighted-average 3.98% due through 2027                          |                                             |           | 192,753   |        |   |           | 313,658   |       
|                        | Subordinated Debt:                                                                   |                                             |           |           |        |   |           |           |       
|                        |                                                                                      | Subordinated Debentures, 7.38%, due in 2006 |           |           | 99,845 |   |           |           | 99,796 | 
|                        |                                                                                      | Subordinated Debentures, 8.75%, due in 2007 |           |           | 99,632 |   |           |           | 99,574 | 
|                        |                                                                                      |                                             |           |           |        |  
|                        |                                                                                      |                                             | 1,773,122 |           |        |   | 1,464,993 |          
|                        |                                                                                      |                                             |           |           |        |  
|Financial Services:     |                                                                                      |                                             |           |           |        |   |           |          
|                        | Home Equity Loans Asset-Backed Certificates, 2.91% to 8.48%,
due through 2033        |                                             |           | 3,120,402 |        |   |           | 1,548,368 |       
|                        | Harwood
Street Funding II, L.L.C. Variable Rate Subordinated Notes,
due through 2007 |                                             |           | 50,000    |        |   |           | 27,500    |       
|                        |                                                                                      |                                             |           |           |        |  
|                        |                                                                                      |                                             | 3,170,402 |           |        |   | 1,575,868 |          
|                        |                                                                                      |                                             |           |           |        |  
|Total                   |                                                                                      | $                                           | 4,943,524 |           |        | $ | 3,040,861 |          
|                        |                                                                                      |                                             |           |           |        |  

Financial Services debt related to securitized residential mortgage loans
structured as collateralized borrowings (Home Equity Loans Asset-Backed
Certificates) was $3.1 billion at March 31, 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. Maturities of
Non-Financial Services and Financial Services long-term debt during the next
five fiscal years are:

|           |  |               |           |  |           |   |           |       |  |   |           | 
|---------- |  | ------------- | --------- |  | --------- | - | --------- | ----- |  | - | --------- | 
|           |  | Non-Financial |           |  | Financial |   |           |       |  |  
|           |  | Services      |           |  | Services  |   |           | Total | 
|           |  |               |           |  |           |   |           |       | 
|2003       |  | $             | 179,831   |  |           | $ | 747,361   |       |  | $ | 927,192   | 
|2004       |  |               | 193,605   |  |           |   | 636,472   |       |  |   | 830,077   | 
|2005       |  |               | 30,474    |  |           |   | 452,745   |       |  |   | 483,219   | 
|2006       |  |               | 325,249   |  |           |   | 407,717   |       |  |   | 732,966   | 
|2007       |  |               | 290,541   |  |           |   | 379,622   |       |  |   | 670,163   | 
|Thereafter |  |               | 753,422   |  |           |   | 546,485   |       |  |   | 1,299,907 | 
|           |  |               |           |  |           |   |           |       | 
|           |  | $             | 1,773,122 |  |           | $ | 3,170,402 |       |  | $ | 4,943,524 | 
|           |  |               |           |  |           |   |           |       | 

Included in other long-term debt 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 March 31, 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
March 31, 2002 are summarized below:

|                       |                                             |   |                 |           |  |           |           |         |    
|---------------------- | ------------------------------------------- | - | --------------- | --------- |  | --------- | --------- | ------- | ---
|                       |                                             |   | Existing Credit |           |  | Available |          
|                       |                                             |   | Facilities      |           |  | Capacity  |          
|                       |                                             |   |                 |           |  |          
|Non-Financial Services |                                             |   |                 |           |  |           |           |        
|                       | Centex Corporation                          |   |                 |           |  |           |           |         |    
|                       | Multi-Bank Revolving Credit Facility        |   | $               | 600,000   |  |           | $         | 600,000 | (1)
|                       | Uncommitted Bank Lines                      |   |                 | 60,000    |  |           |           | 60,000  |    
|                       | Construction Products                       |   |                 |           |  |           |           |         |    
|                       | Senior Revolving Credit Facility            |   |                 | 275,000   |  |           |           | 112,000 | (2)
|                       | Annually Renewable Commercial Paper
Conduit |   |                 | 50,000    |  |           |           | 31,370  | (2)
|                       |                                             |   |                 |           |  |          
|                       |                                             |   | 985,000         |           |  |           | 803,370   |        
|                       |                                             |   |                 |           |  |          
|Financial Services     |                                             |   |                 |           |  |           |           |        
|                       | Unsecured Credit Facilities                 |   |                 | 145,000   |  |           |           | 125,000 | (3)
|                       | Secured Credit Facilities                   |   |                 | 547,000   |  |           |           | 364,312 | (4)
|                       | Harwood
Street Funding II, L.L.C.
Facility  |   |                 | 1,000,000 |  |           |           | 897,417 |    
|                       | Line of Credit                              |   |                 | 14,250    |  |           |           | 4,896   | (5)
|                       |                                             |   |                 |           |  |          
|                       |                                             |   | 1,706,250       |           |  |           | 1,391,625 |        
|                       |                                             |   |                 |           |  |          
|                       |                                             | $ | 2,691,250       |           |  | $         | 2,194,995 | (6)    
|                       |                                             |   |                 |           |  |          



|(1) |  | This is a committed, multi-bank revolving credit facility, maturing in
August 2005, which serves as backup for commercial paper borrowings. As
of March 31, 2002, there were no borrowings under this facility, and the
companys $500 million commercial paper program had no outstanding
borrowings. Beginning May 31, 2002, this facility increased to $700
million. 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 2002.                                                                                                                                                                                 
|   
|(3) |  | Financial Services maintains a $20 million uncommitted facility, which is
allocated evenly between CTX Mortgage and Home Equity. All borrowings
under this facility are guaranteed by Centex Corporation. 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 $200 million of committed and $242
million of uncommitted secured credit facilities to finance mortgage
inventory. CTX Mortgage maintains $105 million of committed secured
mortgage warehouse facilities maturing in October 2002 to finance
mortgages not sold to HSF-I. Centex Corporation has guaranteed $11.5
million of these facilities.                                                     
|   
|(5) |  | The United Kingdom mortgage operation maintains a £10 million uncommitted
unsecured line of credit guaranteed by Centex Corporation.                                                                                                                                                                                                                                                                                                      
|   
|(6) |  | The amount of available capacity includes $342 million of uncommitted
borrowings. Although the Company believes that this capacity is currently
available, there can be no assurance that the lenders under the applicable
facilities would elect to make advances to the Company or its subsidiaries
if and when requested to do so.                                                                                                     

Home Equity finances its inventory of mortgage loans through Harwood
Street Funding II, L.L.C. (HSF-II), a wholly-owned, consolidated entity, under a
revolving sales agreement that expires February 2006 with certain renewal
options. 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

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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s, 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 on the financial statements of
Financial Services and the Company.

Harwood Street Funding I, L.L.C.

CTX Mortgage finances its inventory of mortgage loans principally through
sales of Conforming, Jumbo A and GNMA 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, that we refer to as the HSF-I Purchase Agreement.
Since 1999, CTX Mortgage has sold substantially all of the Conforming, Jumbo A
and GNMA 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 (i) securitized term debt that is
currently rated AAA by S&P and Aaa by Moodys, (ii) short-term secured
liquidity notes that are currently rated A1+ by S&P and P1 by Moodys and (iii)
five year extendable subordinated certificates maturing in November 2004 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.

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
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 would need to make other arrangements to finance 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, non-credit
related market risks and prepayment risks related to the mortgage loans held by
HSF-I. The purpose of this arrangement is to provide credit enhancement to
HSF-I by permitting it to hedge these risks with a

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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 bank receives from HSF-I pursuant to
the Harwood Swap. Accordingly, Centex effectively bears all interest rate
risks, non-credit related market risks and prepayment 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 March 31, 2002, HSF-I owned $1.34 billion in securitized residential
mortgage loans sold to it by CTX Mortgage and had $1.25 billion of outstanding
securitized term debt and $93.0 million of outstanding subordinated
certificates. The Company does not guarantee the payment of any debt or
subordinated certificates of HSF-I and is not liable for credit losses relating
to securitized residential mortgage loans sold to HSF-I. However, the Company
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. During
fiscal 2002, CTX Mortgage sold $10.2 billion of mortgage loans to HSF-I.

(G) CAPITAL STOCK AND EMPLOYEE BENEFIT PLANS

Stockholder Rights Plan

On October 2, 1996, the Board of Directors of the Company (the Board)
adopted a new stockholder rights plan (Plan) to replace the original rights
plan, which expired on October 1, 1996. In connection with the Plan, the Board
authorized and declared a dividend of one right (Right) for each share of
Common Stock of the Company to all stockholders of record at the close of
business on October 15, 1996. After giving effect to the Companys two-for-one
stock split effective March 2, 1998, and the April 2002 amendment to the Plan
increasing the exercise price, each Right entitles its holder to purchase one
two-hundredths of a share of a new series of preferred stock designated Junior
Participating Preferred Stock, Series D, at an exercise price of $210.00. The
Rights will become exercisable upon the earlier of ten days after the first
public announcement that a person or group has acquired beneficial ownership of
15% or more of the Common Stock or ten business days after a person or group
announces an offer, the consummation of which would result in such person or
group beneficially owning 15% or more of the Common Stock (even if no purchases
actually occur), unless such time periods are deferred by appropriate Board
action. The Plan excludes FMR Corp. from causing the rights to become
exercisable until such time as FMR Corp., together with certain affiliated and
associated persons, collectively own 20% or more of the Common Stock.

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

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Right until 15 days after the Rights become exercisable as described above.
Unless earlier redeemed, the Rights will expire on October 12, 2006.

Stock Options

Stock options granted under the Centex 2001 Director and Officer Stock
Option Plan (the 2001 Plan) and the Fourth Amended and Restated 1998 Centex
Corporation Employee Non-Qualified Stock Option Plan (the 1998 Plan) may not
be granted at less than fair market value. Although the Centex Corporation
Amended and Restated 1987 Stock Option Plan (the 1987 Plan) provides that
stock options may be granted at less than fair market value, the Company has
consistently followed the practice of issuing options at or above fair market
value. The 1987 Plan expired in fiscal 2002. Stock options granted under the
Centex Corporation Stock Option Plan (the Centex Plan) were not granted at
less than fair market value. The Centex Plan expired in fiscal 1999. Under
all four plans, the option periods and the dates that the shares covered by
the options may first become exercisable may vary within a maximum period of
ten years at which time these options expire.

The Company records proceeds from the exercise of stock options as
additions to common stock and capital in excess of par value. The federal tax
benefit, if any, is considered additional capital in excess of par value. The
Company accounts for stock options using the intrinsic value method of
accounting as prescribed by APB Opinion No. 25, Accounting for Stock Issued to
Employees. In general, no expense is recognized related to the Companys
stock options because the stock options are granted at or above fair market
value.

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

|                                                               |                         |   |            |   |  |          |           |   |           |   |                               |          |  |           |           |   |  |          |            |           |           |   |       |       | 
|-------------------------------------------------------------- | ----------------------- | - | ---------- | - |  | -------- | --------- | - | --------- | - | ----------------------------- | -------- |  | --------- | --------- | - |  | -------- | ---------- | --------- | --------- | - | ----- | ----- | 
|                                                               |                         |   |            |   |  |          |           |   |           |   | For the Years Ended March 31, |          |  |           |           |   |  |          |            |          
|                                                               |                         |   |            |  
|                                                               |                         |   | 2002       |   |  | 2001     |           |   | 2000      |  
|                                                               |                         |   |            |   |  |          |           |   |           |  
|                                                               |                         |   |            |   |  |          | Weighted- |   |           |   |                               |          |  | Weighted- |           |   |  |          |            |           | Weighted- |  
|                                                               |                         |   |            |   |  |          | Average   |   |           |   |                               |          |  | Average   |           |   |  |          |            |           | Average   |  
|                                                               |                         |   | Number     |   |  | Exercise |           |   | Number    |   |                               | Exercise |  |           | Number    |   |  | Exercise |           
|                                                               |                         |   | of Shares  |   |  | Price    |           |   | of Shares |   |                               | Price    |  |           | of Shares |   |  | Price    |           
|                                                               |                         |   |            |   |  |          |           |   |           |   |                               |          |  |           |           |   |  |          |           
|Options Outstanding,
Beginning of Year                         |                         |   | 6,872,169  |   |  | $        | 27.52     |   |           |   | 7,370,571                     |          |  | $         | 28.23     |   |  |          | 6,763,748  |           |           | $ | 22.46 |      
|Options Granted
At Fair Market Value                           |                         |   | 1,702,710  |   |  | $        | 39.42     |   |           |   | 2,108,300                     |          |  | $         | 24.01     |   |  |          | 42,500     |           |           | $ | 27.53 |      
|                                                               | Above Fair Market Value |   |            |  |  |          | $         |  |           |   |                               |         |  |           | $         |  |  |          |            | 2,337,590 |           |   | $     | 36.06 | 
|Options Exercised                                              |                         |   | (1,385,659 | ) |  | $        | 22.19     |   |           |   | (1,159,166                    | )        |  | $         | 15.30     |   |  |          | (1,336,568 | )         |           | $ | 11.40 |      
|Options Cancelled                                              |                         |   | (50,315    | ) |  | $        | 32.12     |   |           |   | (1,447,536                    | )        |  | $         | 35.82     |   |  |          | (436,699   | )         |           | $ | 32.24 |      
|                                                               |                         |   |            |   |  |          |           |   |           |   |                               |          |  |           |           |   |  |          |            |           |          
|Options Outstanding, End of Year                               |                         |   | 7,138,905  |   |  | $        | 31.36     |   |           |   | 6,872,169                     |          |  | $         | 27.52     |   |  |          | 7,370,571  |           |           | $ | 28.23 |      
|                                                               |                         |   |            |   |  |          |           |   |           |   |                               |          |  |           |           |   |  |          |            |           |          
|Options Exercisable, End of Year                               |                         |   | 3,776,873  |   |  |          |           |   |           |   | 3,418,766                     |          |  |           |           |   |  |          | 3,546,606  |           |           |   |       |      
|                                                               |                         |   |            |   |  |          |           |   |           |   |                               |          |  |           |           |   |  |          |            |           |          
|Shares Available for Future Stock
Option Grants, End of Year   |                         |   | 2,467,738  |   |  |          |           |   |           |   | 2,461,813                     |          |  |           |           |   |  |          | 3,121,938  |           |           |   |       |      
|                                                               |                         |   |            |   |  |          |           |   |           |   |                               |          |  |           |           |   |  |          |            |           |          
|Weighted-Average Fair Value of
Options Granted During the
Year |                         | $ | 21.32      |   |  |          |           |   |           | $ | 13.14                         |          |  |           |           |   |  | $        | 14.80      |           |           |   |       |      

Using the treasury stock method, which assumes that any proceeds together
with the related tax benefits from the exercise of options would be used to
purchase Common Stock at current prices, the dilutive effect of the options on
outstanding shares as of March 31, 2002 would have been 3.3%. This is
significantly less than appears on a gross basis when compared to the
61,171,149 shares of Common Stock outstanding as of March 31, 2002.

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The following table summarizes information about stock options outstanding
at March 31, 2002:

|                         |  |             |           |  |              |                     |      |          |           |   |             |  |                     |          |           |           |  |   |       | 
|------------------------ |  | ----------- | --------- |  | ------------ | ------------------- | ---- | -------- | --------- | - | ----------- |  | ------------------- | -------- | --------- | --------- |  | - | ----- | 
|                         |  |             |           |  |              | Options Outstanding |      |          |           |   |             |  | Options Exercisable |         
|                         |  |             |          
|                         |  |             |           |  |              | Weighted-           |      |          |           |   |             |  |                     |         
|                         |  |             |           |  |              | Average             |      |          | Weighted- |   |             |  |                     |          |           | Weighted- | 
|                         |  | Number      |           |  | Remaining    |                     |      | Average  |           |   | Number      |  |                     | Average  |          
|                         |  | of Shares   |           |  | Contractual  |                     |      | Exercise |           |   | of Shares   |  |                     | Exercise |          
|Range of Exercise Prices |  | Outstanding |           |  | Life (Years) |                     |      | Price    |           |   | Outstanding |  |                     | Price    |          
|                         |  |             |           |  |              |                     |      |          |           |   |             |  |                     |          |          
|$12.56 - $23.81          |  |             | 2,826,600 |  |              |                     | 6.79 |          |           | $ | 21.22       |  |                     |          | 1,553,490 |           |  | $ | 19.75 | 
|$25.06 - $38.69          |  |             | 2,648,426 |  |              |                     | 6.49 |          |           | $ | 37.09       |  |                     |          | 1,806,186 |           |  | $ | 37.39 | 
|$39.36 - $49.63          |  |             | 1,658,179 |  |              |                     | 6.06 |          |           | $ | 39.39       |  |                     |          | 415,772   |           |  | $ | 39.42 | 
|$54.75                   |  |             | 5,700     |  |              |                     | 6.77 |          |           | $ | 54.75       |  |                     |          | 1,425     |           |  | $ | 54.75 | 
|                         |  |             |           |  |              |                     |      |          |           |   |             |  |                     |          |           |           |  |  
|                         |  |             | 7,138,905 |  |              |                     | 6.51 |          |           | $ | 31.36       |  |                     |          | 3,776,873 |           |  | $ | 30.37 | 
|                         |  |             |           |  |              |                     |      |          |           |   |             |  |                     |          |           |           |  |  

The Company has adopted the disclosure-only provisions of Statement of
Financial Accounting Standards No. 123, Accounting for Stock Based
Compensation (SFAS No. 123). Accordingly, no compensation cost has been
recognized for the stock options. Had compensation cost for the Companys
stock option plans been determined based on the fair value at the grant date
for awards in fiscal 2002, 2001 and 2000 consistent with the provisions of SFAS
No. 123, the Companys net earnings and earnings per share would have been
reduced to the pro forma amounts indicated below:

|                                       |         |   |                               |      |  |      |         |      |      |   |         |      | 
|-------------------------------------- | ------- | - | ----------------------------- | ---- |  | ---- | ------- | ---- | ---- | - | ------- | ---- | 
|                                       |         |   | For the Years Ended March 31, |     
|                                       |         |   |                               |     
|                                       |         |   | 2002                          |      |  | 2001 |         |      | 2000 |  
|                                       |         |   |                               |      |  |      |         |      |      |  
|Net Earnings  as Reported             |         | $ | 382,226                       |      |  | $    | 281,977 |      |      | $ | 257,132 |     
|Net Earnings  Pro Forma               |         | $ | 357,753                       |      |  | $    | 257,504 |      |      | $ | 231,399 |     
|Earnings Per Share  as Reported
Basic |         | $ | 6.31                          |      |  | $    | 4.77    |      |      | $ | 4.34    |     
|                                       | Diluted |   | $                             | 6.11 |  |      | $       | 4.65 |      |   | $       | 4.22 | 
|Earnings Per Share  Pro Forma
Basic   |         | $ | 5.91                          |      |  | $    | 4.36    |      |      | $ | 3.90    |     
|                                       | Diluted |   | $                             | 5.72 |  |      | $       | 4.24 |      |   | $       | 3.80 | 

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

|                        |  |                               |      |   |      |  |      |      |  |  |      |  
|----------------------- |  | ----------------------------- | ---- | - | ---- |  | ---- | ---- |  |  | ---- | -
|                        |  | For the Years Ended March 31, |     
|                        |  |                               |     
|                        |  | 2002                          |      |   | 2001 |  |      | 2000 | 
|                        |  |                               |      |   |      |  |      |      | 
|Expected Volatility     |  |                               | 47.0 | % |      |  | 43.5 | %    |  |  | 35.0 | %
|Risk-Free Interest Rate |  |                               | 5.4  | % |      |  | 6.3  | %    |  |  | 5.5  | %
|Dividend Yield          |  |                               | 0.4  | % |      |  | 0.7  | %    |  |  | 0.5  | %
|Expected Life (Years)   |  |                               | 7    |   |      |  | 8    |      |  |  | 8    |  

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The following table summarizes information about equity compensation plans
as of March 31, 2002:

|                    |                   |                                    |  |      |                                                                                                 |  |           |                                                                             |           |   |                                                                                                                                              |       |       |  |           |           |         | 
|------------------- | ----------------- | ---------------------------------- |  | ---- | ----------------------------------------------------------------------------------------------- |  | --------- | --------------------------------------------------------------------------- | --------- | - | -------------------------------------------------------------------------------------------------------------------------------------------- | ----- | ----- |  | --------- | --------- | ------- | 
|Plan Category       |                   | Plan                               |  |      | (a)
Number of
securities to be
issued upon
exercise of
outstanding
options, warrants
and rights |  |           | (b)
Weighted-averageexercise price ofoutstandingoptions,
warrantsand rights |           |   | (c)
Number of securitiesremaining available
for future issuance
under equity
compensation plans
[excluding securitiesreflected in column(a)]
|                    |                   |                                    |  |      |                                                                                                 |  |           |                                                                             |           |   |                                                                                                                                              |      
|Equity compensation |                   |                                    |  |      |                                                                                                 |  |           |                                                                             |           |   |                                                                                                                                              |       |       |  |           |          
|                    | plans approved by |                                    |  | 1987 |                                                                                                 |  |           | 4,140,525                                                                   |           |   | $                                                                                                                                            | 30.14 |       |  |           |          |        
|                    | stockholders      |                                    |  | 2001 |                                                                                                 |  |           | 19,790                                                                      |           |   | $                                                                                                                                            | 40.11 |       |  |           | 1,722,210 |        
|Equity compensation |                   |                                    |  |      |                                                                                                 |  |           |                                                                             |           |   |                                                                                                                                              |       |       |  |           |          
|                    |                   | plans not approved by
stockholders |  |      | 1998                                                                                            |  |           |                                                                             | 2,978,590 |   |                                                                                                                                              | $     | 32.99 |  |           |           | 745,528 | 
|                    |                   |                                    |  |      |                                                                                                 |  |           |                                                                             |           |   |                                                                                                                                              |       |       | 
|Total               |                   |                                    |  |      |                                                                                                 |  | 7,138,905 |                                                                             |           | $ | 34.41                                                                                                                                        |       |       |  | 2,467,738 |          
|                    |                   |                                    |  |      |                                                                                                 |  |           |                                                                             |           |   |                                                                                                                                              |       |       | 

Subsequent to year end, the Board amended the 1998 Plan to allow for the
issuance of an additional 1.5 million shares.

Employee Benefit Plans

Benefits are provided to eligible employees of the Company and certain
subsidiaries under the Companys profit sharing plans. The plans operate on a
calendar year. The aggregate cost of these plans to the Company was $25.2
million in fiscal 2001, $21.6 million in fiscal 2000 and $17.8 million in
fiscal 1999.

(H) COMPREHENSIVE INCOME

Comprehensive income is summarized below:

|                                   |                                          |   |                               |         |   |      |         |        |      |   |         |        |  
|---------------------------------- | ---------------------------------------- | - | ----------------------------- | ------- | - | ---- | ------- | ------ | ---- | - | ------- | ------ | -
|                                   |                                          |   | For the Years Ended March 31, |        
|                                   |                                          |   |                               |        
|                                   |                                          |   | 2002                          |         |   | 2001 |         |        | 2000 |  
|                                   |                                          |   |                               |         |   |      |         |        |      |  
|Net Earnings                       |                                          | $ | 382,226                       |         |   | $    | 281,977 |        |      | $ | 257,132 |       
|Other Comprehensive Income (Loss): |                                          |   |                               |         |   |      |         |        |      |   |         |       
|                                   | Foreign Currency Translation Adjustments |   |                               | 2,622   |   |      |         | (5,001 | )    |   |         | (96    | )
|                                   | Unrealized Gain (Loss) on Investments    |   |                               | 552     |   |      |         | 1,152  |      |   |         | (1,152 | )
|                                   | Unrealized Loss on Hedging Instruments   |   |                               | (11,033 | ) |      |         |       |      |   |         |       |  
|                                   |                                          |   |                               |         |   |      |         |        |     
|Comprehensive Income               |                                          | $ | 374,367                       |         |   | $    | 278,128 |        |      | $ | 255,884 |       
|                                   |                                          |   |                               |         |   |      |         |        |     

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

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The components of Accumulated Other Comprehensive Loss are as follows:

|                                         |  |                                   |         |   |               |   |       |            |  |   |         |  
|---------------------------------------- |  | --------------------------------- | ------- | - | ------------- | - | ----- | ---------- |  | - | ------- | -
|                                         |  | For the Year Ended March 31, 2002 |        
|                                         |  |                                   |        
|                                         |  | Before Tax                        |         |   | Tax (Expense) |   |       | Net-of-Tax | 
|                                         |  | Amount                            |         |   | Benefit       |   |       | Amount     | 
|                                         |  |                                   |         |   |               |   |       |            | 
|Foreign Currency Translation Adjustments |  | $                                 | (3,808  | ) |               | $ | 1,333 |            |  | $ | (2,475  | )
|Unrealized Gain on Investments           |  |                                   | 849     |   |               |   | (297  | )          |  |   | 552     |  
|Unrealized Loss on Hedging Instruments   |  |                                   | (16,974 | ) |               |   | 5,941 |            |  |   | (11,033 | )
|                                         |  |                                   |         |   |               |   |       |            | 
|Accumulated Other Comprehensive Loss     |  | $                                 | (19,933 | ) |               | $ | 6,977 |            |  | $ | (12,956 | )
|                                         |  |                                   |         |   |               |   |       |            | 

As of March 31, 2001, Accumulated Other Comprehensive Loss was made up of
$7,842 ($5,097 net of tax) in foreign currency translation adjustments.

(I) INCOME TAXES

The provision for income taxes includes the following components:

|                             |         |   |                               |         |   |      |         |         |      |   |         |         |  
|---------------------------- | ------- | - | ----------------------------- | ------- | - | ---- | ------- | ------- | ---- | - | ------- | ------- | -
|                             |         |   | For the Years Ended March 31, |        
|                             |         |   |                               |        
|                             |         |   | 2002                          |         |   | 2001 |         |         | 2000 |  
|                             |         |   |                               |         |   |      |         |         |      |  
|Current Provision            |         |   |                               |         |   |      |         |         |      |   |         |        
|                             | Federal |   | $                             | 219,160 |   |      | $       | 121,083 |      |   | $       | 143,101 |  
|                             | State   |   |                               | 33,686  |   |      |         | 25,252  |      |   |         | 22,228  |  
|                             |         |   |                               |         |   |      |         |         |     
|                             |         |   | 252,846                       |         |   |      | 146,335 |         |      |   | 165,329 |        
|                             |         |   |                               |         |   |      |         |         |     
|Deferred (Benefit) Provision |         |   |                               |         |   |      |         |         |      |   |         |        
|                             | Federal |   |                               | (19,260 | ) |      |         | 15,313  |      |   |         | (3,274  | )
|                             | State   |   |                               | 2,953   |   |      |         | (7,294  | )    |   |         | (2,326  | )
|                             |         |   |                               |         |   |      |         |         |     
|                             |         |   | (16,307                       | )       |   |      | 8,019   |         |      |   | (5,600  | )      
|                             |         |   |                               |         |   |      |         |         |     
|Provision for Income Taxes   |         | $ | 236,539                       |         |   | $    | 154,354 |         |      | $ | 159,729 |        
|                             |         |   |                               |         |   |      |         |         |     

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

|                                              |                             |   |                               |        |   |      |         |         |      |   |         |        |  
|--------------------------------------------- | --------------------------- | - | ----------------------------- | ------ | - | ---- | ------- | ------- | ---- | - | ------- | ------ | -
|                                              |                             |   | For the Years Ended March 31, |       
|                                              |                             |   |                               |       
|                                              |                             |   | 2002                          |        |   | 2001 |         |         | 2000 |  
|                                              |                             |   |                               |        |   |      |         |         |      |  
|Financial Income Before Taxes                 |                             | $ | 618,765                       |        |   | $    | 436,331 |         |      | $ | 416,861 |       
|                                              |                             |   |                               |        |   |      |         |         |     
|Income Taxes at Statutory Rate                |                             | $ | 216,568                       |        |   | $    | 152,716 |         |      | $ | 145,902 |       
|Increases (Decreases) in Tax Resulting from - |                             |   |                               |        |   |      |         |         |      |   |         |       
|                                              | State Income Taxes, net     |   |                               | 23,388 |   |      |         | 10,909  |      |   |         | 10,265 |  
|                                              | Negative Goodwill Accretion |   |                               |       |   |      |         | (17,013 | )    |   |         | (6,000 | )
|                                              | Other                       |   |                               | (3,417 | ) |      |         | 7,742   |      |   |         | 9,562  |  
|                                              |                             |   |                               |        |   |      |         |         |     
|Provision for Income Taxes                    |                             | $ | 236,539                       |        |   | $    | 154,354 |         |      | $ | 159,729 |       
|                                              |                             |   |                               |        |   |      |         |         |     
|Effective Tax Rate                            |                             |   | 38                            | %      |   |      | 35      | %       |      |   | 38      | %     

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

|                                         |  |                               |         |   |      |   |         |      |  |   |         |  
|---------------------------------------- |  | ----------------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                                         |  | For the Years Ended March 31, |        
|                                         |  |                               |        
|                                         |  | 2002                          |         |   | 2001 |   |         | 2000 | 
|                                         |  |                               |         |   |      |   |         |      | 
|Basis in Long-Lived Assets               |  | $                             | 2,935   |   |      | $ | 7,240   |      |  | $ | 7,666   |  
|Uniform Capitalization for Tax Reporting |  |                               | (3,384  | ) |      |   | (14,502 | )    |  |   |        |  
|Excess Tax Depreciation and Amortization |  |                               | 32,383  |   |      |   | 21,242  |      |  |   | 7,626   |  
|Securitization Reporting Differences     |  |                               | (25,663 | ) |      |   | (12,196 | )    |  |   | (9,567  | )
|Financial Accrual Changes and Other      |  |                               | (22,578 | ) |      |   | 6,235   |      |  |   | (11,325 | )
|                                         |  |                               |         |   |      |   |         |      | 
|Deferred Income Tax (Benefit) Provision  |  | $                             | (16,307 | ) |      | $ | 8,019   |      |  | $ | (5,600  | )
|                                         |  |                               |         |   |      |   |         |      | 

Components of deferred income taxes are as follows:

|                               |                                                     |   |           |          |   |      |         |          |  
|------------------------------ | --------------------------------------------------- | - | --------- | -------- | - | ---- | ------- | -------- | -
|                               |                                                     |   | March 31, |         
|                               |                                                     |   |           |         
|                               |                                                     |   | 2002      |          |   | 2001 |        
|                               |                                                     |   |           |          |   |      |        
|Deferred Tax Assets            |                                                     |   |           |          |   |      |         |         
|                               | Basis in Long-Lived Assets                          |   | $         | 8,871    |   |      | $       | 12,313   |  
|                               | Net Operating Loss Carryforwards                    |   |           | 195,968  |   |      |         | 132,114  |  
|                               | Uniform Capitalization for Tax Reporting            |   |           | 50,053   |   |      |         | 46,579   |  
|                               | Financial Accruals                                  |   |           | 134,204  |   |      |         | 86,699   |  
|                               | State Income Taxes                                  |   |           | 10,228   |   |      |         | 8,769    |  
|                               | Securitization Reporting Differences                |   |           | 46,346   |   |      |         | 20,683   |  
|                               | All Other                                           |   |           | 13,299   |   |      |         | 9,559    |  
|                               |                                                     |   |           |          |   |     
|Total Deferred Tax Assets      |                                                     |   | 458,969   |          |   |      | 316,716 |         
|                               | Valuation Allowance for Deferred Tax Assets         |   |           | (181,847 | ) |      |         | (130,766 | )
|                               |                                                     |   |           |          |   |     
|Net Deferred Tax Assets        |                                                     |   | 277,122   |          |   |      | 185,950 |         
|                               |                                                     |   |           |          |   |     
|Deferred Tax Liabilities       |                                                     |   |           |          |   |      |         |         
|                               | Deferred Income and Expenses                        |   |           | 16,792   |   |      |         |         |  
|                               | Excess Tax Depreciation and Amortization            |   |           | 104,189  |   |      |         | 57,711   |  
|                               | Interest and Real Estate Taxes Expensed as Incurred |   |           | 21,895   |   |      |         | 19,827   |  
|                               | Investment in Construction Products                 |   |           | 36,398   |   |      |         | 34,753   |  
|                               | Consolidated Return Regulation Deferrals            |   |           | 6,872    |   |      |         | 6,597    |  
|                               | All Other                                           |   |           | 14,809   |   |      |         | 8,608    |  
|                               |                                                     |   |           |          |   |     
|Total Deferred Tax Liabilities |                                                     |   | 200,955   |          |   |      | 127,496 |         
|                               |                                                     |   |           |          |   |     
|Net Deferred Tax Assets        |                                                     | $ | 76,167    |          |   | $    | 58,454  |         
|                               |                                                     |   |           |          |   |     

At March 31, 2002, the Company had $519.6 million of net operating loss
carryforwards available to reduce future federal taxable income that, if
unused, expire in fiscal years 2004 to 2023. Of those carryovers, $142.7
million resulted from the Companys 2002 acquisition of NAB Asset Corporation
(NAB). An additional valuation allowance of $68.0 million was established to
offset the deferred tax assets of NAB at the time of acquisition. This
valuation allowance was reduced by $16.4 million during fiscal 2002, of which
$8.2 million was applied to reduce goodwill and an additional $8.2 million
reduced the Companys income tax provision as a portion of those deferred tax
assets was utilized. Construction Products incurred a net operating loss for
tax purposes of $41.0 million in fiscal 2002 that will expire if unused by
fiscal 2022.

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(J) CENTEX DEVELOPMENT COMPANY, L.P.

The Partnership is a master limited partnership formed by Centex in March
1987 to broaden Centexs business to include general real estate development.
Centex believed that this expansion would improve stockholder value through
longer-term real estate investments, real estate developments and the benefits
of the partnership form of business. Because the real estate development
business generally requires a longer time horizon to maximize value than
Centexs core 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 March 31, 2002, these
adjusted capital contributions, or Unrecovered Capital, were $241.1 million and
preference payments in arrears totaled $41.4 million. The Partnership has made
no preference payments since fiscal 1998.

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

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

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

|                                     |                                          |   |           |           |  |      |           |           | 
|------------------------------------ | ---------------------------------------- | - | --------- | --------- |  | ---- | --------- | --------- | 
|                                     |                                          |   | March 31, |          
|                                     |                                          |   |           |          
|                                     |                                          |   | 2002      |           |  | 2001 |          
|                                     |                                          |   |           |           |  |      |          
|Assets                               |                                          |   |           |           |  |      |           |          
|                                     | Cash and Cash Equivalents                |   | $         | 242,254   |  |      | $         | 60,786    | 
|                                     | Restricted Cash                          |   |           | 106,270   |  |      |           | 57,428    | 
|                                     | Receivables                              |   |           | 4,066,401 |  |      |           | 2,613,035 | 
|                                     | Inventories                              |   |           | 3,283,719 |  |      |           | 2,629,733 | 
|                                     | Investments in Joint Ventures and Other  |   |           | 99,962    |  |      |           | 72,679    | 
|                                     | Property and Equipment, net              |   |           | 723,497   |  |      |           | 732,490   | 
|                                     | Other Assets                             |   |           | 862,580   |  |      |           | 757,882   | 
|                                     |                                          |   |           |           |  |     
|                                     |                                          | $ | 9,384,683 |           |  | $    | 6,924,033 |          
|                                     |                                          |   |           |           |  |     
|Liabilities and Stockholders Equity |                                          |   |           |           |  |      |           |          
|                                     | Accounts Payable and Accrued Liabilities |   | $         | 1,546,334 |  |      | $         | 1,352,467 | 
|                                     | Short-term Debt                          |   |           | 545,789   |  |      |           | 602,185   | 
|                                     | Long-term Debt                           |   |           | 5,020,116 |  |      |           | 3,111,607 | 
|                                     | Minority Stockholders Interest          |   |           | 155,671   |  |      |           | 143,710   | 
|                                     | Stockholders Equity                     |   |           | 2,116,773 |  |      |           | 1,714,064 | 
|                                     |                                          |   |           |           |  |     
|                                     |                                          | $ | 9,384,683 |           |  | $    | 6,924,033 |          
|                                     |                                          |   |           |           |  |     

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

|                             |  |                               |           |   |      |   |           |      |  |   |           |  
|---------------------------- |  | ----------------------------- | --------- | - | ---- | - | --------- | ---- |  | - | --------- | -
|                             |  | For the Years Ended March 31, |          
|                             |  |                               |          
|                             |  | 2002                          |           |   | 2001 |   |           | 2000 | 
|                             |  |                               |           |   |      |   |           |      | 
|Revenues                     |  | $                             | 8,114,891 |   |      | $ | 7,048,573 |      |  | $ | 6,380,125 |  
|Cost of Sales                |  |                               | 7,494,369 |   |      |   | 6,612,484 |      |  |   | 5,959,430 |  
|                             |  |                               |           |   |      |   |           |      | 
|Earnings Before Income Taxes |  |                               | 620,522   |   |      |   | 436,089   |      |  |   | 420,695   |  
|Income Taxes                 |  |                               | 238,296   |   |      |   | 154,112   |      |  |   | 163,563   |  
|                             |  |                               |           |   |      |   |           |      | 
|Net Earnings                 |  |                               | 382,226   |   |      |   | 281,977   |      |  |   | 257,132   |  
|Other Comprehensive Loss     |  |                               | (12,956   | ) |      |   | (3,849    | )    |  |   | (1,248    | )
|                             |  |                               |           |   |      |   |           |      | 
|Comprehensive Income         |  | $                             | 369,270   |   |      | $ | 278,128   |      |  | $ | 255,884   |  
|                             |  |                               |           |   |      |   |           |      | 

(K) 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 $269.2 million) is included in the Investment Real Estate
segment.

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Home Building

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

Financial Services

Financial Services operations consist primarily of home financing,
sub-prime home equity lending and the sale of title insurance and other various
insurance coverages. These activities include mortgage origination, servicing
and other related services for homes sold by Centex subsidiaries and others.
Financial Services revenues include interest income of $266.9 million, $123.8
million and $83.4 million in fiscal 2002, 2001 and 2000, respectively.
Substantially all of Centexs interest income in each year is earned by the
Financial Services segment. Financial Services cost of sales is comprised
of interest expense related to debt issued to fund its home financing,
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%, 65.2% and 64.4% of
Centex Construction Products, Inc. at March 31, 2002, 2001 and 2000,
respectively.

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 $7.1 million, $9.1 million,
and $8.4 million for fiscal 2002, 2001 and 2000, 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. Investment Real Estate also recorded
revenues, under the equity method of accounting for investments, from its
investment in the Partnership of $18.7 million, $4.6 million, and $0.5 million
for fiscal 2002, 2001 and 2000, respectively. Property sales related to
Investment Real Estates nominally-valued assets resulted in operating margins
of $35.8 million, $13.6 million, and $19.6 million in fiscal 2002, 2001 and
2000, respectively.

Other

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

Others selling, general and administrative expenses in the table below
include corporate general and administrative expenses of $50.2 million, $36.9
million and $33.0 million; interest expense of $115.8 million, $99.1 million
and $66.8 million and minority interest of $20.8 million, $32.4 million and
$64.8 million for fiscal 2002, 2001 and 2000, respectively.

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|                                           |  |                                   |          |   |           |   |         |              |  |   |              |   |  |             |          |   |       |   |       |       |  |   |        |   |  |   |          |  
|------------------------------------------ |  | --------------------------------- | -------- | - | --------- | - | ------- | ------------ |  | - | ------------ | - |  | ----------- | -------- | - | ----- | - | ----- | ----- |  | - | ------ | - |  | - | -------- | -
|                                           |  | For the Year Ended March 31, 2002
|                                           |  | (Dollars in millions)             |         
|                                           |  |                                   |         
|                                           |  | Home                              |          |   | Financial |   |         | Construction |  |   | Construction |   |  | Investment  |          |   |       |   |       |       |  |   |       
|                                           |  | Building                          |          |   | Services  |   |         | Products     |  |   | Services     |   |  | Real Estate |          |   | Other |   |       | Total | 
|                                           |  |                                   |          |   |           |   |         |              |  |   |              |   |  |             |          |   |       |   |       |       | 
|Revenues                                   |  | $                                 | 4,984.8  |   |           | $ | 699.8   |              |  | $ | 471.1        |   |  | $           | 1,296.0  |   |       | $ | 72.4  |       |  | $ | 224.3  |   |  | $ | 7,748.4  |  
|Cost of Sales                              |  |                                   | (3,713.4 | ) |           |   | (159.1  | )            |  |   | (389.7       | ) |  |             | (1,196.1 | ) |       |   | (12.1 | )     |  |   | (139.5 | ) |  |   | (5,609.9 | )
|Selling, General &
Administrative Expenses |  |                                   | (743.9   | ) |           |   | (426.0  | )            |  |   | (5.5         | ) |  |             | (63.7    | ) |       |   | (12.2 | )     |  |   | (268.4 | ) |  |   | (1,519.7 | )
|                                           |  |                                   |          |   |           |   |         |              |  |   |              |   |  |             |          |   |       |   |       |       | 
|Earnings
(Loss) Before Income Tax          |  | $                                 | 527.5    |   |           | $ | 114.7   |              |  | $ | 75.9         |   |  | $           | 36.2     |   |       | $ | 48.1  |       |  | $ | (183.6 | ) |  | $ | 618.8    |  
|                                           |  |                                   |          |   |           |   |         |              |  |   |              |   |  |             |          |   |       |   |       |       | 
|Identifiable Assets                        |  | $                                 | 3,020.0  |   |           | $ | 4,148.0 |              |  | $ | 689.6        |   |  | $           | 260.2    |   |       | $ | 309.7 |       |  | $ | 558.0  |   |  | $ | 8,985.5  |  
|Capital Expenditures                       |  | $                                 | 20.9     |   |           | $ | 10.7    |              |  | $ | 19.0         |   |  | $           | 3.9      |   |       | $ | 0.1   |       |  | $ | 17.7   |   |  | $ | 72.3     |  
|Depreciation and Amortization              |  | $                                 | 16.2     |   |           | $ | 15.8    |              |  | $ | 35.8         |   |  | $           | 2.6      |   |       | $ | 0.4   |       |  | $ | 19.8   |   |  | $ | 90.6     |  

There was no goodwill amortization or negative goodwill accretion in fiscal
2002.

|                                  |                         |                                   |          |        |   |           |         |        |              |   |        |              |   |   |             |       |   |       |       |       |       |   |        |        |   |   |          |          |  
|--------------------------------- | ----------------------- | --------------------------------- | -------- | ------ | - | --------- | ------- | ------ | ------------ | - | ------ | ------------ | - | - | ----------- | ----- | - | ----- | ----- | ----- | ----- | - | ------ | ------ | - | - | -------- | -------- | -
|                                  |                         | For the Year Ended March 31, 2001 |         
|                                  |                         | (Dollars in millions)             |         
|                                  |                         |                                   |         
|                                  |                         |                                   | Home     |        |   | Financial |         |        | Construction |   |        | Construction |   |   | Investment  |       |   |       |       |       |       |   |        |       
|                                  |                         |                                   | Building |        |   | Services  |         |        | Products     |   |        | Services     |   |   | Real Estate |       |   | Other |       |       | Total |  
|                                  |                         |                                   |          |        |   |           |         |        |              |   |        |              |   |   |             |       |   |       |       |       |       |  
|Revenues                          |                         | $                                 | 4,356.2  |        |   | $         | 463.6   |        |              | $ | 441.1  |              |   | $ | 1,290.4     |       |   | $     | 33.0  |       |       | $ | 126.4  |        |   | $ | 6,710.7  |         
|Cost of Sales                     |                         |                                   | (3,304.9 | )      |   |           | (92.6   | )      |              |   | (335.1 | )            |   |   | (1,199.9    | )     |   |       | (11.0 | )     |       |   | (113.0 | )      |   |   | (5,056.5 | )       
|Selling, General &                |                         |                                   |          |        |   |           |         |        |              |   |        |              |   |   |             |       |   |       |       |       |       |   |        |        |   |   |          |         
|                                  | Administrative Expenses |                                   |          | (625.9 | ) |           |         | (351.3 | )            |   |        | (6.6         | ) |   |             | (59.6 | ) |       |       | (21.9 | )     |   |        | (203.4 | ) |   |          | (1,268.7 | )
|Negative Goodwill                 |                         |                                   |         |        |   |           |        |        |              |   |       |              |   |   |            |       |   |       | 50.8  |       |       |   |       |        |   |   | 50.8     |         
|                                  |                         |                                   |          |        |   |           |         |        |              |   |        |              |   |   |             |       |   |       |       |       |      
|Earnings
(Loss) Before Income Tax |                         | $                                 | 425.4    |        |   | $         | 19.7    |        |              | $ | 99.4   |              |   | $ | 30.9        |       |   | $     | 50.9  |       |       | $ | (190.0 | )      |   | $ | 436.3    |         
|                                  |                         |                                   |          |        |   |           |         |        |              |   |        |              |   |   |             |       |   |       |       |       |      
|Identifiable Assets               |                         | $                                 | 2,510.5  |        |   | $         | 2,490.1 |        |              | $ | 761.1  |              |   | $ | 248.2       |       |   | $     | 270.2 |       |       | $ | 368.9  |        |   | $ | 6,649.0  |         
|Capital Expenditures              |                         | $                                 | 18.4     |        |   | $         | 12.2    |        |              | $ | 16.3   |              |   | $ | 6.3         |       |   | $     | 0.6   |       |       | $ | 15.1   |        |   | $ | 68.9     |         
|Depreciation and Amortization     |                         | $                                 | 16.6     |        |   | $         | 15.3    |        |              | $ | 24.9   |              |   | $ | 3.0         |       |   | $     | 0.1   |       |       | $ | 31.5   |        |   | $ | 91.4     |         
|Goodwill and Negative             |                         |                                   |          |        |   |           |         |        |              |   |        |              |   |   |             |       |   |       |       |       |       |   |        |        |   |   |          |         
|                                  | Goodwill Accretion      |                                   | $        | 5.8    |   |           | $       | 2.5    |              |   | $      | 1.0          |   |   | $           | 0.1   |   |       | $     | (50.8 | )     |   | $      | 17.4   |   |   | $        | (24.0    | )

|                                           |  |                                   |          |   |           |   |        |              |  |   |              |   |  |             |          |   |       |   |       |       |  |   |        |   |  |   |          |  
|------------------------------------------ |  | --------------------------------- | -------- | - | --------- | - | ------ | ------------ |  | - | ------------ | - |  | ----------- | -------- | - | ----- | - | ----- | ----- |  | - | ------ | - |  | - | -------- | -
|                                           |  | For the Year Ended March 31, 2000 |         
|                                           |  | (Dollars in millions)             |         
|                                           |  |                                   |         
|                                           |  | Home                              |          |   | Financial |   |        | Construction |  |   | Construction |   |  | Investment  |          |   |       |   |       |       |  |   |       
|                                           |  | Building                          |          |   | Services  |   |        | Products     |  |   | Services     |   |  | Real Estate |          |   | Other |   |       | Total | 
|                                           |  |                                   |          |   |           |   |        |              |  |   |              |   |  |             |          |   |       |   |       |       | 
|Revenues                                   |  | $                                 | 3,686.8  |   |           | $ | 430.6  |              |  | $ | 470.5        |   |  | $           | 1,205.8  |   |       | $ | 30.9  |       |  | $ | 183.5  |   |  | $ | 6,008.1  |  
|Cost of Sales                              |  |                                   | (2,852.3 | ) |           |   | (61.7  | )            |  |   | (295.6       | ) |  |             | (1,130.7 | ) |       |   | (7.6  | )     |  |   | (143.7 | ) |  |   | (4,491.6 | )
|Selling,
General &
Administrative Expenses |  |                                   | (511.3   | ) |           |   | (336.4 | )            |  |   | (6.2         | ) |  |             | (51.6    | ) |       |   | (9.2  | )     |  |   | (200.9 | ) |  |   | (1,115.6 | )
|Negative Goodwill                          |  |                                   |         |   |           |   |       |              |  |   |             |   |  |             |         |   |       |   | 16.0  |       |  |   |       |   |  |   | 16.0     |  
|                                           |  |                                   |          |   |           |   |        |              |  |   |              |   |  |             |          |   |       |   |       |       | 
|Earnings
(Loss) Before Income Tax          |  | $                                 | 323.2    |   |           | $ | 32.5   |              |  | $ | 168.7        |   |  | $           | 23.5     |   |       | $ | 30.1  |       |  | $ | (161.1 | ) |  | $ | 416.9    |  
|                                           |  |                                   |          |   |           |   |        |              |  |   |              |   |  |             |          |   |       |   |       |       | 
|Identifiable Assets                        |  | $                                 | 2,204.4  |   |           | $ | 771.5  |              |  | $ | 410.8        |   |  | $           | 235.8    |   |       | $ | 66.4  |       |  | $ | 299.0  |   |  | $ | 3,987.9  |  
|Capital Expenditures                       |  | $                                 | 12.6     |   |           | $ | 39.6   |              |  | $ | 28.0         |   |  | $           | 7.5      |   |       | $ |      |       |  | $ | 8.5    |   |  | $ | 96.2     |  
|Depreciation and Amortization              |  | $                                 | 14.0     |   |           | $ | 14.1   |              |  | $ | 18.6         |   |  | $           | 2.9      |   |       | $ | 0.1   |       |  | $ | 15.3   |   |  | $ | 65.0     |  
|Goodwill
and Negative
Goodwill Accretion   |  | $                                 | 5.4      |   |           | $ | 2.2    |              |  | $ | 0.1          |   |  | $           | 0.2      |   |       | $ | (16.0 | )     |  | $ | 6.3    |   |  | $ | (1.8     | )

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(L) FAIR VALUE OF FINANCIAL INSTRUMENTS

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

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

|                      |                                     |            |   |           |           |  |       |                        |           |          |   |           |           |  |   |           |           |    
|--------------------- | ----------------------------------- | ---------- | - | --------- | --------- |  | ----- | ---------------------- | --------- | -------- | - | --------- | --------- |  | - | --------- | --------- | ---
|                      |                                     |            |   | March 31, |          
|                      |                                     |            |   |           |          
|                      |                                     |            |   | 2002      |           |  | 2001  |                       
|                      |                                     |            |   |           |           |  |       |                       
|                      |                                     |            |   | Carrying  |           |  | Fair  |                        |           | Carrying |   |           | Fair      | 
|                      |                                     |            |   | Value     |           |  | Value |                        |           | Value    |   |           | Value     | 
|                      |                                     |            |   |           |           |  |       |                        |           |          |   |           |           | 
|                      |                                     |            |   |           |           |  |       | (Dollars in thousands) |           |          |   |           |          
|Financial Assets      |                                     |            |   |           |           |  |       |                        |           |          |   |           |           |  |   |          
|                      | Residential Mortgage Loans Held for |            |   |           |           |  |       |                        |           |          |   |           |           |  |   |           |          
|                      |                                     | Investment |   | $         | 3,254,017 |  |       | $                      | 3,264,165 | (1)      |   | $         | 1,771,831 |  |   | $         | 1,778,903 | (1)
|                      | Residential Mortgage Loans Held for |            |   |           |           |  |       |                        |           |          |   |           |           |  |   |           |          
|                      |                                     | Sale       |   | $         | 241,793   |  |       | $                      | 242,562   | (1)      |   | $         | 224,915   |  |   | $         | 233,883   | (1)
|Financial Liabilities |                                     |            |   |           |           |  |       |                        |           |          |   |           |           |  |   |          
|                      | Non-Financial Services Long-term    |            |   |           |           |  |       |                        |           |          |   |           |           |  |   |           |          
|                      |                                     | Debt       |   | $         | 1,773,122 |  |       | $                      | 1,810,119 | (2)      |   | $         | 1,464,993 |  |   | $         | 1,495,525 | (2)
|                      | Financial Services Long-term Debt   |            | $ | 3,170,402 |           |  | $     | 3,199,150              | (2)       |          | $ | 1,575,868 |           |  | $ | 1,598,950 | (2)      



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

(M) COMMITMENTS AND CONTINGENCIES

In order to ensure the future availability of land for homebuilding, the
Company has deposited or invested $68.0 million as of March 31, 2002 as options
toward the purchase of undeveloped land and developed lots having a total
purchase price of approximately $1.5 billion. These options expire at various
dates through the year 2007.

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

The Company has certain deductible limits under its workers compensation,
automobile and general liability insurance policies for which reserves are
established based on the estimated costs of known and anticipated claims.

The Company leases certain office facilities and other equipment under
operating leases. Future minimum payments under the noncancelable leases are
as follows: 2003  $50.2 million; 2004  $42.3 million; 2005  $34.0 million;
2006  $25.5 million; 2007  $20.3 million and thereafter  $68.6 million.

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Rental expense for the years ended March 31, 2002, 2001 and 2000 was $49.7
million, $38.5 million and $25.1 million, respectively.

(N) DERIVATIVES AND HEDGING

The Company is exposed to the risk of interest rate fluctuations on its
debt and other obligations. As part of its strategy to manage the obligations
that are subject to changes in interest rates, the Company has entered into
various interest rate swap agreements, designated as cash flow hedges as
described below. The swap agreements are recorded at their fair value in Other
Assets or Accrued Liabilities in the 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 March 31, 2002. During the year ended March 31,
2002, there was no hedge ineffectiveness related to these derivatives. These
swaps expire at varying times through October 2005. Amounts to be received or
paid under the swap agreements are recognized as a change in interest incurred
on the related debt instrument. Based on the balance in Accumulated Other
Comprehensive Loss at March 31, 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 March 31, 2002, the liability and the balance
in Accumulated Other Comprehensive Loss related to these derivatives was $4.3
million ($2.8 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 year ended March 31, 2002, there was no hedge ineffectiveness
related to these interest rate swaps. These swaps expire at varying times
through January 2008. Based on the balance in Accumulated Other Comprehensive
Loss at March 31, 2002 related to these derivatives, the Company would estimate
adjustments to interest incurred over the next 12 months to be a reduction of
approximately $1 million. As of March 31, 2002, the asset and the balance in
Accumulated Other Comprehensive Loss related to these derivatives was $0.7
million ($0.5 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 CTX Mortgage, 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,
non-credit related market risk and prepayment 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

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are recorded as an adjustment to earnings. The net change in the estimated
fair value of these derivative positions resulted in a gain of $4.8 million for
the year ended March 31, 2002.

(O) RELATED PARTY TRANSACTIONS

Centex Homes purchased land from the Partnership during fiscal 2002, 2001
and 2000 totaling $1.7 million, $21.1 million (including the purchase of the
Partnerships Domestic Home Building operation) and $5.4 million, respectively.

During fiscal 2002 and 2001, Centex Homes deposited $9.1 million with the
Partnership as option deposits for the purchase of 345 acres in Florida,
Hawaii, Nevada and South Carolina. Centex Homes also entered into agreements
to reimburse the Partnership for certain costs and fees incurred in the
Partnerships purchase of these tracts of land. During fiscal 2002, Centex
Homes paid $1.4 million to the Partnership in fees and reimbursements pursuant
to these agreements. Centex Homes expects to pay an additional $62.6 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 multi-family apartments, a recreational ice skating facility,
two office buildings and two industrial facilities. These contracts totaled
$15.0 million, $14.9 million and $43.2 million in fiscal 2002, 2001 and 2000,
respectively. During fiscal 2002 and 2001, the Partnership paid $10.0 million
and $7.7 million, respectively, to Construction Services pursuant to these
contracts.

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Report of Independent Auditors

TO THE BOARD OF DIRECTORS OF CENTEX CORPORATION AND SUBSIDIARIES:

We have audited the accompanying consolidated balance sheets of Centex
Corporation and subsidiaries as of March 31, 2002 and 2001, and the related
statements of consolidated earnings, consolidated stockholders equity and
consolidated cash flows for each of the three years in the period ended March
31, 2002. These financial statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Centex
Corporation and subsidiaries at March 31, 2002 and 2001, and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended March 31, 2002, in conformity with accounting principles
generally accepted in the United States.

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



---

/s/ ERNST & YOUNG LLPDallas, Texas

May 31, 2002

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

|               |                              |         |   |                               |            |  |      |           |            | 
|-------------- | ---------------------------- | ------- | - | ----------------------------- | ---------- |  | ---- | --------- | ---------- | 
|               |                              |         |   | For the Years Ended March 31, |           
|               |                              |         |   |                               |           
|               |                              |         |   | 2002                          |            |  | 2001 |          
|               |                              |         |   |                               |            |  |      |          
|First Quarter  |                              |         |   |                               |            |  |      |          
|               | Revenues                     |         | $ | 1,709,145                     |            |  | $    | 1,436,622 |           
|               | Earnings Before Income Taxes |         | $ | 117,986                       |            |  | $    | 78,069    |           
|               | Net Earnings                 |         | $ | 75,216                        |            |  | $    | 48,205    |           
|               | Earnings Per Share           |         |   |                               |            |  |      |           |           
|               |                              | Basic   |   | $                             | 1.25       |  |      | $         | .82        | 
|               |                              | Diluted |   | $                             | 1.22       |  |      | $         | .81        | 
|               | Average Shares Outstanding   |         |   |                               |            |  |      |           |           
|               |                              | Basic   |   |                               | 60,174,973 |  |      |           | 58,803,345 | 
|               |                              | Diluted |   |                               | 61,910,092 |  |      |           | 59,854,565 | 
|Second Quarter |                              |         |   |                               |            |  |      |          
|               | Revenues                     |         | $ | 1,883,633                     |            |  | $    | 1,615,784 |           
|               | Earnings Before Income Taxes |         | $ | 152,314                       |            |  | $    | 95,925    |           
|               | Net Earnings                 |         | $ | 93,389                        |            |  | $    | 59,094    |           
|               | Earnings Per Share           |         |   |                               |            |  |      |           |           
|               |                              | Basic   |   | $                             | 1.54       |  |      | $         | 1.00       | 
|               |                              | Diluted |   | $                             | 1.50       |  |      | $         | .98        | 
|               | Average Shares Outstanding   |         |   |                               |            |  |      |           |           
|               |                              | Basic   |   |                               | 60,568,258 |  |      |           | 58,954,694 | 
|               |                              | Diluted |   |                               | 62,289,902 |  |      |           | 60,303,878 | 
|Third Quarter  |                              |         |   |                               |            |  |      |          
|               | Revenues                     |         | $ | 1,894,484                     |            |  | $    | 1,653,498 |           
|               | Earnings Before Income Taxes |         | $ | 157,935                       |            |  | $    | 110,494   |           
|               | Net Earnings                 |         | $ | 96,145                        |            |  | $    | 68,467    |           
|               | Earnings Per Share           |         |   |                               |            |  |      |           |           
|               |                              | Basic   |   | $                             | 1.59       |  |      | $         | 1.16       | 
|               |                              | Diluted |   | $                             | 1.54       |  |      | $         | 1.12       | 
|               | Average Shares Outstanding   |         |   |                               |            |  |      |           |           
|               |                              | Basic   |   |                               | 60,554,328 |  |      |           | 59,080,788 | 
|               |                              | Diluted |   |                               | 62,429,572 |  |      |           | 60,929,675 | 
|Fourth Quarter |                              |         |   |                               |            |  |      |          
|               | Revenues                     |         | $ | 2,261,168                     |            |  | $    | 2,004,831 |           
|               | Earnings Before Income Taxes |         | $ | 190,530                       |            |  | $    | 151,843   |           
|               | Net Earnings                 |         | $ | 117,476                       |            |  | $    | 106,211   |           
|               | Earnings Per Share           |         |   |                               |            |  |      |           |           
|               |                              | Basic   |   | $                             | 1.93       |  |      | $         | 1.78       | 
|               |                              | Diluted |   | $                             | 1.85       |  |      | $         | 1.73       | 
|               | Average Shares Outstanding   |         |   |                               |            |  |      |           |           
|               |                              | Basic   |   |                               | 60,949,857 |  |      |           | 59,549,480 | 
|               |                              | Diluted |   |                               | 63,486,498 |  |      |           | 61,562,118 | 

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

On March 23, 2002, the Audit Committee of Centex Corporations Board of
Directors approved the engagement of Ernst & Young LLP as our independent
auditors for the fiscal year ending March 31, 2002, to replace Arthur Andersen
LLP, who was dismissed as our auditors effective as of that date. This action
followed the Audit Committees decision to seek proposals from independent
accountants to audit our financial statements.

Arthur Andersens audit reports on our financial statements as of and for
the two most recent fiscal years, that ended March 31, 2000 and 2001,
respectively, did not contain an adverse opinion or a disclaimer of opinion,
nor were they qualified or modified as to uncertainty, audit scope or
accounting principles.

During the fiscal years that ended March 31, 2000 and 2001 and the
subsequent interim period through March 23, 2002:



|(i)   |  | there were no disagreements between Arthur Andersen and us on any
matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements, if not
resolved to Arthur Andersens satisfaction, would have caused Arthur
Andersen to make reference to the subject matter of the disagreement in
connection with its reports;
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     
|(ii)  |  | none of the reportable events described under Item 304(a)(1)(v) of
Regulation S-K occurred; and                                                                                                                                                                                                                                                                                      
|     
|(iii) |  | we did not consult with Ernst & Young regarding any of the matters
or events described in item 304(a)(2)(i) and (ii) of Regulation S-K.                                                                                                                                                                                                                                              

We provided Arthur Andersen with a copy of the foregoing statements. A
letter from Arthur Andersen, dated March 27, 2002, stating its agreement with
such statements as filed with the SEC, is attached to this Report as Exhibit
16.1.




PART III




ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Except for the information relating to the executive officers of the
Company that follows Item 4 of Part I of Part A of this Report and is
incorporated herein by reference, the information called for by Items 10, 11,
12 and 13 is incorporated herein by reference to the information included and
referenced under the following captions in the Companys Proxy Statement for
the July 18, 2002 Annual Meeting of Stockholders:

|     |  |                                                               
|---- |  | --------------------------------------------------------------
|Item |  | Caption in the 2002 Proxy Statement                           
|10   |  | Election of Directors                                         
|10   |  | Section 16(a) Beneficial Ownership Reporting Compliance       
|11   |  | Executive Compensation                                        
|12   |  | Security Ownership of Management and Certain Beneficial Owners
|13   |  | Certain Transactions                                          

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ITEM 11. EXECUTIVE COMPENSATION

See Item 10 above.




ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

See Item 10 above.




ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

See Item 10 above for information respecting indebtedness to Centex of
certain officers and directors.




PART IV




ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

| |    |  |                                                                                                                                                                                                                                                                              |     |  |                                                                                                                                                                                                                                                                                                                                                                                                               
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) |  | The following documents are filed as part of this Report:                                                                                                                                                                                                                   
|
| |    |  |                                                                                                                                                                                                                                                                              | (1) |  | Financial Statements                                                                                                                                                                                                                                                                                                                                                                                          
|
| |    |  |                                                                                                                                                                                                                                                                              |     |  | The consolidated balance sheets of Centex Corporation and
subsidiaries as of March 31, 2002 and 2001, and the related
consolidated statements of earnings, stockholders equity and cash
flows for each of the three years in the period ended March 31,
2002, together with the accompanying Notes to Consolidated Financial
Statements and the Report of Independent Auditors on pages 51-85 of
this Report.
|
| |    |  |                                                                                                                                                                                                                                                                              | (2) |  | Schedules                                                                                                                                                                                                                                                                                                                                                                                                     
|
| |    |  |                                                                                                                                                                                                                                                                              |     |  | Schedules are omitted because they are not applicable or not
required or the information required to be set forth therein is
included in the consolidated financial statements referenced above
in section (a) (1) of this Item 14.                                                                                                                                                                           
|
| |    |  |                                                                                                                                                                                                                                                                              | (3) |  | Exhibits                                                                                                                                                                                                                                                                                                                                                                                                      
|
| |    |  |                                                                                                                                                                                                                                                                              |     |  | The information on exhibits required by this Item 14 is set forth in
the Centex Index to Exhibits appearing on pages 148-150 of this
Report.                                                                                                                                                                                                                                                                  
|
| | b) |  | Reports on Form 8-K:                                                                                                                                                                                                                                                        
|
| |    |  | Current Report on Form 8-K of Centex Corporation dated January 8, 2002
reflecting a decrease in the aggregate initial offering amount of the
Companys Senior Medium-Term Notes, Series E and/or Subordinated
Medium-Term Notes, Series E from $500 million to $350 million.
|
| |    |  | Current Report on Form 8-K of Centex Corporation dated January 8, 2002
filing certain documents relating to the public offering of $350 million
aggregate principal amount of the Companys 7 1/2% senior notes due
2012.                                                   

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| |  |  |                                                                                                                                                                                    |  |  | 
| |  |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | 
| |  |  | Current Report on Form 8-K of Centex Corporation dated January 23, 2002
announcing the Companys financial results for the quarter and nine months
ended December 31, 2001.       
|
| |  |  | Current Report on Form 8-K of Centex Corporation dated February 27, 2002
reaffirming the Companys previous statements regarding net earnings in
fiscal years 2002, 2003 and 2004.
|
| |  |  | Amended Current Report on Form 8-K/A of Centex Corporation dated March 23,
2002 announcing the engagement of Ernst & Young LLP as the Companys
independent auditors.             

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SIGNATURES

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

|              |  |     |  |                                                                      
|------------- |  | --- |  | ---------------------------------------------------------------------
|              |  |     |  | CENTEX CORPORATION                                                   
|              |  |     | 
|              |  |     |  | Registrant                                                           
|              |  |     |  |                                                                      
|June 19, 2002 |  | By: |  | /s/ LAURENCE E. HIRSCH                                               
|              |  |     | 
|              |  |     |  | Laurence E. Hirsch, Chairman of the Board and
Chief Executive Officer

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

|              |  |            |  |                                                                                                                                                                                                     
|------------- |  | ---------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|June 19, 2002 |  | By:        |  | /s/ LAURENCE E. HIRSCH                                                                                                                                                                              
|              |  |            | 
|              |  |            |  | Laurence E. Hirsch, Chairman of the Board and
Chief Executive Officer
(principal executive officer)                                                                                                 
|              |  |            |  |                                                                                                                                                                                                     
|June 19, 2002 |  | By:        |  | /s/ LELDON E. ECHOLS                                                                                                                                                                                
|              |  |            | 
|              |  |            |  | Leldon E. Echols, Executive Vice President and
Chief Financial Officer
(principal financial officer)                                                                                                
|              |  |            |  |                                                                                                                                                                                                     
|June 19, 2002 |  | By:        |  | /s/ MARK A. BLINN                                                                                                                                                                                   
|              |  |            | 
|              |  |            |  | Mark A. Blinn, Vice President  Controller and
Financial Strategy
(principal accounting officer)                                                                                                    
|              |  |            |  |                                                                                                                                                                                                     
|              |  | Directors: |  | Barbara T. Alexander, Juan L.
Elek,
Laurence E. Hirsch, Clint W. Murchison, III,
Charles H. Pistor, Jr., Frederic M. Poses, 
David W. Quinn, Thomas M. Schoewe, 
Paul R. Seegers and Paul T. Stoffel
|              |  |            |  |                                                                                                                                                                                                     
|June 19, 2002 |  | By:        |  | /s/ LAURENCE E. HIRSCH                                                                                                                                                                              
|              |  |            | 
|              |  |            |  | Laurence E. Hirsch,
Individually and as
Attorney-in-Fact*                                                                                                                                           



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

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PART B.

3333 HOLDING CORPORATION AND SUBSIDIARY
AND CENTEX DEVELOPMENT COMPANY, L.P. AND SUBSIDIARIES

PREFATORY STATEMENT

Part Bof this Report (pages 91-147) includes information relating to 3333
Holding Corporation, SEC File No. 1-9624, and Centex Development Company, L.P.,
SEC File No. 1-9625. In Part Bof this Report, we refer to 3333 Holding
Corporation and its subsidiary as Holding and to Centex Development Company,
L.P. and its subsidiaries as the Partnership. Whenever we refer to Holding in
this Part Bwe are also referring to its subsidiary, 3333 Development
Corporation, or Development, a Nevada corporation which is the sole general
partner of the Partnership, unless the context otherwise requires. For more
information regarding the structure and relationship of these entities, see the
Joint Explanatory Statement on page 2 of this Report. Because the Partnership
is a separate reporting entity under the Securities Exchange Act of 1934, or
the Exchange Act, the information required by Form 10-K is separately included
even though the Partnership may be deemed a subsidiary of Holding under the
rules and regulations of the Securities and Exchange Commission promulgated
pursuant to the Exchange Act. We have included information relating to both
Holding and the Partnership in this Report as a single disclosure where
applicable or appropriate. We have set forth all other information separately.
You should consider information provided with respect to the Partnership as if
it is also provided with respect to Holding to the extent appropriate. You
should read Part Aof this Report for information relating to Centex
Corporation, or Centex, and its subsidiaries.




PART I




ITEM 1. BUSINESS

General Development of Business

Holding

Holding is a Nevada corporation incorporated on May 5, 1987. Holding owns
all of the outstanding common stock of Development and, as a result, has the
ability to control Development. Development is the sole general partner of the
Partnership. The executive offices of Holding and Development are located at
2728 N. Harwood, Dallas, Texas 75201, and their telephone number is (214)
981-6770.

Holding is not engaged in any business other than its ownership and
control of Development. The Second Amended and Restated Agreement of Limited
Partnership of Centex Development Company, L.P., or the Partnership Agreement,
governs the operations of the Partnership. It provides that neither Holding
nor Development is permitted, prior to payout, as that term is defined in the
Partnership Agreement, to own business interests or to engage in business
activities other than those relating to the Partnership. The Partnership
Agreement would have to be amended to permit Holding to engage in any other
business activities.

The Partnership

Centex formed the Partnership as a master limited partnership in March
1987 to broaden its business to include general real estate development.
Centex believed that this expansion would improve stockholder value through
longer-term real estate investments, real estate developments and the benefits
of the partnership form of business. Because the real estate development
business generally requires a longer time

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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, which are collectively convertible
into 20% of the Partnerships Class B limited partnership units. The
Partnership may issue additional Class C limited partnership units in
connection with the acquisition of real property and other assets. No Class B
limited partnership units have been issued. However, the stockholders of
Centex hold warrants to purchase approximately 80% of the Class B limited
partnership units, which we refer to in this Part Bas Stockholder Warrants.
These Stockholder 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 limited partnership units, Centex is
entitled to a cumulative preferred return of 9% per year on the average
outstanding balance of its capital contributions to the Partnership, adjusted
for cash and other distributions representing a return of capital. As of March
31, 2002, these adjusted capital contributions, or unrecovered capital, were
$241.1 million and preference payments in arrears totaled $41.4 million. The
Partnership has not made any preference payments since fiscal 1998.

The Partnership is managed by its general partner, Development, which is 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.

You should review Note (N) of the Notes to Combining Financial Statements
of Holding and the Partnership included on pages 130-131 of this Report for
more information regarding the capital structure of Holding and the
Partnership.

Description of the Securities

The nominee agreement among Centex, Holding, the Partnership and a nominee
restricts the common stock, par value $.01 per share, of Holding and the
Stockholder Warrants from being transferred separate from the common stock, par
value $.25 per share, of Centex. Subject to some restrictions, Centex may, in
its sole discretion, terminate the nominee agreement as to all or any portion
of the Stockholder Warrants and the Holding common stock, which are referred to
as the deposited securities. Unless Centex terminates it sooner, the nominee
agreement will terminate as to the Stockholder Warrants on November 30, 2007.
Centex is not obligated to terminate the nominee agreement as to the Holding
common stock. The termination of the nominee agreement as to any of the
deposited securities will cause those securities to be detached from Centex
common stock. Upon a termination of the nominee agreement, certificates
evidencing the interest of each holder of Centex common stock in that
stockholders pro rata portion of the deposited securities in respect of which
the nominee agreement was terminated will be delivered to the Centex
stockholders of record as of the record date set for the detachment. From and
after that record date,

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certificates evidencing Centex common stock will no longer represent the
beneficial interest in the detached deposited security.

Narrative Description of Business

The Partnership is actively involved in all phases of acquisition,
development and sale of industrial, office, multi-family, retail, mixed-use and
residential properties. During the year ended March 31, 2002, or fiscal 2002,
the Partnership operated in four segments: International Home Building,
Commercial Development, Multi-Family Communities, which was formerly known as
Multi-Family Development, and Corporate-Other, which was formerly known as Land
Sales and Other.

In prior years, the Partnership operated a Domestic Home Building segment,
which was sold in the year ended March 31, 2001, or fiscal 2001, to Centexs
conventional homebuilding subsidiary, Centex Homes. The Domestic Home Building
segment generated revenues of $30.3 million and $13.4 million, respectively,
and operating earnings of $2.8 million and $0.2 million, respectively, for
fiscal 2001 and fiscal 2000.

INTERNATIONAL HOME BUILDING

The Partnership entered the International Home Building business on April
15, 1999 through the acquisition by Centex Development Company UK Limited, a
wholly-owned subsidiary of the Partnership, of all of the voting shares of
Fairclough Homes Group Limited, or Fairclough, a British homebuilder.

Fairclough operates in four geographical regions in the United Kingdom and
develops a range of products, from small single-family units to executive
houses and apartments. Fairclough currently has 53 developments located
throughout England and delivered 1,387 units in fiscal 2002, with prices
ranging from $43,000 to $1,003,000. The average selling price was
approximately $204,000.

The following tables summarize, by geographic area, International Home
Buildings home closings, sales backlog and sales for fiscal 2002 and fiscal
2001.

Closings (in units):

|                               |                        |   |                               |     |  |      |       |     | 
|------------------------------ | ---------------------- | - | ----------------------------- | --- |  | ---- | ----- | --- | 
|                               |                        |   | For the Years Ended March 31, |    
|                               |                        |   |                               |    
|                               |                        |   | 2002                          |     |  | 2001 |      
|                               |                        |   |                               |     |  |      |      
|                               | Southern Home Counties |   |                               | 117 |  |      |       | 122 | 
|                               | Northern Home Counties |   |                               | 290 |  |      |       | 272 | 
|                               | North West/ Yorkshire  |   |                               | 647 |  |      |       | 550 | 
|                               | Midlands               |   |                               | 333 |  |      |       | 299 | 
|                               |                        |   |                               |     |  |     
|                               |                        |   | 1,387                         |     |  |      | 1,243 |    
|                               |                        |   |                               |     |  |     
|Average Sales Price (in 000s) |                        | $ | 204                           |     |  | $    | 204   |    
|                               |                        |   |                               |     |  |     

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

|                       |  |                               |     |  |      |  |     | 
|---------------------- |  | ----------------------------- | --- |  | ---- |  | --- | 
|                       |  | For the Years Ended March 31, |    
|                       |  |                               |    
|                       |  | 2002                          |     |  | 2001 | 
|                       |  |                               |     |  |      | 
|Southern Home Counties |  |                               | 32  |  |      |  | 30  | 
|Northern Home Counties |  |                               | 142 |  |      |  | 70  | 
|North West/Yorkshire   |  |                               | 315 |  |      |  | 173 | 
|Midlands               |  |                               | 96  |  |      |  | 63  | 
|                       |  |                               |     |  |      | 
|                       |  |                               | 585 |  |      |  | 336 | 
|                       |  |                               |     |  |      | 

Sales (in units):

|                       |  |                               |       |  |      |  |       | 
|---------------------- |  | ----------------------------- | ----- |  | ---- |  | ----- | 
|                       |  | For the Years Ended March 31, |      
|                       |  |                               |      
|                       |  | 2002                          |       |  | 2001 | 
|                       |  |                               |       |  |      | 
|Southern Home Counties |  |                               | 117   |  |      |  | 85    | 
|Northern Home Counties |  |                               | 365   |  |      |  | 273   | 
|North West/Yorkshire   |  |                               | 784   |  |      |  | 600   | 
|Midlands               |  |                               | 366   |  |      |  | 254   | 
|                       |  |                               |       |  |      | 
|                       |  |                               | 1,632 |  |      |  | 1,212 | 
|                       |  |                               |       |  |      | 

COMMERCIAL DEVELOPMENT

The Commercial Development segment, on its own and in joint ventures with
third parties, actively develops office, industrial, retail and mixed-use
projects for sale and to hold for investment. Many of the areas Commercial
Development targets for development include land owned by the Partnership and
Centex affiliates, but Commercial Development has also purchased
strategically-positioned land for future development. Commercial Developments
operations during fiscal 2002 included:



| |  |  | completion of six projects totaling 1,037,000 square feet of
industrial, medical and office space located in Arizona, California,
Michigan, Mississippi and North Carolina;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | initiation of construction on six projects totaling 542,000 square
feet of industrial, office and retail space located in California and
Texas;                            
|
| |  |  | acquisition of a 113,000 square foot existing industrial project in
Ventura County, California, together with 16 acres of adjacent
undeveloped land;                       
|
| |  |  | sale of a 132,500 square foot industrial project and an 86,000 square
foot industrial project in Ventura County, California;                                               
|
| |  |  | sale of a partnership interest in a partnership owning 0.6 acres of land in Dallas, Texas;                                                                                 
|
| |  |  | sale of approximately 1.8 acres of land in Ventura County, California; and                                                                                                 
|
| |  |  | sale of a joint venture interest in a medical office building in Rowlett, Texas.                                                                                           

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Through its Commercial Development segment, the Partnership has an
interest in the following completed commercial properties, which are set forth
by geographic location:

|               |  |                        |  |           |                 |          |  |  |     |  
|-------------- |  | ---------------------- |  | --------- | --------------- | -------- |  |  | --- | -
|               |  |                        |  | Size      |                 | Percent 
|State          |  | Product Type           |  | (Sq. Ft.) |                 | by State
|               |  |                        |  |           |                 |         
|Arizona        |  | Industrial             |  |           | 283,000         |          |  |  | 11  | %
|California     |  | Industrial/Flex        |  |           | 113,000         |          |  |  | 4   | %
|Florida        |  | Industrial/Flex
Office |  |           | 134,000
219,000 |          |  |  | 14  | %
|Massachusetts  |  | Industrial/Flex        |  |           | 68,000          |          |  |  | 3   | %
|Michigan       |  | Office                 |  |           | 55,000          |          |  |  | 2   | %
|Mississippi    |  | Medical                |  |           | 22,000          |          |  |  | 1   | %
|North Carolina |  | Industrial/Flex        |  |           | 1,426,000       |          |  |  | 55  | %
|Texas          |  | Office/Medical         |  |           | 266,000         |          |  |  | 10  | %
|               |  |                        |  |           |                 |          |  |  |     |  
|               |  |                        |  |           | 2,586,000       |          |  |  | 100 | %
|               |  |                        |  |           |                 |          |  |  |     |  

MULTI-FAMILY COMMUNITIES

The Multi-Family Communities segment develops multi-family rental
projects, which it actively markets for sale during the development period.
During fiscal 2002, Multi-Family Communities commenced construction on a
381-unit apartment community in St. Petersburg, Florida, a 323-unit apartment
community in Lewisville, Texas, and two apartment communities in San Antonio,
Texas containing 336 and 280 units, respectively, one of which is being
developed for an unaffiliated owner. In addition to this new construction,
Multi-Family Communities continued construction on a 398-unit apartment
community in Haltom City, Texas, as the developer for an unaffiliated owner.
Multi-Family Communities also commenced redevelopment of 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.

During fiscal 2002, Multi-Family Communities also closed on the sale of a
400-unit apartment community in Grand Prairie, Texas, and a 382-unit apartment
community in St. Petersburg, Florida. In addition, Multi-Family Communities
negotiated a pre-sale agreement on the 381-unit apartment community under
construction in St. Petersburg, Florida and sold 12 acres of land in
Lewisville, Texas to Centex Homes.

CORPORATE-OTHER

The Corporate-Other segment acquires and disposes of land and other assets
of the Partnership not identified with another specific business segment.
During fiscal 2002, the Corporate-Other segment purchased a total of 339 acres
in Florida, Hawaii and South Carolina from unaffiliated third parties. In
addition to current year purchases, the Corporate-Other segment also owns six
acres of land in Nevada, which it purchased in fiscal 2001. During fiscal
2002, the Corporate-Other segment sold a 12-acre land parcel in Allen, Texas,
and a single-family lot in Dallas, Texas, to unaffiliated third parties, and 99
single-family lots in Allen, Texas, to Centex Homes.

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You should read Item 2. Properties for additional information concerning
material properties owned by the Partnership at March 31, 2002.

Competition and Other Factors

The Partnerships domestic properties are generally located in areas in
which there is moderate to good demand for land suitable for development.
However, the Partnership is subject to substantial competition from other
owners of similarly-situated or developed properties that wish to sell or
develop their properties. Many of these other owners may hold more parcels or
be in the process of developing more projects than the Partnership, or may have
greater financial resources and longer operating histories than the
Partnership. The Partnerships properties are well positioned to compete with
similar properties within each of these geographic areas.

The Partnership may also compete in the acquisition of additional
desirable properties with a variety of investors, including Centex and its
affiliates and institutional investors and developers, seeking similar
investments.

Faircloughs operations account for less than 1% of the new homes market
in the United Kingdom. The main competitive factors affecting Faircloughs
operations include location, price, mortgage interest rates, construction
costs, design and quality of homes, marketing expertise, and the availability
of land.

In order to be able to compete successfully for the acquisition of
strategic land parcels, Fairclough has put in place procedures to ensure that
the company expands its strategic land portfolio. At March 31, 2002,
Fairclough owned or controlled land inventory for housing starts sufficient for
over three years of building volume at current sales rates.

Ownership and development of each of the Partnerships properties is
subject to licensing and regulation by zoning, land use, environmental, health,
sanitation, and other agencies in the country, state, county and/or
municipality in which the property is located. Difficulties or failures in
obtaining the required licenses or approvals could delay or prevent the
development or sale of any of these properties. In addition, some of the
properties may be subject to zoning or other regulatory limitations that may
not permit development of these properties for their highest and best use. The
ability of the Partnership to obtain favorable zoning changes may affect the
ultimate value of these properties to the Partnership or to a third-party
purchaser.

Centex and its affiliates continue to be involved in many facets of real
estate development and, for this reason, may be in competition with the
Partnership in certain activities and projects. The relationship between
Centex and its affiliates, on the one hand, and Holding, Development, and the
Partnership, on the other hand, from time to time involves decisions by Centex
and its affiliates, directly or indirectly, on behalf of Holding, Development,
and the Partnership. For this reason, the transactions and activities of
Holding, Development, and/or the Partnership may lack the benefit of
arms-length bargaining and may involve conflicts of interest. Holding,
Development, and the Partnership believe, however, that adequate safeguards,
including the fact that the Boards of Directors of Holding and Development
consist of a majority of independent outside directors, sufficiently prevent
any of these conflicts from adversely affecting the business of Holding,
Development, or the Partnership. To the extent that any conflict of interest
or the lack of arms-length bargaining may benefit Centex or its affiliates, on
the one hand, or the Partnership or Holding, on the other hand, the combined
value of the tandem-traded securities beneficially owned by a Centex
stockholder should not be affected one way or another.

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The Partnership is not a real estate investment trust. Therefore, the
Partnerships activities are not subject to the restrictions imposed on real
estate investment trusts qualified under the Internal Revenue Code of 1986, as
amended.

Management and Employees

As of March 31, 2002, the Partnership had 628 employees, 589 of whom are
employees of Centex Development Company UK Limited and Fairclough. Neither
Holding nor Development have any employees. As a result, all executive
management functions for Holding and Development are performed by the directors
and executive officers of the Partnership. You should review the information
relating to the executive officers of Holding and Development that follows Item
4 of Part B of this Report and is included in Item 10 of Part B of this Report.
Some administrative and clerical services required by Holding and by the
Partnership that are not provided by employees of the Partnership are provided
pursuant to services agreements between the Partnership and Holding and between
Holding and Centex Service Company, an affiliate of Centex. For a more
complete discussion of these services agreements, you should read Item 10.
Directors and Executive Officers of the Registrants  Services Agreements and
Note (O) of the Notes to the Combining Financial Statements of Holding and the
Partnership included on pages 131-133 of this Report.




ITEM 2. PROPERTIES

Holding

Due to the nature of its business, Holding does not own or hold for
investment any real or personal properties other than cash, receivables and
other similar assets, and its stock ownership in Development.

The Partnership

The Partnership properties, which are located in Arizona, California,
Florida, Hawaii, Texas, North Carolina, Massachusetts, Michigan, Nevada, South
Carolina and the United Kingdom, consist of:



| |  |  | land zoned for commercial, multi-family, and residential use, which
is held for sale and near-term development;
| | - |  | ---------------------------------------------------------------------------------------------------------------
|
| |  |  | commercial buildings under development or held for sale or investment;                                         
|
| |  |  | multi-family projects under development; and                                                                   
|
| |  |  | office space, both owned and leased, from which the Partnership conducts its operations.                       

Set forth below is a brief description of these properties.

INTERNATIONAL HOME BUILDING

United Kingdom

Fairclough operates from seven divisional offices and a corporate office.
Fairclough owns buildings in Thames Ditton, Surrey, and Tamworth,
Staffordshire. Fairclough leases its remaining facilities located in Sale,
Cheshire; St. Albans, Hertfordshire; Horsham, Sussex; and Wakefield, Yorkshire.
Fairclough also leases its corporate office at Meirion House, Woking, England.
As of March 31, 2002, Faircloughs owned or controlled land inventory included
4,720 plots in 112 developments located throughout England.

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COMMERCIAL DEVELOPMENT

Arizona



| |  |  | Buckeye I this property is located in Tolleson, Arizona. During
fiscal 2002, the Partnership commenced and completed construction on a
283,000 square foot bottling facility for a single tenant. This project
is encumbered by construction financing.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

California



| |  |  | Camarillo Ranch Business Park this property is located in
Camarillo, Ventura County, California and is zoned for light industrial
use. During fiscal 2000, the Partnership completed construction on a
132,500 square foot facility, which it sold during fiscal 2002. The
Partnership constructed an 86,000 square foot building that it sold
during fiscal 2002. The Partnership continues to own 32 acres of
undeveloped land encumbered by a mortgage in favor of a third-party
lender.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Camarillo Business Center in a joint venture arrangement with a
local developer, the Partnership acquired a 113,000 square foot
industrial building and 16 acres of adjacent undeveloped land in
Camarillo, Ventura County, California. The building and land are
encumbered by an acquisition and development loan.                                                                                                                                                                       
|
| |  |  | Northfield the Partnership owns approximately 12 acres of land
located in Oxnard, Ventura County, California. Northfield is zoned for
light industrial uses and is situated in an industrial business park.                                                                                                                                                                                                                                                                                
|
| |  |  | Rivermark this property is located in Santa Clara, California.
The Partnership, in a joint venture with two unaffiliated third parties,
has commenced construction of a 136,000 square foot grocer-anchored
community retail center. This project is encumbered by construction
financing.                                                                                                                                                                                                 

Florida



| |  |  | Gateway Centre this is a 24-acre industrial tract situated in
Pinellas Park, Florida. During fiscal 2000 and 2001, the Partnership
completed construction on three buildings with a combined 134,000 square
feet of office/industrial space. The Partnership continues to own
approximately six acres of undeveloped land adjacent to the three
existing buildings. All of the property is encumbered by construction
financing.                                                                                                                                                      
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Southpointe this property, located in Plantation, Florida, is zoned
for office use. During fiscal 2000, the Partnership completed
construction of a 140,000 square foot office building, which is fully
leased to the General Services Administration for use by the Internal
Revenue Service. This building is encumbered by a mortgage in favor of
a permanent lender. During fiscal 2001, the Partnership and a Centex
affiliate created a joint venture, which completed construction of a
79,000 square foot office building. This building is encumbered by
permanent financing.

Massachusetts



| |  |  | Summit I in a joint venture arrangement with a North Carolina-based
developer, the Partnership owns a 68,000 square foot industrial building
in Gardner, Massachusetts, which is encumbered by permanent financing.
The building is 100% leased to a single tenant.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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Michigan



| |  |  | State Street in a joint venture arrangement with a Michigan-based
developer, the Partnership completed construction of a 55,000 square
foot office building in the State Street Business Park located in
Pittsfield Township, Michigan. The project is encumbered by
construction financing. The Partnership controls approximately 15 acres
of additional land in the project subject to seller financing.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Mississippi



| |  |  | Medical Office Building the Partnership and unaffiliated entities
formed a joint venture that owns a 22,000 square foot medical office
building in Desoto, Mississippi, which is encumbered by permanent
financing.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

North Carolina



| |  |  | South Point in a joint venture arrangement with a local developer,
the Partnership owns a 123,000 square foot industrial building in South
Point Business Park, an industrial park located in Charlotte, North
Carolina. This building is encumbered by construction financing. The
building is 100% leased to a single tenant.                                                                                                                                                                                                                                       
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Westlake the Partnership is involved in a number of single-tenant
industrial projects in the Westlake Business Park located in Charlotte,
North Carolina. The Partnership owns a 38,000 square foot building that
is encumbered by a mortgage in favor of a permanent lender. The
Partnership has also entered into several joint venture arrangements
with a local developer through which it owns six buildings containing
over 1,265,000 square feet of office/industrial space. Each of these
buildings is encumbered by permanent or construction loan financing.

Texas



| |  |  | Citymark the Partnership owns a 218,000 square foot multi-tenant
office building located in Dallas. The building is encumbered by
permanent financing.                                                                                                                                                                                                                                                                                                                            
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Colony South Planning Unit located in suburban Dallas in the city
of The Colony, which originally consisted of 590.65 acres, and
Lewisville, which originally consisted of 134.05 acres. As of March 31,
2002, all acreage, other than approximately 131 acres in The Colony and
approximately 116 acres in Lewisville, had been sold. The acreage in
The Colony is zoned for office, general retail, and business park. The
Lewisville acreage is zoned for light industrial use.
|
| |  |  | Hilltop the Partnership has commenced construction on a 223,000
square foot speculative industrial project located in Grand Prairie,
Texas, in a joint venture with a third party. The project is encumbered
by construction financing.                                                                                                                                                                                                                                           
|
| |  |  | Medical Office Buildings the Partnership and unaffiliated entities
formed several joint ventures that own three medical office buildings
(ranging in size from 9,000 to 20,000 square feet) in Denton, Lewisville
and Palestine. Each of these projects is encumbered by permanent or
construction loan financing.                                                                                                                                                                
|
| |  |  | Vista Ridge In fiscal 2002, the Partnership commenced construction
of a 102,000 square foot, two-phase retail project in Vista Ridge, a
mixed-use development located in the cities of Lewisville and Coppell.
The project is encumbered by construction financing. The Partnership
also owns seven                                                                                                                                                                               

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| |  |  | acres of retail land adjacent to its retail project. The Partnership also
constructed a 40,000 square foot single-tenant office building in
Lewisville, Texas, which is encumbered by construction financing.
| |  |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

MULTI-FAMILY COMMUNITIES

Florida



| |  |  | Brighton Bay this property is located in St. Petersburg, Pinellas
County, Florida. The Partnership completed construction of a 382-unit
apartment complex during fiscal 2001, which it sold during fiscal 2002.
In fiscal 2002, the Partnership commenced construction on a second phase
of apartments totaling 381 units. This complex has been pre-sold to the
buyer of the first phase. The apartment complex is encumbered by
construction financing.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Texas



| |  |  | Dominion Park the Partnership commenced construction on this
280-unit apartment complex in San Antonio, Texas during fiscal 2002.
The apartment complex is encumbered by construction financing.    
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Vista Ridge Villas the Partnership commenced construction on
this 323-unit apartment complex in Lewisville, Texas during fiscal
2002. The apartment complex is encumbered by construction financing.

CORPORATE  OTHER

Florida



| |  |  | Cinnamon Beach during fiscal 2002, the Partnership purchased
approximately 51 acres of land in Palm Coast, Florida. The seller of
the property financed the purchase. Centex Homes has agreements to
purchase lots in the project.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Hawaii



| |  |  | Waikoloa during fiscal 2002, the Partnership purchased
approximately 43 acres of land in Waikoloa, Hawaii. The seller of the
property financed the purchase. Centex Homes has agreements to purchase
lots in the project.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Nevada



| |  |  | Lake Las Vegas during fiscal 2001, the Partnership purchased
approximately six acres of land in Henderson, Nevada. The seller of the
property financed the purchase. Subsequent to March 31, 2002, Centex
Homes purchased all lots in the project.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

South Carolina



| |  |  | Barefoot during fiscal 2002, the Partnership purchased
approximately 245 acres of land in Myrtle Beach, South Carolina. The
seller of the property financed the purchase. Centex Homes has
agreements to purchase lots in the project.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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ITEM 3. LEGAL PROCEEDINGS

Holding is not a party to, and its assets are not the subject of, any
material pending legal proceedings. In the normal course of its business, the
Partnership and/or its subsidiaries are named as defendants in litigation
matters. Management believes that such litigation, if determined unfavorably
to the Partnership, would not have a material adverse effect on the financial
condition or operations of the Partnership.




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

Not applicable.

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EXECUTIVE OFFICERS OF HOLDING AND DEVELOPMENT

The following is an alphabetical listing of the present executive officers
of Holding and/or Development. The Partnership has no executive officers,
since it is managed by its general partner, Development.

|                    |  |     |    |  |          |                                                                        
|------------------- |  | --- | -- |  | -------- | -----------------------------------------------------------------------
|Name                |  | Age |    |  | Position
|                    |  |     |    |  |         
|Richard C. Decker   |  |     | 49 |  |          | President, Centex Commercial Development (a
division of Development)(1)
|Todd D. Newman      |  |     | 45 |  |          | Senior Vice President, Chief Financial
Officer, and Treasurer(2)       
|Stephen M. Weinberg |  |     | 54 |  |          | President and Chief Executive Officer(3)                               



|(1) |  | Mr. Decker is an employee of the Partnership and, since April 1, 2001,
has served as the President of the Centex Commercial Development division
of Development. Mr. Decker is also concurrently employed by Centex
Service Company under a dual employment arrangement. Mr. Decker was
President and Chief Executive Officer of Holding and Development, from
April 1, 1998 until his resignation on March 31, 2000. Mr. Decker also
served as Director of both Holding and Development from June 10, 1998 to
March 31, 2000. Mr. Decker has also been a director and an officer of
various Centex subsidiaries engaged in real estate development since July
1996. From 1995 until July 1996, Mr. Decker operated Decker & Company, a
Phoenix, Arizona-based real estate development company. Prior to that,
Mr. Decker was a partner with Dallas-based Trammell Crow Company, a
commercial real estate development firm, for 15 years and served as
Principal from 1990 until 1995.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Mr. Newman is an employee of the Partnership and serves as Senior Vice
President, Chief Financial Officer, and Treasurer of Holding and
Development. Mr. Newman is also concurrently employed by Centex Service
Company under a dual employment arrangement. Mr. Newman joined the
Partnership in July 2000. From 1999 until joining the Partnership, Mr.
Newman was Chief Financial Officer for Internet Sportstations, Inc. From
1996 to 1999, Mr. Newman was a financial consultant. Mr. Newman was
President of Consolidated Capital Equities Corporation from 1991 through
1996.                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|(3) |  | Mr. Weinberg is an employee of the Partnership and has been President and
a director of Holding and Development since April 1, 2000. He has also
served as Chief Executive Officer of Holding and Development since April
1, 2001. Mr. Weinberg is also concurrently employed by Centex Service
Company under a dual employment arrangement. Mr. Weinberg joined Centex
in 1978 and held the positions of Centex Homes Division President from
1984 to 1988 and Centex Homes Executive Vice President from 1988 until
1995. In 1995, Mr. Weinberg was appointed Chairman and Chief Executive
Officer for Centex Home Services, a Centex subsidiary, where he served
until his appointment as President of both Holding and Development.                                                                                                                                                                                                                                               

The Board of Directors of Holding and Development elect all of their
respective executive officers annually to serve until the next annual meeting
of the Board of Directors or until their successors have been duly elected.
The directors and executive officers perform all executive management
functions. All other services necessary to conduct Holdings business are
performed by employees of the Partnership or by Centex Service under a services
agreement. See Item 10. Directors and Executive Officers of the
Registrants, and Note (O) of the Notes to the Combining Financial Statements
of Holding and the Partnership included on pages 131-133 of this Report. There
are no family relationships among or between the executive officers or the
directors.

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PART II




ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

We have set forth below information called for by this Item 5 with respect
to Holding and the Partnership. We are also incorporating into this Item 5:
(1) the Joint Explanatory Statement on page 2 of this Report, (2) the
information included and referenced under the caption Stock Prices and
Dividends on page 25 of this Report and (3) the information included in Note
(N) of the Notes to the Combining Financial Statements of Holding and the
Partnership on pages 130-131 of this Report.

Holding

Prior to the November 30, 1987 distribution of Holding common stock to
Centex stockholders, Centex owned all of the issued and outstanding shares of
Holding common stock. Accordingly, there was no public market for these
shares. Following the distribution, shares of Holding common stock have been
tradable only in tandem with, and as a part of, shares of Centex common stock
and may not be separately sold or otherwise transferred. Therefore, except
with respect to the trading market established for the tandem traded
securities, there is no separate market for shares of Holding common stock.
Because of the tandem trading arrangement, we cannot identify precisely the
portion of the market price of the tandem-traded securities allocable to shares
of Holding common stock.

Holding has not paid any dividends on shares of its common stock. Whether
Holding pays future cash dividends will depend on the earnings, financial
condition, capital requirements, and other factors affecting Holding and
Development.

The Partnership

The Stockholder Warrants were issued to Centex immediately prior to the
distribution. Accordingly, there was no public market for the Stockholder
Warrants. Following the distribution, the Stockholder Warrants have been
tradable only in tandem with, and as part of, shares of Centex common stock and
may not be separately sold or otherwise transferred. Therefore, except with
respect to the trading market established for the tandem-traded securities,
there is no separate market for the Stockholder Warrants. Because of the
tandem trading arrangement, we cannot identify precisely the portion of the
market price of the tandem-traded securities allocable to the Stockholder
Warrants. No dividends or distributions have been made on the Stockholder
Warrants.

Centex Homes is the current holder of all of the Class A limited
partnership units and Class C limited partnership units. Accordingly, at this
time there is no public market for these securities. At March 31, 2002, there
were 32,260 Class A limited partnership units and 208,330 Class C limited
partnership units outstanding. See Item 1. Business-General Development of
Business. The Partnership has not made preference payments to the holder of
the Class C limited partnership units since fiscal 1998. As of March 31, 2002,
the partners unrecovered capital totaled $241.1 million, and preference
payments in arrears amounted to $41.4 million.

Restrictions on Transfer

The nominee agreement restricts the Stockholder Warrants from being
transferred separate from the Centex common stock. Centex common stock
certificates issued after the date of the nominee agreement bear a legend
referring to the restrictions on transfer imposed by that agreement.

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ITEM 6. SELECTED FINANCIAL DATA

Financial Highlights (Unaudited)(Dollars in thousands, except per share/unit data)

|                                         |                                                           |  |                               |         |  |      |   |         |      |  |   |         |   |  |      |         |   |  |   |        |  
|---------------------------------------- | --------------------------------------------------------- |  | ----------------------------- | ------- |  | ---- | - | ------- | ---- |  | - | ------- | - |  | ---- | ------- | - |  | - | ------ | -
|                                         |                                                           |  | For the Years Ended March 31, |        
|                                         |                                                           |  |                               |        
|                                         |                                                           |  | 2002                          |         |  | 2001 |   |         | 2000 |  |   | 1999    |   |  | 1998 |        
|                                         |                                                           |  |                               |         |  |      |   |         |      |  |   |         |   |  |      |        
|Revenues                                 |                                                           |  |                               |         |  |      |   |         |      |  |   |         |   |  |      |         |   |  |   |       
|                                         | 3333 Holding Corporation and Subsidiary                   |  | $                             | 1,611   |  |      | $ | 1,001   |      |  | $ | 607     |   |  | $    | 1,103   |   |  | $ | 1,505  |  
|                                         | Centex Development Company, L.P. and
Subsidiaries         |  | $                             | 385,145 |  |      | $ | 339,316 |      |  | $ | 378,199 |   |  | $    | 28,228  |   |  | $ | 19,618 |  
|                                         | Combined Revenues                                         |  | $                             | 386,630 |  |      | $ | 339,317 |      |  | $ | 378,199 |   |  | $    | 28,618  |   |  | $ | 20,121 |  
|Net Earnings (Loss)                      |                                                           |  |                               |         |  |      |   |         |      |  |   |         |   |  |      |         |   |  |   |       
|                                         | 3333 Holding Corporation and Subsidiary                   |  | $                             | 1,337   |  |      | $ | (746    | )    |  | $ | (1,127  | ) |  | $    | (1,385  | ) |  | $ | (125   | )
|                                         | Centex Development Company, L.P. and
Subsidiaries         |  | $                             | 15,645  |  |      | $ | 5,362   |      |  | $ | 1,583   |   |  | $    | 1,815   |   |  | $ | 4,524  |  
|                                         | Combined Net Earnings                                     |  | $                             | 16,982  |  |      | $ | 4,616   |      |  | $ | 456     |   |  | $    | 430     |   |  | $ | 4,399  |  
|Total Assets                             |                                                           |  |                               |         |  |      |   |         |      |  |   |         |   |  |      |         |   |  |   |       
|                                         | 3333 Holding Corporation and Subsidiary                   |  | $                             | 3,042   |  |      | $ | 3,253   |      |  | $ | 3,023   |   |  | $    | 2,522   |   |  | $ | 10,423 |  
|                                         | Centex Development Company, L.P. and
Subsidiaries         |  | $                             | 670,953 |  |      | $ | 488,281 |      |  | $ | 515,188 |   |  | $    | 113,233 |   |  | $ | 59,260 |  
|                                         | Combined Assets                                           |  | $                             | 668,436 |  |      | $ | 484,650 |      |  | $ | 511,618 |   |  | $    | 112,176 |   |  | $ | 60,497 |  
|Total Debt                               |                                                           |  |                               |         |  |      |   |         |      |  |   |         |   |  |      |         |   |  |   |       
|                                         | 3333 Holding Corporation and Subsidiary                   |  | $                             |        |  |      | $ |        |      |  | $ |        |   |  | $    | 582     |   |  | $ | 1,480  |  
|                                         | Centex Development Company, L.P. and
Subsidiaries         |  | $                             | 289,126 |  |      | $ | 187,301 |      |  | $ | 323,740 |   |  | $    | 41,896  |   |  | $ | 13,821 |  
|                                         | Combined Debt                                             |  | $                             | 289,126 |  |      | $ | 187,301 |      |  | $ | 323,740 |   |  | $    | 42,478  |   |  | $ | 15,301 |  
|Operating Earnings (Loss) Per Share/Unit |                                                           |  |                               |         |  |      |   |         |      |  |   |         |   |  |      |         |   |  |   |       
|                                         | 3333 Holding Corporation and Subsidiary                   |  | $                             | 1,337   |  |      | $ | (746    | )    |  | $ | (1,127  | ) |  | $    | (1,385  | ) |  | $ | (125   | )
|                                         | Centex Development Company, L.P. and
Subsidiaries         |  | $                             | 69.91   |  |      | $ | 76.34   |      |  | $ | 25.08   |   |  | $    | 33.38   |   |  | $ | 140.14 |  
|Average Shares/Units Outstanding         |                                                           |  |                               |         |  |      |   |         |      |  |   |         |   |  |      |         |   |  |   |       
|                                         | 3333 Holding Corporation and Subsidiary
(shares)          |  |                               | 1,000   |  |      |   | 1,000   |      |  |   | 1,000   |   |  |      | 1,000   |   |  |   | 1,000  |  
|                                         | Centex Development Company, L.P. and
Subsidiaries (units) |  |                               | 223,788 |  |      |   | 70,235  |      |  |   | 63,116  |   |  |      | 54,377  |   |  |   | 32,281 |  

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

FISCAL YEAR 2002 COMPARED TO FISCAL YEAR 2001

On a combined basis, revenues for the Partnership and Holding for fiscal
year 2002 totaled $386.6 million compared to revenues of $339.3 million for the
prior fiscal year. The Partnership and Holding had combined net earnings for
fiscal 2002 of $17.0 million compared to combined net earnings of $4.6 million
in fiscal 2001.

INTERNATIONAL HOME BUILDING

The following summarizes International Home Buildings results for the
two-year period ended March 31, 2002 (dollars in thousands):

|                                  |  |                               |          |   |      |   |          |  
|--------------------------------- |  | ----------------------------- | -------- | - | ---- | - | -------- | -
|                                  |  | For the Years Ended March 31, |         
|                                  |  |                               |         
|                                  |  | 2002                          |          |   | 2001 |  
|                                  |  |                               |          |   |      |  
|Revenues                          |  | $                             | 290,406  |   |      | $ | 252,487  |  
|Cost of Sales                     |  |                               | (251,010 | ) |      |   | (222,634 | )
|General & Administrative Expenses |  |                               | (25,135  | ) |      |   | (22,085  | )
|Interest Expense                  |  |                               | (1,947   | ) |      |   | (7,802   | )
|                                  |  |                               |          |   |      |  
|Operating Earnings (Loss)         |  | $                             | 12,314   |   |      | $ | (34      | )
|                                  |  |                               |          |   |      |  
|Units Closed                      |  |                               | 1,387    |   |      |   | 1,243    |  

In connection with the purchase of this segment by the Partnership, the
seller received $219 million in non-interest-bearing promissory notes due April
1, 2001 and retained preferred non-voting shares in Fairclough that entitled
the seller to receive the net after-tax earnings of Fairclough until March 31,
2001. During fiscal 2001, Fairclough generated after-tax earnings totaling
$7.8 million. The Partnership has accounted for the non-interest-bearing debt
and nominal residual value preferred shares as if they were a single debt
instrument. Accordingly, the Partnership recorded distributions attributable
to the preferred shares as interest expense in the accompanying financial
statements. After taxes, International Homebuilding generated earnings of
$10.5 million and $0.2 million for fiscal 2002 and 2001, respectively.

International Home Buildings revenues for the fiscal year ended March 31,
2002 increased by $37.9 million from revenues for the same period last year.
The increase is primarily attributable to an increase in unit completions.

Home sales totaled 1,387 units during the fiscal year ended March 31,
2002, compared to 1,243 units during the same period in the preceding year,
representing a 12% increase. The backlog of homes sold but not closed at March
31, 2002 was 585 units, 74% more than the 336 units at the same point in the
preceding year.

The events of September 11, 2001, had an adverse impact on Faircloughs
operations, particularly in its Southern Home Counties division, a high-end
home market around London that has a significant expatriate community.
Fairclough responded to a decline in sales rates by increasing marketing
efforts, purchase incentives and price discounting.

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COMMERCIAL DEVELOPMENT

The following summarizes Commercial Developments results for the two-year
period ended March 31, 2002 (dollars and square footage in thousands):

|                                           |  |                               |         |   |      |   |         |  
|------------------------------------------ |  | ----------------------------- | ------- | - | ---- | - | ------- | -
|                                           |  | For the Years Ended March 31, |        
|                                           |  |                               |        
|                                           |  | 2002                          |         |   | 2001 |  
|                                           |  |                               |         |   |      |  
|Sales Revenues                             |  | $                             | 20,597  |   |      | $ | 22,144  |  
|Rental and Other Income                    |  |                               | 18,871  |   |      |   | 10,944  |  
|Cost of Sales                              |  |                               | (16,750 | ) |      |   | (18,398 | )
|Selling, General & Administrative Expenses |  |                               | (7,913  | ) |      |   | (5,936  | )
|Interest Expense                           |  |                               | (6,755  | ) |      |   | (4,525  | )
|                                           |  |                               |         |   |      |  
|Operating Earnings before Depreciation     |  |                               | 8,050   |   |      |   | 4,229   |  
|Depreciation                               |  |                               | (3,535  | ) |      |   | (2,076  | )
|                                           |  |                               |         |   |      |  
|Operating Earnings                         |  | $                             | 4,515   |   |      | $ | 2,153   |  
|                                           |  |                               |         |   |      |  
|Operating Square Footage at March 31       |  |                               | 2,586   |   |      |   | 1,541   |  



| |   |  | Commercial Developments operations during fiscal 2002 included:                                                                                                           
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | completion of six projects totaling 1,037,000 square feet of
industrial, medical and office space located in Arizona, California,
Michigan, Mississippi and North Carolina;
|
| |  |  | initiation of construction on six projects totaling 542,000 square
feet of industrial, office and retail space located in California and
Texas;                            
|
| |  |  | acquisition of a 113,000 square foot existing industrial project in
Ventura County, California, together with 16 acres of adjacent
undeveloped land;                       
|
| |  |  | sale of a 132,500 square foot industrial project and an 86,000 square
foot industrial project in Ventura County, California;                                               
|
| |  |  | sale of a partnership interest in a partnership owning 0.6 acres of land in Dallas, Texas;                                                                                 
|
| |  |  | sale of approximately 1.8 acres of land in Ventura County, California; and                                                                                                 
|
| |  |  | sale of a joint venture interest in a medical office building in Rowlett, Texas.                                                                                           



| |   |  | Commercial Developments operations during fiscal 2001 included:                                                                                      
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | completion of eight buildings totaling 856,000 square feet of office
and industrial space located in Florida, California, Texas, and North
Carolina;  
|
| |  |  | initiation of construction on six new projects totaling 929,000
square feet of office and industrial space in Michigan, California and
North Carolina;
|
| |  |  | acquisition of a 134,500 square foot existing industrial building in Charlotte, North Carolina;                                                       
|
| |  |  | sale of five industrial buildings totaling 485,000 square feet in Ventura County, California; and                                                     
|
| |  |  | sale of five acres of land in Lewisville, Texas.                                                                                                      

Sales Revenues and Cost of Sales for fiscal 2002 reflect the sale of two
industrial projects and the sale of approximately two acres of land. Sales
Revenues and Cost of Sales for fiscal 2001 reflect the sale of an industrial
project in California and the sale of land in Texas and California. Rental and
Other Income increased in fiscal 2002 as a result of an increase in the number
of operating properties. Selling, General and Administrative Expenses,
Interest Expense and Depreciation also increased for fiscal 2002 as a result of
an increase in the number of operating properties.

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|                     |  |                               |       |  |           |  |      |          |  |  |           |  |  |  |      |  
|-------------------- |  | ----------------------------- | ----- |  | --------- |  | ---- | -------- |  |  | --------- |  |  |  | ---- | -
|                     |  | For the Years Ended March 31, |      
|                     |  |                               |      
|                     |  | 2002                          |       |  | 2001      | 
|                     |  |                               |       |  |           | 
|                     |  | (000's)                       |       |  | Weighted  |  |      | (000's)  |  |  | Weighted  | 
|                     |  | Rentable                      |       |  | Average   |  |      | Rentable |  |  | Average   | 
|                     |  | Sq. Ft.                       |       |  | Occupancy |  |      | Sq. Ft.  |  |  | Occupancy | 
|                     |  |                               |       |  |           |  |      |          |  |  |           | 
|Operating Properties |  |                               |       |  |           |  |      |          |  |  |           |  |  |  |      |  
|Industrial           |  |                               | 2,024 |  |           |  | 92.4 | %        |  |  | 1,046     |  |  |  | 94.3 | %
|Office/Medical       |  |                               | 562   |  |           |  | 88.3 | %        |  |  | 495       |  |  |  | 95.7 | %
|                     |  |                               |       |  |           |  |      |          |  |  |           |  |  | 
|                     |  |                               | 2,586 |  |           |  | 91.5 | %        |  |  | 1,541     |  |  |  | 94.7 | %
|                     |  |                               |       |  |           |  |      |          |  |  |           |  |  | 

|                           |  |          |     |  |  |  |  |          |         |  |     |  |  |  |  | 
|-------------------------- |  | -------- | --- |  |  |  |  | -------- | ------- |  | --- |  |  |  |  | 
|                           |  | (000's)  |     |  |  |  |  |          | (000's) |  |     |  |  | 
|                           |  | Rentable |     |  |  |  |  | Rentable |         |  |     | 
|                           |  | Sq. Ft.  |     |  |  |  |  | Sq. Ft.  |         |  |     | 
|                           |  |          |     |  |  |  |  |          |         |  |     | 
|Projects Under Development |  |          |     |  |  |  |  |          |         |  |     |  |  |  |  | 
|Industrial                 |  |          | 308 |  |  |  |  |          |         |  | 677 |  |  |  |  | 
|Office/Medical             |  |          | 40  |  |  |  |  |          | 55      |  |     | 
|Retail                     |  |          | 194 |  |  |  |  |          |         |  |    |  |  |  |  | 
|                           |  |          |     |  |  |  |  |          |         |  |     |  |  | 
|                           |  |          | 542 |  |  |  |  |          |         |  | 732 |  |  |  |  | 
|                           |  |          |     |  |  |  |  |          |         |  |     |  |  | 

MULTI-FAMILY COMMUNITIES

The following summarizes the results of Multi-Family Communities, which
was formerly known as Multi-Family Development, for the two-year period ended
March 31, 2002 (dollars in thousands):

|                                           |  |                               |         |   |      |   |        |  
|------------------------------------------ |  | ----------------------------- | ------- | - | ---- | - | ------ | -
|                                           |  | For the Years Ended March 31, |        
|                                           |  |                               |        
|                                           |  | 2002                          |         |   | 2001 |  
|                                           |  |                               |         |   |      |  
|Revenues                                   |  | $                             | 53,944  |   |      | $ | 1,664  |  
|Cost of Sales                              |  |                               | (46,866 | ) |      |   |       |  
|Selling, General & Administrative Expenses |  |                               | (3,923  | ) |      |   | (2,399 | )
|                                           |  |                               |         |   |      |  
|Operating Earnings (Loss)                  |  | $                             | 3,155   |   |      | $ | (735   | )
|                                           |  |                               |         |   |      |  

During fiscal 2002 Multi-Family Communities closed on the sale of a
400-unit apartment complex located in Grand Prairie, Texas, a 382-unit
apartment complex in St. Petersburg, Florida, and the sale of 12 acres of land
in Lewisville, Texas to Centex Homes.

Revenues for fiscal 2001 resulted from the sale of a 172-apartment
community in College Station, Texas, that Multi-Family Communities owned in a
joint venture with an unaffiliated developer, and the receipt of an earn-out
payment related to the fiscal 2000 sale of a 304-unit apartment community in
The Colony, Texas.

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CORPORATE-OTHER

The following summarizes the results of Corporate-Other, which was
formerly known as Land Sales and Other, for the two-year period ended March 31,
2002 (dollars in thousands):

|                                  |  |                               |        |   |      |   |         |  
|--------------------------------- |  | ----------------------------- | ------ | - | ---- | - | ------- | -
|                                  |  | For the Years Ended March 31, |       
|                                  |  |                               |       
|                                  |  | 2002                          |        |   | 2001 |  
|                                  |  |                               |        |   |      |  
|Revenues                          |  | $                             | 2,812  |   |      | $ | 21,774  |  
|Cost of Sales                     |  |                               | (1,209 | ) |      |   | (20,578 | )
|General & Administrative Expenses |  |                               | (2,013 | ) |      |   | (1,047  | )
|Interest Expense                  |  |                               | (835   | ) |      |   |        |  
|                                  |  |                               |        |   |      |  
|Operating (Loss) Earnings         |  | $                             | (1,245 | ) |      | $ | 149     |  
|                                  |  |                               |        |   |      |  

The Partnerships Corporate-Other segment acquires and disposes of land
and other assets of the Partnership not identified with another specific
business segment. Fiscal 2002 revenues included $1.8 million from sales of
residential lots to Centex Homes and fees related to agreements to sell
residential lots to Centex Homes, $0.5 million from the sale of commercial land
in Allen, Texas, $0.4 million from the sale of a residential lot in Dallas,
Texas, and $0.1 million from miscellaneous sources. Fiscal 2001 revenues from
the sale of real estate totaled $21.1 million, which resulted from the sale of
the Domestic Homebuilding operations to Centex Homes at book value, which
approximated market value.

FISCAL YEAR 2001 COMPARED TO FISCAL YEAR 2000

On a combined basis, revenues for the Partnership and Holding for fiscal
2001 totaled $339.3 million compared to revenues of $378.2 million for the
prior fiscal year. The Partnership and Holding had combined net earnings for
fiscal 2001 of $4.6 million compared to combined net earnings of $456,000 in
fiscal 2000.

INTERNATIONAL HOME BUILDING

The following summarizes International Home Buildings results for the
two-year period ended March 31, 2001 (dollars in thousands):

|                                  |  |                               |          |   |      |   |          |  
|--------------------------------- |  | ----------------------------- | -------- | - | ---- | - | -------- | -
|                                  |  | For the Years Ended March 31, |         
|                                  |  |                               |         
|                                  |  | 2001                          |          |   | 2000 |  
|                                  |  |                               |          |   |      |  
|Revenues                          |  | $                             | 252,487  |   |      | $ | 329,582  |  
|Cost of Sales                     |  |                               | (222,634 | ) |      |   | (283,456 | )
|General & Administrative Expenses |  |                               | (22,085  | ) |      |   | (24,188  | )
|Interest Expense, Paid to Seller  |  |                               | (7,802   | ) |      |   | (18,229  | )
|                                  |  |                               |          |   |      |  
|Operating (Loss) Earnings         |  | $                             | (34      | ) |      | $ | 3,709    |  
|                                  |  |                               |          |   |      |  
|Units Closed                      |  |                               | 1,243    |   |      |   | 1,707    |  

In connection with the purchase of this segment by the Partnership, the
seller received $219 million in non-interest-bearing promissory notes due April
1, 2001 and retained preferred non-voting shares in Fairclough. During fiscal
2001, Fairclough generated after tax earnings totaling $7.8 million. The
earnings are subject to distribution to the seller under the preferred share
arrangement. The Partnership has accounted for the non-interest-bearing debt
and nominal residual value preferred shares as if they were a single debt
instrument. Accordingly, it recorded distributions attributable to the
preferred shares as interest expense in the accompanying financial statements.
After taxes, International Home Building generated earnings of $0.2 million for
fiscal 2001.

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International Home Buildings revenues for fiscal 2001 decreased by $77.1
million from revenues for the same period in the preceding year. The decrease
is attributable to declining unit completions resulting principally from the
repositioning of Faircloughs land position and the buildout of communities
that were developed under previous ownership, offset slightly by higher sales
prices.

Home sales totaled 1,243 units during fiscal 2001, compared to 1,707 units
during the same period in the preceding year, representing a 27% decrease. The
backlog of homes sold but not closed at March 31, 2001 was 336 units, 8% less
than the 367 units at the same point in the preceding year.

DOMESTIC HOME BUILDING

The following summarizes Domestic Home Buildings results for the two-year
period ended March 31, 2001 (dollars in thousands):

|                                  |  |                               |         |   |      |   |         |  
|--------------------------------- |  | ----------------------------- | ------- | - | ---- | - | ------- | -
|                                  |  | For the Years Ended March 31, |        
|                                  |  |                               |        
|                                  |  | 2001                          |         |   | 2000 |  
|                                  |  |                               |         |   |      |  
|Revenues                          |  | $                             | 30,304  |   |      | $ | 13,377  |  
|Cost of Sales                     |  |                               | (24,002 | ) |      |   | (11,672 | )
|General & Administrative Expenses |  |                               | (3,461  | ) |      |   | (1,495  | )
|                                  |  |                               |         |   |      |  
|Operating Earnings                |  | $                             | 2,841   |   |      | $ | 210     |  
|                                  |  |                               |         |   |      |  
|Gross Margin per Unit             |  | $                             | 53      |   |      | $ | 39      |  
|Units Closed                      |  |                               | 119     |   |      |   | 44      |  

Fiscal 2001 revenues included revenues from the sale of single-family
homes in New Jersey. The increase in the number of single-family homes sold
during fiscal 2001 resulted from the Partnerships ability to market and sell
homes in a new single-family community for which zoning approval was obtained
in fiscal 2000.

On March 31, 2001, the Partnership sold its Domestic Home Building segment
to Centex Homes for total consideration of $21.1 million. The financial
results from the sale of this segment are included in Corporate-Other.
Domestic Homebuilding accounted for 8.9% and 3.5% of revenues and 65.0% and
4.9% of operating earnings in fiscal 2001 and 2000, respectively.

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COMMERCIAL DEVELOPMENT

The following summarizes Commercial Developments results for the two-year
period ended March 31, 2001 (dollars and square footage in thousands):

|                                           |  |                               |         |   |      |   |        |  
|------------------------------------------ |  | ----------------------------- | ------- | - | ---- | - | ------ | -
|                                           |  | For the Years Ended March 31, |        
|                                           |  |                               |        
|                                           |  | 2001                          |         |   | 2000 |  
|                                           |  |                               |         |   |      |  
|Sales Revenues                             |  | $                             | 22,144  |   |      | $ | 4,465  |  
|Rental and Other Income                    |  |                               | 10,944  |   |      |   | 5,862  |  
|Cost of Sales                              |  |                               | (18,398 | ) |      |   | (3,438 | )
|Selling, General & Administrative Expenses |  |                               | (5,936  | ) |      |   | (1,758 | )
|Interest Expense                           |  |                               | (4,525  | ) |      |   | (2,440 | )
|                                           |  |                               |         |   |      |  
|Operating Earnings before Depreciation     |  |                               | 4,229   |   |      |   | 2,691  |  
|Depreciation                               |  |                               | (2,076  | ) |      |   | (1,246 | )
|                                           |  |                               |         |   |      |  
|Operating Earnings                         |  | $                             | 2,153   |   |      | $ | 1,445  |  
|                                           |  |                               |         |   |      |  
|Operating Square Footage at March 31       |  |                               | 1,541   |   |      |   | 976    |  



| |   |  | Commercial Developments operations during fiscal 2001 included:                                                                                       
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | completion of eight buildings totaling 856,000 square feet of office
and industrial space located in Florida, California, Texas, and North
Carolina;   
|
| |  |  | initiation of construction on six new projects totaling 929,000
square feet of office and industrial space in Michigan, California, and
North Carolina;
|
| |  |  | acquisition of a 134,500 square foot existing industrial building in Charlotte, North Carolina;                                                        
|
| |  |  | sale of five industrial buildings totaling 485,000 square feet in Ventura County, California;                                                          
|
| |  |  | sale of five acres of land in Lewisville, Texas.                                                                                                       

Sales revenues for the prior year included six acres in Camarillo,
California and forty developed lots in Plano, Texas.

MULTI-FAMILY COMMUNITIES

The following summarizes the results of Multi-Family Communities, which
was formerly known as Multi-Family Development, for the two-year period ended
March 31, 2001 (dollars in thousands):

|                                  |  |                               |        |   |      |   |         |  
|--------------------------------- |  | ----------------------------- | ------ | - | ---- | - | ------- | -
|                                  |  | For the Years Ended March 31, |       
|                                  |  |                               |       
|                                  |  | 2001                          |        |   | 2000 |  
|                                  |  |                               |        |   |      |  
|Revenues                          |  | $                             | 1,664  |   |      | $ | 17,154  |  
|Cost of Sales                     |  |                               |       |   |      |   | (17,057 | )
|General & Administrative Expenses |  |                               | (2,399 | ) |      |   | (1,977  | )
|                                  |  |                               |        |   |      |  
|Operating Loss                    |  | $                             | (735   | ) |      | $ | (1,880  | )
|                                  |  |                               |        |   |      |  

Revenues for fiscal 2001 resulted from the sale of a 172-unit apartment
community in College Station, Texas, that Multi-Family Communities owned in a
joint venture with an unaffiliated developer, and the receipt of an earn-out
payment related to the fiscal 2000 sale of a 304-unit apartment community in
The Colony, Texas. Revenues for fiscal 2000 resulted from the sale of the
property in The Colony, Texas.

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During fiscal 2001, Multi-Family Communities completed construction on a
382-unit apartment community in St. Petersburg, Florida and began construction
on a 398-unit apartment community in Haltom City, Texas, as the developer for
an unaffiliated owner.

CORPORATE-OTHER

The following summarizes the results of Corporate-Other, which was
formerly known as Land Sales and Other, for the two-year period ended March 31,
2001 (dollars in thousands):

|                                  |  |                               |         |   |      |   |        |  
|--------------------------------- |  | ----------------------------- | ------- | - | ---- | - | ------ | -
|                                  |  | For the Years Ended March 31, |        
|                                  |  |                               |        
|                                  |  | 2001                          |         |   | 2000 |  
|                                  |  |                               |         |   |      |  
|Revenues                          |  | $                             | 21,774  |   |      | $ | 7,759  |  
|Cost of Sales                     |  |                               | (20,578 | ) |      |   | (6,384 | )
|General & Administrative Expenses |  |                               | (1,047  | ) |      |   | (569   | )
|                                  |  |                               |         |   |      |  
|Operating Earnings                |  | $                             | 149     |   |      | $ | 806    |  
|                                  |  |                               |         |   |      |  

The Partnerships Corporate-Other segment acquires and disposes of land
and other assets of the Partnership not identified with another specific
business segment. Fiscal 2001 revenues from the sale of real estate totaled
$21.1 million, which resulted from the sale of the Domestic Homebuilding
operations to Centex Homes at book value, which approximated market value.
Fiscal 2000 sales totaled $7.3 million and included revenues from the sale of
524 lots in Florida and Texas, ten acres in New Jersey to Centex affiliates,
and ten acres in The Colony and Dallas, Texas.

LIQUIDITY AND CAPITAL RESOURCES

The Partnership finances 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 units to Centex affiliates, and cash flow from operations,
which is comprised largely of proceeds from the sale of real estate and
operating projects.

The Partnership typically finances 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 $56.0 million at March 31, 2002. As
properties are completed, the Partnership either sells or refinances the
properties with long-term fixed-rate debt. In both instances, the proceeds are
used to repay the short-term borrowings. According to the terms of various
construction loan agreements, the Partnership is required to maintain certain
minimum liquidity and net worth levels. At March 31, 2002, the Partnership was
in compliance with these covenants.

Permanent commercial project loans outstanding at March 31, 2002 totaled
$76.6 million compared to $70.7 million at March 31, 2001. The project loans
are collateralized by completed commercial properties and have original terms
ranging from ten to twenty-two years with fixed interest rates ranging from
6.92% to 8.72%.

Seller-financed land loans of $57.1 million and $6.5 million were obtained
during fiscal 2002 and fiscal 2001, respectively. Outstanding balances on
seller-financed loans at March 31, 2002 totaled $62.4 million, with terms of up
to three years and fixed interest rates ranging from 0.0% to 14.0%.

The International Home Building segment has secured a revolving bank
credit facility of 100 million in British pounds sterling. The term of this
facility expires in fiscal 2004. Advances under this facility totaled £66.0
million, or $94.1 million, at March 31, 2002. Under the terms of this
facility, Fairclough is

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required to maintain certain leverage and interest coverage ratios and a
minimum tangible net worth. At March 31, 2002, Fairclough was in compliance
with all of these covenants.

During fiscal 2002, the Partnership issued 27,135 Class C units in
exchange for assets valued at $27.1 million. The assets acquired included land
and $26.4 million in cash.

The Partnership and Holding 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 their current and future
needs.

CERTAIN OFF-BALANCE-SHEET AND OTHER OBLIGATIONS

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

Joint Ventures

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 $16.1 million as of March 31, 2002 and $10.2 million as of March
31, 2001. The Partnerships liability for the obligations of these
non-consolidated joint ventures is limited to approximately $1.1 million as of
March 31, 2002.

Letters of Credit, Guarantees and Leases

At March 31, 2002 the Partnership had outstanding performance bonds and
bank guarantees of $25.8 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 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 March 31, 2002, the Partnership had issued demand
notes totaling $1.6 million. In some instances, the Partnership has also
executed partial recourse payment guarantees. At March 31, 2002, subsidiaries
of the Partnership had outstanding letters of credit of $0.9 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, the Partnerships liability
exposure will be decreased and, eventually, the Partnership will not have any
continuing obligations with respect to these projects.

We have no material capital or operating leases.

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CRITICAL ACCOUNTING POLICIES

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

Goodwill

We adopted the provisions of Statement of Financial Accounting Standards
No. 142, Goodwill and Other Intangible Assets, or SFAS No. 142, effective
April 1, 2001. Upon the adoption of SFAS No. 142, goodwill is no longer
subject to amortization. Rather, goodwill is subject to an assessment, at
least annually, for impairment by applying a fair value based test. If the
carrying amount exceeds the fair value, an impairment exists. We continually
evaluate whether events and circumstances have occurred that indicate that the
remaining balance of goodwill may not be recoverable. In evaluating
impairment, we estimate the sum of the expected future cash flows derived from
such goodwill. Such evaluations for impairment are significantly impacted by
estimates of future revenues, costs and expenses and other factors. If the
goodwill is considered to be impaired, the impairment to be recognized is
measured by the amount by which the carrying amount of the goodwill exceeds the
fair value of the future cash flows.

Impairment of Long-Lived Assets

We account for long-lived assets in accordance with the provisions of
Statement of Financial Accounting Standards No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of,
or SFAS No. 121. SFAS No. 121 requires that long-lived assets and certain
identifiable intangibles, which includes our inventories, real estate
investments and property and equipment, be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an
asset may not be recoverable. Recoverability of assets is measured by
comparing the carrying amount of an asset to future undiscounted net cash flows
expected to be generated by the asset. These evaluations for impairment are
significantly impacted by estimates of revenues, costs and expenses and other
factors. If these assets are considered to be impaired, the impairment to be
recognized is measured by the amount by which the carrying amount of the assets
exceeds the fair value of the assets.

FORWARD-LOOKING STATEMENTS

The Business, Managements Discussion and Analysis of Financial Condition
and Results of Operations, and other sections of this Report contain
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
may be identified by the context of the statement and generally arise when 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 Partnership and Holding include the following:



| |  |  | general economic conditions and interest rates in the United States and the United Kingdom;
| | - |  | -------------------------------------------------------------------------------------------
|
| |  |  | the cyclical nature of the businesses of Partnership and Holding;                          
|
| |  |  | adverse weather;                                                                           
|
| |  |  | changes in property taxes;                                                                 

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| |  |  | 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 Partnership and Holding;
|
| |  |  | 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 Partnership and Holding.




ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Partnership utilizes both short-term and long-term debt in its
financing strategy. The Partnerships financial position is exposed to
fluctuations in variable interest rates for loans obtained by its subsidiaries
and joint ventures, and to a certain extent, to fluctuations in variable
interest rates prior to obtaining a locked rate on permanent project financing.

For fixed-rate debt, changes in interest rates do not affect the
Partnerships earnings or cash flows. Conversely, for variable-rate debt,
changes in interest rates do affect the Partnerships future earnings and cash
flows. At March 31, 2002 the Partnership, through its subsidiaries and joint
ventures, had $76.6 million in fixed-rate permanent debt with a
weighted-average interest rate of 7.76%. The permanent debt has monthly
principal and interest debt service and has maturities ranging from 2009 to
2023. In addition, the Partnership, through its subsidiaries and joint
ventures, had $83.5 million in other fixed-rate debt at March 31, 2002, with
maturities ranging from fiscal 2003 to fiscal 2004. Also at March 31, 2002,
the Partnership, through its subsidiaries and joint ventures, had $136.5
million in variable-rate loans. If interest rates increased 100 basis points,
the annual effect to the Partnerships financial position and cash flows would
approximate $1.4 million based on the balances outstanding at March 31, 2002.
We cannot determine future fluctuations in interest rates. Accordingly, actual
results from interest rate fluctuation could differ from the estimate presented
above. Fairclough has entered into an interest rate swap agreement on a
portion of its variable rate debt, which, in effect, fixes the interest rate on
approximately 53% of its debt outstanding at March 31, 2002. In addition,
Fairclough has issued promissory notes and incurred bank debt payable in
British pounds sterling.

As of March 31, 2002, the Partnership had not utilized any forward or
option contracts on foreign currencies or commodities, or other types of
derivative financial instruments, to mitigate any of the associated foreign
currency exchange rate risk.

A single tenant leases, pursuant to leases signed over the last several
years, 1,037,000 square feet, or approximately 40%, of the Partnerships
completed commercial projects. Fiscal 2002 revenues from this tenant were
approximately 19% of total rental revenues from commercial projects.

Various Centex affiliates lease, pursuant to leases signed over the last
several years, an aggregate of 249,000 square feet, or approximately 10%, of
the Partnerships completed commercial projects. Fiscal 2002 revenues from
these Centex affiliates were approximately 23% of total rental revenues from
commercial projects.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

|                                                                                              |  |  |     | 
|--------------------------------------------------------------------------------------------- |  |  | --- | 
|3333 Holding Corporation and Subsidiary and Centex Development
Company, L.P. and Subsidiaries |  |  |     | 
|                                                                                             
|Combining Balance Sheets                                                                      |  |  | 116 | 
|                                                                                             
|Combining Statements of Operations                                                            |  |  | 117 | 
|                                                                                             
|Combining Statements of Cash Flows                                                            |  |  | 118 | 
|                                                                                             
|Combining Statements of Stockholders Equity and Partners Capital                            |  |  | 120 | 
|                                                                                             
|Notes to Combining Financial Statements                                                       |  |  | 121 | 
|                                                                                             
|Report of Independent Auditors                                                                |  |  | 137 | 
|                                                                                             
|Quarterly Results                                                                             |  |  | 138 | 

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

|                                                        |                                                  |                                     |                                                        |         |           |         |         |              |       |         |            |         |                    |         |         |                 |       |         |       |        |    |        |       |        |   |        |  
|------------------------------------------------------- | ------------------------------------------------ | ----------------------------------- | ------------------------------------------------------ | ------- | --------- | ------- | ------- | ------------ | ----- | ------- | ---------- | ------- | ------------------ | ------- | ------- | --------------- | ----- | ------- | ----- | ------ | -- | ------ | ----- | ------ | - | ------ | -
|                                                        |                                                  |                                     |                                                        |         | March 31, |        
|                                                        |                                                  |                                     |                                                        |         |           |        
|                                                        |                                                  |                                     |                                                        |         | 2002      |         |         | 2001         |       |         | 2002       |         |                    | 2001    |         |                 | 2002  |         |       | 2001   |   
|                                                        |                                                  |                                     |                                                        |         |           |         |         |              |       |         |            |         |                    |         |         |                 |       |         |       |        |   
|                                                        |                                                  |                                     |                                                        |         |           |         |         |              |       |         |            |         | Centex Development |         |         | 3333 Holding    |      
|                                                        |                                                  |                                     |                                                        |         |           |         |         |              |       |         |            |         | Company, L.P. and  |         |         | Corporation and |      
|                                                        |                                                  |                                     |                                                        |         | Combined  |         |         | Subsidiaries |       |         | Subsidiary |        
|                                                        |                                                  |                                     |                                                        |         |           |         |         |              |       |         |            |        
|Assets                                                  |                                                  |                                     |                                                        |         |           |         |         |              |       |         |            |         |                    |         |         |                 |       |         |       |        |    |        |       |       
|                                                        | Cash and Cash Equivalents                        |                                     | $                                                      | 22,538  |           |         | $       | 3,034        |       |         | $          | 22,529  |                    |         | $       | 3,029           |       |         | $     | 9      |    |        | $     | 5      |  
|                                                        | Receivables                                     |                                     |                                                        |         |           |         |         |              |       |         |            |         |                    |         |         |                 |       |         |       |        |    |        |       |        |  
|                                                        |                                                  | Affiliates                          |                                                        |         |          |         |         |              |      |         |            |         | 4,368              |         |         |                 | 5,168 |         |       |        |   |        |       |        |  |       
|                                                        |                                                  | Centex Corporation and Subsidiaries |                                                        |         |          |         |         |              | 578   |         |            |         |                   |         |         |                 | 578   |         |       |        |   |        |       |        |  |       
|                                                        |                                                  | Notes                               |                                                        |         |          |         |         |              | 14    |         |            |         |                   |         |         |                 | 14    |         |       |        |   |        |       |        |  |       
|                                                        |                                                  | Other                               |                                                        |         | 7,481     |         |         |              | 9,607 |         |            |         | 7,410              |         |         |                 | 9,607 |         |       |        | 71 |        |       |        |  |       
|                                                        | Inventories                                     |                                     |                                                        |         |           |         |         |              |       |         |            |         |                    |         |         |                 |       |         |       |        |    |        |       |        |  
|                                                        |                                                  |                                     | Housing Projects                                       |         |           | 317,186 |         |              |       | 250,556 |            |         |                    | 317,186 |         |                 |       | 250,556 |       |        |    |       |       |        |   |       |  
|                                                        |                                                  |                                     | Land Held for Development and Sale                     |         |           | 88,138  |         |              |       | 30,954  |            |         |                    | 88,138  |         |                 |       | 30,954  |       |        |    |       |       |        |   |       |  
|                                                        |                                                  |                                     | Commercial and Multi-Family
Projects Under Development |         |           | 41,524  |         |              |       | 59,317  |            |         |                    | 41,524  |         |                 |       | 57,945  |       |        |    |       |       |        |   | 1,372  |  
|                                                        | Investments                                     |                                     |                                                        |         |           |         |         |              |       |         |            |         |                    |         |         |                 |       |         |       |        |    |        |       |        |  
|                                                        |                                                  |                                     | Commercial Properties, net                             |         |           | 132,457 |         |              |       | 83,649  |            |         |                    | 132,457 |         |                 |       | 83,649  |       |        |    |       |       |        |   |       |  
|                                                        |                                                  |                                     | Real Estate Joint Ventures                             |         |           | 5,353   |         |              |       | 2,699   |            |         |                    | 5,353   |         |                 |       | 2,699   |       |        |    |       |       |        |   |       |  
|                                                        |                                                  |                                     | Affiliate                                              |         |           |        |         |              |       |        |            |         |                    |        |         |                 |       |        |       |        |    | 1,191  |       |        |   | 1,716  |  
|                                                        | Property and Equipment, net                      |                                     |                                                        | 3,212   |           |         |         | 3,391        |       |         |            | 3,212   |                    |         |         | 3,331           |       |         |       |       |    |        |       | 60     |  
|                                                        | Other Assets                                    |                                     |                                                        |         |           |         |         |              |       |         |            |         |                    |         |         |                 |       |         |       |        |    |        |       |        |  
|                                                        |                                                  |                                     | Goodwill, net                                          |         |           | 27,799  |         |              |       | 27,616  |            |         |                    | 27,799  |         |                 |       | 27,616  |       |        |    |       |       |        |   |       |  
|                                                        |                                                  |                                     | Deferred Charges and Other                             |         |           | 22,748  |         |              |       | 13,235  |            |         |                    | 20,977  |         |                 |       | 13,135  |       |        |    | 1,771  |       |        |   | 100    |  
|                                                        |                                                  |                                     |                                                        |         |           |         |         |              |       |         |            |         |                    |         |         |                 |       |        
|                                                        |                                                  | $                                   | 668,436                                                |         |           | $       | 484,650 |              |       | $       | 670,953    |         |                    | $       | 488,281 |                 |       | $       | 3,042 |        |    | $      | 3,253 |       
|                                                        |                                                  |                                     |                                                        |         |           |         |         |              |       |         |            |         |                    |         |         |                 |       |        
|Liabilities, Stockholders Equity and
Partners Capital |                                                  |                                     |                                                        |         |           |         |         |              |       |         |            |         |                    |         |         |                 |       |         |       |        |    |        |       |       
|                                                        | Accounts Payable and Accrued
Liabilities        |                                     |                                                        |         |           |         |         |              |       |         |            |         |                    |         |         |                 |       |         |       |        |    |        |       |        |  
|                                                        |                                                  |                                     | Affiliates                                             |         | $         |        |         |              | $     |        |            |         | $                  |        |         |                 | $     |        |       |        | $  | 4,368  |       |        | $ | 5,692  |  
|                                                        |                                                  |                                     | Centex Corporation and Subsidiaries                    |         |           | 7,061   |         |              |       | 591     |            |         |                    | 7,061   |         |                 |       | 327     |       |        |    |       |       |        |   | 264    |  
|                                                        |                                                  |                                     | Other                                                  |         |           | 110,102 |         |              |       | 80,945  |            |         |                    | 110,109 |         |                 |       | 80,993  |       |        |    | 42     |       |        |   | 2      |  
|                                                        | Notes Payable                                    |                                     |                                                        | 289,126 |           |         |         | 187,301      |       |         |            | 289,126 |                    |         |         | 187,301         |       |         |       |       |    |        |       |       |  
|                                                        | Stockholders Equity and Partners
Capital      |                                     |                                                        |         |           |         |         |              |       |         |            |         |                    |         |         |                 |       |         |       |        |    |        |       |        |  
|                                                        |                                                  |                                     | Stock and Stock/Class B Unit                           |         |           |         |         |              |       |         |            |         |                    |         |         |                 |       |         |       |        |    |        |       |        |   |        |  
|                                                        |                                                  |                                     | Warrants                                               |         |           | 501     |         |              |       | 501     |            |         |                    | 500     |         |                 |       | 500     |       |        |    | 1      |       |        |   | 1      |  
|                                                        |                                                  |                                     | Capital in Excess of Par Value                         |         |           | 800     |         |              |       | 800     |            |         |                    |        |         |                 |       |        |       |        |    | 800    |       |        |   | 800    |  
|                                                        |                                                  |                                     | Retained Earnings (Deficit)                            |         |           | (2,169  | )       |              |       | (3,506  | )          |         |                    |        |         |                 |       |        |       |        |    | (2,169 | )     |        |   | (3,506 | )
|                                                        |                                                  |                                     | Partners Capital                                      |         |           | 264,994 |         |              |       | 222,214 |            |         |                    | 266,136 |         |                 |       | 223,356 |       |        |    |       |       |        |   |       |  
|                                                        |                                                  |                                     | Accumulated Other Comprehensive
Loss                   |         |           | (1,979  | )       |              |       | (4,196  | )          |         |                    | (1,979  | )       |                 |       | (4,196  | )     |        |    |       |       |        |   |       |  
|                                                        |                                                  |                                     |                                                        |         |           |         |         |              |       |         |            |         |                    |         |         |                 |       |        
|                                                        | Total Stockholders Equity and
Partners Capital |                                     |                                                        | 262,147 |           |         |         | 215,813      |       |         |            | 264,657 |                    |         |         | 219,660         |       |         |       | (1,368 | )  |        |       | (2,705 | )
|                                                        |                                                  |                                     |                                                        |         |           |         |         |              |       |         |            |         |                    |         |         |                 |       |        
|                                                        |                                                  | $                                   | 668,436                                                |         |           | $       | 484,650 |              |       | $       | 670,953    |         |                    | $       | 488,281 |                 |       | $       | 3,042 |        |    | $      | 3,253 |       
|                                                        |                                                  |                                     |                                                        |         |           |         |         |              |       |         |            |         |                    |         |         |                 |       |        

See Notes to Combining Financial Statements.

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##### Table of Contents



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

|                                           |                                               |   |                               |         |                       |      |            |         |      |   |         |         |  |                            |         |                 |  |      |         |         |      |   |         |         |  |   |              |       |  |   |       |       |  |   |        |       | 
|------------------------------------------ | --------------------------------------------- | - | ----------------------------- | ------- | --------------------- | ---- | ---------- | ------- | ---- | - | ------- | ------- |  | -------------------------- | ------- | --------------- |  | ---- | ------- | ------- | ---- | - | ------- | ------- |  | - | ------------ | ----- |  | - | ----- | ----- |  | - | ------ | ----- | 
|                                           |                                               |   | For the Years Ended March 31, |        
|                                           |                                               |   |                               |        
|                                           |                                               |   | 2002                          |         |                       | 2001 |            |         | 2000 |   |         | 2002    |  |                            | 2001    |                 |  | 2000 |         |         | 2002 |   |         | 2001    |  |   | 2000         |      
|                                           |                                               |   |                               |         |                       |      |            |         |      |   |         |         |  |                            |         |                 |  |      |         |         |      |   |         |         |  |   |              |      
|                                           |                                               |   |                               |         |                       |      |            |         |      |   |         |         |  |                            |         |                 |  |      |         |         |      |   |         |         |  |   | 3333 Holding |      
|                                           |                                               |   |                               |         |                       |      |            |         |      |   |         |         |  | Centex Development Company |         | Corporation and | 
|                                           |                                               |   | Combined                      |         | L.P. and Subsidiaries |      | Subsidiary |        
|                                           |                                               |   |                               |         |                       |      |            |         |      |  
|Revenues                                   |                                               |   |                               |         |                       |      |            |         |      |   |         |         |  |                            |         |                 |  |      |         |         |      |   |         |         |  |   |              |       |  |   |       |       |  |   |        |      
|                                           | Real Estate Sales                             |   | $                             | 364,162 |                       |      | $          | 328,362 |      |   | $       | 371,610 |  |                            | $       | 364,162         |  |      | $       | 328,362 |      |   | $       | 371,610 |  |   | $            |      |  |   | $     |      |  |   | $      |      | 
|                                           | Interest and Other Income                     |   |                               | 22,468  |                       |      |            | 10,955  |      |   |         | 6,589   |  |                            |         | 20,983          |  |      |         | 10,954  |      |   |         | 6,589   |  |   |              | 1,611 |  |   |       | 1,001 |  |   |        | 607   | 
|                                           |                                               |   |                               |         |                       |      |            |         |      |   |         |         |  |                            |         |                 |  |      |         |         |      |   |         |         |  |   |             
|                                           |                                               |   | 386,630                       |         |                       |      | 339,317    |         |      |   | 378,199 |         |  |                            | 385,145 |                 |  |      | 339,316 |         |      |   | 378,199 |         |  |   | 1,611        |       |  |   | 1,001 |       |  |   | 607    |      
|                                           |                                               |   |                               |         |                       |      |            |         |      |   |         |         |  |                            |         |                 |  |      |         |         |      |   |         |         |  |   |             
|Costs and Expenses                         |                                               |   |                               |         |                       |      |            |         |      |   |         |         |  |                            |         |                 |  |      |         |         |      |   |         |         |  |   |              |       |  |   |       |       |  |   |        |      
|                                           | Cost of Real Estate Sold                      |   |                               | 315,835 |                       |      |            | 285,612 |      |   |         | 321,044 |  |                            |         | 315,835         |  |      |         | 285,612 |      |   |         | 321,044 |  |   |              |      |  |   |       |      |  |   |        |      | 
|                                           | Selling, General, and
Administrative Expenses |   |                               | 38,408  |                       |      |            | 32,164  |      |   |         | 28,305  |  |                            |         | 38,260          |  |      |         | 31,455  |      |   |         | 27,237  |  |   |              | 274   |  |   |       | 1,709 |  |   |        | 1,675 | 
|                                           | Interest                                      |   |                               | 9,543   |                       |      |            | 12,327  |      |   |         | 20,681  |  |                            |         | 9,543           |  |      |         | 12,327  |      |   |         | 20,666  |  |   |              |      |  |   |       |      |  |   |        | 15    | 
|                                           | Depreciation and Amortization                 |   |                               | 4,105   |                       |      |            | 4,840   |      |   |         | 3,879   |  |                            |         | 4,105           |  |      |         | 4,802   |      |   |         | 3,835   |  |   |              |      |  |   |       | 38    |  |   |        | 44    | 
|                                           |                                               |   |                               |         |                       |      |            |         |      |   |         |         |  |                            |         |                 |  |      |         |         |      |   |         |         |  |   |             
|                                           |                                               |   | 367,891                       |         |                       |      | 334,943    |         |      |   | 373,909 |         |  |                            | 367,743 |                 |  |      | 334,196 |         |      |   | 372,782 |         |  |   | 274          |       |  |   | 1,747 |       |  |   | 1,734  |      
|                                           |                                               |   |                               |         |                       |      |            |         |      |   |         |         |  |                            |         |                 |  |      |         |         |      |   |         |         |  |   |             
|Earnings (Loss) Before
Income Taxes        |                                               |   | 18,739                        |         |                       |      | 4,374      |         |      |   | 4,290   |         |  |                            | 17,402  |                 |  |      | 5,120   |         |      |   | 5,417   |         |  |   | 1,337        |       |  |   | (746  | )     |  |   | (1,127 | )    
|                                           | Income Taxes                                  |   |                               | 1,757   |                       |      |            | (242    | )    |   |         | 3,834   |  |                            |         | 1,757           |  |      |         | (242    | )    |   |         | 3,834   |  |   |              |      |  |   |       |      |  |   |        |      | 
|                                           |                                               |   |                               |         |                       |      |            |         |      |   |         |         |  |                            |         |                 |  |      |         |         |      |   |         |         |  |   |             
|Net Earnings (Loss)                        |                                               | $ | 16,982                        |         |                       | $    | 4,616      |         |      | $ | 456     |         |  | $                          | 15,645  |                 |  | $    | 5,362   |         |      | $ | 1,583   |         |  | $ | 1,337        |       |  | $ | (746  | )     |  | $ | (1,127 | )    
|                                           |                                               |   |                               |         |                       |      |            |         |      |   |         |         |  |                            |         |                 |  |      |         |         |      |   |         |         |  |   |             
|Net Earnings Allocable to
Limited Partner  |                                               |   |                               |         |                       |      |            |         |      |   |         |         |  | $                          | 15,645  |                 |  | $    | 5,362   |         |      | $ | 1,583   |         |  |   |              |       |  |   |       |       |  |   |        |      
|                                           |                                               |   |                               |         |                       |      |            |         |      |   |         |         |  |                            |         |                 |  |      |         |         |      |   |         |         |  |   |              |       |  |   |       |       | 
|Net Earnings (Loss) Per
Unit/Share         |                                               |   |                               |         |                       |      |            |         |      |   |         |         |  | $                          | 69.91   |                 |  | $    | 76.34   |         |      | $ | 25.08   |         |  | $ | 1,337        |       |  | $ | (746  | )     |  | $ | (1,127 | )    
|                                           |                                               |   |                               |         |                       |      |            |         |      |   |         |         |  |                            |         |                 |  |      |         |         |      |   |         |         |  |   |              |       |  |  
|Weighted-Average Units/
Shares Outstanding |                                               |   |                               |         |                       |      |            |         |      |   |         |         |  |                            | 223,788 |                 |  |      | 70,235  |         |      |   | 63,116  |         |  |   | 1,000        |       |  |   | 1,000 |       |  |   | 1,000  |      
|                                           |                                               |   |                               |         |                       |      |            |         |      |   |         |         |  |                            |         |                 |  |      |         |         |      |   |         |         |  |   |              |       |  |  

See Notes to Combining Financial Statements.

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##### Table of Contents



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

|                                               |                                                   |                                     |          |          |         |   |         |         |          |      |        |         |        |  
|---------------------------------------------- | ------------------------------------------------- | ----------------------------------- | -------- | -------- | ------- | - | ------- | ------- | -------- | ---- | ------ | ------- | ------ | -
|                                               |                                                   |                                     |          | March 31 |        
|                                               |                                                   |                                     |          |          |        
|                                               |                                                   |                                     |          | 2002     |         |   | 2001    |         |          | 2000 |       
|                                               |                                                   |                                     |          |          |         |   |         |         |          |      |       
|                                               |                                                   |                                     |          | Combined |        
|                                               |                                                   |                                     |          |          |        
|Cash Flows  Operating Activities              |                                                   |                                     |          |          |         |   |         |         |          |      |        |        
|                                               | Net Earnings (Loss)                               |                                     | $        | 16,982   |         |   | $       | 4,616   |          |      | $      | 456     |       
|                                               | Adjustments-                                      |                                     |          |          |         |   |         |         |          |      |        |         |       
|                                               |                                                   | Depreciation and Amortization       |          |          | 4,105   |   |         |         | 4,840    |      |        |         | 3,879  |  
|                                               | Earnings from Joint Ventures                      |                                     |          | (161     | )       |   |         | (394    | )        |      |        | (30     | )     
|                                               | Decrease (Increase) in Restricted Cash            |                                     |          |         |         |   |         | 1,915   |          |      |        | (1,915  | )     
|                                               | Decrease (Increase) in Receivables                |                                     |          | 2,716    |         |   |         | 133     |          |      |        | (5,238  | )     
|                                               | Decrease in Notes Receivable                      |                                     |          | 14       |         |   |         | 3,117   |          |      |        | 423     |       
|                                               | (Increase) Decrease in Inventories                |                                     |          | (103,403 | )       |   |         | (36,126 | )        |      |        | 21,278  |       
|                                               | Increase in Commercial Properties                 |                                     |          | (51,780  | )       |   |         | (24,143 | )        |      |        | (57,423 | )     
|                                               | (Increase) Decrease in Other Assets               |                                     |          | (9,370   | )       |   |         | (7,895  | )        |      |        | (2,556  | )     
|                                               | Increase (Decrease) in Payables and Accruals      |                                     |          | 35,483   |         |   |         | (25,571 | )        |      |        | 67,813  |       
|                                               |                                                   |                                     |          |          |         |   |         |         |         
|                                               |                                                   |                                     | (105,414 | )        |         |   | (79,508 | )       |          |      | 26,687 |        
|                                               |                                                   |                                     |          |          |         |   |         |         |         
|Cash Flows  Investing Activities              |                                                   |                                     |          |          |         |   |         |         |          |      |        |        
|                                               | (Increase) Decrease in Advances to Joint Ventures |                                     |          | (2,493   | )       |   |         | 290     |          |      |        | (1,893  | )     
|                                               | Property and Equipment Additions, net             |                                     |          | (236     | )       |   |         | (633    | )        |      |        | 224     |       
|                                               |                                                   |                                     |          |          |         |   |         |         |         
|                                               |                                                   |                                     | (2,729   | )        |         |   | (343    | )       |          |      | (1,669 | )      
|                                               |                                                   |                                     |          |          |         |   |         |         |         
|Cash Flows  Financing Activities              |                                                   |                                     |          |          |         |   |         |         |          |      |        |        
|                                               | (Decrease) Increase in Notes Payable-             |                                     |          |          |         |   |         |         |          |      |        |         |       
|                                               |                                                   | Centex Corporation and Subsidiaries |          |          |        |   |         |         |         |      |        |         | (582   | )
|                                               |                                                   | Other                               |          |          | 101,676 |   |         |         | (114,318 | )    |        |         | 27,311 |  
|                                               | Issuance of Class C Units                         |                                     |          | 26,378   |         |   |         | 142,268 |          |      |        | 4,830   |       
|                                               | Capital Distributions
Return of Capital           |                                     |          |         |         |   |         |        |          |      |        |        |       
|                                               |                                                   |                                     |          |          |         |   |         |         |         
|                                               |                                                   |                                     | 128,054  |          |         |   | 27,950  |         |          |      | 31,559 |        
|                                               |                                                   |                                     |          |          |         |   |         |         |         
|                                               | Effect of Exchange Rate Changes on Cash           |                                     |          | (407     | )       |   |         | (1,464  | )        |      |        | (542    | )     
|                                               |                                                   |                                     |          |          |         |   |         |         |         
|Net Increase (Decrease) in Cash                |                                                   |                                     | 19,504   |          |         |   | (53,365 | )       |          |      | 56,035 |        
|Cash and Cash Equivalents at Beginning of Year |                                                   |                                     | 3,034    |          |         |   | 56,399  |         |          |      | 364    |        
|                                               |                                                   |                                     |          |          |         |   |         |         |         
|Cash and Cash Equivalents at End of Year       |                                                   | $                                   | 22,538   |          |         | $ | 3,034   |         |          | $    | 56,399 |        
|                                               |                                                   |                                     |          |          |         |   |         |         |         

See Notes to Combining Financial Statements.

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##### Table of Contents



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

| | March 31,          |          |   | March 31,       |  
| | ------------------ | -------- | - | --------------- | -
| |                    |          |   |                 |  
| | 2002               |          |   | 2001            |  
| |                    |          |   |                 |  
| | Centex Development |          |   | 3333 Holding    |  
| | Company, L.P. and  |          |   | Corporation and |  
| | Subsidiaries       |          |   | Subsidiary      |  
| |                    |          |   |                 |  
| |                    |          |   |                 |  
| | $                  | 15,645   |   |                 | $
| |                    |          |   |                 |  
| |                    | 4,105    |   |                 |  
| |                    | (161     | ) |                 |  
| |                    |         |   |                 |  
| |                    | 2,787    |   |                 |  
| |                    | 14       |   |                 |  
| |                    | (105,299 | ) |                 |  
| |                    | (51,780  | ) |                 |  
| |                    | (7,699   | ) |                 |  
| |                    | 37,031   |   |                 |  
| |                    |          |   |                 |  
| |                    | (105,357 | ) |                 |  
| |                    |          |   |                 |  
| |                    |          |   |                 |  
| |                    | (2,493   | ) |                 |  
| |                    | (297     | ) |                 |  
| |                    |          |   |                 |  
| |                    | (2,790   | ) |                 |  
| |                    |          |   |                 |  
| |                    |          |   |                 |  
| |                    |          |   |                 |  
| |                    |         |   |                 |  
| |                    | 101,676  |   |                 |  
| |                    | 26,378   |   |                 |  
| |                    |         |   |                 |  
| |                    |          |   |                 |  
| |                    | 128,054  |   |                 |  
| |                    |          |   |                 |  
| |                    | (407     | ) |                 |  
| |                    |          |   |                 |  
| |                    | 19,500   |   |                 |  
| |                    | 3,029    |   |                 |  
| |                    |          |   |                 |  
| | $                  | 22,529   |   |                 | $
| |                    |          |   |                 |  

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3333 Holding Corporation and Subsidiary
and Centex Development Company, L.P. and Subsidiaries
Combining Statements of Stockholders Equity and Partners Capital(Dollars in thousands)

|                          |                              |         |         |                                  |   |     |                            |         |   |         |           |   |         |           |         |          |       |   |           |           |            |           |          |          |   |        |        |       |  | 
|------------------------- | ---------------------------- | ------- | ------- | -------------------------------- | - | --- | -------------------------- | ------- | - | ------- | --------- | - | ------- | --------- | ------- | -------- | ----- | - | --------- | --------- | ---------- | --------- | -------- | -------- | - | ------ | ------ | ----- |  | 
|                          |                              |         |         | Centex Development Company, L.P. |   |     | 3333 Holding               |        
|                          |                              |         |         | and Subsidiaries                 |   |     | Corporation and Subsidiary |        
|                          |                              |         |         |                                  |   |     |                            |        
|                          |                              |         |         |                                  |   |     |                            | Class B |   |         | General   |   |         | Limited   |         |          |       |   |           |           | Capital in |           |          | Retained |  
|                          |                              |         |         |                                  |   |     |                            | Unit    |   |         | Partners' |   |         | Partners' |         |          | Stock |   |           | Excess of |            |           | Earnings |         
|                          |                              |         |         | Combined                         |   |     | Warrants                   |         |   | Capital |           |   | Capital |           |         | Warrants |       |   | Par Value |           |            | (Deficit) |         
|                          |                              |         |         |                                  |   |     |                            |         |   |         |           |   |         |           |         |          |       |   |           |           |            |           |         
|Balance at March 31, 1999 |                              | $       | 60,730  |                                  |   | $   | 500                        |         |   | $       | 767       |   |         | $         | 61,062  |          |       | $ | 1         |           |            | $         | 800      |          |   | $      | (1,633 | )    
|                          | General Partner Contribution |         |        |                                  |   |     |                           |         |   |         | 375       |   |         |           |        |          |       |   |          |           |            |           |         |          |   |        |       |      
|                          | Issuance of Class C Units    |         | 8,095   |                                  |   |     |                           |         |   |         |          |   |         |           | 8,095   |          |       |   |          |           |            |           |         |          |   |        |       |      
|                          | Net Earnings                 |         | 456     |                                  |   |     |                           |         |   |         |          |   |         |           | 1,583   |          |       |   |          |           |            |           |         |          |   |        | (1,127 | )    
|                          | Other Comprehensive
Loss     |         | (96     | )                                |   |     |                           |         |   |         |          |   |         |           | (96     | )        |       |   |          |           |            |           |         |          |   |        |       |      
|                          |                              |         |         |                                  |   |     |                            |         |   |         |           |   |         |           |         |          |       |   |           |           |            |           |          |          |   |        |       
|                          | Comprehensive Income         |         | 360     |                                  |   |     |                            |         |   |         |           |   |         |           |         |          |       |   |           |           |            |           |          |          |   |        |        |      
|                          |                              |         |         |                                  |   |     |                            |         |   |         |           |   |         |           |         |          |       |   |           |           |           
|Balance at March 31, 2000 |                              |         | 69,185  |                                  |   |     | 500                        |         |   |         | 1,142     |   |         |           | 70,644  |          |       |   | 1         |           |            |           | 800      |          |   |        | (2,760 | )    
|                          | Issuance of Class C Units    |         | 146,112 |                                  |   |     |                           |         |   |         |          |   |         |           | 146,112 |          |       |   |          |           |            |           |         |          |   |        |       |      
|                          | Net Earnings                 |         | 4,616   |                                  |   |     |                           |         |   |         |          |   |         |           | 5,362   |          |       |   |          |           |            |           |         |          |   |        | (746   | )    
|                          | Other Comprehensive
Loss     |         | (4,100  | )                                |   |     |                           |         |   |         |          |   |         |           | (4,100  | )        |       |   |          |           |            |           |         |          |   |        |       |      
|                          |                              |         |         |                                  |   |     |                            |         |   |         |           |   |         |           |         |          |       |   |           |           |            |           |          |          |   |       
|                          | Comprehensive Income         |         | 516     |                                  |   |     |                            |         |   |         |           |   |         |           |         |          |       |   |           |           |            |           |          |          |   |        |        |      
|                          |                              |         |         |                                  |   |     |                            |         |   |         |           |   |         |           |         |          |       |   |           |           |           
|Balance at March 31, 2001 |                              |         | 215,813 |                                  |   |     | 500                        |         |   |         | 1,142     |   |         |           | 218,018 |          |       |   | 1         |           |            |           | 800      |          |   |        | (3,506 | )    
|                          | Issuance of Class C Units    |         | 27,135  |                                  |   |     |                           |         |   |         |          |   |         |           | 27,135  |          |       |   |          |           |            |           |         |          |   |        |       |      
|                          | Net Earnings                 |         |         | 16,982                           |   |     |                            |        |   |         |           |  |         |           |         | 15,645   |       |   |           |          |            |           |          |         |   |        |        | 1,337 | 
|                          | Other Comprehensive
Income   |         | 2,217   |                                  |   |     |                           |         |   |         |          |   |         |           | 2,217   |          |       |   |          |           |            |           |         |          |   |        |       |      
|                          |                              |         |         |                                  |   |     |                            |         |   |         |           |   |         |           |         |          |       |   |           |           |            |           |          |          |   |        |       
|                          | Comprehensive Income         |         |         | 19,199                           |   |     |                            |         |   |         |           |   |         |           |         |          |       |   |           |           |            |           |          |          |   |        |        |       | 
|                          |                              |         |         |                                  |   |     |                            |         |   |         |           |   |         |           |         |          |       |   |           |           |           
|Balance at March 31, 2002 | $                            | 262,147 |         |                                  | $ | 500 |                            |         | $ | 1,142   |           |   | $       | 263,015   |         |          | $     | 1 |           |           | $          | 800       |          |          | $ | (2,169 | )     
|                          |                              |         |         |                                  |   |     |                            |         |   |         |           |   |         |           |         |          |       |   |           |           |           

See Notes to Combining Financial Statements.

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3333 Holding Corporation and Subsidiary
and Centex Development Company, L.P. and Subsidiaries
Notes to Combining Financial Statements(Dollars in thousands, except per share/unit data)

(A) ORGANIZATION

Centex Development Company, L.P. (the Partnership) is a master limited
partnership formed by Centex Corporation (Centex) in March 1987 to broaden
its business to include general real estate development. Centex believed that
this expansion would improve stockholder value through longer-term real estate
investments, real estate developments and the benefits of the partnership form
of business. Because the real estate development business generally requires a
longer time horizon to maximize value than Centexs core 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 (Stockholder Warrants) to purchase
approximately 80% of the Class B Units. The Stockholder 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 a return of capital. As of March 31, 2002, these
adjusted capital contributions, or Unrecovered Capital, were $241.1 million and
preference payments in arrears totaled $41.4 million. The Partnership has not
made any preference payments since fiscal 1998.

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

Supplementary condensed combined financial statements of Centex and
subsidiaries, Holding and subsidiary, and the Partnership and subsidiaries are
set forth below. For additional information on Centex and subsidiaries, you
should refer to the separate financial statements and related footnotes
included elsewhere in this Report.

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

|                                     |                                          |   |           |           |  |      |           |           | 
|------------------------------------ | ---------------------------------------- | - | --------- | --------- |  | ---- | --------- | --------- | 
|                                     |                                          |   | March 31, |          
|                                     |                                          |   |           |          
|                                     |                                          |   | 2002      |           |  | 2001 |          
|                                     |                                          |   |           |           |  |      |          
|Assets                               |                                          |   |           |           |  |      |           |          
|                                     | Cash and Cash Equivalents                |   | $         | 242,254   |  |      | $         | 60,786    | 
|                                     | Restricted Cash                          |   |           | 106,270   |  |      |           | 57,428    | 
|                                     | Receivables                              |   |           | 4,066,401 |  |      |           | 2,613,035 | 
|                                     | Inventories                              |   |           | 3,283,719 |  |      |           | 2,629,733 | 
|                                     | Investments in Joint Ventures and Other  |   |           | 99,962    |  |      |           | 72,679    | 
|                                     | Property and Equipment, net              |   |           | 723,497   |  |      |           | 732,490   | 
|                                     | Other Assets                             |   |           | 862,580   |  |      |           | 757,882   | 
|                                     |                                          |   |           |           |  |     
|                                     |                                          | $ | 9,384,683 |           |  | $    | 6,924,033 |          
|                                     |                                          |   |           |           |  |     
|Liabilities and Stockholders Equity |                                          |   |           |           |  |      |           |          
|                                     | Accounts Payable and Accrued Liabilities |   | $         | 1,546,334 |  |      | $         | 1,352,467 | 
|                                     | Short-term Debt                          |   |           | 545,789   |  |      |           | 602,185   | 
|                                     | Long-term Debt                           |   |           | 5,020,116 |  |      |           | 3,111,607 | 
|                                     | Minority Stockholders Interest          |   |           | 155,671   |  |      |           | 143,710   | 
|                                     | Stockholders Equity                     |   |           | 2,116,773 |  |      |           | 1,714,064 | 
|                                     |                                          |   |           |           |  |     
|                                     |                                          | $ | 9,384,683 |           |  | $    | 6,924,033 |          
|                                     |                                          |   |           |           |  |     

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

|                             |  |                               |           |   |      |   |           |      |  |   |           |  
|---------------------------- |  | ----------------------------- | --------- | - | ---- | - | --------- | ---- |  | - | --------- | -
|                             |  | For the Years Ended March 31, |          
|                             |  |                               |          
|                             |  | 2002                          |           |   | 2001 |   |           | 2000 | 
|                             |  |                               |           |   |      |   |           |      | 
|Revenues                     |  | $                             | 8,114,891 |   |      | $ | 7,048,573 |      |  | $ | 6,380,125 |  
|Cost of Sales                |  |                               | 7,494,369 |   |      |   | 6,612,484 |      |  |   | 5,959,430 |  
|                             |  |                               |           |   |      |   |           |      | 
|Earnings Before Income Taxes |  |                               | 620,522   |   |      |   | 436,089   |      |  |   | 420,695   |  
|Income Taxes                 |  |                               | 238,296   |   |      |   | 154,112   |      |  |   | 163,563   |  
|                             |  |                               |           |   |      |   |           |      | 
|Net Earnings                 |  |                               | 382,226   |   |      |   | 281,977   |      |  |   | 257,132   |  
|Other Comprehensive Loss     |  |                               | (12,956   | ) |      |   | (3,849    | )    |  |   | (1,248    | )
|                             |  |                               |           |   |      |   |           |      | 
|Comprehensive Income         |  | $                             | 369,270   |   |      | $ | 278,128   |      |  | $ | 255,884   |  
|                             |  |                               |           |   |      |   |           |      | 

(B) BASIS OF PRESENTATION

The accompanying combining financial statements present the individual and
combined financial statements of Holding and subsidiary and the Partnership and
subsidiaries as of March 31, 2002 and 2001, and results of operations for each
of fiscal 2002, 2001 and 2000, after the elimination of all significant
intercompany balances and transactions. The financial statements of the
Partnership and subsidiaries are included in the combined statements since
Development, as general partner of the Partnership, is able to exercise
effective control over the Partnership.

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(C) SIGNIFICANT ACCOUNTING POLICIES

Revenue Recognition

Revenues from homebuilding projects are recognized as homes are sold and
title passes. Real estate sales are recognized when a buyer has made an
adequate cash down payment, all significant risks and rewards of ownership have
been relinquished and title has transferred to the buyer. Sales revenues
related to contractually obligated improvements are deferred until such
improvements have been completed. The Partnership recognizes revenues from
rentals to tenants under operating leases ratably over the lease terms. Rental
revenues are included in Interest and Other Income in the Combining Statements
of Operations.

Earnings (Loss) Per Share/Unit

Earnings (loss) per share/unit is based on the weighted-average number of
outstanding shares of Holding common stock of 1,000 and on the weighted-average
number of outstanding Class A and Class C Units of 223,788; 70,235; and 63,116
for fiscal 2002, 2001, and 2000, respectively.

Cash and Cash Equivalents

The Partnership considers all highly liquid investments purchased with an
original maturity of three months or less to be cash and cash equivalents.

Inventory Capitalization and Cost Allocation

Projects under development and held for sale are stated at the lower of
cost (including development costs and, where appropriate, capitalized interest
and real estate taxes) or fair value less costs to sell. Capitalized costs are
included in cost of sales in the combining statements of operations as related
revenues are recognized. Interest costs relieved from inventories are included
in cost of sales. The Companies review recoverability of their inventories on
an individual basis in accordance with Statement of Financial Accounting
Standards (SFAS) No. 121, Accounting for Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed Of.

Commercial Properties, net

Commercial real estate properties are carried at cost, net of accumulated
depreciation. Betterments, major renovations, and certain costs directly
related to the acquisition, improvement and leasing of real estate are
capitalized. Expenditures for maintenance and repairs are charged to
operations as incurred. Depreciation is computed using the straight-line
method over the estimated useful lives of the assets, as follows:

|                                               |  |                              
|---------------------------------------------- |  | -----------------------------
|Buildings and Improvements
Tenant Improvements |  | 5 to 39 years
Terms of leases

The cost of commercial real estate properties and accumulated depreciation
are summarized below:

|                         |  |           |         |   |      |   |        |  
|------------------------ |  | --------- | ------- | - | ---- | - | ------ | -
|                         |  | March 31, |        
|                         |  |           |        
|                         |  | 2002      |         |   | 2001 |  
|                         |  |           |         |   |      |  
|Commercial Properties    |  | $         | 137,942 |   |      | $ | 86,778 |  
|Accumulated Depreciation |  |           | (5,485  | ) |      |   | (3,129 | )
|                         |  |           |         |   |      |  
|                         |  | $         | 132,457 |   |      | $ | 83,649 |  
|                         |  |           |         |   |      |  

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Deferred Charges and Other

Deferred charges and other are primarily composed of loan fees, lease
commissions, prepaid expenses, deposits and investments.

Property and Equipment, net

Property and equipment are stated at cost. Major renewals and
improvements are capitalized and depreciated. Repairs and maintenance are
expensed as incurred. Depreciation is provided on a straight-line basis over
the estimated useful lives of depreciable assets ranging from three to ten
years. Costs and accumulated depreciation applicable to assets retired or sold
are eliminated from the accounts and any resulting gains or losses are
recognized at such time.

Goodwill

Goodwill represents the excess of purchase price over the net assets of
businesses acquired. In accordance with Statement of Financial Accounting
Standards No. 142 (SFAS No. 142), goodwill and certain identifiable
intangible assets are no longer amortized over their expected lives. Instead,
these assets are tested for impairment annually at the reporting unit level
using a two-step impairment assessment. See further discussion of goodwill at
Note (J).

Advertising Costs

Advertising costs are expensed as incurred. The advertising costs for
fiscal 2002, 2001 and 2000 were $4.3 million, $3.7 million and $3.4 million,
respectively.

Foreign Currency Exchange Gains or Losses

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

Use of Estimates

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

Reclassifications

Certain prior year balances have been reclassified to be consistent with
the fiscal 2002 presentation.

Combining Statements of Cash Flows  Supplemental Disclosures

Net interest capitalized by the Partnership during fiscal 2002, 2001, and
2000 totaled $4.4 million, $3.9 million, and $3.7 million, respectively. Cash
payments made for interest were $9.3 million,

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$12.7 million and $16.5 million
for fiscal 2002, 2001 and 2000, respectively. Land assets acquired by the
Partnership during fiscal 2002 and 2001 in exchange for Class C Units totaled
$0.8 million and $3.8 million, respectively. In addition, during fiscal 2002
and 2001, the Partnership issued 27,135 and 142,268 new Class C Units for $27.1
million, and $142.3 million, respectively. In fiscal 2000, the Partnership
acquired the assets and assumed liabilities of Fairclough (as defined in Note
(D) below) totaling $267.7 million and $297.0 million, respectively.

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, which 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. Management
does not believe that adoption of this statement in fiscal 2003 will have a
material effect on the interim or annual financial statements of Holding and
the Partnership. However, the financial statement presentation will be
modified in fiscal 2003 to report the results of operations and financial
position of a component of an entity that either has been disposed of or is
classified as held for sale as discontinued operations. As a result, in fiscal
2003, Holding and the Partnership will reclassify certain amounts in prior
period financial statements to conform to the new presentation requirements.

(D) ACQUISITION OF FAIRCLOUGH HOMES GROUP LIMITED

On April 15, 1999, Centex Development Company UK Limited (CDCUK), a
company incorporated in England and Wales and a wholly-owned subsidiary of the
Partnership, closed its acquisition of all of the voting shares of Fairclough
Homes Group Limited, a British home builder (Fairclough). The purchase price
at closing (approximately $219 million) was paid by the delivery of two-year
non-interest-bearing promissory notes. A major portion of the promissory notes
was secured by a letter of credit obtained by the Partnership from a United
Kingdom bank. Additionally, the seller of the voting shares retained
non-voting preference shares in Fairclough that entitled it to receive
substantially all of the net after-tax earnings of Fairclough until March 31,
2001. During that time period CDCUK also retained the rights to participate in
Faircloughs earnings in excess of certain specified levels. During the period
between April 15, 1999 and March 31, 2001, Faircloughs operations were carried
out subject to certain guidelines that were negotiated with the seller in
connection with its ownership of the preference shares.

Because the non-voting preference shares retained by the seller had the
characteristics of debt, the preference obligation was reported as interest
expense in the financial statements. Subsequent to March 31, 2001, CDCUK
redeemed the preference shares for nominal value.

As of March 31, 2001, the non-interest-bearing promissory notes were
repaid in full (less the holdback described below) from a combination of bank
borrowings, equity contributions to CDCUK from the Partnership, and a loan to
CDCUK from the Partnership. CDCUK retained a $6.9 million holdback relative to
CDCUK exercising its right of offset for asserted breaches of representations
and warranties by the seller under the share purchase agreement. In fiscal
2002, $1.2 million of this holdback was paid to the seller and $5.7 million has
been dedicated to fund repair costs and claims arising out of a project
completed prior to CDCUKs acquisition of Fairclough.

The purchase of Fairclough has been accounted for using the purchase
method of accounting, pursuant to which the total cost of the acquisition has
been allocated to the tangible and intangible assets acquired and liabilities
assumed based upon their estimated fair values.

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(E) PROPERTY AND EQUIPMENT

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

|                                  |  |           |       |   |      |   |       |  
|--------------------------------- |  | --------- | ----- | - | ---- | - | ----- | -
|                                  |  | March 31, |      
|                                  |  |           |      
|                                  |  | 2002      |       |   | 2001 |  
|                                  |  |           |       |   |      |  
|Land, Buildings, and Improvements |  | $         | 2,004 |   |      | $ | 3,022 |  
|Machinery, Equipment, and Other   |  |           | 1,659 |   |      |   | 1,016 |  
|                                  |  |           |       |   |      |  
|                                  |  |           | 3,663 |   |      |   | 4,038 |  
|Accumulated Depreciation          |  |           | (451  | ) |      |   | (647  | )
|                                  |  |           |       |   |      |  
|                                  |  | $         | 3,212 |   |      | $ | 3,391 |  
|                                  |  |           |       |   |      |  

(F) 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 $16.1 million as of March 31, 2002 and $10.2 million as of March
31, 2001. The Partnerships liability for the obligations of these
non-consolidated joint ventures is limited to approximately $1.1 million as of
March 31, 2002.

(G) NOTES PAYABLE

Non-recourse debt totaled $233.1 million at March 31, 2002. As projects
are sold, a portion of the proceeds is restricted for repayment of the note
that was secured by the project sold. In addition, the Partnership, through
wholly-owned single asset entities, had construction debt outstanding at March
31, 2002 totaling $56.0 million. The Partnership itself has also issued
completion and payment guarantees for up to 100% of the construction loan
amounts. The note balances and rates in effect were as follows:

|                   |                        |  |                                   |  |   |        |           |   |   |        |         |       | 
|------------------ | ---------------------- |  | --------------------------------- |  | - | ------ | --------- | - | - | ------ | ------- | ----- | 
|                   |                        |  |                                   |  |   |        | March 31, |  
|                   |                        |  |                                   |  |   |        |           |  
|                   |                        |  |                                   |  |   |        | 2002      |   |   | 2001   |        
|                   |                        |  |                                   |  |   |        |           |   |   |        |        
|Non-Recourse Debt  |                        |  |                                   |  |   |        |           |   |   |        |         |      
|                   | Mortgage Notes (3)     |  | 6.92% to 8.72%                    |  | $ | 76,592 |           |   | $ | 70,746 |        
|                   | Mezzanine Notes        |  | 9.00%
(1)  to LIBOR (2) + 4.00%   |  |   |       |           |   |   | 8,470  |        
|                   | Land Notes (4)         |  | 0.00% to 14.00%                   |  |   | 62,370 |           |   |   | 6,477  |        
|                   | Other (5)              |  | LIBOR(2) + 1.00%                  |  |   | 94,129 |           |   |   | 41,342 |        
|                   |                        |  |                                   |  |   |        |           |   |   |       
|                   |                        |  |                                   |  |   |        | 233,091   |   |   |        | 127,035 |      
|                   |                        |  |                                   |  |   |        |           |   |   |       
|Limited-Recourse   |                        |  |                                   |  |   |        |           |   |   |        |         |      
|                   | Construction Notes (6) |  | LIBOR(2) + 1.75% - 2.35% to 8.00% |  |   | 56,035 |           |   |   | 48,806 |        
|                   |                        |  |                                   |  |   |        |           |   |   |       
|Full-Recourse Debt |                        |  |                                   |  |   |        |           |   |   |        |         |      
|                   | Entity Purchase        |  | Zero Coupon                       |  |   |       |           |   |   | 6,857  |        
|                   | Land Note              |  | 6.14%                             |  |   |        |           |  |   |        |         | 4,603 | 
|                   |                        |  |                                   |  |   |        |           |   |   |       
|                   |                        |  |                                   |  |   |        |          |   |   |        | 11,460  |      
|                   |                        |  |                                   |  |   |        |           |   |   |       
|                   |                        |  |                                   |  |   | $      | 289,126   |   |   | $      | 187,301 |      
|                   |                        |  |                                   |  |   |        |           |   |   |       



|(1) |  | In addition to the stated rate, the lender received a participation
payment of up to 35% of net proceeds upon disposition of the underlying
real estate.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | The 30-day LIBOR rate at March 31, 2002 and 2001 was 1.88% and 5.08%
respectively.                                                                      
|   
|(3) |  | Secured by assets with an aggregate book value of $83.8 million at
March 31, 2002.                                                                      
|   
|(4) |  | Secured by assets with an aggregate book value of $72.5 million at
March 31, 2002.                                                                      

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|(5) |  | As of March 31, 2002, the Partnership has drawn £66.0 million of the
£100.0 million availability.
|--- |  | -------------------------------------------------------------------------------------------------
|   
|(6) |  | Secured by assets with an aggregate book value of $92.3 million at
March 31, 2002.               

Maturities of debt (in thousands) during the next five fiscal years are: 2003,
$35,936; 2004, $131,815; 2005, $9,506; 2006, $32,000; 2007, $3,277; and $76,592
thereafter.

(H) COMPREHENSIVE INCOME

Comprehensive income is summarized for the three-year period ended March
31, 2002 below:

|                                               |                                          |   |                               |       |  |      |       |        |      |   |     |     |  
|---------------------------------------------- | ---------------------------------------- | - | ----------------------------- | ----- |  | ---- | ----- | ------ | ---- | - | --- | --- | -
|                                               |                                          |   | For the Years Ended March 31, |      
|                                               |                                          |   |                               |      
|                                               |                                          |   | 2002                          |       |  | 2001 |       |        | 2000 |  
|                                               |                                          |   |                               |       |  |      |       |        |      |  
|Net Earnings                                   |                                          | $ | 16,982                        |       |  | $    | 4,616 |        |      | $ | 456 |    
|Other
Comprehensive Income (Loss), net of tax: |                                          |   |                               |       |  |      |       |        |      |   |     |    
|                                               | Foreign Currency Translation
Adjustments |   |                               | 1,829 |  |      |       | (4,100 | )    |   |     | (96 | )
|                                               | Unrealized Gain on Hedging Instruments   |   |                               | 388   |  |      |       |       |      |   |     |    |  
|                                               |                                          |   |                               |       |  |      |       |        |     
|Comprehensive Income                           |                                          | $ | 19,199                        |       |  | $    | 516   |        |      | $ | 360 |    
|                                               |                                          |   |                               |       |  |      |       |        |     

(I) DERIVATIVES AND HEDGING

The Partnership is exposed to the risk of interest rate fluctuations on
the debt obligations of the Partnership and its subsidiaries. As part of its
strategy to manage the obligations that are subject to changes in interest
rates, a subsidiary of 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 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 fiscal 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 March 31, 2002, the asset and
Accumulated Other Comprehensive Loss was $554 thousand ($388 thousand net of
tax).

(J) GOODWILL  ADOPTION OF STATEMENT 142

Holding and the Partnership adopted Statement of Financial Accounting
Standards No. 142 Goodwill and Other Intangible Assets (SFAS No. 142)
effective April 1, 2001. SFAS No. 142 provides guidance on accounting for
intangible assets and eliminates the amortization of goodwill and certain
identifiable intangible assets. Under the provisions of SFAS No. 142,
intangible assets, including goodwill, that are not subject to amortization
will be tested for impairment annually at the reporting unit level using a
two-step impairment assessment. Impairment testing must be performed more
frequently if events or changes in circumstances indicate that the asset might
be impaired. Holding and the Partnership tested for potential impairment, both
upon adoption of SFAS No. 142 and annually as of January 1, 2002, by
determining whether the carrying amount of a reporting unit exceeds its fair
value. Holding and the Partnership had no impairment of goodwill in fiscal
2002. Identifiable intangible assets, other than goodwill, are immaterial.
The Partnerships International Home Building segment carries all of the
Partnerships goodwill. The carrying amount of goodwill was $27.8 million and
$27.7 million at March 31, 2002 and 2001, respectively. The increase in fiscal
2002 reflects the impact of foreign currency translation adjustments.

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For fiscal 2002, 2001 and 2000, net earnings excluding goodwill
amortization and earnings per unit excluding such amortization expense are as
follows:

|                                                   |                       |   |                               |        |  |      |       |       | 
|-------------------------------------------------- | --------------------- | - | ----------------------------- | ------ |  | ---- | ----- | ----- | 
|                                                   |                       |   | For the Years Ended March 31, |       
|                                                   |                       |   |                               |       
|                                                   |                       |   | 2001                          |        |  | 2000 |      
|                                                   |                       |   |                               |        |  |      |      
|Reported Net Earnings Allocable to Limited Partner |                       | $ | 5,362                         |        |  | $    | 1,583 |      
|Goodwill Amortization                              |                       |   | 1,750                         |        |  |      | 1,576 |      
|                                                   |                       |   |                               |        |  |     
|Adjusted Net Earnings                              |                       | $ | 7,112                         |        |  | $    | 3,159 |      
|                                                   |                       |   |                               |        |  |     
|Net Earnings (Loss) Per Unit:                      |                       |   |                               |        |  |      |       |      
|                                                   | Reported Net Earnings |   | $                             | 76.34  |  |      | $     | 25.08 | 
|                                                   | Goodwill Amortization |   |                               | 24.92  |  |      |       | 24.97 | 
|                                                   |                       |   |                               |        |  |     
|                                                   | Adjusted Net Earnings |   | $                             | 101.26 |  |      | $     | 50.05 | 
|                                                   |                       |   |                               |        |  |     

(K) COMMITMENTS AND CONTINGENCIES

As of March 31, 2002, the Partnership had remaining commitments of
approximately $62.6 million on construction contracts.

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

Subsidiaries of the Partnership have also obtained demand notes from
Centex for up to 10% of the construction loan commitment amount. These demand
notes have been pledged to the lenders as additional collateral on the
construction loans, and may be called only in the event of a default on the
demand notes issued by the Partnership.

Benefits are provided to eligible employees of the Partnership and certain
subsidiaries under various profit sharing plans. The aggregate cost of these
plans to the Partnership was $1.0 million in fiscal 2002, $0.8 million in
fiscal 2001 and $1.4 million in fiscal 2000. The employees rights to employer
contributions to these plans vest over a period of up to seven years.

(L) BUSINESS SEGMENTS

During fiscal 2002, the Partnership operated in four principal business
segments: International Home Building, Commercial Development, Multi-Family
Communities (formerly known as Multi-Family Development), and Corporate-Other
(formerly known as Land Sales and Other). Before fiscal 2002, the Partnership
also operated a Domestic Home Building segment. 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.

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

|                                           |  |                                   |          |   |             |   |         |              |  |   |            |   |  |       |        |   |  |   |          |  
|------------------------------------------ |  | --------------------------------- | -------- | - | ----------- | - | ------- | ------------ |  | - | ---------- | - |  | ----- | ------ | - |  | - | -------- | -
|                                           |  | For the Year Ended March 31, 2002 |         
|                                           |  | (Dollars in thousands)            |         
|                                           |  |                                   |         
|                                           |  | Int'l Home                        |          |   | Commercial  |   |         | Multi-Family |  |   | Corporate- |   |  |       |        |  
|                                           |  | Building                          |          |   | Development |   |         | Communities  |  |   | Other      |   |  | Total |       
|                                           |  |                                   |          |   |             |   |         |              |  |   |            |   |  |       |       
|Revenues                                   |  | $                                 | 290,406  |   |             | $ | 39,468  |              |  | $ | 53,944     |   |  | $     | 2,812  |   |  | $ | 386,630  |  
|Cost of Sales                              |  |                                   | (251,010 | ) |             |   | (16,750 | )            |  |   | (46,866    | ) |  |       | (1,209 | ) |  |   | (315,835 | )
|Selling, General & Administrative
Expenses |  |                                   | (25,135  | ) |             |   | (11,448 | )            |  |   | (3,917     | ) |  |       | (2,013 | ) |  |   | (42,513  | )
|Interest Expense                           |  |                                   | (1,947   | ) |             |   | (6,755  | )            |  |   | (6         | ) |  |       | (835   | ) |  |   | (9,543   | )
|                                           |  |                                   |          |   |             |   |         |              |  |   |            |   |  |       |       
|Earnings (Loss) Before Income Tax          |  | $                                 | 12,314   |   |             | $ | 4,515   |              |  | $ | 3,155      |   |  | $     | (1,245 | ) |  | $ | 18,739   |  
|                                           |  |                                   |          |   |             |   |         |              |  |   |            |   |  |       |       
|Identifiable Assets                        |  | $                                 | 382,903  |   |             | $ | 179,270 |              |  | $ | 28,725     |   |  | $     | 77,538 |   |  | $ | 668,436  |  
|Capital Expenditures                       |  | $                                 | 185      |   |             | $ |        |              |  | $ | 24         |   |  | $     | 27     |   |  | $ | 236      |  
|Depreciation and Amortization              |  | $                                 | 540      |   |             | $ | 3,535   |              |  | $ | 28         |   |  | $     | 2      |   |  | $ | 4,105    |  

|                                           |  |                                   |          |   |          |          |         |             |  |   |              |   |  |            |        |   |       |   |         |   |  |   |          |  
|------------------------------------------ |  | --------------------------------- | -------- | - | -------- | -------- | ------- | ----------- |  | - | ------------ | - |  | ---------- | ------ | - | ----- | - | ------- | - |  | - | -------- | -
|                                           |  | For the Year Ended March 31, 2001 |         
|                                           |  | (Dollars in thousands)            |         
|                                           |  |                                   |         
|                                           |  |                                   |          |   |          | Domestic |         |             |  |   |              |   |  |            |        |   |       |   |         |   |  |   |         
|                                           |  | Int'l Home                        |          |   | Home     |          |         | Commercial  |  |   | Multi-Family |   |  | Corporate- |        |   |       |   |        
|                                           |  | Building                          |          |   | Building |          |         | Development |  |   | Communities  |   |  | Other      |        |   | Total |  
|                                           |  |                                   |          |   |          |          |         |             |  |   |              |   |  |            |        |   |       |  
|Revenues                                   |  | $                                 | 252,487  |   |          | $        | 30,304  |             |  | $ | 33,088       |   |  | $          | 1,664  |   |       | $ | 21,774  |   |  | $ | 339,317  |  
|Cost of Sales                              |  |                                   | (222,634 | ) |          |          | (24,002 | )           |  |   | (18,398      | ) |  |            |       |   |       |   | (20,578 | ) |  |   | (285,612 | )
|Selling, General & Administrative Expenses |  |                                   | (22,085  | ) |          |          | (3,461  | )           |  |   | (8,012       | ) |  |            | (2,399 | ) |       |   | (1,047  | ) |  |   | (37,004  | )
|Interest Expense                           |  |                                   | (7,802   | ) |          |          |        |             |  |   | (4,525       | ) |  |            |       |   |       |   |        |   |  |   | (12,327  | )
|                                           |  |                                   |          |   |          |          |         |             |  |   |              |   |  |            |        |   |       |  
|Earnings (Loss) Before Income Tax          |  | $                                 | (34      | ) |          | $        | 2,841   |             |  | $ | 2,153        |   |  | $          | (735   | ) |       | $ | 149     |   |  | $ | 4,374    |  
|                                           |  |                                   |          |   |          |          |         |             |  |   |              |   |  |            |        |   |       |  
|Identifiable Assets                        |  | $                                 | 295,885  |   |          | $        |        |             |  | $ | 127,109      |   |  | $          | 50,783 |   |       | $ | 10,873  |   |  | $ | 484,650  |  
|Capital Expenditures                       |  | $                                 | 629      |   |          | $        | 4       |             |  | $ |             |   |  | $          |       |   |       | $ |        |   |  | $ | 633      |  
|Depreciation & Amortization                |  | $                                 | 2,678    |   |          | $        | 45      |             |  | $ | 2,076        |   |  | $          | 41     |   |       | $ |        |   |  | $ | 4,840    |  

|                                           |  |                                   |          |   |          |          |         |             |  |   |              |   |  |            |         |   |       |   |        |   |  |   |          |  
|------------------------------------------ |  | --------------------------------- | -------- | - | -------- | -------- | ------- | ----------- |  | - | ------------ | - |  | ---------- | ------- | - | ----- | - | ------ | - |  | - | -------- | -
|                                           |  | For the Year Ended March 31, 2000 |         
|                                           |  | (Dollars in thousands)            |         
|                                           |  |                                   |         
|                                           |  |                                   |          |   |          | Domestic |         |             |  |   |              |   |  |            |         |   |       |   |        |   |  |   |         
|                                           |  | Int'l Home                        |          |   | Home     |          |         | Commercial  |  |   | Multi-Family |   |  | Corporate- |         |   |       |   |       
|                                           |  | Building                          |          |   | Building |          |         | Development |  |   | Communities  |   |  | Other      |         |   | Total |  
|                                           |  |                                   |          |   |          |          |         |             |  |   |              |   |  |            |         |   |       |  
|Revenues                                   |  | $                                 | 329,582  |   |          | $        | 13,377  |             |  | $ | 10,327       |   |  | $          | 17,154  |   |       | $ | 7,759  |   |  | $ | 378,199  |  
|Cost of Sales                              |  |                                   | (283,456 | ) |          |          | (11,672 | )           |  |   | (3,438       | ) |  |            | (17,057 | ) |       |   | (6,384 | ) |  |   | (322,007 | )
|Selling, General & Administrative Expenses |  |                                   | (24,188  | ) |          |          | (1,495  | )           |  |   | (3,004       | ) |  |            | (1,977  | ) |       |   | (569   | ) |  |   | (31,233  | )
|Interest Expense                           |  |                                   | (18,229  | ) |          |          |        |             |  |   | (2,440       | ) |  |            |        |   |       |   |       |   |  |   | (20,669  | )
|                                           |  |                                   |          |   |          |          |         |             |  |   |              |   |  |            |         |   |       |  
|Earnings (Loss) Before Income Tax          |  | $                                 | 3,709    |   |          | $        | 210     |             |  | $ | 1,445        |   |  | $          | (1,880  | ) |       | $ | 806    |   |  | $ | 4,290    |  
|                                           |  |                                   |          |   |          |          |         |             |  |   |              |   |  |            |         |   |       |  
|Identifiable Assets                        |  | $                                 | 347,748  |   |          | $        | 9,270   |             |  | $ | 85,905       |   |  | $          | 30,898  |   |       | $ | 37,797 |   |  | $ | 511,618  |  
|Capital Expenditures                       |  | $                                 |         |   |          | $        |        |             |  | $ |             |   |  | $          |        |   |       | $ |       |   |  | $ |         |  
|Depreciation & Amortization                |  | $                                 | 2,537    |   |          | $        | 52      |             |  | $ | 1,246        |   |  | $          | 44      |   |       | $ |       |   |  | $ | 3,879    |  

In March 2001, the Partnership sold its Domestic Home Building segment to
Centex Homes for total consideration of $21.1 million representing book value,
which also approximated market value. The

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financial results from the sale of
this segment are included in Corporate-Other. Domestic Home Building accounted
for 8.9% and 3.5% of revenues and 65.0% and 4.9% of operating earnings in
fiscal 2001 and 2000, respectively.

(M) FAIR VALUE OF FINANCIAL INSTRUMENTS

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

The consolidated carrying values of Cash and Cash Equivalents, Other
Receivables, Accounts Payable and Accrued Liabilities, and other variable-rate
debt approximate their fair values. The carrying values and estimated fair
values of other financial liabilities were as follows:

|                                      |  |           |         |  |       |   |         |          |  |   |        |  |  |   |        |    
|------------------------------------- |  | --------- | ------- |  | ----- | - | ------- | -------- |  | - | ------ |  |  | - | ------ | ---
|                                      |  | March 31, |        
|                                      |  |           |        
|                                      |  | 2002      |         |  | 2001  |  
|                                      |  |           |         |  |       |  
|                                      |  | Carrying  |         |  | Fair  |   |         | Carrying |  |   | Fair   | 
|                                      |  | Value     |         |  | Value |   |         | Value    |  |   | Value  | 
|                                      |  |           |         |  |       |   |         |          |  |   |        | 
|Financial Liabilities
Fixed-Rate Debt |  | $         | 152,616 |  |       | $ | 153,815 | (1)      |  | $ | 81,683 |  |  | $ | 84,722 | (1)



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

(N) STOCKHOLDERS EQUITY AND PARTNERS CAPITAL

Equity Securities

The partnership agreement governing the Partnership (the Partnership
Agreement) contemplates the issuance of three classes of limited partnership
units: Class A Units, Class B Units, and Class C Units. Under the Partnership
Agreement, holders of Class C Units are entitled to substantially the same
rights as holders of Class A Units in connection with matters in common, such
as voting, allocations, and distributions. During fiscal 2002 and 2001, 27,135
and 146,112 Class C Units, respectively, were issued in exchange for cash and
other assets with a fair market value of $27.1 million and $146.1 million. At
March 31, 2002, there were 32,260 Class A Units and 208,330 Class C Units
outstanding.

No Class B Units are issued and outstanding. However, warrants to
purchase approximately 80% of the Class B Units were issued to Centex
stockholders and are held by a nominee on their behalf. These warrants will
detach and trade separately from Centex common stock on the earlier of Payout
(as defined below) or November 30, 2007, the scheduled detachment date.

Preferred Return

The Partnership Agreement provides that the holders of the Class A Units
and Class C Units are entitled to a cumulative preferred return of 9% per annum
on the average outstanding balance of their Unrecovered Capital. No preference
payments have been made since fiscal 1998. Preference payments in arrears at
March 31, 2002 amounted to $41.4 million, and Unrecovered Capital for the
holders of Class A Units and Class C Units at March 31, 2002 totaled $32.8
million, and $208.3 million, respectively.

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Allocation of Profits and Losses

As provided in the Partnership Agreement, prior to Payout (as defined
below), net income of the Partnership is to be allocated to the partners in the
following order of priority:



| | [i]   |  | To the holders of Class A Units and Class C Units to the extent of the
cumulative preferred return.                                                                                     
| | ----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | [ii]  |  | To the partners to the extent and in the same ratio that cumulative
net losses were allocated.                                                                                          
|
| | [iii] |  | To the partners in accordance with their percentage interests.
Currently, this would be a combined 20% to the holders of Class A
Units and Class C Units and 80% to the general partner.

After Payout, the percentage interests will change to a combined 99% to
the limited partners and 1% to the general partner. Thereafter, all loss
allocations and allocations of net income will be made to the partners in
accordance with their modified percentage interests.

Distributions

Distributions of cash or other property are to be made at the discretion
of the general partner and are to be distributed in the following order of
priority:



| |     |  |                                                                                                                                                                                                                                     
| | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | [i] |  | Prior to the time at which the Class A and Class C limited partners
have received aggregate distributions equal to their original capital
contribution (Payout), distributions of cash or other property shall
be made as follows:



| |     |  |                                                                                                                                                 
| | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------
| | [a] |  | To the Class A and Class C limited partners
with respect to their cumulative preferred
return, then                                             
|
| | [b] |  | To the partners in an amount equal to the
maximum marginal corporate tax rate times
the amount of taxable income allocated to
the partners, then
|
| | [c] |  | To the Class A and Class C limited partners
until their Unrecovered Capital is reduced
to zero.                                                 



| |      |  |                                                                                                                         
| | ---- |  | ------------------------------------------------------------------------------------------------------------------------
| | [ii] |  | After Payout, distributions of cash will be made to the
partners in accordance with their modified percentage interests.

Warrants

In November 1987, Centex acquired from the Partnership 100 warrants to
purchase Class B Units in the Partnership at an exercise price of $500 per
Class B Unit, and Centex acquired from Holding 100 warrants to purchase shares
of Holding common stock at an exercise price of $800 per share. These warrants
are subject to future adjustment to provide the holders of options to purchase
Centex common stock with the opportunity to acquire Class B Units and shares of
Holding. These warrants will generally become exercisable upon the detachment
of the tandem-traded securities from Centex common stock.

(O) RELATED PARTY TRANSACTIONS

Services Agreements

The Partnership has a services agreement with Holding whereby Holding
provides certain executive and managerial services and tax, accounting and
other similar services to the Partnership. The agreement was amended and
restated effective April 1, 2001, to decrease the quarterly fee to $50
thousand. Effective October 1, 2001, the quarterly fee was further decreased
to $12.5 thousand. In addition to the

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$125 thousand in service fees paid
during fiscal 2002, the Partnership paid $1.0 million and $583 thousand to
Holding during fiscal 2001 and 2000, respectively.

Holding has a services agreement with Centex Service Company (Centex
Service), a wholly-owned subsidiary of Centex, whereby Centex Service provides
certain tax, accounting, administrative and other similar services for Holding.
In conjunction with the employment by the Partnership of employees previously
employed by Centex Service, the agreement was amended and restated effective
April 1, 2001, to decrease the quarterly fee to $50 thousand. Effective
October 1, 2001, the quarterly fee was further decreased to $12.5 thousand to
reflect employment by the Partnership of certain additional employees
previously employed by Centex Service. Fees of $125 thousand, $1.0 million,
and $360 thousand in fiscal 2002, 2001, and 2000 paid by Holding to Centex
Service under this agreement are reflected as administrative expenses in the
accompanying combining financial statements.

Sales and Purchases

Partnership revenues include sales to Centex Homes of $1.7 million, $21.1
million (from the sale of the Partnerships Domestic Home Building operation)
and $5.4 million during fiscal 2002, 2001, and 2000 respectively. Earnings
associated with lot sales to Centex totaled $0, $0, and $333 thousand, for
fiscal 2002, 2001, and 2000, respectively.

During fiscal 2002 and 2001, the Partnership, through its subsidiaries,
purchased 345 acres in Florida, Hawaii, Nevada and South Carolina. The total
consideration of $71.7 million consisted of an aggregate $62.6 million in
purchase money mortgage notes and an aggregate $9.1 million in cash payments.
Concurrently with those transactions, Centex Homes deposited $9.1 million with
the Partnership as option deposits for the purchase of the properties.
Partnership revenues during fiscal 2002 included $1.4 million in fees and
reimbursements pursuant to the various option agreements.

During fiscal 2002, Centex Homes purchased a 12-acre site in Lewisville,
Texas, from subsidiaries of Holding and the Partnership for cash consideration
of $1.25 million. Centex Homes will pay additional consideration to the
subsidiaries in the form of a participation in profits above certain gross
margin threshold levels on townhome sales.

Other

The Partnership has entered into a management agreement with Centex Homes
whereby the Partnership provides certain services to Centex Homes for the
operation, management, development and sale of its commercial real estate
portfolio. The management agreement, which was entered into effective April 1,
2001, provides for the reimbursement of a portion of the expenditures incurred
by the Partnership (including overhead expenses) with respect to the
properties. The management agreement further provides for the payment of
additional amounts to the Partnership based upon its performance of services
under the management agreement. Collectively, such payments amounted to
approximately $4.2 million during fiscal 2002.

The Partnership has entered into a management agreement with Centex Homes
whereby Centex Homes provides management and oversight services for the
Partnerships investment in Fairclough. The
Partnership pays Centex Homes an annual fee of $10 thousand and reimburses
Centex Homes for its direct expenses associated with its management and
oversight.

Centex performs cash management services for the Partnership. Excess
funds generated by the Partnership are transferred to Centex on a daily basis,
and funds required by the Partnership are advanced by

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Centex to the Partnership
as necessary. Advances to or from Centex bear interest at the one-month LIBOR
rate plus 25 basis points, computed on the daily outstanding borrowings or
advances.

The Partnership, through its operating subsidiaries, executed contracts
with Centex construction subsidiaries totaling $15.0 million in fiscal 2002,
$14.9 million in fiscal 2000 and $43.2 million in fiscal 1999 for the
construction of multi-family apartments, a recreational ice skating facility,
two office buildings and two industrial facilities. During fiscal 2002 and
2001, $10.0 million and $7.7 million, respectively, was paid to Centex
construction subsidiaries pursuant to the construction contracts.

During fiscal 2002 and 2001, in connection with third-party construction
and permanent loans made to the Partnerships operating subsidiaries and in
connection with the acquisition and sale of properties, the Partnership paid an
aggregate of $412 thousand and $273 thousand, respectively, in title insurance
premiums and escrow fees to Centex title insurance subsidiaries.

Centex has issued an $0.8 million demand note as a form of guarantee
relating to one of the Partnerships project loans. This demand note is
payable only in the event of default by the Partnership or its subsidiary under
its obligations to the lender.

A subsidiary of the Partnership owns a 50% interest in a 79,000 square
foot office building in Plantation, Florida. The remaining 50% interest is
owned by Centex Construction Group Services, L.L.C., a Centex affiliate.
Approximately 61% of the rentable square footage of this building is leased and
occupied by Centex affiliates.

A subsidiary of the Partnership has leased approximately 161,225 square
feet, or 74% of leasable space, in the Citymark office building in Dallas,
Texas to Centex Service and other Centex affiliates.

During fiscal 2002, a subsidiary of the Partnership entered into a lease
having a term of at least ten years with Centex Home Equity Company,
L.L.C., a
Centex affiliate, for approximately 40,000 square feet of office space in a
newly-constructed building in Lewisville, Texas. Payment of rent under this
lease is guaranteed by Centex Financial Services, Inc. The tenant occupied the
space in April, 2002.

Under the Partnership Agreement, Class C Units may be issued in exchange
for assets acquired and capital received from a limited partner or from an
entity that is to be admitted as limited partner. Centex Homes is currently
the sole limited partner of the Partnership. During fiscal 2002, the
Partnership issued 27,135 Class C Units to Centex Homes in exchange for $27.1
million in assets and cash.

The Partnership Agreement provides that the holders of Class A Units and
Class C Units are entitled to a cumulative preferred return of 9% per annum on
the average outstanding balance of their Unrecovered Capital. As noted above,
Centex Homes is currently the sole limited partner of the Partnership and the
sole holder of all outstanding Class A Units and Class C Units. During fiscal
2002, the Partnership made no preference payments to Centex Homes. At March 31,
2002, unpaid preference accruals totaled $41.4 million, and Unrecovered Capital
for Class A Units and Class C Units totaled $32.8 million and $208.3 million,
respectively.

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(P) INCOME TAXES

The components of the total provision (benefit) for income taxes at March
31 are as follows:

|                                     |         |   |                               |        |   |      |      |        |      |   |       |        |  
|------------------------------------ | ------- | - | ----------------------------- | ------ | - | ---- | ---- | ------ | ---- | - | ----- | ------ | -
|                                     |         |   | For the Years Ended March 31, |       
|                                     |         |   |                               |       
|                                     |         |   | 2002                          |        |   | 2001 |      |        | 2000 |  
|                                     |         |   |                               |        |   |      |      |        |      |  
|Current Provision (Benefit):         |         |   |                               |        |   |      |      |        |      |   |       |       
|                                     | Federal |   | $                             |       |   |      | $    | (3,600 | )    |   | $     | (3,600 | )
|                                     | State   |   |                               |       |   |      |      |       |      |   |       |       |  
|                                     | Foreign |   |                               | 3,019  |   |      |      | 3,358  |      |   |       | 7,434  |  
|                                     |         |   |                               |        |   |      |      |        |     
|Total Current Provision (Benefit)    |         |   | 3,019                         |        |   |      | (242 | )      |      |   | 3,834 |       
|                                     |         |   |                               |        |   |      |      |        |     
|Deferred Benefit:                    |         |   |                               |        |   |      |      |        |      |   |       |       
|                                     | Federal |   |                               |       |   |      |      |       |      |   |       |       |  
|                                     | State   |   |                               |       |   |      |      |       |      |   |       |       |  
|                                     | Foreign |   |                               | (1,262 | ) |      |      |       |      |   |       |       |  
|                                     |         |   |                               |        |   |      |      |        |     
|Total Deferred Benefit               |         |   | (1,262                        | )      |   |      |     |        |      |   |      |       
|                                     |         |   |                               |        |   |      |      |        |     
|Total Income Tax Provision (Benefit) |         | $ | 1,757                         |        |   | $    | (242 | )      |      | $ | 3,834 |       
|                                     |         |   |                               |        |   |      |      |        |     

The effective tax rate differs from the federal statutory rate of 35% in
fiscal 2002, 2001 and 2000 due to the following items:

|                                              |                                               |   |                               |        |   |      |       |        |      |   |       |        |  
|--------------------------------------------- | --------------------------------------------- | - | ----------------------------- | ------ | - | ---- | ----- | ------ | ---- | - | ----- | ------ | -
|                                              |                                               |   | For the Years Ended March 31, |       
|                                              |                                               |   |                               |       
|                                              |                                               |   | 2002                          |        |   | 2001 |       |        | 2000 |  
|                                              |                                               |   |                               |        |   |      |       |        |      |  
|Financial Income Before Taxes                 |                                               | $ | 18,739                        |        |   | $    | 4,374 |        |      | $ | 4,290 |       
|                                              |                                               |   |                               |        |   |      |       |        |     
|Income Taxes at Statutory Rate                |                                               | $ | 6,559                         |        |   | $    | 1,531 |        |      | $ | 1,502 |       
|(Decreases) Increases in Tax Resulting from - |                                               |   |                               |        |   |      |       |        |      |   |       |       
|                                              | Benefit of Pass-through Status of Partnership |   |                               | (5,918 | ) |      |       | (1,765 | )    |   |       | 1,554  |  
|                                              | Preferred Share Distributions                 |   |                               | 1,609  |   |      |       | 2,731  |      |   |       | 4,263  |  
|                                              | Goodwill Amortization                         |   |                               |       |   |      |       | 613    |      |   |       | 709    |  
|                                              | Tax Allocation Agreement Payments             |   |                               |       |   |      |       | (3,600 | )    |   |       | (3,600 | )
|                                              | Other                                         |   |                               | (493   | ) |      |       | 248    |      |   |       | (594   | )
|                                              |                                               |   |                               |        |   |      |       |        |     
|Provision (Benefit) for Income Taxes          |                                               | $ | 1,757                         |        |   | $    | (242  | )      |      | $ | 3,834 |       
|                                              |                                               |   |                               |        |   |      |       |        |     
|Effective Tax Rate                            |                                               |   | 9.38                          | %      |   |      | -5.53 | %      |      |   | 89.37 | %     

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The Companys deferred tax assets and liabilities as of March 31 are as
follows:

|                               |                                   |   |           |       |   |      |       |        |  
|------------------------------ | --------------------------------- | - | --------- | ----- | - | ---- | ----- | ------ | -
|                               |                                   |   | March 31, |      
|                               |                                   |   |           |      
|                               |                                   |   | 2002      |       |   | 2001 |      
|                               |                                   |   |           |       |   |      |      
|Deferred Tax Assets            |                                   |   |           |       |   |      |       |       
|                               | Accrued Interest                  |   | $         | 1,738 |   |      | $     |       |  
|                               | Other                             |   |           | 215   |   |      |       |       |  
|                               | Net Operating Loss Carryforwards  |   |           | 717   |   |      |       | 1,190  |  
|                               |                                   |   |           |       |   |     
|Total Deferred Tax Assets      |                                   |   | 2,670     |       |   |      | 1,190 |       
|                               | Valuation Allowance               |   |           | (717  | ) |      |       | (1,190 | )
|                               |                                   |   |           |       |   |     
|Net Deferred Tax Assets        |                                   |   | 1,953     |       |   |      |      |       
|                               |                                   |   |           |       |   |     
|Deferred Tax Liabilities       |                                   |   |           |       |   |      |       |       
|                               | Swap Agreement Market Adjustments |   |           | (166  | ) |      |       |       |  
|                               | Interest Expensed as Incurred     |   |           | (691  | ) |      |       |       |  
|                               |                                   |   |           |       |   |     
|Total Deferred Tax Liabilities |                                   |   | (857      | )     |   |      |      |       
|                               |                                   |   |           |       |   |     
|Net Deferred Tax Assets        |                                   | $ | 1,096     |       |   | $    |      |       
|                               |                                   |   |           |       |   |     

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes.

At March 31, 2002, Holding had net operating loss carryforwards of $2.0
million. If unused, the loss carryforwards will expire in fiscal years 2019
through 2021. Holding has recorded a valuation allowance, valuing the deferred
tax asset at zero.

Holding joins with its subsidiaries in filing consolidated income tax
returns. The taxable income of the Partnership has been allocated to the
holders of the Class A and Class C Units. Accordingly, no tax provision for
the Partnership earnings is shown in the combining financial statements other
than a payment of $3.6 million from Centex in fiscal 2001 and 2000 under the
terms of a Tax Liability Allocation Agreement.

As of March 31, 2002, the Partnership has not provided for withholding or
U.S. Federal Income Taxes on the accumulated undistributed earnings of its
foreign subsidiaries as they are considered by management to be permanently
reinvested. Determination of the deferred income tax liability on these
unremitted earnings is not practicable as such liability, if any, may be
allocated to the holders of the Class A and Class C Units, and is dependent on
circumstances existing when remittance occurs.

(Q) SUBSEQUENT EVENTS

Pursuant to a redevelopment agreement with the Housing and Redevelopment
Authority of the City of Saint Paul, Minnesota, and with the City of Saint
Paul, a subsidiary of the Partnership has committed to undertake environmental
remediation and development of project infrastructure and project improvements
to redevelop a 21-acre brownfield site in downtown Saint Paul, Minnesota into
a mixed-use project containing for sale and for rent housing units and
related retail space. The subsidiary has substantially completed environmental
remediation as of March 31, 2002, and subsequent to March 31, 2002 acquired
title to the site.

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The Partnership anticipates that funds for fulfillment of its obligations
under the redevelopment agreement will be available from various sources,
including internally generated funds, grants for environmental remediation,
reimbursement of certain costs from the proceeds of a bond issuance and sale of
various land parcels to Centex Homes and unaffiliated developers.

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Report of Independent Auditors

TO THE BOARD OF DIRECTORS OF 3333 HOLDING CORPORATION:

We have audited the accompanying combining balance sheets of 3333 Holding
Corporation and subsidiary and Centex Development Company, L.P. and
subsidiaries as of March 31, 2002 and 2001, and the related combining
statements of operations, cash flows, and stockholders equity and partners
capital for each of the three years in the period ended March 31, 2002. Our
audits also included the financial statement schedules listed in the index at
Item 14 (a). These financial statements and the schedule are the
responsibility of the Companies management. Our responsibility is to express
an opinion on these financial statements and the schedule based on our audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the individual and combined financial positions of
3333 Holding Corporation and subsidiary and Centex Development Company, L.P.
and subsidiaries as of March 31, 2002 and 2001, and the individual and combined
results of their operations and their cash flows for each of the three years in
the period ended March 31, 2002, in conformity with accounting principles
generally accepted in the United States. Also, in our opinion, the related
financial statement schedule, when considered in relation to the basic
financial statements taken as a whole, presents fairly in all material respects
the information set forth therein.



---

/s/ ERNST & YOUNG LLPDallas, Texas

May 31, 2002

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

|               |                                |  |                               |         |  |              |   |         |            |  |                    |         |  |                 |      |         |   |      |   |       |   |  |   |       |  
|-------------- | ------------------------------ |  | ----------------------------- | ------- |  | ------------ | - | ------- | ---------- |  | ------------------ | ------- |  | --------------- | ---- | ------- | - | ---- | - | ----- | - |  | - | ----- | -
|               |                                |  | For the Years Ended March 31, |        
|               |                                |  |                               |        
|               |                                |  | 2002                          |         |  | 2001         |   |         | 2002       |  |                    | 2001    |  |                 | 2002 |         |   | 2001 |  
|               |                                |  |                               |         |  |              |   |         |            |  |                    |         |  |                 |      |         |   |      |  
|               |                                |  |                               |         |  |              |   |         |            |  | Centex Development |         |  | 3333 Holding    |     
|               |                                |  |                               |         |  |              |   |         |            |  | Company, L.P. and  |         |  | Corporation and |     
|               |                                |  | Combined                      |         |  | Subsidiaries |   |         | Subsidiary | 
|               |                                |  |                               |         |  |              |   |         |            | 
|First Quarter  |                                |  |                               |         |  |              |   |         |            |  |                    |         |  |                 |      |         |   |      |   |       |   |  |   |      
|               | Revenues                       |  | $                             | 83,955  |  |              | $ | 71,117  |            |  | $                  | 83,345  |  |                 | $    | 71,116  |   |      | $ | 660   |   |  | $ | 1     |  
|               | Earnings (Loss) Before Taxes   |  | $                             | 3,366   |  |              | $ | 1,047   |            |  | $                  | 2,790   |  |                 | $    | 1,151   |   |      | $ | 576   |   |  | $ | (104  | )
|               | Net Earnings (Loss)            |  | $                             | 3,075   |  |              | $ | 401     |            |  | $                  | 2,499   |  |                 | $    | 505     |   |      | $ | 576   |   |  | $ | (104  | )
|               | Earnings (Loss) Per Unit/Share |  |                               |         |  |              |   |         |            |  | $                  | 11.70   |  |                 | $    | 7.49    |   |      | $ | 576   |   |  | $ | (104  | )
|               | Average Units Outstanding      |  |                               |         |  |              |   |         |            |  |                    | 213,504 |  |                 |      | 67,356  |   |      |   |      |   |  |   |      |  
|               | Average Shares Outstanding     |  |                               |         |  |              |   |         |            |  |                    |        |  |                 |      |        |   |      |   | 1,000 |   |  |   | 1,000 |  
|Second Quarter |                                |  |                               |         |  |              |   |         |            |  |                    |         |  |                 |      |         |   |      |   |       |   |  |   |      
|               | Revenues                       |  | $                             | 86,287  |  |              | $ | 70,641  |            |  | $                  | 86,287  |  |                 | $    | 70,641  |   |      | $ | 50    |   |  | $ |      |  
|               | Earnings (Loss) Before Taxes   |  | $                             | 3,800   |  |              | $ | (775    | )          |  | $                  | 3,837   |  |                 | $    | (657    | ) |      | $ | (37   | ) |  | $ | (118  | )
|               | Net Earnings (Loss)            |  | $                             | 3,382   |  |              | $ | (186    | )          |  | $                  | 3,419   |  |                 | $    | (68     | ) |      | $ | (37   | ) |  | $ | (118  | )
|               | Earnings (Loss) Per Unit/Share |  |                               |         |  |              |   |         |            |  | $                  | 15.63   |  |                 | $    | (0.96   | ) |      | $ | (37   | ) |  | $ | (118  | )
|               | Average Units Outstanding      |  |                               |         |  |              |   |         |            |  |                    | 218,785 |  |                 |      | 70,669  |   |      |   |      |   |  |   |      |  
|               | Average Shares Outstanding     |  |                               |         |  |              |   |         |            |  |                    |        |  |                 |      |        |   |      |   | 1,000 |   |  |   | 1,000 |  
|Third Quarter  |                                |  |                               |         |  |              |   |         |            |  |                    |         |  |                 |      |         |   |      |   |       |   |  |   |      
|               | Revenues                       |  | $                             | 95,866  |  |              | $ | 80,752  |            |  | $                  | 95,041  |  |                 | $    | 80,752  |   |      | $ | 838   |   |  | $ |      |  
|               | Earnings (Loss) Before Taxes   |  | $                             | 5,774   |  |              | $ | 2,721   |            |  | $                  | 4,988   |  |                 | $    | 2,858   |   |      | $ | 786   |   |  | $ | (137  | )
|               | Net Earnings (Loss)            |  | $                             | 5,538   |  |              | $ | 3,649   |            |  | $                  | 4,778   |  |                 | $    | 3,786   |   |      | $ | 760   |   |  | $ | (137  | )
|               | Earnings (Loss) Per Unit/Share |  |                               |         |  |              |   |         |            |  | $                  | 20.84   |  |                 | $    | 53.57   |   |      | $ | 760   |   |  | $ | (137  | )
|               | Average Units Outstanding      |  |                               |         |  |              |   |         |            |  |                    | 229,277 |  |                 |      | 70,669  |   |      |   |      |   |  |   |      |  
|               | Average Shares Outstanding     |  |                               |         |  |              |   |         |            |  |                    |        |  |                 |      |        |   |      |   | 1,000 |   |  |   | 1,000 |  
|Fourth Quarter |                                |  |                               |         |  |              |   |         |            |  |                    |         |  |                 |      |         |   |      |   |       |   |  |   |      
|               | Revenues                       |  | $                             | 120,522 |  |              | $ | 116,807 |            |  | $                  | 120,472 |  |                 | $    | 116,807 |   |      | $ | 63    |   |  | $ | 1,000 |  
|               | Earnings (Loss) Before Taxes   |  | $                             | 5,799   |  |              | $ | 1,381   |            |  | $                  | 5,787   |  |                 | $    | 1,768   |   |      | $ | 12    |   |  | $ | (387  | )
|               | Net Earnings (Loss)            |  | $                             | 4,987   |  |              | $ | 752     |            |  | $                  | 4,949   |  |                 | $    | 1,139   |   |      | $ | 38    |   |  | $ | (387  | )
|               | Earnings (Loss) Per Unit/Share |  |                               |         |  |              |   |         |            |  | $                  | 21.18   |  |                 | $    | 15.76   |   |      | $ | 38    |   |  | $ | (387  | )
|               | Average Units Outstanding      |  |                               |         |  |              |   |         |            |  |                    | 233,689 |  |                 |      | 72,256  |   |      |   |      |   |  |   |      |  
|               | Average Shares Outstanding     |  |                               |         |  |              |   |         |            |  |                    |        |  |                 |      |        |   |      |   | 1,000 |   |  |   | 1,000 |  




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

On March 23, 2002, the audit committees of the boards of directors of
Holding and Development, approved, for itself and on behalf of its
subsidiaries, including the Partnership, the engagement of Ernst & Young LLP as
the independent auditors for the Partnership and Holding for the fiscal year
ending March 31, 2002, to replace Arthur Andersen LLP, who was dismissed as
auditors for these entities effective as of that date. This action followed the
audit committees decision to seek proposals from independent accountants to
audit the financial statements of the Partnership and Holding.

Arthur Andersens audit reports on the financial statements for Holding
and the Partnership as of and for the two most recent fiscal years, that ended
March 31, 2000 and 2001, respectively, did not contain an adverse opinion or a
disclaimer of opinion, nor were they qualified or modified as to uncertainty,
audit scope or accounting principles.

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During the two most recent fiscal years, that ended March 31, 2000 and
2001, respectively, and the subsequent interim period through March 23, 2002:



| |  |  | there were no disagreements between the Partnership and Holding, on
the one hand, and Arthur Andersen on any matter of accounting principles
or practices, financial statement disclosure, or auditing scope or
procedure, which disagreements, if not resolved to Arthur Andersens
satisfaction, would have caused Arthur Andersen to make reference to the
subject matter of the disagreement in connection with its reports;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | none of the reportable events described under Item 304(a)(1)(v) of
Regulation S-K occurred; and                                                                                                                                                                                                                                                                                                                                 
|
| |  |  | the Partnership and Holding did not consult with Ernst & Young
regarding any of the matters or events described in item 304(a)(2)(i)
and (ii) of Regulation S-K.                                                                                                                                                                                                                                                                

The Partnership and Holding provided Arthur Andersen with a copy of the
foregoing statements. A letter from Arthur Andersen, dated March 27, 2002,
stating its agreement with such statements as filed with the SEC, is attached
to this Report as Exhibit 16.1.




PART III




ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTS

Holding

We have included the information with respect to Holding called for by
this Item 10 by incorporating into this Item 10 the information regarding the
executive officers of Holding, which follows Item 4 of Part I of Part B of this
report, and the information included under the captions Election of Directors
and Section 16(a) Beneficial Ownership Reporting Compliance in Holdings
Proxy Statement for its July 18, 2002 Annual Meeting of Stockholders.

The Partnership

We have included the information with respect to the Partnership and
directors and officers of the Partnerships general partner, Development,
called for by this Item 10 by incorporating into this Item 10 the information
relating to the executive officers of Development, which follows Item 4 of Part
I of Part B of this Report, information included under the captions Election
of Directors and Section 16(a) Beneficial Ownership Reporting Compliance in
Holdings 2002 Proxy Statement and the additional information regarding the
Partnership set forth below.

The Partnership has no directors or officers and, instead, is managed by
Development, its sole general partner. Directors and officers of Holding hold
the same positions with Development and, together with the other officers of
Development, perform all executive management functions required for the
Partnership. The limited partners of the Partnership have no power to direct or
participate in the control of the Partnership or to remove the general partner.
Through its Board of Directors, a majority of whom are independent outside
directors, Development manages how the Partnership conducts its activities,
including the acquisition, development, maintenance, and sales of properties
belonging to the Partnership and all other decisions regarding the
Partnerships business or operations. See Item 1. Business.

Services Agreements

The Partnership has entered into a services agreement pursuant to which
Holding provides executive oversight and various administrative and clerical
services required by the Partnership that are not performed by the employees of
the Partnership. From time to time, Holding delegates the performance of some

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responsibilities to Centex Service under the terms of a services agreement
between Holding and Centex Service.

Holding is entitled to reimbursement from the Partnership for all
reasonable costs and expenses incurred and paid by Holding in connection with
the performance of its duties and obligations under the services agreement. In
addition, the Partnership paid Holding a quarterly managerial fee equal to
$50,000 per quarter from April 1, 2001, through September 30, 2001 and $12,500
per quarter from October 1, 2001, through March 31, 2002. During fiscal 2002,
Holding received $125,000 from the Partnership for its services.

The term of the services agreement between Holding and the Partnership is
subject to automatic renewal for successive one-year terms unless either party
elects to terminate the agreement prior to March 1 of any year. However, the
Partnership may
not terminate the agreement prior to the later of date of the detachment
of the Stockholder Warrants from Centexs common stock or payout, which is
defined in the partnership agreement. Nevertheless, the Partnership may
terminate the agreement if Holding breaches the agreement.




ITEM 11. EXECUTIVE COMPENSATION

Holding

We have included the information with respect to Holding called for by
this Item 11 by incorporating into this Report the information included under
the caption Executive Compensation in Holdings 2002 Proxy Statement.

The Partnership

We have included the information with respect to the Partnership and the
directors and officers of the Partnerships general partner, Development, by
incorporating into this Item 11 the information included under the captions
Board Meetings, Fees, Committees and Attendance Records and Executive
Compensation in Holdings 2002 Proxy Statement.

As noted above, the Partnership does not have any directors or officers
and, instead, is managed by its sole general partner, Development. See Item
10. Directors and Executive Officers of the Registrants. Under the terms of
the Partnership Agreement, Development, as general partner, is entitled to be
allocated particular items of income and loss of the Partnership and to receive
certain distributions of cash from the Partnership depending upon the level of
income and cash available for distribution and whether payout has occurred. For
a summary of these rights and benefits, see Note (N) of the Notes to the
Combining Financial Statements of Holding and the Partnership included on pages
130-131 of this Report. Except as described above, and except for the right to
be reimbursed for some expenses, Development does not receive any compensation
from the Partnership with respect to its duties and obligations as general
partner of the Partnership.

The executive officers of Development did not receive any remuneration
from Development for fiscal 2002. Directors of Development who are neither
officers nor employees of Development, the Partnership, Centex, or Centexs
subsidiaries received compensation from Development in the form of directors
and committee members fees. During fiscal 2002, each executive officer of
Development received remuneration from the Partnership or from Centex or one of
its subsidiaries in his capacity as an employee or officer of that entity.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Holding

We have included the information with respect to Holding called for by
this Item 12 by incorporating into this Item 12 the information included and
referenced under the caption Security Ownership of Management and Certain
Beneficial Owners in Holdings 2002 Proxy Statement.

The Partnership

The following table sets forth information with respect to the beneficial
ownership of the equity securities of the Partnership as of June 6, 2002 by
Development, the directors and executive officers of Development, individually
itemized, all directors and executive officers of Development as a group, and
any person known to the Partnership to be the beneficial owner of more than 5%
of any class of the Partnerships equity securities. Except as otherwise
indicated, all securities are owned directly, and the beneficial owner of these
securities has the sole voting and investment power with respect thereto.

|                             |  |                                         |  |             |            |          |         |  |      |   |  | 
|---------------------------- |  | --------------------------------------- |  | ----------- | ---------- | -------- | ------- |  | ---- | - |  | 
|                             |  |                                         |  | Number of   |            |          |         | 
|                             |  |                                         |  | Units       |            |          |         | 
|                             |  | Name of                                 |  | or
Warrants |            |          | Percent
|Title of Class*              |  | Beneficial Owner**                      |  | Owned       |            | of Class
|                             |  |                                         |  |             |            |         
|General Partner Interest (1) |  | 3333 Development Corporation            |  |             |            |          |         |  |      |  
|                             |  | 2728 N. Harwood                         |  |             |            |          |         |  |      |  
|                             |  | Dallas, Texas 75201                     |  |             | A11        |          |         |  | 100  | %
|Class A Units (2)            |  | Centex Homes                            |  |             | 32,260.085 |          |         |  | 100  | %
|                             |  | 2728 N. Harwood                         |  |             |            |          |         |  |      |  
|                             |  | Dallas, Texas 75201                     |  |             |            |          |         |  |      |  
|Stockholder Warrants (3)     |  | 3333 Development Corporation            |  |             |           |          |         |  | ***  |  
|                             |  | Richard C. Decker (4)                   |  |             | 0.259      |          |         |  | ***  |  
|                             |  | Josiah O. Low, III                      |  |             | 0.058      |          |         |  | ***  |  
|                             |  | Todd D. Newman (4)                      |  |             | 0.018      |          |         |  | ***  |  
|                             |  | David M. Sherer                         |  |             |           |          |         |  | ***  |  
|                             |  | Stephen M. Weinberg (4)                 |  |             | 0.135      |          |         |  | ***  |  
|                             |  | Roger O. West                           |  |             |           |          |         |  | ***  |  
|                             |  | All directors and executive officers of |  |             | 0.470      |          |         |  | ***  |  
|                             |  | Development as a group (6 persons) (4)  |  |             |            |          |         |  |      |  
|                             |  | FMR Corp (5)                            |  |             | 111        |          |         |  | 12.3 | %
|                             |  | 82 Devonshire Street                    |  |             |            |          |         |  |      |  
|                             |  | Boston, MA  02109                       |  |             |            |          |         |  |      |  
|                             |  | Greenhaven Associates, Inc. (6)         |  |             | 59         |          |         |  | 6.5  | %
|                             |  | Three Manhattanville Road               |  |             |            |          |         |  |      |  
|                             |  | Purchase, NY  10577                     |  |             |            |          |         |  |      |  

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|                    |  |                     |  |             |  |          |  | 
|------------------- |  | ------------------- |  | ----------- |  | -------- |  | 
|                    |  |                     |  | Number of   |  |          |  | 
|                    |  |                     |  | Units       |  |          |  | 
|                    |  | Name of             |  | or Warrants |  | Percent  | 
|Title of Class*     |  | Beneficial Owner**  |  | Owned       |  | of Class | 
|                    |  |                     |  |             |  |          | 
|Centex Class B Unit |  | Centex Corporation  |  |             |  |          |  | 
|Warrants (7)        |  | 2728 N. Harwood     |  |             |  |          |  | 
|                    |  | Dallas, Texas 75201 |  | 100         |  | 100%     | 
|Class B Units (8)   |  | Centex Corporation  |  | 350         |  | 28%      | 
|                    |  | 2728 N. Harwood     |  |             |  |          |  | 
|                    |  | Dallas, Texas 75201 |  |             |  |          |  | 
|Class C Units (9)   |  | Centex Homes        |  | 208,330.422 |  | 100%     | 
|                    |  | 2728 N. Harwood     |  |             |  |          |  | 
|                    |  | Dallas, Texas 75201 |  |             |  |          |  | 



|*   |  | Under the terms of the Partnership Agreement, the Partnership is managed
by a sole corporate general partner and none of the present classes of the
Partnerships securities are voting securities within the meaning of the
rules and regulations of the Securities and Exchange Commission
promulgated pursuant to the Exchange Act. Nonetheless, information with
respect to each class of the Partnerships equity securities has been set
forth in accordance with those rules and regulations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|**  |  | The address of any person who is the beneficial owner of more than 5% of
a class of the Partnerships securities is also included.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|*** |  | Less than 1%.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|(1) |  | In connection with the formation of the Partnership, Development made a
capital contribution to the Partnership of $767,182 in exchange for
Developments general partner interest in the Partnership. As general
partner, Development is entitled to receive allocations of income and loss
and distributions of property from the Partnership.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|(2) |  | The Class A units were issued to wholly-owned subsidiaries of Centex in
exchange for the Original Properties, which is defined in the Partnership
Agreement. Centex Homes presently holds record title to the Class A
units. See Item 1. Business  General Development of Business. As of
the date or dates when the Stockholder Warrants are deemed to have been
exercised, the Class A units and Class C units will be automatically
converted collectively into (1) a number of Class B units equal to 20% of
the total number of Class B units that would be outstanding after
conversion based on the actual exercise of the Stockholder Warrants and
the assumed exercise of all the then exercisable Centex Class B Unit
Warrants, which are described in footnote (8), and (2) a like number of
Class A units and Class C units. The Class A units and Class C units will
be automatically canceled upon payout and the exercise and/or expiration
of all of the Stockholder Warrants and the Centex Class B Unit Warrants.
|   
|(3) |  | The nominee holds record title to the Stockholder Warrants, which are
exercisable for Class B units, for the benefit of Centex stockholders
pursuant to the nominee agreement. See Item 5. Market for Registrants
Common Equity and Related Stockholder Matters. However, the nominee has
no power to vote the Class B units issuable upon exercise of the
Stockholder Warrants or to direct the investment of the Stockholder
Warrants or the Class B units. Beneficial ownership of the Stockholder
Warrants is, by virtue of the nominee arrangement, indirect and undivided.
The number of Stockholder Warrants listed as beneficially owned has been
rounded to the nearest whole warrant.                                                                                                                                                                                                                                                                                                                                    

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|(4) |  | Shares of Centex common stock (and therefore a beneficial interest in
Stockholder Warrants) covered by stock options that are outstanding under
the Centex Corporation Amended and Restated 1987 Stock Option Plan, the
Fourth Amended and Restated 1998 Centex Corporation Employee Non-qualified
Stock Option Plan and the Centex Corporation 2001 Stock Plan and
exercisable on June 4, 2002 or within 60 days of that date, are included
as beneficially owned pursuant to the rules and regulations of the
Commission. Amounts include the following shares of Centex common stock
and therefore a beneficial interest in the following Stockholder Warrants,
that may be acquired upon exercise of such stock options: Mr. Decker 
17,750 shares, and therefore a beneficial interest in 0.259 Stockholder
Warrants; Mr. Newman  1,250 shares, and therefore a beneficial interest
in 0.018 Stockholder Warrants; Mr. Weinberg  7,500 shares, and therefore
a beneficial interest in 0.135 Stockholder Warrants; and all directors and
executive officers of Development as a group, which totals six persons,
 24,500 shares, and therefore a beneficial interest in 0.387 Stockholder
Warrants. In addition, this table includes shares of Centex common stock
and therefore a beneficial interest in Stockholder Warrants that may be
beneficially owned as of May 31, 2002 pursuant to the Centex Common Stock
Fund of the Profit Sharing and Retirement Plan of Centex Corporation, a
defined contribution plan, as follows: Mr. Weinberg  1,756 shares, and
therefore a beneficial interest in 0.26 Stockholder Warrants, and all
directors and executive officers of Development as a group, which totals
six persons,  1,756 shares, and therefore a beneficial interest in 0.26
Stockholder Warrants).
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(5) |  | Based solely upon information contained in the Schedule 13G of FMR Corp.
filed with the Commission on February 14, 2002 with respect to shares of
Centex common stock owned as of December 31, 2001, but calculating the
percentage shown by dividing the number of Stockholder Warrants
represented by those shares of Centex Common Stock by the total number of
Stockholder Warrants issued and outstanding on the record date. According
to FMR Corp., that number includes 7,556,831 shares of Centex common
stock, and therefore a beneficial interest in 111 Stockholder Warrants.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|(6) |  | Based solely upon information contained in the Schedule 13G of Greenhaven
Associates, Inc. filed with the Commission on January 2, 2002 with respect
to shares of Centex common stock owned as of December 31, 2001, but
calculating the percentage shown by dividing the number of Stockholder
Warrants represented by those shares of Centex common stock by the total
number of Stockholder Warrants issued and outstanding on the record date.
According to Greenhaven, that number includes 4,005,000 shares of Centex
common stock, and therefore a beneficial interest in 59 Stockholder
Warrants.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|(7) |  | On November 30, 1987, Centex acquired from the Partnership 100 warrants,
or Centex Class B Unit Warrants, to purchase a like number of Class B
units, subject to adjustment, pursuant to an agreement for purchase of
warrants. The Centex Class B Unit Warrants are generally in the same form
as, and contain the same terms as, the Stockholder Warrants, except for
the manners in which they may be subdivided, and the corresponding
exercise price, and the applicable exercise period. See Note (N) of the
Notes the Combining Financial Statements of Holding and the Partnership
included on pages 130-131 of this Report.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|(8) |  | Presently, there are no Class B units issued or outstanding. The Class B
units issuable upon exercise of the Stockholder Warrants have not been
shown as beneficially owned under the rules and regulations of the
Commission promulgated pursuant to the Exchange Act because the beneficial
owners of the Stockholder Warrants have no present right to exercise the
Stockholder Warrants and acquire Class B units. For the purpose of
calculating Centexs beneficial interest in Class B units, Class B units
that may be acquired upon the exercise of the Centex Class B Unit
Warrants, which is 100 in total, and the Class B units that may be
acquired upon conversion of outstanding Class A                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

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|    |  | units and Class C units
held by Centex Homes as of the date of the exercise of the Stockholder
Warrants, which is 250 in total, which date Centex may indirectly
determine by virtue of its ability, in its sole and absolute discretion,
to determine the date of
detachment of the Stockholder Warrants from Centex common stock, are
included as beneficially owned pursuant to the rules and regulations of
the Commission promulgated pursuant to the Exchange Act. See footnotes
(2), (3) and (10). The number of Class B units and the percentage of
class listed assume that the Stockholder Warrants and the Centex Class B
Unit Warrants have been exercised in full for Class B units but that no
subdivision of any of the warrants has occurred. However, both the
Stockholder Warrants and the Centex Class B Unit Warrants may be
subdivided or combined and any subdivision or combination would
necessarily change the number of Class B units beneficially owned and the
percentage of class represented.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(9) |  | The Class C units were issued in exchange for assets acquired by the
Partnership from Centex Homes. See Item 1. Business-General Development
of Business. As of the dates when the Stockholder Warrants are deemed to
have been exercised, the Class A units and Class C units will be
automatically converted collectively into (1) a number of Class B units
equal to 20% of the total number of Class B units that would be
outstanding after conversion based on the actual exercise of the
Stockholder Warrants and the assumed exercise of all the then exercisable
Centex Class B Unit Warrants, which are described in footnote (8) and (2)
a like number of Class A units and Class C units. The Class A units and
Class C units will be automatically canceled upon payout and the exercise
and/or expiration of all of the Stockholder Warrants and the Centex Class
B Unit Warrants.                                                                                                                           




ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

We have included the information with respect to Holding and the
Partnership called for by this Item 13 by incorporating into this Item 13 the
information included under the caption Certain Transactions in Holdings 2002
Proxy Statement.




PART IV




ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K



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



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Financial Statements                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|    | The combining balance sheets of Holding and subsidiary and the
Partnership and subsidiaries as of March 31, 2002 and 2001, and
the related combining statements of operations, cash flows, and
stockholders equity and partners capital for each of the
three years in the period ended March 31, 2002, together with
the accompanying Notes to Combining Financial Statements and
the Report of Independent Auditors on pages 115-137 of this
Report.
|   
|(2) | Schedules                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|    | Schedules are omitted because they are not applicable or not
required or the information required to be set forth therein is
included in the consolidated financial statements referenced above
in section (a)(1) of this Item 14.                                                                                                                                                                                                                      

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|    |         
|--- | --------
|(3) | Exhibits



|    |                                                                                                                                                                                                      
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(A) | Holding                                                                                                                                                                                              
|   
|    | The information on exhibits required by this Item 14 with
respect to Holding is set forth in the index to
Exhibits-3333 Holding Corporation and Subsidiary appearing
on pages 151-152 of this Report.
|   
|(B) | The Partnership                                                                                                                                                                                      
|   
|    | Real Estate and Accumulated Depreciation  Schedule III,
filed as Exhibit 99.1 to this Report.                                                                                                       
|   
|    | The information on exhibits required by this Item 14 is set
forth in the Index to Exhibits-Centex Development Company,
L.P. and Subsidiaries appearing on pages 153-155 of this
Report.              



|    |                                                                                                                                                                                                          
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | Reports on Form 8-K:                                                                                                                                                                                     
|   
|    | Amended Joint Current Report on Form 8-K/A of 3333 Holding Corporation and
Centex Development Company, L.P. dated March 23, 2002, announcing the
engagement of Ernst & Young LLP as independent auditors.

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SIGNATURES

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

|              |  |     |  |                                                                     
|------------- |  | --- |  | --------------------------------------------------------------------
|              |  |     |  | 3333 HOLDING CORPORATION                                            
|              |  |     | 
|              |  |     |  | Registrant                                                          
|              |  |     |  |                                                                     
|June 19, 2002 |  | By: |  | /s/ STEPHEN M. WEINBERG                                             
|              |  |     | 
|              |  |     |  | Stephen M. Weinberg,
Director, President and Chief Executive Officer

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

|              |  |            |  |                                                                                                                                            
|------------- |  | ---------- |  | -------------------------------------------------------------------------------------------------------------------------------------------
|June 19, 2002 |  |            |  | /s/ STEPHEN M. WEINBERG                                                                                                                    
|              |  |            | 
|              |  |            |  | Stephen M. Weinberg,
Director, President and Chief Executive Officer
(principal executive officer)                                         
|              |  |            |  |                                                                                                                                            
|June 19, 2002 |  |            |  | /s/ TODD D. NEWMAN                                                                                                                         
|              |  |            | 
|              |  |            |  | Todd D. Newman,
Senior Vice President, Chief
Financial Officer and Treasurer
(principal financial officer
and principal accounting officer)
|              |  |            |  |                                                                                                                                            
|              |  | Directors: |  | Josiah O. Low, III, David M. Sherer,
Stephen M. Weinberg and Roger O. West                                                                 
|              |  |            |  |                                                                                                                                            
|June 19, 2002 |  | By:        |  | /s/ STEPHEN M. WEINBERG                                                                                                                    
|              |  |            | 
|              |  |            |  | Stephen M. Weinberg,
Individually and as
Attorney-in-Fact*                                                                                 



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

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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                       
|              |  |     |  |                                                                     
|June 19, 2002 |  | By: |  | /s/ STEPHEN M. WEINBERG                                             
|              |  |     | 
|              |  |     |  | Stephen M. Weinberg,
Director, President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of 3333
Development Corporation, as general partner of, and on behalf of, the
registrant in the capacities and on the dates indicated.

|              |  |            |  |                                                                                                                                            
|------------- |  | ---------- |  | -------------------------------------------------------------------------------------------------------------------------------------------
|June 19, 2002 |  |            |  | /s/ STEPHEN M. WEINBERG                                                                                                                    
|              |  |            | 
|              |  |            |  | Stephen M. Weinberg,
Director, President and Chief Executive Officer
(principal executive officer)                                         
|              |  |            |  |                                                                                                                                            
|June 19, 2002 |  |            |  | /s/ TODD D. NEWMAN                                                                                                                         
|              |  |            | 
|              |  |            |  | Todd D. Newman,
Senior Vice President, Chief
Financial Officer and Treasurer
(principal financial officer
and principal accounting officer)
|             
|              |  | Directors: |  | Josiah O. Low, III, David M. Sherer,
Stephen M. Weinberg and Roger O. West                                                                 
|              |  |            |  |                                                                                                                                            
|June 19, 2002 |  | By:        |  | /s/ STEPHEN M. WEINBERG                                                                                                                    
|              |  |            | 
|              |  |            |  | Stephen M. Weinberg,
Individually and as
Attorney-in-Fact*                                                                                 



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

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INDEX TO EXHIBITS

CENTEX CORPORATION
AND SUBSIDIARIES

|        |  |                                                                                                                                                                                                                                       |  |                                                                                                                                                                                                                                                                                                                                                
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                       |  | Filed Herewith or                                                                                                                                                                                                                                                                                                                              
|Number  |  | Exhibit                                                                                                                                                                                                                               |  | Incorporated by Reference                                                                                                                                                                                                                                                                                                                      
|        |  |                                                                                                                                                                                                                                       |  |                                                                                                                                                                                                                                                                                                                                                
|3.1     |  | Restated Articles of Incorporation of
Centex Corporation (Centex)                                                                                                                                                                   |  | Exhibit 4.1 to Joint Registration Statement
of Centex, 3333 Holding Corporation
(Holding) and Centex Development Company,
L.P. (the Partnership) on Form S-8 (File
Nos. 333-55717, 333-55717-01, and
333-55717-02, respectively) filed with the
Securities and Exchange Commission (the
Commission) on June 1, 1998 (the 1998
Form S-8)
|3.2     |  | Amended and Restated By-laws of Centex                                                                                                                                                                                                |  | Exhibit 3.2 to the amended Joint Annual
Report on Form 10-K/A of Centex, Holding
and the Partnership for the fiscal year
ended March 31, 1999 (the 1999 Form
10-K/A)                                                                                                                                                                         
|4.1     |  | Specimen Centex common stock certificate
(with tandem trading legend and Rights
Agreement legend)                                                                                                                                     |  | Exhibit 4.3 to Joint Registration Statement
of Centex, Holding and the Partnership, on
Form S-8 (File Nos. 333-28229,
333-28229-01, and 333-28229-02,
respectively) filed with the Commission on
June 2, 1997 (the 1997 Form S-8)                                                                                                            
|4.2     |  | Nominee Agreement, dated November 30,
1987, by and between Centex, Holding and
the Partnership, and First RepublicBank
Dallas, National Association, as nominee                                                                       |  | Exhibit 4.2 of Centex to the Joint Annual
Report on Form 10-K of Centex, Holding and
the Partnership for the fiscal year ended
March 31, 1993 (the 1993 Form 10-K)                                                                                                                                                                           
|4.3     |  | Supplement to Nominee Agreement, dated
as of July 27, 2000, by and between
Centex, Holding, the Partnership, The
Chase Manhattan Bank, as successor
nominee, and ChaseMellon Shareholder
Services L.L.C., as successor transfer
agent |  | Exhibit 4.15 to the Joint Registration
Statement of Centex, Holding and the
Partnership on Form S-3 (File Nos.
333-54722, 333-54722-01, and 333-54722-02,
respectively) filed with the Commission on
January 31, 2001 (the 2001 Form S-3)                                                                                                    
|4.4     |  | Agreement for Purchase of Warrants,
dated as of November 30, 1987, by and
between Holding and Centex                                                                                                                                  |  | Exhibit 4.3 to Centex 1993 Form 10-K                                                                                                                                                                                                                                                                                                           

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|        |  |                                                                                                                                                                                                                                 |  |                                                                                                                                                                       
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                 |  | Filed Herewith or                                                                                                                                                     
|Number  |  | Exhibit                                                                                                                                                                                                                         |  | Incorporated by Reference                                                                                                                                             
|        |  |                                                                                                                                                                                                                                 |  |                                                                                                                                                                       
|4.5     |  | Rights Agreement, dated as of October 2,
1996, between Centex and ChaseMellon
Shareholder Services, L.L.C., as rights
agent                                                                                                     |  | Exhibit 4 to the Registration Statement of
Centex on Form 8-A (File No. 1-6776) filed
with the Commission on October 8, 1996 (the
1996 Form 8-A)                    
|4.6     |  | Amendment No. 1 to Rights Agreement,
dated as of February 18, 1999, between
Centex and ChaseMellon Shareholder
Services, L.L.C., as rights agent                                                                                |  | Exhibit 4.2 to Amendment No. 1, filed with
the Commission on February 22, 1999, to the
1996 Form 8-A                                                                  
|4.7     |  | Amendment No. 2 to Rights Agreement,
dated as of April 29, 2002, between
Centex and Mellon Investor Services L.L.C.
(f/k/a ChaseMellon Shareholder Services,
L.L.C.), as rights agent                                           |  | Exhibit 4.3 to Amendment No. 2, filed with
the Commission on May 2, 2002, to the 1996
Form 8-A                                                                        
|4.8     |  | Instruments with respect to long-term
debt, which do not exceed 10% of the
total assets of Centex and its
subsidiaries, have not been filed;
Centex agrees to furnish a copy of such
instruments to the Commission upon
request |  | Not Applicable                                                                                                                                                        
|10.1    |  | Centex Corporation Amended and Restated
1987 Stock Option Plan*                                                                                                                                                                 |  | Exhibit 10.1 of Centex to the Joint
Quarterly Report on Form 10-Q of Centex,
Holding and the Partnership for the fiscal
quarter ended September 30, 2000              
|10.2    |  | Fourth Amended and Restated 1998 Centex
Corporation Employee Non-Qualified Stock
Option Plan*                                                                                                                                   |  | Exhibit 10.2 of Centex to the Joint Annual
Report on Form 10-K of Centex, Holding, and
the Partnership for the fiscal year ended
March 31, 2001 (the 2001 Form 10-K)
|10.3    |  | Centex Corporation 2001 Stock Plan*                                                                                                                                                                                             |  | Filed herewith                                                                                                                                                        
|10.4    |  | Executive Employment Agreement, dated as
of September 17, 1990, between Centex
and Laurence E. Hirsch*                                                                                                                          |  | Exhibit 10.6 to the 1993 Form 10-K                                                                                                                                    
|10.5    |  | Executive Employment Agreement, dated as
of January 18, 1991, between Centex and
David W. Quinn*                                                                                                                                |  | Exhibit 10.7 to the 1993 Form 10-K                                                                                                                                    

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|        |  |                                                                                                                                                                                                                                  |  |                                                                                                                                                                       
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                  |  | Filed Herewith or                                                                                                                                                     
|Number  |  | Exhibit                                                                                                                                                                                                                          |  | Incorporated by Reference                                                                                                                                             
|        |  |                                                                                                                                                                                                                                  |  |                                                                                                                                                                       
|10.6    |  | Executive Employment Agreement, dated as
of June 1, 2000, between Centex and
Leldon E. Echols*                                                                                                                                   |  | Exhibit 10.5a of Centex to the 2001 Form
10-K                                                                                                                         
|10.7    |  | Centex Corporation $2,100,000
Convertible Subordinated Note issued to
Laurence E. Hirsch on May 28, 1999*                                                                                                                        |  | Exhibit 10.8 of Centex to the Joint Annual
Report on Form 10-K of Centex, Holding, and
the Partnership for the fiscal year ended
March 31, 2000 (the 2000 Form 10-K)
|10.8    |  | Amended and Restated Supplemental
Executive Retirement Plan of Centex
Corporation*                                                                                                                                               |  | Exhibit 10.9 of Centex to the 2000 Form 10-K                                                                                                                          
|10.9    |  | Centex Corporation Deferred Compensation
Plan*                                                                                                                                                                                   |  | Exhibit 4 to the Registration Statement of
Centex on Form S-8 (File No. 333-37956)
filed with the Commission on May 26, 2000                                          
|10.10   |  | Centex Corporation Long Term Incentive
Plan*                                                                                                                                                                                     |  | Filed herewith                                                                                                                                                        
|10.11   |  | Credit Agreement dated as of August 9,
2000, among Centex, Bank of America,
N.A., as Administrative Agent, The Chase
Manhattan Bank, as Syndication Agent,
Citibank, N.A., as Documentation Agent,
and the lenders named therein |  | Exhibit 10.9 of Centex to the 2001 Form 10-K                                                                                                                          
|10.12   |  | First Amendment of Credit Agreement,
dated as of May 9, 2002, among Centex,
Bank of America, as Administrative
Agent, and the lenders named therein                                                                              |  | Filed herewith                                                                                                                                                        
|16.1    |  | Letter re Change in Certifying Accountant                                                                                                                                                                                        |  | Exhibit 16.1 to the Amended Current Report
(Amendment No. 1) of Form 8-K/A of Centex
filed with the Commission on April 2, 2002                                       
|21      |  | List of Subsidiaries of Centex, Holding
and the Partnership                                                                                                                                                                      |  | Filed herewith                                                                                                                                                        
|23      |  | Consent of Independent Public Accountants                                                                                                                                                                                        |  | Filed herewith                                                                                                                                                        
|24.1    |  | Powers of Attorney                                                                                                                                                                                                               |  | Filed herewith                                                                                                                                                        



|* |  | Management contract or compensatory plan or arrangement
|- |  | -------------------------------------------------------

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##### Table of Contents



INDEX TO EXHIBITS
3333 HOLDING CORPORATION
AND SUBSIDIARY

|        |  |                                                                                                                                                                                                                                       |  |                                                                                                                                                                                                                                                             
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                       |  | Filed Herewith or                                                                                                                                                                                                                                           
|Number  |  | Exhibit                                                                                                                                                                                                                               |  | Incorporated by Reference                                                                                                                                                                                                                                   
|        |  |                                                                                                                                                                                                                                       |  |                                                                                                                                                                                                                                                             
|3.1     |  | Articles of Incorporation of Holding                                                                                                                                                                                                  |  | Exhibit 3.2a to Amendment No. 1, filed with
the Commission on October 15, 1987
(Amendment No. 1), to the Registration
Statement of Holding on Form 10 (File No.
1-9624), filed with the Commission on July
13, 1987 (the Holding Registration
Statement)
|3.2     |  | By-laws of Holding, as amended                                                                                                                                                                                                        |  | Exhibit 3.1 of Holding to the Joint
Quarterly Report on Form 10-Q of Centex,
Holding and the Partnership for the fiscal
quarter ended December 31, 2001                                                                                                     
|4.1     |  | Specimen Holding common stock
certificate                                                                                                                                                                                             |  | Exhibit 4.1 to Amendment No. 1                                                                                                                                                                                                                              
|4.2     |  | Specimen Centex common stock
certificate (with tandem trading
legend and Rights Agreement legend)                                                                                                                                     |  | Exhibit 4.3 to 1997 Form S-8                                                                                                                                                                                                                                
|4.3     |  | Nominee Agreement, dated as of
November 30, 1987, by and between
Centex, Holding and the
Partnership, and First RepublicBank
Dallas, National Association, as
nominee                                                                 |  | Exhibit 4.3 of Holding to the 1993 Form 10-K                                                                                                                                                                                                                
|4.4     |  | Supplement to Nominee Agreement,
dated as of July 27, 2000, by and
between Centex, Holding, the
Partnership, The Chase Manhattan
Bank, as successor nominee, and
ChaseMellon Shareholder Services
L.L.C., as successor transfer agent |  | Exhibit 4.15 to the 2001 Form S-3                                                                                                                                                                                                                           
|4.5     |  | Agreement for Purchase of Warrants,
dated as of November 30, 1987, by
and between Holding and Centex                                                                                                                                  |  | Exhibit 4.4 of Holding to the 1993 Form 10-K                                                                                                                                                                                                                

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|        |  |                                                                                                                                          |  |                                                                                                                                
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                          |  | Filed Herewith or                                                                                                              
|Number  |  | Exhibit                                                                                                                                  |  | Incorporated by Reference                                                                                                      
|        |  |                                                                                                                                          |  |                                                                                                                                
|10.1    |  | Amended and Restated Services Agreement, dated as of
April 1, 2001, by and between Holding and Centex Service
Company (Centex Service) |  | Filed herewith                                                                                                                 
|10.2(a) |  | Amended and Restated Services Agreement,
dated as of April 1, 2001, by and
between the Partnership and Holding                           |  | Filed herewith                                                                                                                 
|16.1    |  | Letter re Change in Certifying Accountant                                                                                                |  | Exhibit 16.1 to the Amended Current Report
(Amendment No. 1) of Form 8-K/A of Centex
filed with the Commission on April 2, 2002
|21      |  | Subsidiaries of Holding                                                                                                                  |  | Filed herewith                                                                                                                 
|23      |  | Consent of Independent Public Accountants                                                                                                |  | Exhibit 23 of Centex Exhibits filed herewith                                                                                   
|24.2    |  | Powers of Attorney                                                                                                                       |  | Filed herewith                                                                                                                 

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##### Table of Contents



INDEX TO EXHIBITS

CENTEX DEVELOPMENT COMPANY, L.P.
AND SUBSIDIARIES

|        |  |                                                                                                              |  |                                                                                                                                                                                                                                                                                         
|------- |  | ------------------------------------------------------------------------------------------------------------ |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                              |  | Filed Herewith or                                                                                                                                                                                                                                                                       
|Number  |  | Exhibit                                                                                                      |  | Incorporated by Reference                                                                                                                                                                                                                                                               
|        |  |                                                                                                              |  |                                                                                                                                                                                                                                                                                         
|3.1     |  | Articles of Incorporation of
Development, as amended                                                         |  | Exhibit 3.2a to Amendment No. 1,
filed with the Commission on October
15, 1987 (the Partnership Amendment
No. 1), to the Registration
Statement of the Partnership on Form
10 (File No. 1-9625), filed with the
Commission on July 13, 1987 (the
Partnership Registration Statement)
|3.2     |  | By-laws of Development, as amended                                                                           |  | Filed herewith                                                                                                                                                                                                                                                                          
|4.1     |  | Certificate of Limited Partnership of
the Partnership                                                        |  | Exhibit 4.1 to the Partnership
Registration Statement                                                                                                                                                                                                                                   
|4.2     |  | Second Amended and Restated Agreement
of Limited Partnership of the
Partnership                              |  | Exhibit 4.4 to 1998 Form S-8                                                                                                                                                                                                                                                            
|4.3     |  | Amendment No. 1 to Second Amended and
Restated Agreement of
Limited Partnership of the Partnership           |  | Exhibit 4.6 to the 1999 Form 10-K/A                                                                                                                                                                                                                                                     
|4.4     |  | Specimen certificate for Class A
limited partnership units                                                   |  | Exhibit 4.3 to the Partnership
Registration Statement                                                                                                                                                                                                                                   
|4.5     |  | Specimen certificate for Class B
limited partnership units                                                   |  | Exhibit 4.4 to the Partnership
Registration Statement                                                                                                                                                                                                                                   
|4.6     |  | Specimen certificate for Class C
limited partnership units                                                   |  | Exhibit 4.7 to the 1998 Form S-8                                                                                                                                                                                                                                                        
|4.7     |  | Warrant Agreement, dated as of
November 30, 1987, by and between the
Partnership and Centex                  |  | Exhibit 4.5 of the Partnership to
the 1993 Form 10-K                                                                                                                                                                                                                                    
|4.8     |  | Agreement for Purchase of Warrants,
dated as of November 30, 1987, by and
between the Partnership and Centex |  | Exhibit 4.9 of the Partnership to
the 1993 Form 10-K                                                                                                                                                                                                                                    

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##### Table of Contents



|        |  |                                                                                                                                                                                                                                                   |  |                                                                                                                                                             
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                                   |  | Filed Herewith or                                                                                                                                           
|Number  |  | Exhibit                                                                                                                                                                                                                                           |  | Incorporated by Reference                                                                                                                                   
|        |  |                                                                                                                                                                                                                                                   |  |                                                                                                                                                             
|4.9     |  | Specimen warrant certificate                                                                                                                                                                                                                      |  | Exhibit 4.6 to Amendment No. 3, filed with
the Commission on November 24, 1987, to the
Partnership Registration Statement                                   
|4.10    |  | Specimen Centex common stock certificate (with tandem trading
legend and Rights Agreement legend)                                                                                                                                                 |  | Exhibit 4.3 to 1997 Form S-8                                                                                                                                
|4.11    |  | Nominee Agreement, dated as of November 30, 1987, by and between
Centex, Holding and the Partnership, and First RepublicBank
Dallas, National Association, as nominee                                                                             |  | Exhibit 4.8 of the Partnership to the 1993
Form 10-K                                                                                                        
|4.12    |  | Supplement to Nominee Agreement, dated as of July 27, 2000, by and
between Centex, Holding, the Partnership, The Chase Manhattan
Bank, as successor nominee, and ChaseMellon Shareholder Services
L.L.C., as successor transfer agent             |  | Exhibit 4.15 to the 2001 Form S-3                                                                                                                           
|4.13    |  | Form of Operating Partnership Agreement                                                                                                                                                                                                           |  | Exhibit 4.9 to the Partnership Registration
Statement                                                                                                       
|4.14    |  | Instruments with respect to long-term debt, which do not exceed
10% of the total assets of the Partnership and its subsidiaries,
have not been filed; the Partnership agrees to furnish a copy of
such instruments to the Commission upon request |  | Not applicable                                                                                                                                              
|10.1    |  | Amended and Restated Services Agreement, dated as of April 1,
2001, by and between the Partnership and Holding                                                                                                                                    |  | Exhibit 10.2(a) of Holding Exhibits filed
herewith                                                                                                          
|10.2(b) |  | Management Agreement, dated as of April 1, 2001, by and between
Centex Homes and the Partnership                                                                                                                                                  |  | Filed herewith                                                                                                                                              
|10.3    |  | Employment Agreement, dated as of April 1, 2001, by and between
the Partnership and Richard C. Decker                                                                                                                                             |  | Exhibit 10.2 of the Partnership to the
Joint Quarterly Report on Form 10-Q of
Centex, Holding and the Partnership for the
fiscal quarter ended June 30, 2001

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|        |  |                                                                                                                                                                             |  |                                                                                                                                                                   
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                             |  | Filed Herewith or                                                                                                                                                 
|Number  |  | Exhibit                                                                                                                                                                     |  | Incorporated by Reference                                                                                                                                         
|        |  |                                                                                                                                                                             |  |                                                                                                                                                                   
|10.4    |  | Instrument constituting Guaranteed Unsecured Set Off Loan Notes
2001 dated April 15, 1999 made by Centex Development Company UK
Limited (CDCUK)                           |  | Exhibit 4.13 of the Partnership to the
Joint Quarterly Report on Form 10-Q of
Centex, Holding, and the Partnership for
the fiscal quarter ended September 30, 1999
|10.5    |  | Share Purchase Agreement dated April 15,
1999 by and among AMEC Plc, as
Guarantor, AMEC Finance Limited, as
Seller, and Centex Development Company
UK Limited, as Purchaser |  | Exhibit 10.18 to the Current Report on Form
8-K of the Partnership filed with the
Commission on April 29, 1999                                                    
|10.6    |  | Agreement dated March 30, 2001 
£100,000,000 Credit Facility for
Fairclough Homes Group Limited
(Fairclough) arranged by The Royal
Bank of Scotland PLC                  |  | Exhibit 10.5b of the Partnership to the
2001 Form 10-K                                                                                                            
|10.7    |  | Facility Agreement dated March 28, 2001,
by and between the Partnership, as
lender, and CDCUK, as borrower                                                                  |  | Exhibit 10.6 of the Partnership to the 2001
Form 10-K                                                                                                             
|10.8    |  | Facility Agreement dated March 28, 2001,
by and between Fairclough, as lender,
and CDCUK, as borrower                                                                       |  | Exhibit 10.9 of the Partnership to the 2001
Form 10-K                                                                                                             
|10.9    |  | Asset Purchase Agreement dated as of
March 30, 2001, between the Partnership
and Calton Homes, Inc.                                                                         |  | Exhibit 10.8 of the Partnership to the 2001
Form 10-K                                                                                                             
|16.1    |  | Letter re Change in Certifying Accountant                                                                                                                                   |  | Exhibit 16.1 to the Amended Current Report
(Amendment No. 1) of Form 8-K/A of Centex
filed with the Commission on April 2, 2002                                   
|21      |  | Subsidiaries of the Partnership                                                                                                                                             |  | Exhibit 21 of Centex Exhibits filed herewith                                                                                                                      
|23      |  | Consent of Independent Public Accountants                                                                                                                                   |  | Exhibit 23 of Centex Exhibits filed herewith                                                                                                                      
|24.3    |  | Powers of Attorney                                                                                                                                                          |  | Filed herewith                                                                                                                                                    

155