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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, 2003

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

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

|                    |  |                          |  |                                  |  |                        
|------------------- |  | ------------------------ |  | -------------------------------- |  | -----------------------
|                    |  | Name of each             |  |                                  |  | Name of each           
|                    |  | exchange on which        |  |                                  |  | exchange on which      
|Title of each class |  | registered               |  | Title of each class              |  | registered             
|                    |  |                          |  |                                  |  |                        
|Centex Corporation  |  | 3333 Holding Corporation
|Common Stock        |  | New York Stock Exchange  |  | Common Stock                     |  | New York Stock Exchange
|($.25 par value)    |  |                          |  | ($.01 par value)                 |  |                        
|                    |  | London Stock Exchange    |  |                                  |  | London Stock Exchange  
|                    |  |                          |  |                                  |  |                        
|                    |  |                          |  | Centex Development Company, L.P.
|                    |  |                          |  | Warrants to Purchase             |  | New York Stock Exchange
|                    |  |                          |  | Class B Units of                 |  |                        
|                    |  |                          |  | Limited Partnership              |  | London Stock Exchange  
|                    |  |                          |  | Interest Expiring                |  |                        
|                    |  |                          |  | November 30, 2007                |  |                        

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 this Form 10-K. [   ]

Indicate by check mark whether the registrants are an accelerated filer
(as defined in Rule 12b-2 of the Act). Yes [X] No [   ].

On September 30, 2002 (the last business day of the registrants most
recently completed second fiscal quarter), 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 was
$2.68 billion based upon the last sale price reported for such date on the New
York Stock Exchange. For purposes of determining this amount only, registrants
have defined affiliates as the executive officers and directors of Centex
Corporation.

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 15, 2003:

|                                 |  |                                               |  |  |            |  |       
|-------------------------------- |  | --------------------------------------------- |  |  | ---------- |  | ------
|Centex Corporation               |  | Common Stock                                  |  |  | 62,251,136 |  | 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 17, 2003.



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|                                                                                                      |                                                                                               |  |  |  |  |  |  | 
|----------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|JOINT EXPLANATORY STATEMENT                                                                          
|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                                      
|                                                                                                      | ITEM 14. CONTROLS AND PROCEDURES                                                             
|PART IV                                                                                              
|                                                                                                      | ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K                     
|                                                                                                      | ITEM 16. PRINCIPAL ACCOUNTANT FEES AND SERVICES                                              
|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 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                      
|PART IV                                                                                              
|                                                                                                      | ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K                    
|                                                                                                      | ITEM 16. PRINCIPAL ACCOUNTANT FEES AND SERVICES                                              
|SIGNATURES                                                                                           
|INDEX TO EXHIBITS                                                                                    
|EX-10.2 6th Amended/Restated ENQ Stock Option Plan                                                   
|EX-10.3 Amended Centex Corp 2001 Stock Plan                                                          
|Ex-10.A 1st Amendment to Employment Agreement                                                        
|EX-10.3B Profits Agreement with Richard C. Decker                                                    
|Ex-10.6A Supplemental Agreement                                                                      
|EX-10.8 Amended and Restated SERP                                                                    
|EX-10.10 Amended/Restated Long Term Incentive Plan                                                   
|EX-21 List of Subsidiaries                                                                           
|EX-23.A Consent of Independent Auditors                                                              
|EX-23.B Consent of Independent Auditors                                                              
|EX-24.1 Powers of Attorney                                                                           
|EX-24.2 Powers of Attorney                                                                           
|EX-24.3 Powers of Attorney                                                                           
|EX-99.1 Schedule III                                                                                 



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JOINT ANNUAL REPORT ON

FORM 10-K


FOR THE FISCAL YEAR ENDED MARCH 31, 2003


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 record holder 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 the limited
partnership interest in Centex Development Company. These units are
collectively convertible into 20% of the Class B Units of the 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, 2003, or fiscal 2003, 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 2003 annual
meetings of stockholders, the Annual Report to Stockholders of Centex
Corporation for fiscal 2003 and the Annual Report to Stockholders of 3333
Holding Corporation and Centex Development Company for fiscal 2003. 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 (G), Centex Development
Company, L.P., of the Notes to Consolidated Financial Statements of Centex
Corporation and subsidiaries on pages 84-85 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

(FLOWCHART)

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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                                                                            |  |  | 23  |     
|Item 3. Legal Proceedings                                                                     |  |  | 24  |     
|Item 4. Submission of Matters to a Vote of Security Holders                                   |  |  | 24  |     
|PART II                                                                                      
|Item 5. Market for Registrants Common Equity and Related Stockholder
Matters                 |  |  | 26  |     
|Item 6. Selected Financial Data                                                               |  |  | 27  |     
|Item 7. Managements Discussion and Analysis of Financial Condition and
Results of Operations |  |  | 28  |     
|Item 7A. Quantitative and Qualitative Disclosures about Market Risk                           |  |  | 56  |     
|Item 8. Financial Statements and Supplementary Data                                           |  |  | 59  |     
|Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure  |  |  | 101 |     
|PART III                                                                                     
|Item 10. Directors and Executive Officers of the Registrant                                   |  |  | 101 |     
|Item 11. Executive Compensation                                                               |  |  | 102 |     
|Item 12. Security Ownership of Certain Beneficial Owners and Management                       |  |  | 102 |     
|Item 13. Certain Relationships and Related Transactions                                       |  |  | 102 |     
|Item 14. Controls and Procedures                                                              |  |  | 102 |     
|PART IV                                                                                      
|Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K                      |  |  | 102 |     
|Item 16. Principal Accountant Fess and Services                                               |  |  | 103 |     
|SIGNATURES                                                                                    |  |  | 104 |     

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TABLE OF CONTENTS (continued)

|                                                                                             |                                             |                                                   |  |     
|-------------------------------------------------------------------------------------------- | ------------------------------------------- | ------------------------------------------------- |  | ----
|Part B.                                                                                      | 3333 HOLDING CORPORATION AND SUBSIDIARY AND |                                                   | 
|                                                                                             |                                             | CENTEX DEVELOPMENT COMPANY, L.P. AND SUBSIDIARIES |  |     
|                                                                                             |                                             |                                                   |  | Page
|                                                                                             |                                             |                                                   |  |     
|PART I                                                                                      
|Item 1. Business                                                                             |                                             | 107                                              
|Item 2. Properties                                                                           |                                             | 114                                              
|Item 3. Legal Proceedings                                                                    |                                             | 117                                              
|Item 4. Submission of Matters to a Vote of Security Holders                                  |                                             | 117                                              
|PART II                                                                                     
|Item 5. Market for Registrants Common Equity and Related Stockholder Matters                |                                             | 119                                              
|Item 6. Selected Financial Data                                                              |                                             | 121                                              
|Item 7. Managements Discussion and Analysis of Financial
Condition and Results ofOperations |                                             | 122                                              
|Item 7A. Quantitative and Qualitative Disclosures about Market Risk                          |                                             | 134                                              
|Item 8. Financial Statements and Supplementary Data                                          |                                             | 135                                              
|Item 9. Changes in and Disagreements with Accountants on
Accounting and FinancialDisclosure  |                                             | 160                                              
|PART III                                                                                    
|Item 10. Directors and Executive Officers of the Registrants                                 |                                             | 161                                              
|Item 11. Executive Compensation                                                              |                                             | 162                                              
|Item 12. Security Ownership of Certain Beneficial Owners and Management                      |                                             | 163                                              
|Item 13. Certain Relationships and Related Transactions                                      |                                             | 166                                              
|Item 14. Controls and Procedures                                                             |                                             | 166                                              
|PART IV                                                                                     
|Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K                     |                                             | 167                                              
|Item 16. Principal Accountant Fees and Services                                              |                                             | 168                                              
|SIGNATURES                                                                                   |                                             | 169                                              
|                                                                                             |                                             |                                                   |  |     
|                                                                                             |                                             | __________________                                |  |     
|                                                                                             |                                             |                                                   |  |     
|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 106) 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
107 through 174) includes information relating separately to 3333 Holding
Corporation and its subsidiary, to 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 15, 2003, 62,251,136 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. Home Building internally tracks its
performance compared to the last reported twelve months of revenues for its
competitors. Based on Home Building's comparisons, we believe that it ranked as the
nations fourth largest homebuilder at March 31, 2003.

Our Financial Services operations primarily
are engaged in the residential mortgage banking business, as well as in other financial services
that are in large part related to the residential mortgage market. These operations include mortgage origination, servicing
and other related services for purchasers of homes sold by our Home Building
operations and other homebuilders, as well as sub-prime home equity lending
and the sale of title insurance and various other insurance coverages. 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

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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 65.1% as of March 31, 2003. Accordingly, we have
consolidated Construction Products financial statements with our financial statements for the years
ended March 31, 2003, 2002 and 2001, or fiscal 2003, 2002 and 2001.

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.

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. Through our investment in Centex
Development Company, the operations also include the International Home
Building business located in the United Kingdom.

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

Financial Information about Industry Segments

Note (J), Business Segments, of the Notes to Consolidated Financial
Statements of Centex Corporation and subsidiaries on pages 88-91 of this Report
contains additional information about our business segments for fiscal 2003,
2002 and 2001.

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. Centex Homes is the only company to rank among the
nations top 10 homebuilders for each of the past 35 years according to
Professional Buildermagazine. Centex Homes sells to both first-time and
move-up buyers. In fiscal 2003, over 81% of the homes we sold 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, 2003, Centex Homes was building in 92 market areas, including Washington, D.C., and in 26 states.
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/Hunterdon/Sommerset      
|             |  |                |  | 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                             
|             |  |                |  | Eagle                              
|             |  |                |  | Fort Collins/Loveland              
|             |  |                |  | Greeley                            
|             |  | Indiana        |  | Indianapolis                       
|             |  |                |  | Fort Wayne                         
|             |  | Illinois       |  | Chicago                            
|             |  | Kentucky       |  | Louisville                         
|             |  | Michigan       |  | Ann Arbor                          
|             |  |                |  | Detroit                            
|             |  |                |  | Grand Rapids/Muskegon/Holland      
|             |  |                |  | Kalamazoo/Battle Creek             
|             |  | Minnesota      |  | Minneapolis/St. Paul               
|             |  |                |  | Rochester                          
|             |  | Missouri       |  | St. Louis                          
|             |  | Ohio           |  | Akron                              
|             |  |                |  | Canton/Massillon                   
|             |  |                |  | Cincinnati                         
|             |  |                |  | Cleveland/Lorain/Elyria            
|             |  |                |  | Columbus                           
|             |  |                |  | Dayton/Springfield                 
|             |  |                |  | Mansfield                          
|             |  |                |  | Steubenville/Weirton               
|             |  |                |  | Toledo                             
|             |  |                |  | Youngstown/Warren                  
|             |  | Utah           |  | Salt Lake City                     

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|           |  |                |  |                                
|---------- |  | -------------- |  | -------------------------------
|Region     |  | States         |  | Markets                        
|           |  |                |  |                                
|Southwest  |  | Arizona        |  | Phoenix/Mesa                   
|           |  | Nevada         |  | Las Vegas                      
|           |  | New Mexico     |  | Albuquerque                    
|           |  |                |  | Santa Fe                       
|           |  | Texas          |  | Austin/San Marcos              
|           |  |                |  | Brazoria                       
|           |  |                |  | Dallas                         
|           |  |                |  | Ft. Worth/Arlington            
|           |  |                |  | Galveston/Texas City           
|           |  |                |  | Houston                        
|           |  |                |  | Killeen/Temple                 
|           |  |                |  | San Antonio                    
|           |  |                |  |                                
|Southeast  |  | Florida        |  | Daytona Beach                  
|           |  |                |  | Ft. Lauderdale                 
|           |  |                |  | Ft. Myers/Cape Coral           
|           |  |                |  | Ft. Pierce/St. Lucie           
|           |  |                |  | Ft. Walton Beach               
|           |  |                |  | Jacksonville                   
|           |  |                |  | Lakeland/Winter Haven          
|           |  |                |  | Naples                         
|           |  |                |  | Orlando                        
|           |  |                |  | Punta Gorda                    
|           |  |                |  | Sarasota/Bradenton             
|           |  |                |  | Tampa/St. Petersburg/Clearwater
|           |  |                |  | West Palm Beach/Boca Raton     
|           |  | Georgia        |  | Atlanta                        
|           |  | South Carolina |  | Columbia                       
|           |  |                |  | Greenville/Spartanburg/Anderson
|           |  | Tennessee      |  | Nashville                      
|           |  |                |  |                                
|West Coast |  | California     |  | Bakersfield                    
|           |  |                |  | Fresno                         
|           |  |                |  | Kings County                   
|           |  |                |  | Los Angeles/Long Beach         
|           |  |                |  | Oakland                        
|           |  |                |  | Orange County                  
|           |  |                |  | Riverside/San Bernardino       
|           |  |                |  | Sacramento                     
|           |  |                |  | San Diego                      
|           |  |                |  | San Jose                       
|           |  |                |  | San Luis Obispo                
|           |  |                |  | Visalia/Tulare/Porterville     
|           |  |                |  | Yolo                           
|           |  | Hawaii         |  | Hawaii                         
|           |  | Nevada         |  | Reno                           
|           |  | Oregon         |  | Eugene                         
|           |  |                |  | Portland/Vancouver             
|           |  | Washington     |  | Seattle/Bellevue/Everett       
|           |  |                |  | Tacoma                         

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In fiscal 2003, Centex Homes closed 26,427 homes, including first-time,
move-up and, in some markets, custom homes, ranging in price from approximately
$57,000 to about $1.6 million. The average sale price in fiscal 2003 was
$220,183.

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, 2003, Centex Homes owned approximately 60,000 lots and had rights to
purchase approximately 71,000 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, 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
on-your-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.                                                  |  | 
|Jones Company   |  | January 2003   |  | Builds single-family homes for the
first-time and move-up buyer in the
St. Louis, Missouri and Indianapolis,
Indiana areas. |  | 

In addition, in July 1999, 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. 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 2003 presentation.

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Closings (in units):

|                               |              |   |                               |       |  |      |        |       |      |   |        |       |  |   |        |       |  |   |        |       | 
|------------------------------ | ------------ | - | ----------------------------- | ----- |  | ---- | ------ | ----- | ---- | - | ------ | ----- |  | - | ------ | ----- |  | - | ------ | ----- | 
|                               |              |   | For the Years Ended March 31, |      
|                               |              |   |                               |      
|                               |              |   | 2003                          |       |  | 2002 |        |       | 2001 |   |        | 2000  |  |   | 1999   |      
|                               |              |   |                               |       |  |      |        |       |      |   |        |       |  |   |        |      
|                               | Mid-Atlantic |   |                               | 4,501 |  |      |        | 3,877 |      |   |        | 3,395 |  |   |        | 3,058 |  |   |        | 2,332 | 
|                               | Southeast    |   |                               | 4,851 |  |      |        | 4,440 |      |   |        | 4,137 |  |   |        | 4,142 |  |   |        | 3,559 | 
|                               | Midwest      |   |                               | 4,695 |  |      |        | 3,688 |      |   |        | 3,296 |  |   |        | 3,089 |  |   |        | 2,062 | 
|                               | Southwest    |   |                               | 8,157 |  |      |        | 6,910 |      |   |        | 5,661 |  |   |        | 4,923 |  |   |        | 3,779 | 
|                               | West Coast   |   |                               | 4,223 |  |      |        | 4,045 |      |   |        | 4,170 |  |   |        | 3,692 |  |   |        | 3,060 | 
|                               |              |   |                               |       |  |      |        |       |      |   |        |       |  |   |       
|                               |              |   | 26,427                        |       |  |      | 22,960 |       |      |   | 20,659 |       |  |   | 18,904 |       |  |   | 14,792 |      
|                               |              |   |                               |       |  |      |        |       |      |   |        |       |  |   |       
|Average Sales Price (in 000s) |              | $ | 220                           |       |  | $    | 214    |       |      | $ | 206    |       |  | $ | 192    |       |  | $ | 186    |      
|                               |              |   |                               |       |  |      |        |       |      |   |        |       |  |   |       

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

|             |  |                               |        |  |      |  |       |      |  |  |       |  |  |      |       |  |  |  |       | 
|------------ |  | ----------------------------- | ------ |  | ---- |  | ----- | ---- |  |  | ----- |  |  | ---- | ----- |  |  |  | ----- | 
|             |  | For the Years Ended March 31, |       
|             |  |                               |       
|             |  | 2003                          |        |  | 2002 |  |       | 2001 |  |  | 2000  |  |  | 1999 |      
|             |  |                               |        |  |      |  |       |      |  |  |       |  |  |      |      
|Mid-Atlantic |  |                               | 2,148  |  |      |  | 1,503 |      |  |  | 1,365 |  |  |      | 1,210 |  |  |  | 1,061 | 
|Southeast    |  |                               | 2,713  |  |      |  | 2,315 |      |  |  | 1,936 |  |  |      | 1,891 |  |  |  | 1,831 | 
|Midwest      |  |                               | 2,920  |  |      |  | 2,093 |      |  |  | 2,037 |  |  |      | 1,628 |  |  |  | 1,355 | 
|Southwest    |  |                               | 2,258  |  |      |  | 2,361 |      |  |  | 2,546 |  |  |      | 1,861 |  |  |  | 1,624 | 
|West Coast   |  |                               | 2,011  |  |      |  | 1,099 |      |  |  | 1,381 |  |  |      | 989   |  |  |  | 921   | 
|             |  |                               |        |  |      |  |       |      |  |  |       |  |  |      |      
|             |  |                               | 12,050 |  |      |  | 9,371 |      |  |  | 9,265 |  |  |      | 7,579 |  |  |  | 6,792 | 
|             |  |                               |        |  |      |  |       |      |  |  |       |  |  |      |      

Sales (Orders) (in units):

|             |  |                               |        |  |      |  |        |      |  |  |        |  |  |      |        |  |  |  |        | 
|------------ |  | ----------------------------- | ------ |  | ---- |  | ------ | ---- |  |  | ------ |  |  | ---- | ------ |  |  |  | ------ | 
|             |  | For the Years Ended March 31, |       
|             |  |                               |       
|             |  | 2003                          |        |  | 2002 |  |        | 2001 |  |  | 2000   |  |  | 1999 |       
|             |  |                               |        |  |      |  |        |      |  |  |        |  |  |      |       
|Mid-Atlantic |  |                               | 5,146  |  |      |  | 3,936  |      |  |  | 3,550  |  |  |      | 3,207  |  |  |  | 2,464  | 
|Southeast    |  |                               | 5,249  |  |      |  | 4,819  |      |  |  | 4,182  |  |  |      | 4,202  |  |  |  | 3,952  | 
|Midwest      |  |                               | 5,087  |  |      |  | 3,744  |      |  |  | 3,572  |  |  |      | 3,207  |  |  |  | 2,515  | 
|Southwest    |  |                               | 8,054  |  |      |  | 6,725  |      |  |  | 6,325  |  |  |      | 5,031  |  |  |  | 4,010  | 
|West Coast   |  |                               | 5,132  |  |      |  | 3,763  |      |  |  | 4,562  |  |  |      | 3,760  |  |  |  | 2,990  | 
|             |  |                               |        |  |      |  |        |      |  |  |        |  |  |      |       
|             |  |                               | 28,668 |  |      |  | 22,987 |      |  |  | 22,191 |  |  |      | 19,407 |  |  |  | 15,931 | 
|             |  |                               |        |  |      |  |        |      |  |  |        |  |  |      |       

We define backlog units as units that have been sold, as indicated by a
signed contract, but not closed. Substantially all of these orders are
expected to be filled during fiscal year 2004.

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, regional and local
builders. Centex Homes top six competitors based on revenues for their most
recent year-end are as follows: Beazer Homes, D. R. Horton, Inc., KB Homes,
Lennar Corporation, Pulte and Ryland. Centex Homes operations accounted for
approximately 1.6% of the total for-sale housing starts in the United States
for the twelve months ended March 31, 2003. The main competitive factors
affecting

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Centex Homes operations are location, price, availability of 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 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 primarily are engaged in the residential mortgage
banking business, as well as in other financial services that are in
large part related to the residential mortgage market. These
operations include mortgage origination, servicing
and other related services for purchasers of homes sold by our Home
Building operations and other homebuilders, as well as sub-prime home
equity lending and the sale of title insurance and various other
insurance coverages.

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 2003, this capture ratio was 73%. 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, 2003, CTX Mortgage had 223 offices located in 36 states. The
offices vary in size depending on loan volume.

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The following table shows the unit breakdown of Builder and Retail loans
for CTX Mortgage for the five years ended March 31, 2003:

|                                                   |         |   |                               |        |  |      |        |        |      |   |        |        |  |   |        |        |  |   |        |        | 
|-------------------------------------------------- | ------- | - | ----------------------------- | ------ |  | ---- | ------ | ------ | ---- | - | ------ | ------ |  | - | ------ | ------ |  | - | ------ | ------ | 
|                                                   |         |   | For the Years Ended March 31, |       
|                                                   |         |   |                               |       
|                                                   |         |   | 2003                          |        |  | 2002 |        |        | 2001 |   |        | 2000   |  |   | 1999   |       
|                                                   |         |   |                               |        |  |      |        |        |      |   |        |        |  |   |        |       
|Loan Types:                                        |         |   |                               |        |  |      |        |        |      |   |        |        |  |   |        |        |  |   |        |       
|                                                   | Builder |   |                               | 18,127 |  |      |        | 15,435 |      |   |        | 12,506 |  |   |        | 10,958 |  |   |        | 9,882  | 
|                                                   | Retail  |   |                               | 66,807 |  |      |        | 64,949 |      |   |        | 48,244 |  |   |        | 48,301 |  |   |        | 66,496 | 
|                                                   |         |   |                               |        |  |      |        |        |      |   |        |        |  |   |       
|                                                   |         |   | 84,934                        |        |  |      | 80,384 |        |      |   | 60,750 |        |  |   | 59,259 |        |  |   | 76,378 |       
|                                                   |         |   |                               |        |  |      |        |        |      |   |        |        |  |   |       
|Origination Volume (in billions)                   |         | $ | 13.99                         |        |  | $    | 12.45  |        |      | $ | 8.88   |        |  | $ | 8.11   |        |  | $ | 10.06  |       
|Percent of Centex Homes Non-Cash Closings
Financed |         |   | 73                            | %      |  |      | 72     | %      |      |   | 64     | %      |  |   | 61     | %      |  |   | 70     | %     

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 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 sales 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 retain no 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, 2003, CTX
Mortgage had 23 of these agreements, operating in 24 offices located in 11
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 at March 31, 2003.
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.
At March 31, 2003, 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 $2.50 billion.
Under the terms of the sales agreement, 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,
2003, CTX Mortgage was servicing approximately $2.27 billion of mortgage loans
owned by HSF-I. For further discussion of HSF-I and the implication of recent
accounting pronouncements on HSF-I, see Managements Discussion and Analysis
of Financial Condition and Results of Operations  Certain Off-Balance-Sheet
and Other Obligations below.

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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 mortgage 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 such as cash-out refinance and jumbo loans. 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, 2003, Home Equity had 162 offices and was doing business in
47 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 primarily through the Internet.

The following table summarizes Home Equitys origination statistics for
the five-year period ended March 31, 2003:

|                                 |  |                               |        |  |      |   |        |      |  |   |        |  |  |      |        |  |  |   |        | 
|-------------------------------- |  | ----------------------------- | ------ |  | ---- | - | ------ | ---- |  | - | ------ |  |  | ---- | ------ |  |  | - | ------ | 
|                                 |  | For the Years Ended March 31, |       
|                                 |  |                               |       
|                                 |  | 2003                          |        |  | 2002 |   |        | 2001 |  |   | 2000   |  |  | 1999 |       
|                                 |  |                               |        |  |      |   |        |      |  |   |        |  |  |      |       
|Loans                            |  |                               | 29,448 |  |      |   | 26,955 |      |  |   | 26,418 |  |  |      | 20,568 |  |  |   | 15,582 | 
|Origination Volume (in billions) |  | $                             | 2.51   |  |      | $ | 2.09   |      |  | $ | 1.72   |  |  | $    | 1.32   |  |  | $ | 1.02   | 

We began servicing loans through Home Equity in fiscal 1997. Servicing
fees for sub-prime loans are significantly higher than for conforming loans
primarily due to the frequency of contact with customers. 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,
2003, Home Equity was servicing a sub-prime loan portfolio of approximately
$5.48 billion.

From October 1997 through March 2000, a majority of Home Equitys loans
originated were included in securitizations that utilized a structure that
resulted in the securitizations of the loans being accounted for as sales.
Under this structure, Home Equity retained a residual interest in, 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
of the sales accounting treatment, 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 $2.38 billion in loans under this
structure. As of March 31, 2003, Home Equity had a remaining MSRI of $106.4
million.

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We changed the structure of securitizations beginning April 1, 2000.
Subsequent to March 31, 2000, securitizations have been accounted for as
borrowings; interest has been recorded over the life of the loans using the
interest, or actuarial, method; the mortgage loans receivable and the
securitization debt have remained on Home Equitys balance sheet and the
related interest margin has been reflected in our income statement. Under both
structures, recourse on the securitized debt is limited to the payments
received on the underlying mortgage collateral with no recourse to Home Equity
or Centex Corporation. As is common in these structures, Home Equity remains
liable for customary loan representations. The change in structure of the
securitizations has no effect on the cash flow and profit recognized over the
life of the mortgages. However, the change did affect the timing of profit
recognition. Interest margin, rather than gain on sale of loans, is now Home
Equitys primary source of operating income. From April 1, 2000 to March 31,
2003, Home Equity completed 11 securitizations totaling approximately $5.34
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 25 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 24 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.

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 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. Many of the competitors of our financial services
companies have greater resources than we do. During fiscal 2003, 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.

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##### Table of Contents



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, 2003, our ownership in
Construction Products was approximately 65.1%.

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, 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 2.27 million
tons in fiscal 2003 and 2.24 million tons in fiscal 2002. Total net cement
sales were 2.36 million tons in fiscal 2003 and 2.44 million tons in fiscal
2002, as all four cement plants sold all of the product they produced. During
the past five years, Construction Products purchased cement from others to be
resold. In fiscal 2003, 6.7% of the cement sold by Construction Products was
acquired from outside sources, compared to 10.5% in fiscal 2002.

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 its Buda, Texas; LaSalle, Illinois and Laramie,
Wyoming plants to operate at present production capacity for at least 30 years
and the Fernley, Nevada plant to operate at its present production capacity for
at least 12 years. Construction Products management expects that additional
limestone reserves for the Fernley plant will be available when needed on an
economically feasible basis, although such reserves may be more
distant and more expensive to transport than the Fernley plant's
existing reserves.

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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. While power and coal costs generally increased during fiscal
2003 because of the location of Construction Product's cement plants, such increases are not expected to significantly impact cement manufacturing costs in fiscal 2004.

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 49%, 23% and 22%, respectively, of U.S.
cement consumption in calendar year 2002. No single customer of Construction
Products accounted for as much as 10% of total cement sales during fiscal 2003.
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 distribute our cement principally by common carriers and customer pickup.
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 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 1,956 million
square feet in fiscal 2003 and 1,890 million square feet in fiscal 2002. Total
gypsum wallboard sales were 1,933 million square feet in fiscal 2003 and 1,930
million square feet in fiscal 2002.

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,

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Colorado and Oklahoma mines and quarries contain approximately 50
million tons, 21 million tons and 15 million tons of gypsum reserves. Based on
its current production capacity, Construction Products management estimates
that the life of its existing gypsum rock reserves is at least 80 years in
New Mexico, 35 years in Colorado and 15 years in Oklahoma. Construction Products believes other gypsum
deposits are located in the immediate area of the Oklahoma plant and may be
obtained at a reasonable cost when needed.

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 almost 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 September 2003 for Colorado, November 2003 for New
Mexico and June 2004 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, Colorado
plant is supplied by the cogeneration power facility that was acquired along
with the gypsum wallboard plant in 1997. Natural gas costs generally
increased during fiscal 2003 and are likely to remain above average
fiscal 2003 gas costs in fiscal 2004. If gas costs remain at the current high level, such costs are expected to significantly impact fiscal 2004 gypsum wallboard manufacturing costs.

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 permit it to reach customers in all states west of the Mississippi
River and many eastern states. During fiscal 2003, approximately 22% of
Construction Products sales volume of gypsum wallboard was transported by
rail. Construction Products had two customers that together accounted for
approximately 23% of its wallboard sales during fiscal 2003.

Competition and Other Factors

There currently are eight manufacturers of wallboard in the United States
operating a total of 81 plants. Construction Products estimates that the three
largest producers, of which Construction Products is not one, accounted for
approximately 65% of wallboard sales in the United States in calendar year
2002. 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. Currently, the wallboard industry has
production capacity in excess of demand. This excess capacity has historically
resulted in volatile pricing. 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 its Lawton, Oklahoma mill. The Lawton mill commenced commercial
operation in March 2000 and was acquired by

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Construction Products in November
2000. The Lawton mill has the
capacity to produce up to approximately 275,000 tons, of gypsum-grade recycled paperboard
annually. In fiscal 2003, its total recycled paperboard production was
approximately 232,000 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. The
recycled paperboard products are sold primarily to gypsum wallboard
manufacturers. During fiscal 2003, approximately 31% of the recycled
paperboard manufactured and shipped by Construction Products recycled
paperboard mills was consumed by its own gypsum wallboard manufacturing
operations and approximately 53% was shipped to two other gypsum wallboard
manufacturers. Construction Products supplies one of these gypsum wallboard
manufacturers through a long-term supply agreement. The loss of one or more gypsum wallboard
manufacturers as customers, unless replaced by a commercially similar arrangement within a reasonable time period, could have an adverse effect on recycled paperboard sales and profit
margins. The remaining 16% of the recycled paperboard manufactured and shipped
by Construction Products recycled paperboard mills was not gypsum-grade and
was shipped to various customers.

The demand for recycled paperboard directly corresponds to the cyclical
gypsum wallboard market. Construction Products competes with approximately
nine 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 to customers 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 2003. Competition among concrete producers within Construction
Products northern California and Austin markets is strong.

Environmental Matters

The operations of
Construction Products, are subject to numerous federal, state and local laws and
regulations governing the protection of health and safety and
the environment. Some of these laws impose permitting requirements and govern the nature and amount of emissions that may be generated when conducting particular operations. Other laws impose obligations to clean up or remediate spins of
hazardous materials into the environment. We believe that
Construction Products has obtained all the material permits that are necessary to conduct its operations. We further believe that Construction Products is conducting its operations in
material compliance with these permits.

Two environmental issues deserve special mention. First, cement kiln dust or CKD is generated in connection with the operations
of Construction Products cement plants. The federal
Environmental Protection Agency or EPA has been evaluating the
regulatory status of CKD under the federal Resource Conservation and
Recovery Act (RCRA) for a number of years. In 1999, the
EPA proposed a rule that would allow states to regulate properly
managed CKD as a non-hazardous waste under state laws and

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regulations governing solid waste. In contrast, CKD
that was not properly managed would be treated as a hazardous waste
under RCRA. In 2002, the EPA confirmed its intention to exempt
properly managed CKD from the hazardous waste requirements of RCRA.
The agency announced that it would collect additional data over the
next three to five years to determine if the states regulation
of CKD is effective, which may lead the EPA to withdraw its 1999
proposal to treat any CKD as a hazardous waste. Final action
implementing the 2002 announcement is expected to occur in June 2003.

Currently,
substantially all CKD produced in connection with Construction
Products present operations is recycled, and therefore such CKD
is not viewed as a waste. However, CKD was historically collected and
stored on-site at Construction Products cement plants. If
either the EPA or the states decide to impose management standards on
this CKD at some point in the future, Construction Products could
incur additional costs to comply with those requirements.

A second
environmental issue involves the potential regulation of greenhouse
gasses from cement plants under the federal Clean Air Act. Although
no restrictions have been imposed, it is possible that cement plants
may be targeted because of the large amounts of carbon dioxide
generated during the manufacturing process.

Any additional
environmental requirements imposed on Construction Products would
also be imposed on other members of the construction products
industry. Although we believe that Construction Products
practices and procedures are consistent with industry standards,
there can be no assurance that there will not be environmental
liabilities or claims imposed in the future. In addition, there is
always the risk of more stringent environmental laws being enacted or
enforced in such a way that necessitate significant capital outlays.

CONSTRUCTION SERVICES

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 2003
totaled $0.86 billion versus $1.46 billion for fiscal 2002. The backlog of
uncompleted contracts at March 31, 2003 was $1.52 billion compared to $2.18
billion at March 31, 2002. Approximately $1.20 billion of the backlog of
uncompleted contracts at March 31, 2003 is projected to be put into place
during fiscal year 2004. We define backlog as the uncompleted portion of all
signed contracts. 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.           

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| |  |                                                                                                                                                                                                                                                                                                                          
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Centex Engineering & Construction, Inc. This subsidiary, which 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.

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, 2003,
approximately 86% of uncompleted backlog was 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.

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. Our construction companies have been able to deal
effectively with problems they have experienced to date in the supply of
materials and services.

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INVESTMENT REAL ESTATE

Investment Real Estate conducts its operations directly and through our
investment in Centex Development Company. As noted in Note (G), Centex
Development Company, L.P., on pages 84-85 of this Report, our investment in
Centex Development Company is not consolidated and is accounted for on the
equity method of accounting. 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. Through our
investment in Centex Development Company, the operations also include the
International Home Building business located in the United Kingdom.

As of March 31, 2003, Investment Real Estates property portfolio
consisted of land located in five 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, 2003 is
shown in the following table:

|               |  |       |     |  |        |                                         
|-------------- |  | ----- | --- |  | ------ | ----------------------------------------
|State          |  | Acres |     |  | Zoning
|               |  |       |     |  |       
|Texas          |  |       | 319 |  |        | Industrial, Office, Retail & Residential
|California     |  |       | 204 |  |        | Residential                             
|Florida        |  |       | 155 |  |        | Industrial & Office                     
|North Carolina |  |       | 60  |  |        | Industrial & Office                     
|Virginia       |  |       | 13  |  |        | Multi-Family                            

At March 31, 2003, Investment Real Estate also owned, either directly or
through interests in joint ventures, approximately 303,000 square feet of
office and retail buildings located in Arizona and Texas.

In addition, Investment Real Estate owns a limited partnership interest in
Centex Development Company. At March 31, 2003, Centex Development Company
owned or controlled: 4,739 plots in 98 residential developments located
throughout England; 101 homes in 37 residential developments located throughout
England; 304 acres of land located in California, Florida, Hawaii, Michigan and
South Carolina and 2.1 million square feet of industrial, medical, office and
retail buildings in California, Massachusetts, Michigan, Mississippi, North
Carolina and Texas. At March 31, 2003, Centex Development Company had projects
under development totaling approximately 200,000 square feet of office,
industrial and retail projects in California and Texas, 661 multi-family units
in Florida and Texas and six acres of land in a mixed-use development in
Minnesota.

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EMPLOYEES

The following table presents the breakdown of employees in each line of
business as of March 31, 2003:

|                       |  |           |        | 
|---------------------- |  | --------- | ------ | 
|Line of Business       |  | Employees |       
|                       |  |           |       
|Home Building          |  |           | 5,764  | 
|Financial Services     |  |           | 5,704  | 
|Construction Products  |  |           | 1,529  | 
|Construction Services  |  |           | 1,596  | 
|Investment Real Estate |  |           | 605    | 
|Other Operations       |  |           | 2,187  | 
|Corporate              |  |           | 155    | 
|                       |  |           |       
|                       |  |           | 17,540 | 
|                       |  |           |       

The 155 corporate employees are employed by Centex Corporation; all others
are employees of our various subsidiaries. The 2,187 Other Operations
employees are employed by our manufactured homes and home services operations.

AVAILABLE INFORMATION

Shareholders, securities analysts and others seeking information about our
business operations and financial performance can receive copies of the 2003
Annual Report to Shareholders, Annual Report on Form 10-K, Quarterly Reports on
Form 10-Q, Current Reports on Form 8-K, all amendments to those reports and
other publications filed with the Securities and Exchange Commission in
Washington, D.C., without charge, by contacting our Corporate Communications
office at (214) 981-6503; by writing to Centex Corporation, Investor Relations,
P.O. Box 199000, Dallas, Texas 75219 or via email at ir@centex.com. In
addition, all filings with the Securities and Exchange Commission, news
releases and quarterly earnings announcements, including live audio and replays
of recent quarterly earnings webcasts, can be accessed free of charge on our
web site (www.centex.com). We make our Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those
reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange
Act available on our web site as soon as reasonably practicable after we
electronically file such material with, or furnish it to, the Securities and
Exchange Commission. To retrieve any of this information, go to
www.centex.com, select Investor Relations and select SEC Filings.




ITEM 2. PROPERTIES

The following properties are used in the operation of our business:

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, Florida, North Carolina, Minnesota and Washington. Situated on
this land are sales offices for its on-your-lot market segment.

Financial Services owns property in Edmond, Oklahoma. This property
consists of two office buildings situated on approximately 12 acres of a
20-acre parcel of land. The remaining eight acres of the parcel are being held
for future development or sale.

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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, Colorado and Duke, Oklahoma. Construction
Products owns a paperboard mill in Lawton, Oklahoma.

Our wholly-owned subsidiaries also own an office building and land located
in Ocala, Florida.

See Item 1. Business on pages 6-23 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 our 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 our Board
of Directors at our Annual Meeting on July 18, 2002 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   |  |     | 47 |  |                                              | 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   |  |     | 54 |  |                                              | 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 |  |     | 57 |  |                                              | 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)                                                                                                                                                                                                                                                                                                                      
|                   |  |     |    |  |                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Mark D. Kemp       |  |     | 41 |  |                                              | Vice President and Controller of Centex Corporation
since December 2002; Partner and employee at Arthur
Andersen LLP from December 1983 to August 2002                                                                                                                                                                                                                                                                                                                                                                   
|                   |  |     |    |  |                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Raymond G. Smerge  |  |     | 59 |  |                                              | 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)                                                                                                                                                                                                                                 
|                   |  |     |    |  |                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Robert S. Stewart  |  |     | 49 |  |                                              | Senior Vice President of Centex Corporation since May
2000; Employee at the Weyerhaeuser Company from March
1977 to May 2000, during which time he held a range of
key management positions, including positions in
strategic planning                                                                                                                                                                                                                                                                                   

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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, 2003 |       |  | Year Ended March 31, 2002 |  
|        |  |                           |       |  |                           |  
|        |  | Price                     |       |  |                           |   |       |  |  |           |  |      | Price |  |     |  |  |  
|        |  |                           |       |  |                           |   |       |  |  |           |  |      |       |  |     |  |  |  
|        |  | High                      |       |  | Low                       |   |       |  |  | Dividends |  | High |       |  | Low |  |  |   | Dividends | 
|        |  |                           |       |  |                           |   |       |  |  |           |  |      |       |  |     |  |  |   |           | 
|Quarter |  |                           |       |  |                           |   |       |  |  |           |  |      |       |  |     |  |  |   |           |  |  |   |       | 
|First   |  | $                         | 58.89 |  |                           | $ | 48.90 |  |  |           |  | $    | .04   |  |     |  |  | $ | 45.98     |  |  | $ | 34.00 |  |  |  |  | $ | .04 |  |  | 
|Second  |  | $                         | 59.19 |  |                           | $ | 42.53 |  |  |           |  | $    | .04   |  |     |  |  | $ | 50.00     |  |  | $ | 28.03 |  |  |  |  | $ | .04 |  |  | 
|Third   |  | $                         | 52.68 |  |                           | $ | 38.31 |  |  |           |  | $    | .04   |  |     |  |  | $ | 58.80     |  |  | $ | 32.56 |  |  |  |  | $ | .04 |  |  | 
|Fourth  |  | $                         | 57.58 |  |                           | $ | 48.30 |  |  |           |  | $    | .04   |  |     |  |  | $ | 63.09     |  |  | $ | 51.25 |  |  |  |  | $ | .04 |  |  | 

The principal market for our common stock is the New York Stock Exchange
(ticker symbol CTX). Our common stock also trades on the London Stock
Exchange. The approximate number of record holders of our common stock at May
15, 2003 was 3,260.

On November 30, 1987, we distributed as a dividend to our stockholders
securities relating to Centex Development Company, L.P. (see Note (G), Centex
Development Company, L.P., on pages 84-85 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. We currently expect that comparable cash dividends will
continue to be paid for the balance of fiscal year 2004.

The remaining information called for by this item relating to securities
authorized for issuance under equity compensation plans is reported in Note
(L), Capital Stock and Employee Benefit Plans, on pages
93-96 of this Report.

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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, |      
|                                                                              |                                                                   |   |                         |       |                               |      
|                                                                              |                                                                   |   |                         |       | 2003                          |       |           | 2002  |   |       | 2001      |       |   | 2000  |           |       | 1999 |      
|                                                                              |                                                                   |   |                         |       |                               |       |           |       |   |       |           |       |   |       |           |       |      |      
|Revenues                                                                      |                                                                   | $ | 9,117,241               |       |                               | $     | 7,748,430 |       |   | $     | 6,710,735 |       |   | $     | 6,008,136 |       |      | $     | 5,200,666 |      
|Net Earnings                                                                  |                                                                   | $ | 555,919                 |       |                               | $     | 382,226   |       |   | $     | 281,977   |       |   | $     | 257,132   |       |      | $     | 231,962   |      
|Stockholders Equity                                                          |                                                                   | $ | 2,657,846               |       |                               | $     | 2,116,773 |       |   | $     | 1,714,064 |       |   | $     | 1,419,349 |       |      | $     | 1,197,639 |      
|Net Earnings as a Percentage of
Beginning Stockholders Equity                |                                                                   |   | 26.3                    | %     |                               |       | 22.3      | %     |   |       | 19.9      | %     |   |       | 21.5      | %     |      |       | 23.4      | %    
|Total Assets                                                                  |                                                                   | $ | 11,610,536              |       |                               | $     | 8,985,455 |       |   | $     | 6,649,043 |       |   | $     | 3,987,903 |       |      | $     | 4,267,909 |      
|Deferred Income Tax Asset                                                     |                                                                   | $ | 52,929                  |       |                               | $     | 76,167    |       |   | $     | 58,454    |       |   | $     | 49,907    |       |      | $     | 49,107    |      
|Total Long-term Debt, Consolidated                                            |                                                                   | $ | 6,237,213               |       |                               | $     | 4,943,524 |       |   | $     | 3,040,861 |       |   | $     | 751,160   |       |      | $     | 284,299   |      
|Debt (with Financial Services reflected
on the equity method) (1)             |                                                                   | $ | 2,105,880               |       |                               | $     | 1,791,752 |       |   | $     | 1,464,993 |       |   | $     | 898,068   |       |      | $     | 587,955   |      
|Financial Services Debt                                                      |                                                                   |   | 4,998,819               |       |                               |       | 3,485,027 |       |   |       | 2,054,898 |       |   |       | 415,327   |       |      |       | 1,322,944 |      
|                                                                              |                                                                   |   |                         |       |                               |       |           |       |   |       |           |       |   |       |          
|Total Debt, Consolidated                                                      |                                                                   | $ | 7,104,699               |       |                               | $     | 5,276,779 |       |   | $     | 3,519,891 |       |   | $     | 1,313,395 |       |      | $     | 1,910,899 |      
|                                                                              |                                                                   |   |                         |       |                               |       |           |       |   |       |           |       |   |       |          
|Capitalization (with Financial Services
reflected on the equity method)(1)(2) |                                                                   | $ | 4,932,217               |       |                               | $     | 4,063,296 |       |   | $     | 3,320,548 |       |   | $     | 2,495,784 |       |      | $     | 1,991,298 |      
|Financial Services Capitalization (2)                                         |                                                                   |   | 5,380,226               |       |                               |       | 3,797,355 |       |   |       | 2,323,155 |       |   |       | 620,080   |       |      |       | 1,443,890 |      
|Consolidation Adjustments                                                     |                                                                   |   | (379,671                | )     |                               |       | (313,809  | )     |   |       | (266,124  | )     |   |       | (202,931  | )     |      |       | (119,092  | )    
|                                                                              |                                                                   |   |                         |       |                               |       |           |       |   |       |           |       |   |       |          
|Total Capitalization, Consolidated                                            |                                                                   | $ | 9,932,772               |       |                               | $     | 7,546,842 |       |   | $     | 5,377,579 |       |   | $     | 2,912,933 |       |      | $     | 3,316,096 |      
|                                                                              |                                                                   |   |                         |       |                               |       |           |       |   |       |           |       |   |       |          
|Debt as a Percentage of Capitalization (2)                                    |                                                                   |   |                         |       |                               |       |           |       |   |       |           |       |   |       |           |       |      |       |           |      
|                                                                              | Debt (with Financial Services reflected on the equity method) (1) |   |                         | 42.7  | %                             |       |           | 44.1  | % |       |           | 44.1  | % |       |           | 36.0  | %    |       |           | 29.5  | %
|                                                                              | Total Debt, Consolidated                                          |   |                         | 71.5  | %                             |       |           | 69.9  | % |       |           | 65.5  | % |       |           | 45.1  | %    |       |           | 57.6  | %
|Per Common Share                                                              |                                                                   |   |                         |       |                               |       |           |       |   |       |           |       |   |       |           |       |      |       |           |      
|                                                                              | Earnings Per Share  Basic                                        |   | $                       | 9.15  |                               |       | $         | 6.31  |   |       | $         | 4.77  |   |       | $         | 4.34  |      |       | $         | 3.90  |  
|                                                                              | Earnings Per Share  Diluted                                      |   | $                       | 8.83  |                               |       | $         | 6.11  |   |       | $         | 4.65  |   |       | $         | 4.22  |      |       | $         | 3.75  |  
|                                                                              | Cash Dividends                                                    |   | $                       | .16   |                               |       | $         | .16   |   |       | $         | .16   |   |       | $         | .16   |      |       | $         | .16   |  
|                                                                              | Book Value Based on Shares                                        |   |                         |       |                               |       |           |       |   |       |           |       |   |       |           |       |      |       |           |       |  
|                                                                              |                                                                   |   | Outstanding at Year End |       | $                             | 43.69 |           |       | $ | 34.60 |           |       | $ | 28.60 |           |       | $    | 24.14 |           |       | $ | 20.17 | 
|Stock Prices                                                                  |                                                                   |   |                         |       |                               |       |           |       |   |       |           |       |   |       |           |       |      |       |           |      
|                                                                              | High                                                              |   | $                       | 59.19 |                               |       | $         | 63.09 |   |       | $         | 46.20 |   |       | $         | 42.88 |      |       | $         | 45.75 |  
|                                                                              | Low                                                               |   | $                       | 38.31 |                               |       | $         | 28.03 |   |       | $         | 20.63 |   |       | $         | 17.50 |      |       | $         | 26.00 |  

On November 30, 1987, we distributed as a dividend to our stockholders
securities relating to 3333 Holding Corporation and 3333 Development
Corporation (See Note (G), Centex Development Company, L.P., on pages 84-85
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. We believe that separate
disclosure of the consolidating information is useful because the
Financial Services subsidiaries operate in a distinctly different
financial environment that generally requires significantly less equity to
support their higher debt levels compared to the operations of our other
subsidiaries; the Financial Services subsidiaries have structured their
financing programs substantially on a stand alone basis; and we have
limited obligations with respect to the indebtedness of our Financial
Services subsidiaries. Management uses this information in its financial
and strategic planning. We also use this presentation to allow investors
to compare us to homebuilders that do not have financial services
operations.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Capitalization is composed of Debt, Negative Goodwill, Minority Interest
and Stockholders Equity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

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

FISCAL YEAR 2003 COMPARED TO FISCAL YEAR 2002

We reported consolidated revenues of $9.12 billion for fiscal 2003, 17.7%
above the $7.75 billion reported for fiscal 2002. Earnings before income taxes
were $794.9 million, 28.5% more than the $618.8 million of earnings before
income taxes reported last year. Net earnings for fiscal 2003 reached $555.9
million, a historical high and a 45.4% improvement over net earnings of $382.2
million in fiscal 2002. Earnings per share for fiscal 2003 were $9.15 and
$8.83 for basic and diluted, respectively, compared to $6.31 and $6.11 for the
prior year. The increase in net earnings is significantly higher than the
increase in earnings before income taxes due to a reduction in our effective
tax rate. Our effective tax rate decreased to 30.1% for the year ended March
31, 2003 from 38.2% for the year ended March 31, 2002. The decrease in the
effective tax rate is primarily the result of the utilization of net operating
loss carryforwards during fiscal 2003. We expect that the effective tax rate
will increase slightly in fiscal 2004 to approximately 32%.

HOME BUILDING

The following summarizes the results of our Home Building operations for
the two-year period ended March 31, 2003 (dollars in millions, except per unit
data):

|                                             |  |                               |          |      |  |               |       |    |  |   |          |               |  |  |       |   
|-------------------------------------------- |  | ----------------------------- | -------- | ---- |  | ------------- | ----- | -- |  | - | -------- | ------------- |  |  | ----- | --
|                                             |  | For the Years Ended March 31,
|                                             |  |                              
|                                             |  | 2003                          |          | 2002
|                                             |  |                               |          |     
|                                             |  |                               |          |      |  | % of Revenues |       |    |  |   |          | % of Revenues
|Revenues                                     |  | $                             | 5,934.5  |      |  |               | 100.0 | %  |  | $ | 4,984.8  |               |  |  | 100.0 | % 
|Cost of Sales                                |  |                               | (4,388.5 | )    |  |               | (73.9 | %) |  |   | (3,713.4 | )             |  |  | (74.5 | %)
|Selling, General and Administrative Expenses |  |                               | (865.2   | )    |  |               | (14.6 | %) |  |   | (743.9   | )             |  |  | (14.9 | %)
|                                             |  |                               |          |      |  |               |       |    |  |   |          |              
|Operating Earnings                           |  | $                             | 680.8    |      |  |               | 11.5  | %  |  | $ | 527.5    |               |  |  | 10.6  | % 
|                                             |  |                               |          |      |  |               |       |    |  |   |          |              
|                                             |  |                               |          |      |  | % Change      |       |    |  |   |          | % Change     
|Units Closed                                 |  |                               | 26,427   |      |  |               | 15.1  | %  |  |   | 22,960   |               |  |  | 11.1  | % 
|Average Unit Sales Price                     |  | $                             | 220,183  |      |  |               | 3.0   | %  |  | $ | 213,738  |               |  |  | 3.8   | % 
|Operating Earnings Per Unit                  |  | $                             | 25,761   |      |  |               | 12.1  | %  |  | $ | 22,973   |               |  |  | 11.6  | % 
|Backlog Units                                |  |                               | 12,050   |      |  |               | 28.6  | %  |  |   | 9,371    |               |  |  | 1.1   | % 
|Ending Operating Neighborhoods               |  |                               | 552      |      |  |               | 16.5  | %  |  |   | 474      |               |  |  | (1.5  | %)



Revenues for the year ended March 31, 2003 increased 19.1% versus prior
year, primarily due to an increase in units closed and higher unit sales
prices. Units closed during fiscal 2003 increased 15.1% from 22,960 units to
26,427 units, and the average unit sales price increased 3.0% from $213,738 to
$220,183. The increase in units closed was the result of a higher number of
operating neighborhoods in the current year versus last year. The increase in
the unit sales price was largely driven by higher selling prices in the
Washington, D.C., New Jersey and California markets.

Cost of sales was 73.9% of revenues for the year ended March 31, 2003
compared to 74.5% of revenues for the same period last year. The decrease in
cost of sales as a percentage of revenue is a result of higher per unit sales
price and ongoing cost reduction efforts.

Selling, general and administrative expenses for the year ended March 31,
2003 were $865.2 million, or 14.6% of revenues, as compared to the $743.9
million and 14.9% of revenues reported for the same period last year. The
dollar increase was due to incremental costs associated with closing more homes
and higher personnel costs to support Home Buildings growth in neighborhoods.

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Operating earnings for the year ended March 31, 2003 were 11.5% of
revenues and approximately $25,761 on a per-unit basis, compared to operating
earnings of 10.6% of revenues and approximately $22,973 on a per-unit basis
for the same period last year.

Units in backlog increased 28.6% to 12,050 units at March 31, 2003
compared to 9,371 units at March 31, 2002. The increase in backlog resulted
from a 16.5% increase in neighborhoods and a 24.7% increase in sales versus the
prior year. Centex Homes defines backlog units as units that have been sold, as
indicated by a signed contract, but not closed. Centex Homes enters fiscal
2004 with a record year end backlog of home sales and expects to continue to
add more neighborhoods.

FINANCIAL SERVICES

The Financial
Services segment primarily is engaged in the residential mortgage
banking business, as well as in other financial services that are in
large part related to the residential mortgage market. Its operations
include mortgage origination, servicing and other related services
for purchasers of homes sold by our Home Building operations and
other homebuilders, as well as sub-prime home equity lending and the
sale of title insurance and various other insurance
coverages. The following summarizes Financial Services results for the
two-year period ended March 31, 2003 (dollars in millions):

|                           |                                    |                                   |          |                               |        |   |          |        |        | 
|-------------------------- | ---------------------------------- | --------------------------------- | -------- | ----------------------------- | ------ | - | -------- | ------ | ------ | 
|                           |                                    |                                   |          | For the Years Ended March 31, |       
|                           |                                    |                                   |          |                               |       
|                           |                                    |                                   |          | 2003                          |        |   | 2002     |       
|                           |                                    |                                   |          |                               |        |   |          |       
|Revenues                   |                                    | $                                 | 855.0    |                               |        | $ | 699.8    |       
|                           |                                    |                                   |          |                               |        |  
|Interest Margin            |                                    | $                                 | 172.4    |                               |        | $ | 107.7    |       
|                           |                                    |                                   |          |                               |        |  
|Operating Earnings         |                                    | $                                 | 161.8    |                               |        | $ | 114.7    |       
|                           |                                    |                                   |          |                               |        |  
|Origination Volume         |                                    | $                                 | 16,497.4 |                               |        | $ | 14,537.9 |       
|                           |                                    |                                   |          |                               |        |  
|Number of Loans Originated |                                    |                                   |          |                               |        |   |          |       
|                           | CTX Mortgage Company, L.L.C.       |                                   |          |                               |        |   |          |        |       
|                           |                                    | Centex-built Homes (Builder)    |          |                               | 18,127 |   |          |        | 15,435 | 
|                           |                                    | Non-Centex-built Homes (Retail) |          |                               | 66,807 |   |          |        | 64,949 | 
|                           |                                    |                                   |          |                               |        |  
|                           |                                    |                                   | 84,934   |                               |        |   | 80,384   |       
|                           | Centex Home Equity Company, L.L.C. |                                   |          | 29,448                        |        |   |          | 26,955 |       
|                           |                                    |                                   |          |                               |        |  
|                           |                                    |                                   | 114,382  |                               |        |   | 107,339  |       
|                           |                                    |                                   |          |                               |        |  

|                                     |  |                               |       |   |                               |   |       |      |  |   |         |   |  |   |         |  
|------------------------------------ |  | ----------------------------- | ----- | - | ----------------------------- | - | ----- | ---- |  | - | ------- | - |  | - | ------- | -
|                                     |  | CTX Mortgage                  |       |   | Centex Home Equity            |  
|                                     |  | Company, L.L.C.               |       |   | Company, L.L.C.               |  
|                                     |  |                               |       |   |                               |  
|                                     |  | For the Years Ended March 31, |       |   | For the Years Ended March 31, |  
|                                     |  |                               |       |   |                               |  
|                                     |  | 2003                          |       |   | 2002                          |   |       | 2003 |  |   | 2002    |  
|                                     |  |                               |       |   |                               |   |       |      |  |   |         |  
|Average Interest Earnings Assets     |  | $                             | 198.6 |   |                               | $ | 243.7 |      |  | $ | 3,895.5 |   |  | $ | 2,625.1 |  
|Average Yield                        |  |                               | 7.18  | % |                               |   | 7.86  | %    |  |   | 8.76    | % |  |   | 9.38    | %
|Average Interest Bearing
Liabilities |  | $                             | 132.4 |   |                               | $ | 211.0 |      |  | $ | 4,049.2 |   |  | $ | 2,653.9 |  
|Average Rate Paid                    |  |                               | 4.08  | % |                               |   | 5.57  | %    |  |   | 4.38    | % |  |   | 5.46    | %

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

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Conforming Mortgage Banking

The revenues and operating earnings of CTX Mortgage Company, L.L.C. and
related entities, or CTX Mortgage, are derived primarily from the sale of
mortgage loans, inclusive of all service rights and, to a lesser extent,
interest income and other fees. Our business strategy of selling conforming loans reduces our capital investment
and related risks, provides substantial liquidity and is an efficient process
given the size and maturity of the conforming mortgage loan secondary capital
markets. CTX Mortgage originates mortgage loans, holds
them for a short period and sells them to investors and Harwood Street Funding
I, L.L.C., or HSF-I. HSF-I is an unaffiliated entity that is not consolidated
with Financial Services or Centex Corporation and subsidiaries at March 31,
2003. HSF-I purchases mortgage loans, at closing, from CTX Mortgage with the
proceeds from the issuance of securitized term debt, secured liquidity notes
and subordinated certificates that are extendable for up to five years. The
debt, interest income and interest expense of HSF-I are not reflected in the
financial statements of Financial Services or Centex Corporation and
subsidiaries. CTX Mortgage sold $10.55 billion and $10.20 billion of mortgage loans to HSF-I
and repurchased $6.9 million and $1.1 million of delinquent or foreclosed
mortgage loans from HSF-I during the years ended March 31, 2003 and 2002,
respectively. CTX Mortgage recognized gains on the sale of mortgage
loans of $254.6 million and
$188.9 million for the years ended March 31, 2003 and 2002, respectively. For additional information regarding HSF-I and the implication
of recent accounting pronouncements on HSF-I, see Certain Off-Balance-Sheet
and Other Obligations on pages 49-51 of this Report.

Revenues increased 14.3% to $453.9 million for the year ended March 31,
2003 as compared to the same period last year. The increase in revenues for
the year is primarily related to an increase in CTX Mortgage originations as
well as higher revenue from Title and Insurance operations. The increase in
originations and Title and Insurance revenues for the year ended March 31, 2003
was due, in large part, to an increase in mortgage loans originated for Centex
Homes buyers and an increase in refinancing business.

CTX Mortgages selling, general and administrative expenses increased
$38.9 million to $332.2 million at March 31, 2003. This increase primarily was
due to increased employee count and related costs at our Title and Insurance operations
as a result of the increased volume of business discussed above. CTX
Mortgages operating earnings were $116.3 million for the year ended March 31,
2003, resulting in a 27.2% increase as compared to the same period last year.
The increase in operating earnings for the year primarily is due to the
increase in revenues discussed above and a decrease in the cost per loan
originated.

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. The fact that the average rate paid on interest
bearing liabilities decreased significantly more than the yield earned on
interest earning assets decreased and the increase in originations noted above
led to a 32.8% increase in net interest margin for fiscal 2003 as compared to
the same period last year, from $6.4 million to $8.5 million.

For the year ended March 31, 2003, originations totaled 84,934 compared to
80,384 originations in the same period last year; loan volume was $13.99
billion compared to $12.45 billion for the same period last year; the per-loan
profit was $1,369, an increase of 20.4% compared to $1,137 for the same period
last year and total mortgage applications increased 17.6% to 89,986 from 76,532
applications for the same period last year. For the year ended March 31, 2003,
originations increased due to an increase in mortgage loans originated for
Centex Homes buyers and an increase in refinancing business. For the year ended March 31, 2003, per-loan profit increased due to
increased operational leverage as a result of the increase in the volume of
originations, as well as an increase in Title and Insurance revenues and an
improvement in the

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spread between the weighted-average coupon rate of loans
originated by CTX Mortgage and its cost of funds.

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 and
may result in a significant curtailment of refinancing activity, which
represents a substantial portion of our business. There can be no assurance
that mortgage rates will remain at the current level in the future.

Sub-Prime Home Equity Lending

The revenues of Centex Home Equity Company, L.L.C., or Home Equity,
increased 32.6% to $401.1 million for the year ended March 31, 2003 as a result
of continued growth in our portfolio of residential mortgage loans held for investment.
Interest margin,which we define as the difference between interest revenue on mortgage
loans held for sale or investment and interest expense on debt used to fund the
mortgage loans, increased to $163.9 million for the year ended March 31, 2003
as compared to $101.3 million for the same period last year. The increase in
interest margin is primarily a result of an increase in the portfolio of
mortgage loans held for investment and a decrease in interest rates on debt
used to fund mortgage loans. Home Equity reported operating earnings of $47.1
million for the year ended March 31, 2003, as compared to operating earnings of
$25.1 million for the same period last year. The increase in Home Equitys
operating earnings is primarily the result of the increase in interest margin,
as noted above. Interest income will be positively affected as the portfolio
of mortgage loans held for investment increases and matures. The increase in
interest margin was partially offset by an increase in servicing and production
costs, mostly attributable to loan volume and loan servicing growth, and an
increase in the provision for losses on residential mortgage loans held for
investment. Home Equitys selling, general and administrative expenses
increased $44.0 million to $176.5 million for the year ended March 31, 2003 as
a result of Home Equitys growth. Home Equitys increase in loan production
volume, the expansion of its branch offices and the increase in the number of
its employees are directly related to a corresponding increase in salaries and
related costs, rent expense, group insurance costs and advertising expenditures
totaling approximately $26.5 million. The remainder of the increase was due to
higher charges to the provision for loan losses, as discussed below.

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 in, 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. The structure of securitizations changed beginning April 1, 2000. As
a result of the change, subsequent securitizations have been accounted for as
borrowings; interest has been recorded over the life of the loans using the
interest, or actuarial method; the mortgage loans receivable and the
securitization debt have remained on Home Equitys balance sheet and the
related interest margin has been reflected in our income statement. Under both
structures, recourse on the securitized debt is limited to the payments
received on the underlying mortgage collateral with no recourse to Home Equity
or Centex Corporation. As is common in these structures, Home Equity remains
liable for customary loan representations. The change in structure of the
securitizations has no effect on the ultimate cash flow and profit recognized
over the life of the mortgages. However, the change in accounting for
securitizations did affect the timing of profit recognition. Interest margin,
which is recognized over the life of the loan, is now Home Equitys primary
source of operating income as compared to gain on sale of loans, which
previously was recognized upon securitization. Home equity loans are securitized to provide a low

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cost method for funding our
mortgage operations, to increase our liquidity and to reduce our interest rate
exposure on fixed rate loans.

For the year ended March 31, 2003, originations totaled 29,448 compared to
26,955 originations for the same period last year; origination volume was $2.51
billion compared to $2.09 billion for the same period last year and total
applications increased 43.9% to 248,150 from 172,498 applications for the same
period last year. For the year ended March 31, 2003, originations increased
9.2% while origination volume increased 19.8% due to an increase in average
loan size. The slight increase in the number of originations relative to the
larger increase in total applications is reflective of Home Equitys continued
adherence to its credit underwriting guidelines. Average interest earning assets increased 48.4%, from $2,625.1 million in fiscal
2002 to $3,895.5 million in fiscal 2003, and the corresponding average interest
bearing liabilities increased 52.6%, from $2,653.9 million in fiscal 2002 to
$4,049.2 million in fiscal 2003, primarily due to an increase in the volume of
loan originations and an increase in average loan size. The average yield earned
on these assets decreased from 9.38% in fiscal 2002 to 8.76% in fiscal 2003, and
the average rate paid on these liabilities decreased from 5.46% in fiscal 2002
to 4.38% in fiscal 2003, primarily due to lower interest rates in fiscal 2003
compared to fiscal 2002. The fact that the average rate paid on interest bearing
liabilities decreased significantly more than the yield earned on interest
earning assets decreased and the increase in originations noted above led to a
61.8% increase in net interest margin from $101.3 million in fiscal 2002 to
$163.9 million in fiscal 2003.

At March 31, 2003, Home Equitys total servicing portfolio consisted of
74,402 loans totaling $5.48 billion compared to 62,833 loans totaling $4.37
billion at March 31, 2002. For the year ended March 31, 2003, service fee
income related to this servicing was $51.4 million compared to $38.2 million
for the same period last year.

The primary risks in Home Equitys operations are consistent with those
of the financial services industry and include credit risk associated with its loans, liquidity risk related to funding
its loans and interest rate risk prior to securitization of the loans. In addition, as Home Equity services its loans, it is also subject to customer prepayment risks.

Allowance for Losses

Home Equity originates and purchases loans in accordance with standard
underwriting criteria. The underwriting standards are primarily intended to
assess the creditworthiness of the mortgagee and the value of the mortgaged
property and to evaluate the adequacy of the property as collateral for the
home equity loan.

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

We believe that the allowance for losses is sufficient to provide for
credit losses in the existing residential mortgage loans held for investment,
which include real estate owned. We evaluate the allowance on an aggregate
basis considering, among other things, the relationship of the allowance to
residential mortgage loans held for investment and historical credit losses.
The allowance reflects our judgment of the present loss exposure at the end of
the reporting period. A range of expected credit losses is estimated using
historical losses, static pool loss
curves and delinquency modeling. These tools take into consideration historical information regarding
delinquency and loss severity experience and apply that information to the
portfolio at each reporting date.

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

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

|                                                              |                                 |        |      |                               |   |        |   |        |  
|------------------------------------------------------------- | ------------------------------- | ------ | ---- | ----------------------------- | - | ------ | - | ------ | -
|                                                              |                                 |        |      | For the Years Ended March 31, |  
|                                                              |                                 |        |      |                              
|                                                              |                                 |        | 2003 |                               |   | 2002  
|                                                              |                                 |        |      |                               |   |       
|Balance at Beginning of Period                                | $                               | 14,106 |      |                               | $ | 2,814  |  
|                                                              | Provision for Losses            |        |      | 34,859                        |   |        |   | 17,415 |  
|                                                              | Recoveries on Loans Charged Off |        |      | 160                           |   |        |   | 259    |  
|                                                              | Losses Sustained                |        |      | (20,741                       | ) |        |   | (6,382 | )
|                                                              |                                 |        |      |                               |  
|Balance at End of Period                                      | $                               | 28,384 |      |                               | $ | 14,106 |  
|                                                              |                                 |        |      |                               |  
|Allowance as a Percentage of Gross Loans Held for Investment  |                                 | 0.6    | %    |                               |   | 0.4    | %
|Allowance as a Percentage of 90+ Days Contractual Delinquency |                                 | 23.2   | %    |                               |   | 16.9   | %
|90+ Days Contractual Delinquency                              |                                 |        |      |                               |   |        |   |       
|                                                              | Total Dollars Delinquent        |        | $    | 122,479                       |   |        | $ | 83,490 |  
|                                                              | % Delinquent                    |        |      | 2.6                           | % |        |   | 2.6    | %

The increase in the allowance for losses in fiscal 2003 occurred primarily
because the amount of the residential mortgage loans held for investment
increased and the residential mortgage loan portfolio continued to mature. As
the age and size of the residential mortgage loan portfolio continues to mature
and grow, we expect the balance in the allowance for losses, the loans charged
off and the allowance ratio to continue to increase. The increase in 90+ days
contractual delinquency at March 31, 2003 occurred primarily because the
residential mortgage loan portfolio continued to mature.

CONSTRUCTION PRODUCTS

The following summarizes Construction Products results for the two-year
period ended March 31, 2003 (dollars in millions):

|                                             |  |   |                               |   |  |      |        |   | 
|-------------------------------------------- |  | - | ----------------------------- | - |  | ---- | ------ | - | 
|                                             |  |   | For the Years Ended March 31, |  
|                                             |  |   |                               |  
|                                             |  |   | 2003                          |   |  | 2002
|                                             |  |   |                               |   |  |     
|Revenues                                     |  | $ | 501.3                         |   |  | $    | 471.1  |  
|Interest Income                              |  |   | 0.1                           |   |  |      | 2.5    |  
|Cost of Sales and Expenses                   |  |   | (399.4                        | ) |  |      | (392.2 | )
|Selling, General and Administrative Expenses |  |   | (5.7                          | ) |  |      | (5.5   | )
|                                             |  |   |                               |   |  |      |       
|Operating Earnings *                         |  | $ | 96.3                          |   |  | $    | 75.9   |  
|                                             |  |   |                               |   |  |      |       

+ Represents Construction Products Corporate general and administrative expenses.

*Before Minority Interest of $30.3 million and $20.8 million for fiscal 2003 and 2002, respectively.


Construction Products revenues for the year ended March 31, 2003 were
6.4% higher than the same period last year. These increases were primarily the
result of a $29.3 million increase in gypsum wallboard

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revenues and a $8.6
million increase in paperboard revenues, partially offset by a $10.0 million
decrease in cement revenues for the year ended March 31, 2003. The increase in
gypsum wallboard and paperboard revenues was primarily caused by higher average
net sales prices when compared to the same period last year. The decrease in
cement revenues was primarily caused by lower average net sales prices when
compared to the same period last year.

Construction Products cost of sales remained relatively consistent with
the prior year. For the year ended March 31, 2003, cost of sales was 1.8%
higher than the same period last year, primarily due to higher power, fuel and
maintenance costs for cement and higher energy costs for gypsum wallboard.

Construction Products selling, general and administrative expenses for
the year ended March 31, 2003 were 3.6% higher than the same period last year.
This increase was primarily the result of higher office and professional
expenses.

For the year ended March 31, 2003, Construction Products operating
earnings, net of minority interest, increased 27% from results for the same
period a year ago. Operating earnings increased primarily due to the increase
in gypsum wallboard and paperboard pricing noted above.

CONSTRUCTION SERVICES

The following summarizes Construction Services results for the two-year
period ended March 31, 2003 (dollars in millions):

|                                 |  |                               |         |  |      |   |         | 
|-------------------------------- |  | ----------------------------- | ------- |  | ---- | - | ------- | 
|                                 |  | For the Years Ended March 31, |        
|                                 |  |                               |        
|                                 |  | 2003                          |         |  | 2002 |  
|                                 |  |                               |         |  |      |  
|Revenues                         |  | $                             | 1,517.8 |  |      | $ | 1,296.0 | 
|                                 |  |                               |         |  |      |  
|Operating Earnings               |  | $                             | 30.7    |  |      | $ | 36.2    | 
|                                 |  |                               |         |  |      |  
|New Contracts Executed           |  | $                             | 857     |  |      | $ | 1,455   | 
|                                 |  |                               |         |  |      |  
|Backlog of Uncompleted Contracts |  | $                             | 1,520   |  |      | $ | 2,180   | 
|                                 |  |                               |         |  |      |  

Construction Services revenues for the year ended March 31, 2003 were
17.1% higher than revenues for the same period last year. The increase in
revenues was primarily the result of the stage of execution of certain
longer-term contracts, as well as an increase in the volume of shorter-term
contracts. Operating earnings for the group decreased 15.2% in the year ended
March 31, 2003 compared to the same period last year primarily as a result of
a decrease in project margins reflective of the current construction
environment. In addition, in fiscal 2003, Construction Services recorded a project profit write-down of
$2.1 million related to a single project and
a $2.4 million write-down of a long-lived asset. For the year ended March 31, 2003, new contracts executed
decreased 41.1% from the same period last year, and backlog of uncompleted
contracts decreased 30.3% from March 31, 2002, due to reduced activity in the
commercial construction industry and delays in the execution of contracts for awarded projects. Construction Services defines backlog as the
uncompleted portion of all signed contracts. Future operating margins and
earnings are likely to be impacted by this reduced activity and our lower
backlog.

The Construction Services segment provided a positive average net cash
flow in excess of our investment in the segment of $126.5 million for the year
ended March 31, 2003 compared to $121.5 million for the same period last year.

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INVESTMENT REAL ESTATE

The following summarizes Investment Real Estates results for the two-year
period ended March 31, 2003 (dollars in millions):

|                   |  |                               |      |  |      |   |      | 
|------------------ |  | ----------------------------- | ---- |  | ---- | - | ---- | 
|                   |  | For the Years Ended March 31, |     
|                   |  |                               |     
|                   |  | 2003                          |      |  | 2002 |  
|                   |  |                               |      |  |      |  
|Revenues           |  | $                             | 66.9 |  |      | $ | 72.4 | 
|                   |  |                               |      |  |      |  
|Operating Earnings |  | $                             | 54.3 |  |      | $ | 48.1 | 
|                   |  |                               |      |  |      |  

Investment Real Estates revenues for the year ended March 31, 2003 were
7.6% lower than revenues for the same period last year. Operating earnings
from Investment Real Estate for the year ended March 31, 2003 totaled $54.3
million compared to $48.1 million in the same period last year. The
fluctuations in revenues and operating earnings were primarily related to the
timing of property sales and, as discussed below,
fluctuations in results from Investment Real Estates investment in Centex
Development Company, L.P., or the Partnership.

Property sales contributed operating earnings of $18.3 million for the year ended March 31,
2003 and $35.8 million for the same period last year. The timing
of land sales is uncertain and can vary significantly from period to period.
It is not currently anticipated that any significant capital will be allocated
to Investment Real Estate for new business development. Through its investment
in the Partnership, Investment Real Estate will focus on the International Home
Building operations and evaluate opportunistic real estate transactions.

Included in Investment Real Estates operating earnings for the year ended
March 31, 2003 were earnings of $33.6 million derived from its investment in
the Partnership compared to earnings of $18.7 million for the same period last
year. As noted in Note (G), Centex Development Company, L.P., of the Notes
to Consolidated Financial Statements of Centex, the investment in the
Partnership is not consolidated and is accounted for on the equity method of
accounting.

The largest component of the Partnership is its International Home
Building segment, based in London, England. Included in Investment Real
Estates operating earnings were earnings of $20.4 million and $12.3 million
for the years ended March 31, 2003 and 2002, respectively, derived from
International Home Building. The increase in earnings from last year was
primarily due to an increase in profits from sales of certain land holdings and
an improvement in homebuilding operating margins, offset by an increase in
general and administrative expenses resulting primarily from personnel
additions. For the years ended March 31, 2003 and 2002, this segment closed
1,492 units at an average sales price per unit of $235,930 and 1,387 units at
an average sales price per unit of $204,251, respectively. Operating earnings
per unit, before interest, were $15,369 and $10,358 for the years ended March
31, 2003 and 2002, respectively.

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OTHER

Our Other segment includes Corporate general and
administrative expense, interest expense and minority interest. Also included in our
Other segment are our
manufactured housing operations and our home services operations, which are
not material for purposes of segment reporting.

|                                             |  |                               |       |   |      |   |       |  
|-------------------------------------------- |  | ----------------------------- | ----- | - | ---- | - | ----- | -
|                                             |  | For the Years Ended March 31, |      
|                                             |  |                               |      
|                                             |  | 2003                          |       |   | 2002 |  
|                                             |  |                               |       |   |      |  
|Operating Loss from Manufactured Housing     |  | $                             | (9.2  | ) |      | $ | (0.9  | )
|Operating (Loss) Earnings from Home Services |  |                               | (9.6  | ) |      |   | 4.0   |  
|                                             |  |                               |       |   |      |  
|                                             |  | $                             | (18.8 | ) |      | $ | 3.1   |  
|                                             |  |                               |       |   |      |  
|Corporate General and Administrative Expense |  | $                             | 60.3  |   |      | $ | 50.2  |  
|                                             |  |                               |       |   |      |  
|Interest Expense                             |  | $                             | 119.6 |   |      | $ | 115.7 |  
|                                             |  |                               |       |   |      |  
|Minority Interest                            |  | $                             | 30.3  |   |      | $ | 20.8  |  
|                                             |  |                               |       |   |      |  

The increase in our manufactured housing divisions operating loss in the
current year is due to expenses related to the spin-off referred to below and operations that
will be discontinued, including, among other things, a write-down of the value
of property, plant and equipment of retail operations, a write-down in the
value of the Texas manufacturing facility and a write-down in retail
inventories. The decrease in our home services divisions operating earnings
in the current year is primarily due to higher general and administrative
expenses, including higher marketing costs, and an $8.0 million provision in
the fourth quarter to reduce the carrying value of its remaining home security
assets to estimated fair value. Our home services operations sold its chemical lawn care business in the second
quarter. The sale of this business did not have a material effect on home
services operating earnings.

Subsequent to year end, on April 22, 2003, we announced the tax-free
spin-off of the significant part of our manufactured homes operations to our
shareholders. The spin-off will not have a material impact on our future
earnings or debt coverage ratios.

Corporate general and administrative expense represents compensation and
other costs not identifiable with a specific segment. The increase in corporate
general and administrative expense is primarily related to an increase in
personnel and higher compensation resulting from continued improvements in our
performance.

The change in interest expense is primarily related to an increase in
average debt outstanding for the year ended March 31, 2003 as compared to the
same period last year. This increase is offset by an increase in net interest
capitalized and lower interest rates during the year ended March 31, 2003 as
compared to the same period last year.

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

Our effective tax
rate decreased to 30.1% for the year ended March 31, 2003 from 38.2% for the year ended March 31, 2002. The decrease in the effective tax rate is primarily the result of the utilization of net operating loss carryforwards during fiscal 2003. We expect that the effective tax rate will increase slightly in fiscal 2004 to approximately 32%.

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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    
|                                             |                               |   |         
|                                             |                               |   |          |   |  |  |  |  |  | % of
Revenues |       |    |  |   |          |   |  |  |  | % of Revenues
|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 and Administrative Expenses |                               |   | (743.9   | ) |  |  |  |  |  |               | (14.9 | %) |  |   | (625.9   | ) |  |  |  |               |  |  | (14.3 | %)
|                                             |                               |   |          |   |  |  |  |  |  |               |       |    |  |   |          |   |  |  |  |              
|Operating Earnings                           |                               | $ | 527.5    |   |  |  |  |  |  |               | 10.6  | %  |  | $ | 425.4    |   |  |  |  |               |  |  | 9.8   | % 
|                                             |                               |   |          |   |  |  |  |  |  |               |       |    |  |   |          |   |  |  |  |              
|                                             |                               |   |          |   |  |  |  |  |  | % Change      |       |    |  |   |          |   |  |  |  | % Change     
|Units Closed                                 |                               |   | 22,960   |   |  |  |  |  |  |               | 11.1  | %  |  |   | 20,659   |   |  |  |  |               |  |  | 9.3   | % 
|Average Unit Sales Price                     |                               | $ | 213,738  |   |  |  |  |  |  |               | 3.8   | %  |  | $ | 205,913  |   |  |  |  |               |  |  | 7.5   | % 
|Operating Earnings Per Unit                  |                               | $ | 22,973   |   |  |  |  |  |  |               | 11.6  | %  |  | $ | 20,594   |   |  |  |  |               |  |  | 20.4  | % 
|Backlog Units                                |                               |   | 9,371    |   |  |  |  |  |  |               | 1.1   | %  |  |   | 9,265    |   |  |  |  |               |  |  | 22.2  | % 

Revenues increased 14.4% in fiscal 2002 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 neighborhoods and
minimize unsold housing inventory. After a brief slowdown, the business
recovered and no long term impacts have been noted.

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FINANCIAL SERVICES

Our Financial
Services operations primarily are engaged in the residential mortgage
banking business, as well as in other financial services that are in
large part related to the residential mortgage market. These
operations include mortgage origination, servicing and other related
services for purchasers of homes sold by our Home Building operations
and other homebuilders, as well as sub-prime home equity lending and the sale
of title insurance and various 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   |       
|                           |                                    |                        |          |                               |        |  

|                                     |  |                               |       |   |                               |   |       |      |  |   |         |   |  |   |         |  
|------------------------------------ |  | ----------------------------- | ----- | - | ----------------------------- | - | ----- | ---- |  | - | ------- | - |  | - | ------- | -
|                                     |  | CTX Mortgage                  |       |   | Centex Home Equity            |  
|                                     |  | Company, L.L.C.               |       |   | Company, L.L.C.               |  
|                                     |  |                               |       |   |                               |  
|                                     |  | For the Years Ended March 31, |       |   | For the Years Ended March 31, |  
|                                     |  |                               |       |   |                               |  
|                                     |  | 2002                          |       |   | 2001                          |   |       | 2002 |  |   | 2001    |  
|                                     |  |                               |       |   |                               |   |       |      |  |   |         |  
|Average Interest Earnings Assets     |  | $                             | 243.7 |   |                               | $ | 219.4 |      |  | $ | 2,625.1 |   |  | $ | 1,038.8 |  
|Average Yield                        |  |                               | 7.86  | % |                               |   | 7.79  | %    |  |   | 9.38    | % |  |   | 10.10   | %
|Average Interest Bearing
Liabilities |  | $                             | 211.0 |   |                               | $ | 193.3 |      |  | $ | 2,653.9 |   |  | $ | 1,002.2 |  
|Average Rate Paid                    |  |                               | 5.57  | % |                               |   | 5.78  | %    |  |   | 5.46    | % |  |   | 7.44    | %

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 and subsidiaries. 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 and
subsidiaries.
CTX Mortgage sold $10.20 billion and $6.69 billion of mortgage loans to HSF-I and repurchased $1.1 million and
$0.3 million of delinquent or foreclosed mortgage loans from HSF-I during the years ended March 31, 2002 and
2001, respectively. CTX Mortgage recognized gains on the sale of
mortgage loans of $188.9 million and $153.6 million for the
years ended

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March 31, 2002 and 2001, respectively.
For additional information regarding HSF-I, see Certain
Off-Balance-Sheet and Other Obligations on pages 49-51 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. For the year ended March 31, 2002, per-loan profit increased primarily due to
an increase in Title and Insurance revenues, an improvement in the spread
between the weighted average coupon rate of loans originated by CTX Mortgage
and its cost of funds and a decrease in CTX Mortgages cost per loan
originated.

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 in fiscal 2002 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. As a result of the change, subsequent securitizations 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. The change in
structure of the securitizations has no effect on the ultimate cash flow and profit
recognized over the life of the mortgages.

However, the change in accounting for securitizations did affect the
timing of profit recognition. Interest margin, which is recognized over the
life of the loan, is now Home Equitys primary source of operating income as
compared to gain on sale of loans, which previously was recognized upon
securitization. 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. Average interest

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earning assets increased 152.7%, from $1,038.8 million in fiscal 2001 to
$2,625.1 million in fiscal 2002, and the corresponding average interest bearing
liabilities increased 164.8%, from $1,002.2 million in fiscal 2001 to $2,653.9
million in fiscal 2002, primarily due to an increase in the volume of loan
originations and an increase in average loan size. The average yield earned on
these assets decreased from 10.10% in fiscal 2001 to 9.38% in fiscal 2002, and
the average rate paid on these liabilities decreased from 7.44% in fiscal 2001
to 5.46% in fiscal 2002, primarily due to lower interest rates in fiscal 2002
compared to fiscal 2001. The fact that the average rate paid on interest
bearing liabilities decreased significantly more than the yield earned on
interest earning assets decreased and the increase in originations noted above
led to a 234.3% increase in net interest margin, from $30.3 million in fiscal
2001 to $101.3 million in fiscal 2002.

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 was $38.2 million compared to $25.9 million for fiscal
2001.

Allowance for Losses

Home Equity
originates and purchases loans in accordance with standard
underwriting criteria. The underwriting standards are primarily
intended to assess the creditworthiness of the mortgagee and the
value of the mortgaged property and to evaluate the adequacy of the
property as collateral for the home equity loan.

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

We believe that the
allowance for losses is sufficient to provide for credit losses in
the existing residential mortgage loans held for investment, which
include real estate owned. We evaluate the allowance on an aggregate
basis considering, among other things, the relationship of the
allowance to residential mortgage loans held for investment and
historical credit losses. The allowance reflects our judgment of the
present loss exposure at the end of the reporting period. A range of
expected credit losses is estimated using  historical losses, static pool loss curves and delinquency modeling. These
tools take into consideration historical information regarding
delinquency and loss severity experience and apply that information to
the portfolio at each reporting date.

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

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

|                                                                 |                                 |   |                               |        |   |      |       |        |  
|---------------------------------------------------------------- | ------------------------------- | - | ----------------------------- | ------ | - | ---- | ----- | ------ | -
|                                                                 |                                 |   | For the 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
as a Percentage of Gross Loans Held for Investment     |                                 |   | 0.4                           | %      |   |      | 0.2   | %     
|Allowance
as a Percentage of 90+ Days of Contractual Delinquency |                                 |   | 16.9                          | %      |   |      | 10.0  | %     
|90+ Days Contractual Delinquency                                 |                                 |   |                               |        |   |      |       |       
|                                                                 | Total Dollars Delinquent        |   | $                             | 83,490 |   |      | $     | 28,013 |  
|                                                                 | % Delinquent                    |   |                               | 2.6    | % |      |       | 1.6    | %

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, the loans charged off and the allowance ratio
to continue to increase. The increase in 90+ days contractual
delinquency at March 31, 2002 occurred primarily because the
residential mortgage loan portfolio continued to mature.

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 and Administrative Expenses + |  |                               | (5.5   | ) |      |   | (6.6   | )
|                                               |  |                               |        |   |      |  
|Operating Earnings *                           |  | $                             | 75.9   |   |      | $ | 99.4   |  
|                                               |  |                               |        |   |      |  

+Represents Construction Products Corporate
general and administrative expenses.*Before Minority Interest of $20.8 million and $32.4 million for fiscal 2002 and 2001, respectively.

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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.

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. No long term impact from these events has been noted.

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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 (G), Centex
Development Company, L.P., on pages 84-85 of this Report, the investment in
Centex Development Company is not consolidated and is accounted for on the
equity method of accounting. Property sales 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. 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, the
remaining negative goodwill was fully accreted.

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.

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OTHER

Our Other segment
includes Corporate general and administrative expense, interest
expense and minority interest. Also included in our Other segment are
our manufactured homes operations and our home services operations,
which are not
material for purposes of segment reporting.

|                                             |  |                               |       |   |      |   |       |  
|-------------------------------------------- |  | ----------------------------- | ----- | - | ---- | - | ----- | -
|                                             |  | For the Years Ended March 31, |      
|                                             |  |                               |      
|                                             |  | 2002                          |       |   | 2001 |  
|                                             |  |                               |       |   |      |  
|Operating Loss from Manufactured Housing     |  | $                             | (0.9  | ) |      | $ | (26.1 | )
|Operating Earnings from Home Services        |  |                               | 4.0   |   |      |   | 1.1   |  
|Operating Earnings from Other, net           |  |                               |      |   |      |   | 3.4   |  
|                                             |  |                               |       |   |      |  
|                                             |  | $                             | 3.1   |   |      | $ | (21.6 | )
|                                             |  |                               |       |   |      |  
|                                             |  |                               |      
|Corporate General and Administrative Expense |  | $                             | 50.2  |   |      | $ | 36.9  |  
|                                             |  |                               |       |   |      |  
|Interest Expense                             |  | $                             | 115.7 |   |      | $ | 99.1  |  
|                                             |  |                               |       |   |      |  
|Minority Interest                            |  | $                             | 20.8  |   |      | $ | 32.4  |  
|                                             |  |                               |       |   |      |  

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.

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 $115.7 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.

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FINANCIAL CONDITION AND LIQUIDITY

At March 31, 2003, we had cash and cash equivalents of $472.1 million,
including $15.1 million in Financial Services and $13.6 million belonging to
our 65.1%-owned Construction Products subsidiary. The consolidating net cash
used in or provided by the operating, investing and financing activities for
the years March 31, 2003, 2002 and 2001 is summarized below (dollars in
thousands). See Statements of Consolidated Cash Flows with Consolidating
Details on pages 64-65 of this Report for the detail supporting
this summary. Note that we use the term Centex to represent a
supplemental consolidating presentation that reflects the Financial Services
segment as if accounted for under the equity method.

|                                       |                                     |                      |         |                               |            |   |         |   |            |      |         |   |            |  
|-------------------------------------- | ----------------------------------- | -------------------- | ------- | ----------------------------- | ---------- | - | ------- | - | ---------- | ---- | ------- | - | ---------- | -
|                                       |                                     |                      |         | For the Years Ended March 31, |           
|                                       |                                     |                      |         |                               |           
|                                       |                                     |                      |         | 2003                          |            |   | 2002    |   |            | 2001 |        
|                                       |                                     |                      |         |                               |            |   |         |   |            |      |        
|Net Cash (Used in) Provided by
Centex* |                                     |                      |         |                               |            |   |         |   |            |      |         |  
|                                       |                                     | Operating Activities |         | $                             | (132,884   | ) |         | $ | 10,890     |      |         | $ | 93,049     |  
|                                       |                                     | Investing Activities |         |                               | 107,333    |   |         |   | (232,487   | )    |         |   | (659,417   | )
|                                       |                                     | Financing Activities |         |                               | 289,931    |   |         |   | 368,201    |      |         |   | 492,654    |  
|                                       |                                     |                      |         |                               |            |   |         |   |           
|                                       |                                     |                      | 264,380 |                               |            |   | 146,604 |   |            |      | (73,714 | )
|                                       |                                     |                      |         |                               |            |   |         |   |           
|                                       | Financial Services                  |                      |         |                               |            |   |         |   |            |      |         |   |           
|                                       |                                     | Operating Activities |         |                               | (38,348    | ) |         |   | 185,678    |      |         |   | 107,320    |  
|                                       |                                     | Investing Activities |         |                               | (1,413,710 | ) |         |   | (1,506,994 | )    |         |   | (1,801,278 | )
|                                       |                                     | Financing Activities |         |                               | 1,440,015  |   |         |   | 1,336,676  |      |         |   | 1,689,571  |  
|                                       |                                     |                      |         |                               |            |   |         |   |           
|                                       |                                     |                      | (12,043 | )                             |            |   | 15,360  |   |            |      | (4,387  | )
|                                       |                                     |                      |         |                               |            |   |         |   |           
|                                       | Centex Corporation and Subsidiaries |                      |         |                               |            |   |         |   |            |      |         |   |           
|                                       |                                     | Operating Activities |         |                               | (5,509     | ) |         |   | 67,886     |      |         |   | 214,543    |  
|                                       |                                     | Investing Activities |         |                               | (1,545,877 | ) |         |   | (1,636,719 | )    |         |   | (2,424,869 | )
|                                       |                                     | Financing Activities |         |                               | 1,803,723  |   |         |   | 1,730,797  |      |         |   | 2,132,225  |  
|                                       |                                     |                      |         |                               |            |   |         |   |           
|Net Increase (Decrease) in Cash        |                                     | $                    | 252,337 |                               |            | $ | 161,964 |   |            | $    | (78,101 | )
|                                       |                                     |                      |         |                               |            |   |         |   |           



|* |  | Centex represents a supplemental presentation that reflects the Financial
Services segment as if accounted for under the equity method. We believe that separate
disclosure of the consolidating information is useful because the
Financial Services subsidiaries operate in a distinctly different
financial environment that generally requires significantly less equity to
support their higher debt levels compared to the operations of our other
subsidiaries; the Financial Services subsidiaries have structured their
financing programs substantially on a stand alone basis; and we have
limited obligations with respect to the indebtedness of our Financial
Services subsidiaries. Management uses this information in its financial
and strategic planning. We also use this presentation to allow investors
to compare us to homebuilders that do not have financial services
operations.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

We generally fund our Centex 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 2003, cash was primarily used in Centex 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 held for development. The funds provided by
Centex Financing Activities were primarily from new debt used to fund the
increased homebuilding activity.

We generally fund our Financial Services operating and other short-term
needs through credit facilities, securitizations, proceeds from the sale of
mortgage loans to HSF-I and cash flows from operations, as described below.
During fiscal 2003, cash was primarily used in Financial Services Investing
Activities to finance increases in residential mortgage loans held for
investment. The funds provided by Financial Services Financing Activities were
primarily from new debt used to fund the increased residential mortgage loan
activity.

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

Our existing credit facilities and available capacity as of March 31, 2003
are summarized below (dollars in thousands):

|                   |                                             |   |                 |           |  |           |           |         |    
|------------------ | ------------------------------------------- | - | --------------- | --------- |  | --------- | --------- | ------- | ---
|                   |                                             |   | Existing Credit |           |  | Available |          
|                   |                                             |   | Facilities      |           |  | Capacity  |          
|                   |                                             |   |                 |           |  |           |          
|Centex             |                                             |   |                 |           |  |           |           |        
|                   | Centex Corporation                          |   |                 |           |  |           |           |         |    
|                   | Multi-Bank Revolving Credit Facility        |   | $               | 700,000   |  |           | $         | 700,000 | (1)
|                   | Uncommitted Bank Lines                      |   |                 | 60,000    |  |           |           | 60,000  |    
|                   |                                             |   |                 |           |  |           |           |         |    
|                   | Construction Products                       |   |                 |           |  |           |           |         |    
|                   | Senior Revolving Credit Facility            |   |                 | 155,000   |  |           |           | 91,200  | (2)
|                   | Annually Renewable Commercial Paper Conduit |   |                 | 50,000    |  |           |           | 24,743  | (2)
|                   |                                             |   |                 |           |  |          
|                   |                                             |   | 965,000         |           |  |           | 875,943   |        
|                   |                                             |   |                 |           |  |          
|Financial Services |                                             |   |                 |           |  |           |           |        
|                   | Unsecured Credit Facilities                 |   |                 | 125,000   |  |           |           | 53,500  | (3)
|                   | Secured Credit Facilities                   |   |                 | 415,000   |  |           |           | 202,806 | (4)
|                   | Harwood Street Funding II, L.L.C. Facility  |   |                 | 1,500,000 |  |           |           | 865,917 |    
|                   |                                             |   |                 |           |  |          
|                   |                                             |   | 2,040,000       |           |  |           | 1,122,223 |        
|                   |                                             |   |                 |           |  |          
|                   |                                             | $ | 3,005,000       |           |  | $         | 1,998,166 | (5)    
|                   |                                             |   |                 |           |  |          



|(1) |  | This is a committed, multi-bank revolving credit facility, maturing in
August 2005, which serves as backup for commercial paper borrowings. As
of March 31, 2003, there were no borrowings under this backup facility,
and our $600 million commercial paper program had no issuance outstanding.
We have not borrowed under this facility since its inception.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | These committed facilities were entered into by Construction Products and
have no recourse to Centex Corporation. The Senior Revolving Credit
Facility matures in March 2006 and the Annually Renewable Commercial Paper
Conduit matures in June 2004.                                                                                                         
|   
|(3) |  | Centex Corporation, CTX Mortgage and Home Equity, on a joint and several
basis, share in a $125 million uncommitted, unsecured credit facility.                                                                                                                                                                                                                

|(4) |  | CTX Mortgage and Home Equity share in a $250 million committed secured
credit facility to finance mortgage inventory. CTX Mortgage also
maintains $155 million of committed secured mortgage warehouse facilities
to finance mortgages not sold to HSF-I. Home Equity also maintains a $10
million committed secured mortgage warehouse facility to finance
mortgages.                                           
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(5) |  | The amount of available capacity consists of $1.88 billion of committed
borrowings and $113.5 million of uncommitted borrowings as of March 31,
2003. Although we believe that the uncommitted capacity is currently
available, there can be no assurance that the lenders under the applicable
facilities would elect to make advances to Centex Corporation or its
subsidiaries if and when requested to do so.

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

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information regarding HSF-I, see Certain Off-Balance-Sheet and Other
Obligations on pages 49-51 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 upon final payment of the senior and subordinated debt issued by
HSF-II. This arrangement, where HSF-II has committed to finance all eligible
loans, gives Home Equity daily access to HSF-IIs capacity of $1.50 billion.
HSF-II obtains funds through the sale of subordinated notes that are rated BBB
by Standard & Poors, or S&P, Baa2 by Moodys Investors Service, or Moodys,
and BBB by Fitch Ratings, or Fitch, and short-term secured liquidity notes that
are rated A1+ by S&P, P1 by Moodys and F1+ by Fitch. Because HSF-II is a
consolidated entity, the debt, interest income and interest expense of HSF-II
are reflected in the financial statements of Financial Services.

Under our debt covenants, we are required to maintain certain leverage and
interest coverage ratios and a minimum tangible net worth. At March 31, 2003,
we were in compliance with all of these covenants.

As of March 31, 2003, our short-term debt was $867.5 million,
approximately $842.2 million of which was applicable to Financial Services and
$25.3 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.

During fiscal 2003, we issued three senior notes and issued notes under a medium-term note
program. The senior notes included $225.0 million at 5.80%, maturing in fiscal
year 2010; $35.0 million at 5.46%, maturing in fiscal year 2008 and $300.0
million at 4.75%, maturing in fiscal year 2008. The issuance under the medium-term note program
was for $15.0 million at three month LIBOR plus 1.75% (initial rate 3.36%),
maturing in fiscal year 2006.

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Our outstanding debt as of March 31, 2003 was as follows (dollars in
thousands) (1):

|                   |                                                                                                              |                                                                     |           |           |           | 
|------------------ | ------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------- | --------- | --------- | --------- | 
|Centex             |                                                                                                              |                                                                     |           |          
|                   | Short-Term Notes Payable                                                                                     |                                                                     | $         | 25,257    |          
|                   | Senior Debt:                                                                                                 |                                                                     |           |           |          
|                   |                                                                                                              | Medium-Term Note Programs, weighted-average 4.79%, due through 2007 |           |           | 281,000   | 
|                   |                                                                                                              | Long-Term Notes, weighted-average 7.05%, due through 2012           |           |           | 1,508,116 | 
|                   |                                                                                                              | Other Indebtedness, weighted-average 2.81%, due through 2010        |           |           | 91,919    | 
|                   | Subordinated Debt:                                                                                           |                                                                     |           |           |          
|                   |                                                                                                              | Subordinated Debentures, 7.38%, due in 2006                         |           |           | 99,894    | 
|                   |                                                                                                              | Subordinated Debentures, 8.75%, due in 2007                         |           |           | 99,694    | 
|                   |                                                                                                              |                                                                     |          
|                   |                                                                                                              |                                                                     | 2,105,880 |          
|                   |                                                                                                              |                                                                     |          
|Financial Services |                                                                                                              |                                                                     |           |          
|                   | Short-Term Debt:                                                                                             |                                                                     |           |           |          
|                   |                                                                                                              | Short-Term Notes Payable                                            |           |           | 283,146   | 
|                   |                                                                                                              | Harwood Street Funding II, L.L.C. Secured Liquidity Notes           |           |           | 559,083   | 
|                   | Home Equity Loans Asset-Backed Certificates, weighted-average 4.52%, due
through 2033                        |                                                                     |           | 4,081,590 |          
|                   | Harwood Street Funding II, L.L.C. Variable Rate Subordinated Notes,
weighted-average 3.38%, due through 2008 |                                                                     |           | 75,000    |          
|                   |                                                                                                              |                                                                     |          
|                   |                                                                                                              |                                                                     | 4,998,819 |          
|                   |                                                                                                              |                                                                     |          
|Total              |                                                                                                              | $                                                                   | 7,104,699 |          
|                   |                                                                                                              |                                                                     |          



|(1) |  | Certain of the borrowings described in the table above vary on a seasonal
basis and depend on the working capital needs of our operations.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------

Our future obligations primarily consist of long-term debt and operating leases. We had no
future obligations related to capital leases, purchase obligations or other
long-term liabilities at March 31, 2003. Maturities of long-term debt and future obligations under operating leases of Centex and Financial
Services (in thousands) during the next five years ending March
31 are:

|           |      |   |                |         |  |          |           |           |       |   |           |           |  |           |         |        | 
|---------- | ---- | - | -------------- | ------- |  | -------- | --------- | --------- | ----- | - | --------- | --------- |  | --------- | ------- | ------ | 
|           |      |   |                |         |  |          |           |          
|           |      |   | Long-term Debt |         |  |          |           |          
|           |      |   |                |         |  | Total    |          
|           |      |   |                |         |  |          | Financial |           |       |   |           |           |  | Operating |        
|           |      |   | Centex         |         |  | Services |           |           | Total |   |           | Leases    | 
|           |      |   |                |         |  |          |           |           |       |   |           |           | 
|           | 2004 |   | $              | 27,571  |  |          | $         | 1,085,397 |       |   | $         | 1,112,968 |  |           | $       | 47,666 | 
|           | 2005 |   |                | 32,444  |  |          |           | 877,255   |       |   |           | 909,699   |  |           |         | 39,940 | 
|           | 2006 |   |                | 395,124 |  |          |           | 666,675   |       |   |           | 1,061,799 |  |           |         | 31,326 | 
|           | 2007 |   |                | 290,414 |  |          |           | 632,240   |       |   |           | 922,654   |  |           |         | 24,972 | 
|           | 2008 |   |                | 359,341 |  |          |           | 771,340   |       |   |           | 1,130,681 |  |           |         | 25,093 | 
|Thereafter |      |   | 975,729        |         |  |          | 123,683   |           |       |   | 1,099,412 |           |  |           | 49,539  |       
|           |      |   |                |         |  |          |           |           |       |   |           |          
|           |      | $ | 2,080,623      |         |  | $        | 4,156,590 |           |       | $ | 6,237,213 |           |  | $         | 218,536 |       
|           |      |   |                |         |  |          |           |           |       |   |           |           | 

Financial Services debt related to securitized residential mortgage loans
structured as collateralized borrowings (Home Equity Loans Asset-Backed
Certificates) was $4.08 billion at March 31, 2003 and has no recourse to Home
Equity or Centex Corporation. The principal and interest on these notes are
paid using the cash flow from the underlying residential mortgage loans, which
serve as collateral for the debt. Accordingly, the timing of the principal
payments on these notes is dependent upon the payment received on the
underlying residential mortgage loans. The expected maturities of this
component of long-term debt are based on contractual maturities adjusted for
projected repayments and prepayments of principal. As is common in these
structures, Home Equity remains liable for customary loan representations.

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CERTAIN OFF-BALANCE-SHEET AND OTHER OBLIGATIONS

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

Harwood Street Funding I, L.L.C.

HSF-I is an unaffiliated entity established in July 1999 that is not
consolidated with Financial Services or Centex Corporation and subsidiaries as
of March 31, 2003. Since December 1999, CTX Mortgage has sold substantially
all of the Jumbo A and conforming mortgage loans that it originates to HSF-I
in accordance with the HSF-I Purchase Agreement. When HSF-I acquires these
loans, it typically holds them for a period averaging between 45 and 60 days
and then resells them into the secondary market. HSF-I obtains the funds
needed to purchase eligible mortgage loans from CTX Mortgage by issuing (1)
securitized medium-term debt that is currently rated AAA by S&P and Aaa by
Moodys, (2) short-term secured liquidity notes that are currently rated A1+ by
S&P and P1 by Moodys and (3) subordinated certificates maturing in September
2004 and November 2005, extendable for up to five years, that are rated BBB by
S&P and Baa2 by Moodys. This arrangement provides CTX Mortgage with reduced
financing cost for eligible mortgage loans it originates and improves its
liquidity.

Under the terms of the HSF-I Purchase Agreement, CTX Mortgage may elect to
sell to HSF-I, and HSF-I is obligated to purchase from CTX Mortgage, mortgage
loans that satisfy certain eligibility criteria and portfolio requirements.
The maximum amount of mortgage loans that HSF-I is allowed to carry in its
inventory under the HSF-I Purchase Agreement is limited to $2.50 billion.

HSF-Is commitment to purchase eligible mortgage loans continues in effect
until the occurrence of certain termination events described in the HSF-I
Purchase Agreement. These termination events primarily
relate to events of
default under, or other failure to comply with, the provisions, including loan
portfolio limitations, of the agreements that govern the mortgage loan
warehouse program but also include a downgrade in Centex Corporations credit
ratings below BB+ by S&P or Ba1 by Moodys. In the event CTX Mortgage was
unable to sell loans to HSF-I, it would draw on existing credit facilities
currently held in addition to HSF-I. In addition, it might need to make other
customary financing arrangements to fund its mortgage loan origination
activities. Although we believe that CTX Mortgage could arrange for
alternative financing that is common for non-investment grade mortgage
companies, there can be no assurance that such financing would be available on
satisfactory terms, and any delay in obtaining such financing could adversely
affect the results of operations of CTX Mortgage.

In accordance with the HSF-I Purchase Agreement, CTX Mortgage acts as
servicer of the loans owned by HSF-I and arranges for the sale of the eligible
mortgage loans into the secondary market. In its capacity as servicer, CTX
Mortgage must act in the best interests of HSF-I so as to maximize the proceeds
of sales of eligible mortgage loans. The performance of obligations of CTX
Mortgage, solely in its capacity as servicer, is guaranteed by Centex
Corporation. CTX Mortgage received $13.3 million, $9.8 million and $5.0
million in fees for servicing loans owned by HSF-I in fiscal 2003, 2002 and
2001, respectively. These servicer obligations include repurchasing 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

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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. 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. We are also required to reimburse the bank for certain
expenses, costs and damages that it may incur.

As of March 31, 2003, HSF-I owned $2.27 billion in securitized residential
mortgage loans sold to it by CTX Mortgage and had $2.16 billion of outstanding
securitized term debt and $0.11 billion of outstanding subordinated
certificates. We do not guarantee the payment of any debt or subordinated
certificates of HSF-I, and we are not liable for credit losses relating to
securitized residential mortgage loans sold to HSF-I. However, we do retain
certain risks related to the portfolio of mortgage loans held by HSF-I. In
particular, CTX Mortgage makes representations and warranties to HSF-I to the
effect that each mortgage loan sold to HSF-I satisfies the eligibility criteria
and portfolio requirements discussed above. CTX Mortgage may be required to
repurchase mortgage loans sold to HSF-I if such mortgage loans are determined
to be ineligible loans or there occur certain other breaches of representations
and warranties of CTX Mortgage, as seller or servicer. Centex Corporation
guarantees CTX Mortgages obligation to repurchase such loans. CTX Mortgage
records a liability for its estimated losses for these obligations and such
amount is included in its loan origination reserve. CTX Mortgage sold $10.55
billion, $10.20 billion
and $6.69 billion of mortgage loans to HSF-I and repurchased $6.9 million, $1.1
million and $0.3 million of
delinquent or foreclosed mortgage loans from HSF-I
during the years ended March 31, 2003, 2002 and 2001,
respectively. CTX Mortgage recognized gains on the sale of mortgage
loans of $254.6 million, $188.9 million and $153.6 million for the
years ended March 31, 2003, 2002 and 2001, respectively.

In January 2003, the FASB issued Interpretation No. 46, Consolidation of
Variable Interest Entities (FIN 46), which
clarifies the accounting for certain entities in which equity investors do not have a
controlling financial interest or the
entity is unable to finance its activities without additional subordinated financial
support from other parties. We believe it is probable that our interest in
HSF-I will qualify as a variable interest under FIN 46, resulting in the
consolidation of HSF-I in our financial statements beginning July 1, 2003. The
consolidation of HSF-I will increase our residential mortgage loans held for
sale, with a corresponding increase to our financial services debt. The impact
on our financial position and results will be dependent upon the amount of residential mortgage
loans and debt held by HSF-I upon adoption of FIN 46.

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

3333 Holding Corporation, 3333 Development Corporation and the Partnership
are entities that are neither affiliates of nor consolidated with Centex
Corporation and subsidiaries at March 31, 2003. These entities were
established in 1987 to broaden the range of business activities that may be
conducted for the benefit of our stockholders to include general real estate
development. We determined that this expansion would improve stockholder value
through longer-term real estate investments, real estate developments and the
benefits of the partnership form of business. The Partnership is managed by
its general partner, 3333 Development Corporation, a wholly-owned subsidiary of
3333 Holding Corporation. We generally are not liable for the obligations of
3333 Holding Corporation, 3333 Development Corporation or the Partnership.
However, as of March 31, 2003, we guaranteed approximately $1.1 million of
indebtedness of the

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Partnership. In addition, we enter into certain land
purchase and other transactions with the Partnership.
For additional
information regarding these entities, see the Joint Explanatory Note at the
beginning of this Report and the financial statements of the Partnership, filed
in tandem with this Report. In addition, for information regarding these
entities and Centex Corporation and subsidiaries, on an aggregate basis, see
Note (G), Centex Development Company, L.P., of the Notes to Consolidated
Financial Statements of Centex Corporation. For a discussion of the impact of
FIN 46 on our accounting for transactions with these entities, see Recent
Accounting Pronouncements below.

Joint Ventures

We conduct a portion of our land acquisition, development and other
activities through our participation in joint ventures in which we hold less
than a majority interest. These joint ventures are typically large in nature,
and partnering with other developers allows Centex Homes to share the risks and
rewards of ownership while providing for efficient asset utilization. Our
investment in these non-consolidated joint ventures, accounted for using the
equity method, was $102.3 million and $94.6 million at March 31, 2003 and 2002,
respectively. These joint ventures had total outstanding secured construction
debt of approximately $232.5 million and $144.6 million at March 31, 2003 and
2002, respectively. Our liability with respect to this debt, based on our
ownership percentage of the related joint ventures, is limited to approximately
$56.4 million and $27.9 million at March 31, 2003 and 2002, respectively.
Under the structure of this debt, we become liable up to these amounts only to
the extent that the construction debt exceeds a certain percentage of the value
of the project. At March 31, 2003 and 2002, we were not liable for any of this
debt. For a discussion of the impact of FIN 46 on our accounting for
transactions with non-consolidated joint ventures, see Recent Accounting
Pronouncements below.

Letters of Credit and Guarantees

At March 31, 2003, we had outstanding letters of credit of $116.8 million
that primarily relate to 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. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets, or SFAS No. 144. SFAS No. 144 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

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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

Goodwill represents the excess of purchase price over net assets of
businesses acquired. 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, at the reporting unit level, 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. Fair value is estimated using a discounted cash flow or
market valuation approach. 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. We had no impairment of goodwill in
fiscal 2003.

Insurance Accruals

We have certain deductible limits under our workers compensation,
automobile and general liability insurance policies for which reserves are
actuarially determined based on claims filed and an estimate of
claims incurred but not yet reported. Projection of losses concerning
these liabilities is subject to a high degree of variability due to factors
such as claim settlement patterns, litigation trends and legal interpretations,
among others.

Valuation of Residential Mortgage Loans Held for Investment

Home Equity
originates and purchases loans in accordance with standard
underwriting criteria. The underwriting standards are primarily
intended to assess the creditworthiness of the mortgagee and the
value of the mortgaged property and to evaluate the adequacy of the
property as collateral for the home equity loan.

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

We believe that the
allowance for losses is sufficient to provide for credit losses in
the existing residential mortgage loans held for investment, which
include real estate owned. We evaluate the allowance on an aggregate
basis considering, among other things, the relationship of the
allowance to residential mortgage loans held for investment and
historical credit losses. The allowance reflects our judgment of the
present loss exposure at the end of the reporting period. A range of
expected credit losses is estimated using historical losses, static pool loss curves and delinquency modeling. These
tools take into consideration historical information regarding
delinquency and loss severity experience and apply that information to
the portfolio at each reporting date.

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

Mortgage Securitization Residual Interest

Home Equity uses mortgage securitizations to finance its mortgage loan
portfolio. For securitizations prior to April 2000, which Home Equity
accounted for as sales, Home Equity retained a 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.
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. See Note (A), Significant Accounting Policies, of the Notes to
Consolidated Financial Statements of Centex Corporation and subsidiaries for a
discussion of the sensitivity of the MSRI to changes in the assumptions.

Loan Origination Reserve

CTX Mortgage has established a liability for anticipated losses associated
with loans originated and sold to HSF-I or other unaffiliated third parties.
This liability includes losses associated with certain borrower payment
defaults, credit quality issues or misrepresentation. CTX Mortgage estimates the losses that may be incurred for certain loan
originations based on, among other factors, historical loss rates and current
trends in loan originations. This liability reflects managements judgment of
the loss exposure at the end of the reporting period.

Although we consider the loan origination reserve reflected in our
consolidated balance sheet at March 31, 2003 to be adequate, there can be no
assurance that this reserve will prove to be adequate over time to cover
ultimate losses in connection with our loan originations. This reserve may
prove to be inadequate due to unanticipated adverse changes in the economy or
discrete events adversely affecting specific customers.

RECENT ACCOUNTING PRONOUNCEMENTS

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

In November 2002, the FASB issued Interpretation No. 45, Guarantors
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others, or FIN 45, which requires certain
guarantees to be recorded at fair value. FIN 45 also requires a guarantor to
make certain disclosures about guarantees, including product warranties, even
when the likelihood of making any payments under the guarantee is remote. The
disclosure requirements of FIN 45 are effective for financial statements of
interim or annual periods ending after December 15, 2002. The initial
recognition and measurement provisions are applicable only for guarantees
issued or modified after December 31, 2002.

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The implementation of FIN 45 did
not have a material impact on our results of operations or financial position.

In January 2003, the FASB issued Interpretation No. 46, Consolidation of
Variable Interest Entities, or FIN 46, which clarifies the accounting for certain entities in which equity investors do not have a
controlling financial interest or the
entity is unable to finance its activities without additional subordinated financial
support from other parties. Certain disclosure requirements of FIN 46 are
effective for financial statements of interim or annual periods issued after
January 31, 2003. FIN 46 applies immediately to variable interest entities
created, or in which an enterprise obtains an interest, after January 31, 2003.
For variable interest entities in which an enterprise holds a variable
interest that it acquired before February 1, 2003, FIN 46 applies to interim or
annual periods beginning after June 15, 2003. At March 31, 2003, we have
interests in the Partnership, HSF-I and certain joint ventures that may be
affected by this interpretation. The nature of these entities operations and
our potential maximum exposure related to these entities are discussed in the
financial statements of the Partnership, filed in tandem with this Report, and
in Note (F), Indebtedness, Note (G), Centex Development Company, L.P., and
Note (H), Commitments and Contingencies of Notes to Consolidated Financial
Statements of Centex Corporation and subsidiaries. Management is in the
process of evaluating the applicability of FIN 46 and the related accounting
for our interests in the Partnership, HSF-I and our non-consolidated joint
ventures.

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

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

STOCK REPURCHASE PROGRAM

During fiscal 2003, we repurchased a total of 874,700 shares of common
stock under our stock option-related repurchase program, which we retained as
treasury stock. At March 31, 2003, we had repurchased a total of 2.5 million
shares out of 3.5 million shares authorized for repurchase by our Board of
Directors and retired approximately 1.4 million shares.

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FORWARD-LOOKING STATEMENTS

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 operations are somewhat cyclical
and sensitive to changes in economic conditions, including
levels of employment, consumer confidence and income,
availability of financing, interest rate levels and changes in
the economic condition of the local markets in which we operate.                                                                                                                                                                                                 
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | Our residential Home Building operations are also subject to
other risks and uncertainties, including seasonal variations,
adverse weather conditions, the availability of adequate land in
desirable locations, the cost and availability of labor and
construction materials, labor disputes, the general demand for
housing and new construction and the resale market for existing
homes.                                                                                                                   
| 
| |  | Our Construction Services operations are also somewhat cyclical
and sensitive to changes in economic conditions, including
overall capital spending trends in the economy, changes in
federal and state appropriations for construction projects and
competitive pressures on the availability and pricing of
construction projects.                                                                                                                                                                            
| 
| |  | Our Construction Services operations are also subject to other
risks and uncertainties, including the timing of new awards and
the funding of such awards; adverse weather conditions;
cancellations of, or changes in the scope to, existing
contracts; the cost and availability of labor and construction
materials; labor disputes; the ability to meet performance or
schedule guarantees and cost overruns.                                                                                               
| 
| |  | Virtually all of our homebuyers finance their home acquisitions
through our Financial Services operations or third party
lenders. In general, our Home Building operations can be
adversely affected by increases in interest rates.                                                                                                                                                                                                                                                                            
| 
| |  | The results of operations of CTX Mortgage depend to a
significant extent on the level of interest rates. Any
significant increases in mortgage rates above currently
prevailing levels could adversely affect the volume of loan
originations. There can be no assurance that mortgage rates
will remain at the current level in the future. Our mortgage
loan operations are also dependent upon the securitization
market for mortgage-backed securities and the availability of
mortgage warehouse financing.
| 
| |  | Our Home Equity operations involve holding residential mortgage
loans for investment and establishing an allowance for credit
losses on these loans. Although the amount of this allowance
reflects our                                                                                                                                                                                                                                                                                                         



|  |  | judgment as to our present loss exposure on these loans, there can be no
assurance that it will be sufficient to cover any losses that may ultimately
be incurred.                                                                                                                                                   
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | 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

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|  |  | cyclical downturns at different times than the
national economy. The price at which we sell our construction
products, particularly gypsum wallboard, is highly sensitive to
changes in supply and demand for such products, energy costs,
raw material prices and competition from other domestic and
foreign producers.                                                                 
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | All of our businesses operate in very competitive environments,
which are characterized by competition from a number of other
homebuilders, mortgage lenders, construction products producers
and contractors in each of the markets in which we operate.                                                                                                                                 
| 
| |  | We are subject to various federal, state and local statutes,
rules and regulations that could affect our businesses,
including those concerning zoning, construction, protecting the
environment and health. In addition, our businesses could be
affected by changes in federal income tax policy, federal
mortgage loan financing programs and by other changes in
regulation or policy.




ITEM 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, 2003.

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, 2003, we had interest rate
swap agreements that converted $1.26 billion of our variable-rate 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 risks, non-credit related
market risks and prepayment risks 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. Home Equity also uses
interest rate swaps, included in the balance above, that, in effect, fix the
interest rate on its variable interest rate debt.

Prior to fiscal 2001, Home Equity retained the MSRI from its securitized
pools of mortgages. As of March 31, 2003, our total MSRI was $108.1 million,
comprised of $106.4 million related to Home Equity and $1.7 million related to
CTX Mortgage. CTX Mortgages MSRI resulted from an acquisition in fiscal 2002.
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

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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
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, 2003, short-term debt was $867.5 million, approximately
$842.2 million of which was applicable to Financial Services and $25.3 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 $600 million program
size supported by a $700 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 short-term borrowings outstanding at March 31, 2003
was 1.6%.

The maturities of Centexs long-term debt outstanding at March 31, 2003
were as follows. We define Centex as a supplemental presentation that
reflects the Financial Services segment as it accounted for under the
equity method.

|           |                                |                       |   |                              |      |   |      |        |      |      |   |         |      |   |   |            |      |   |       |         |      |            |   |         |      |   |   |           |      |   |   |           |  | 
|---------- | ------------------------------ | --------------------- | - | ---------------------------- | ---- | - | ---- | ------ | ---- | ---- | - | ------- | ---- | - | - | ---------- | ---- | - | ----- | ------- | ---- | ---------- | - | ------- | ---- | - | - | --------- | ---- | - | - | --------- |  | 
|           |                                |                       |   | Maturities through March 31, |      |   |      |        |      |      |   |         |      |   |   |            |     
|           |                                |                       |   |                              |      |   |      |        |      |      |   |         |      |   |   |            |     
|(in 000s) | 2004                           |                       |   | 2005                         |      |   | 2006 |        |      | 2007 |   |         | 2008 |   |   | Thereafter |      |   | Total |         |      | Fair Value |  
|           |                                |                       |   |                              |      |   |      |        |      |      |   |         |      |   |   |            |      |   |       |         |      |            |   |         |      |  
|Centex     |                                |                       |   |                              |      |   |      |        |      |      |   |         |      |   |   |            |      |   |       |         |      |            |   |         |      |   |   |           |      |   |   |          
|           | Fixed Rate Debt                |                       | $ | 13,571                       |      |   | $    | 2,444  |      |      | $ | 300,124 |      |   | $ | 202,414    |      |   | $     | 335,022 |      |            | $ | 973,629 |      |   | $ | 1,827,204 |      |   | $ | 2,038,693 | 
|           |                                | Average Interest Rate |   |                              | 7.88 | % |      |        | 5.07 | %    |   |         | 8.96 | % |   |            | 8.01 | % |       |         | 4.82 | %          |   |         | 7.26 | % |   |           | 7.18 | % |   |           |  | 
|          
|           | Variable Rated Hedged Debt (1) |                       | $ | 55,000                       |      |   | $    |       |      |      | $ | 25,000  |      |   | $ |           |      |   | $     |        |      |            | $ |        |      |   | $ | 80,000    |      |   | $ | 80,030    | 
|           |                                | Average Interest Rate |   |                              | 5.49 | % |      |        |     | %    |   |         | 7.99 | % |   |            |     | % |       |         |     | %          |   |         |     | % |   |           | 6.27 | % |   |           |  | 
|          
|           | Variable Rate Debt             |                       | $ | 14,000                       |      |   | $    | 30,000 |      |      | $ | 15,000  |      |   | $ | 88,000     |      |   | $     | 24,319  |      |            | $ | 2,100   |      |   | $ | 173,419   |      |   | $ | 176,380   | 
|           |                                | Average Interest Rate |   |                              | 2.37 | % |      |        | 3.34 | %    |   |         | 3.10 | % |   |            | 3.32 | % |       |         | 2.49 | %          |   |         | 2.75 | % |   |           | 3.10 | % |   |           |  | 



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

The maturities of Centexs long-term debt outstanding at March 31, 2002
were as follows:

|           |                                |                       |   |                              |      |   |      |         |      |      |   |        |      |   |   |            |      |   |       |         |      |            |   |         |      |   |   |           |      |   |   |           |  | 
|---------- | ------------------------------ | --------------------- | - | ---------------------------- | ---- | - | ---- | ------- | ---- | ---- | - | ------ | ---- | - | - | ---------- | ---- | - | ----- | ------- | ---- | ---------- | - | ------- | ---- | - | - | --------- | ---- | - | - | --------- |  | 
|           |                                |                       |   | Maturities through March 31, |      |   |      |         |      |      |   |        |      |   |   |            |     
|           |                                |                       |   |                              |      |   |      |         |      |      |   |        |      |   |   |            |     
|(in 000s) | 2003                           |                       |   | 2004                         |      |   | 2005 |         |      | 2006 |   |        | 2007 |   |   | Thereafter |      |   | Total |         |      | Fair Value |  
|           |                                |                       |   |                              |      |   |      |         |      |      |   |        |      |   |   |            |      |   |       |         |      |            |   |         |      |  
|Centex     |                                |                       |   |                              |      |   |      |         |      |      |   |        |      |   |   |            |      |   |       |         |      |            |   |         |      |   |   |           |      |   |   |          
|           | 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.
|--- |  | ------------------------------------------------------------------------------------------------------

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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, 2003. 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, which
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, |      |   |      |         |      |      |   |         |      |   |   |            |     
|                   |                    |                       |   |                              |      |   |      |         |      |      |   |         |      |   |   |            |     
|(in 000s)         | 2004               |                       |   | 2005                         |      |   | 2006 |         |      | 2007 |   |         | 2008 |   |   | Thereafter |      |   | Total |         |      | Fair Value |  
|                   |                    |                       |   |                              |      |   |      |         |      |      |   |         |      |   |   |            |      |   |       |         |      |            |   |        |      |  
|Financial Services |                    |                       |   |                              |      |   |      |         |      |      |   |         |      |   |   |            |      |   |       |         |      |            |   |        |      |   |   |           |      |   |   |          
|                   | Fixed Rate Debt    |                       | $ | 584,776                      |      |   | $    | 452,417 |      |      | $ | 353,367 |      |   | $ | 459,027    |      |   | $     | 497,246 |      |            | $ | 71,177 |      |   | $ | 2,418,010 |      |   | $ | 2,501,771 | 
|                   |                    | Average Interest Rate |   |                              | 5.46 | % |      |         | 5.62 | %    |   |         | 5.75 | % |   |            | 5.61 | % |       |         | 4.87 | %          |   |        | 4.01 | % |   |           | 5.55 | % |   |           | 
|                  
|                   | Variable Rate Debt |                       | $ | 500,621                      |      |   | $    | 424,838 |      |      | $ | 313,308 |      |   | $ | 173,214    |      |   | $     | 274,094 |      |            | $ | 52,505 |      |   | $ | 1,738,580 |      |   | $ | 1,732,822 | 
|                   |                    | Average Interest Rate |   |                              | 1.99 | % |      |         | 2.15 | %    |   |         | 2.37 | % |   |            | 2.43 | % |       |         | 2.62 | %          |   |        | 2.77 | % |   |           | 2.17 | % |   |           | 

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, 2002.

|                   |                    |                       |   |                              |      |   |      |         |      |      |   |         |      |   |   |            |      |   |       |         |      |            |   |         |      |   |   |           |      |   |   |           | 
|------------------ | ------------------ | --------------------- | - | ---------------------------- | ---- | - | ---- | ------- | ---- | ---- | - | ------- | ---- | - | - | ---------- | ---- | - | ----- | ------- | ---- | ---------- | - | ------- | ---- | - | - | --------- | ---- | - | - | --------- | 
|                   |                    |                       |   | Maturities through March 31, |      |   |      |         |      |      |   |         |      |   |   |            |     
|                   |                    |                       |   |                              |      |   |      |         |      |      |   |         |      |   |   |            |     
|(in 000s)         | 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 | % |   |           | 

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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 |  |  | 60  | 
|                                                                 |  |  |     | 
|Statements of Consolidated Earnings                              |  |  | 61  | 
|                                                                 |  |  |     | 
|Consolidated Balance Sheets with Consolidating Details           |  |  | 62  | 
|                                                                 |  |  |     | 
|Statements of Consolidated Cash Flows with Consolidating Details |  |  | 64  | 
|                                                                 |  |  |     | 
|Statements of Consolidated Stockholders Equity                  |  |  | 66  | 
|                                                                 |  |  |     | 
|Notes to Consolidated Financial Statements                       |  |  | 68  | 
|                                                                 |  |  |     | 
|Report of Independent Auditors                                   |  |  | 99  | 
|                                                                 |  |  |     | 
|Quarterly Results                                                |  |  | 100 | 

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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, |        
|                                       |                                            |                              |           |                               |        
|                                       |                                            |                              |           | 2003                          |         |   | 2002      |           |         | 2001 |           |           | 2000    |   |           | 1999      |        
|                                       |                                            |                              |           |                               |         |   |           |           |         |      |           |           |         |   |           |           |        
|Revenues                               |                                            |                              |           |                               |         |   |           |           |         |      |           |           |         |   |           |           |         |   |           |          
|                                       | Home Building                              |                              | $         | 5,934,510                     |         |   | $         | 4,984,817 |         |      | $         | 4,356,172 |         |   | $         | 3,686,844 |         |   | $         | 2,819,442 |        
|                                       |                                            |                              | 65        | %                             |         |   | 64        | %         |         |      | 65        | %         |         |   | 61        | %         |         |   | 54        | %        
|                                       | Financial Services                         |                              |           | 855,015                       |         |   |           | 699,760   |         |      |           | 463,646   |         |   |           | 430,611   |         |   |           | 436,299   |        
|                                       |                                            |                              | 9         | %                             |         |   | 9         | %         |         |      | 7         | %         |         |   | 7         | %         |         |   | 8         | %        
|                                       | Construction Products                      |                              |           | 501,257                       |         |   |           | 471,083   |         |      |           | 441,127   |         |   |           | 470,465   |         |   |           | 381,899   |        
|                                       |                                            |                              | 5         | %                             |         |   | 6         | %         |         |      | 7         | %         |         |   | 8         | %         |         |   | 7         | %        
|                                       | Construction Services                      |                              |           | 1,517,851                     |         |   |           | 1,296,024 |         |      |           | 1,290,382 |         |   |           | 1,205,762 |         |   |           | 1,350,776 |        
|                                       |                                            |                              | 17        | %                             |         |   | 17        | %         |         |      | 19        | %         |         |   | 20        | %         |         |   | 26        | %        
|                                       | Investment Real Estate                     |                              |           | 66,862                        |         |   |           | 72,416    |         |      |           | 33,042    |         |   |           | 30,928    |         |   |           | 33,694    |        
|                                       |                                            |                              | 1         | %                             |         |   | 1         | %         |         |      |          | %         |         |   | 1         | %         |         |   | 1         | %        
|                                       | Other                                      |                              |           | 241,746                       |         |   |           | 224,330   |         |      |           | 126,366   |         |   |           | 183,526   |         |   |           | 178,556   |        
|                                       |                                            |                              | 3         | %                             |         |   | 3         | %         |         |      | 2         | %         |         |   | 3         | %         |         |   | 4         | %        
|                                       |                                            |                              |           |                               |         |   |           |           |         |      |           |           |         |   |          
|                                       |                                            | $                            | 9,117,241 |                               |         | $ | 7,748,430 |           |         | $    | 6,710,735 |           |         | $ | 6,008,136 |           |         | $ | 5,200,666 |          
|                                       |                                            |                              |           |                               |         |   |           |           |         |      |           |           |         |   |          
|                                       |                                            |                              | 100       | %                             |         |   | 100       | %         |         |      | 100       | %         |         |   | 100       | %         |         |   | 100       | %        
|Business Segment Operating Earnings(1) |                                            |                              |           |                               |         |   |           |           |         |      |           |           |         |   |           |           |         |   |           |          
|                                       | Home Building                              |                              | $         | 680,777                       |         |   | $         | 527,462   |         |      | $         | 425,450   |         |   | $         | 323,220   |         |   | $         | 242,223   |        
|                                       |                                            |                              | 68        | %                             |         |   | 66        | %         |         |      | 70        | %         |         |   | 56        | %         |         |   | 49        | %        
|                                       | Financial Services                         |                              |           | 161,825                       |         |   |           | 114,733   |         |      |           | 19,667    |         |   |           | 32,474    |         |   |           | 92,309    |        
|                                       |                                            |                              | 16        | %                             |         |   | 14        | %         |         |      | 3         | %         |         |   | 6         | %         |         |   | 19        | %        
|                                       | Construction Products                      |                              |           | 96,268                        |         |   |           | 75,868    |         |      |           | 99,441    |         |   |           | 168,611   |         |   |           | 120,310   |        
|                                       |                                            |                              | 10        | %                             |         |   | 9         | %         |         |      | 17        | %         |         |   | 29        | %         |         |   | 24        | %        
|                                       | Construction Services                      |                              |           | 30,718                        |         |   |           | 36,225    |         |      |           | 30,886    |         |   |           | 23,471    |         |   |           | 15,209    |        
|                                       |                                            |                              | 3         | %                             |         |   | 5         | %         |         |      | 5         | %         |         |   | 4         | %         |         |   | 3         | %        
|                                       | Investment Real Estate                     |                              |           | 54,334                        |         |   |           | 48,068    |         |      |           | 50,908    |         |   |           | 30,122    |         |   |           | 29,420    |        
|                                       |                                            |                              | 5         | %                             |         |   | 6         | %         |         |      | 8         | %         |         |   | 5         | %         |         |   | 6         | %        
|                                       | Other                                      |                              |           | (18,849                       | )       |   |           | 3,140     |         |      |           | (21,613   | )       |   |           | 2,580     |         |   |           | (5,371    | )      
|                                       |                                            |                              | (2        | %)                            |         |   |          | %         |         |      | (3        | %)        |         |   |          | %         |         |   | (1        | %)       
|                                       |                                            |                              |           |                               |         |   |           |           |         |      |           |           |         |   |          
|                                       |                                            |                              | 1,005,073 |                               |         |   | 805,496   |           |         |      | 604,739   |           |         |   | 580,478   |           |         |   | 494,100   |          
|                                       |                                            |                              | 100       | %                             |         |   | 100       | %         |         |      | 100       | %         |         |   | 100       | %         |         |   | 100       | %        
|                                       | Corporate General and Administrative       |                              |           | 60,289                        |         |   |           | 50,189    |         |      |           | 36,924    |         |   |           | 33,015    |         |   |           | 28,104    |        
|                                       | Interest                                   |                              |           | 119,560                       |         |   |           | 115,766   |         |      |           | 99,069    |         |   |           | 66,844    |         |   |           | 41,581    |        
|                                       | Minority Interest in Construction Products |                              |           | 30,373                        |         |   |           | 20,776    |         |      |           | 32,415    |         |   |           | 63,758    |         |   |           | 51,121    |        
|                                       |                                            |                              |           |                               |         |   |           |           |         |      |           |           |         |   |          
|                                       |                                            | Earnings Before Income Taxes |           | $                             | 794,851 |   |           | $         | 618,765 |      |           | $         | 436,331 |   |           | $         | 416,861 |   |           | $         | 373,294 | 
|                                       |                                            |                              |           |                               |         |   |           |           |         |      |           |           |         |   |          

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



|(1) |  | Business Segment Operating Earnings excludes corporate general and
administrative 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, |          
|                           |                                      |                                 |           |                               |          
|                           |                                      |                                 |           | 2003                          |           |   | 2002      |            |           | 2001 |          
|                           |                                      |                                 |           |                               |           |   |           |            |           |      |          
|Revenues                   |                                      |                                 |           |                               |           |   |           |            |           |      |           |           
|                           | Home Building                        |                                 | $         | 5,934,510                     |           |   | $         | 4,984,817  |           |      | $         | 4,356,172  |          
|                           | Financial Services                   |                                 |           | 855,015                       |           |   |           | 699,760    |           |      |           | 463,646    |          
|                           | Construction Products                |                                 |           | 501,257                       |           |   |           | 471,083    |           |      |           | 441,127    |          
|                           | Construction Services                |                                 |           | 1,517,851                     |           |   |           | 1,296,024  |           |      |           | 1,290,382  |          
|                           | Investment Real Estate               |                                 |           | 66,862                        |           |   |           | 72,416     |           |      |           | 33,042     |          
|                           | Other                                |                                 |           | 241,746                       |           |   |           | 224,330    |           |      |           | 126,366    |          
|                           |                                      |                                 |           |                               |           |   |           |            |          
|                           |                                      |                                 | 9,117,241 |                               |           |   | 7,748,430 |            |           |      | 6,710,735 |           
|                           |                                      |                                 |           |                               |           |   |           |            |          
|Costs and Expenses         |                                      |                                 |           |                               |           |   |           |            |           |      |           |           
|                           | Home Building                        |                                 |           | 5,253,733                     |           |   |           | 4,457,355  |           |      |           | 3,930,722  |          
|                           | Financial Services                   |                                 |           | 693,190                       |           |   |           | 585,027    |           |      |           | 443,979    |          
|                           | Construction Products                |                                 |           | 404,989                       |           |   |           | 395,215    |           |      |           | 341,686    |          
|                           | Construction Services                |                                 |           | 1,487,133                     |           |   |           | 1,259,799  |           |      |           | 1,259,496  |          
|                           | Investment Real Estate               |                                 |           | 12,528                        |           |   |           | 24,348     |           |      |           | (17,866    | )        
|                           | Other                                |                                 |           | 260,595                       |           |   |           | 221,190    |           |      |           | 147,979    |          
|                           | Corporate General and Administrative |                                 |           | 60,289                        |           |   |           | 50,189     |           |      |           | 36,924     |          
|                           | Interest                             |                                 |           | 119,560                       |           |   |           | 115,766    |           |      |           | 99,069     |          
|                           | Minority Interest                    |                                 |           | 30,373                        |           |   |           | 20,776     |           |      |           | 32,415     |          
|                           |                                      |                                 |           |                               |           |   |           |            |          
|                           |                                      |                                 | 8,322,390 |                               |           |   | 7,129,665 |            |           |      | 6,274,404 |           
|                           |                                      |                                 |           |                               |           |   |           |            |          
|Earnings Before Income Tax |                                      |                                 | 794,851   |                               |           |   | 618,765   |            |           |      | 436,331   |           
|                           | Income Taxes                         |                                 |           | 238,932                       |           |   |           | 236,539    |           |      |           | 154,354    |          
|                           |                                      |                                 |           |                               |           |   |           |            |          
|Net Earnings               |                                      | $                               | 555,919   |                               |           | $ | 382,226   |            |           | $    | 281,977   |           
|                           |                                      |                                 |           |                               |           |   |           |            |          
|Earnings Per Share         |                                      |                                 |           |                               |           |   |           |            |           |      |           |           
|                           | Basic                                |                                 | $         | 9.15                          |           |   | $         | 6.31       |           |      | $         | 4.77       |          
|                           |                                      |                                 |           |                               |           |   |           |            |          
|                           | Diluted                              |                                 | $         | 8.83                          |           |   | $         | 6.11       |           |      | $         | 4.65       |          
|                           |                                      |                                 |           |                               |           |   |           |            |          
|Average Shares Outstanding |                                      |                                 |           |                               |           |   |           |            |           |      |           |           
|                           | Basic                                |                                 |           | 60,782,042                    |           |   |           | 60,560,788 |           |      |           | 59,095,403 |          
|                           | Dilutive Securities:                 |                                 |           |                               |           |   |           |            |           |      |           |            |          
|                           |                                      | Options                         |           |                               | 1,732,308 |   |           |            | 1,554,501 |      |           |            | 1,165,482 | 
|                           |                                      | Convertible Debenture and Other |           |                               | 543,806   |   |           |            | 413,858   |      |           |            | 400,000   | 
|                           |                                      |                                 |           |                               |           |   |           |            |          
|                           | Diluted                              |                                 |           | 63,058,156                    |           |   |           | 62,529,147 |           |      |           | 60,660,885 |          
|                           |                                      |                                 |           |                               |           |   |           |            |          
|Cash Dividends Per Share   |                                      | $                               | 0.16      |                               |           | $ | 0.16      |            |           | $    | 0.16      |           
|                           |                                      |                                 |           |                               |           |   |           |            |          



| |  | 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 and Subsidiaries |          
|                                     |                                          |                                                                                                                         |            |                                     |          
|                                     |                                          |                                                                                                                         |            | March 31,                           |          
|                                     |                                          |                                                                                                                         |            |                                     |          
|                                     |                                          |                                                                                                                         |            | 2003                                |           |   | 2002      |          
|                                     |                                          |                                                                                                                         |            |                                     |           |   |           |          
|Assets                               |                                          |                                                                                                                         |            |                                     |           |   |           |          
|                                     | Cash and Cash Equivalents                |                                                                                                                         | $          | 472,053                             |           |   | $         | 219,716   |          
|                                     | Restricted Cash                          |                                                                                                                         |            | 172,321                             |           |   |           | 106,270   |          
|                                     | Receivables                             |                                                                                                                         |            |                                     |           |   |           |           |          
|                                     |                                          | Residential Mortgage Loans Held for Investment, net                                                                     |            |                                     | 4,642,826 |   |           |           | 3,279,450 |  
|                                     |                                          | Residential Mortgage Loans Held for Sale                                                                                |            |                                     | 303,328   |   |           |           | 241,793   |  
|                                     |                                          | Construction Contracts                                                                                                  |            |                                     | 251,024   |   |           |           | 221,705   |  
|                                     |                                          | Trade, including Notes of $32,119 and $30,908                                                                           |            |                                     | 412,311   |   |           |           | 345,311   |  
|                                     | Inventories                             |                                                                                                                         |            |                                     |           |   |           |           |          
|                                     |                                          | Housing Projects                                                                                                        |            |                                     | 3,315,947 |   |           |           | 2,513,168 |  
|                                     |                                          | Land Held for Development and Sale                                                                                      |            |                                     | 106,057   |   |           |           | 85,997    |  
|                                     |                                          | Construction Products                                                                                                   |            |                                     | 58,254    |   |           |           | 54,220    |  
|                                     |                                          | Other                                                                                                                   |            |                                     | 25,125    |   |           |           | 25,626    |  
|                                     | Investments                             |                                                                                                                         |            |                                     |           |   |           |           |          
|                                     |                                          | Centex Development Company, L.P.                                                                                        |            |                                     | 281,100   |   |           |           | 269,178   |  
|                                     |                                          | Joint Ventures and Other                                                                                                |            |                                     | 102,277   |   |           |           | 94,609    |  
|                                     |                                          | Unconsolidated Subsidiaries                                                                                             |            |                                     |          |   |           |           |          |  
|                                     | Property and Equipment, net              |                                                                                                                         |            | 696,148                             |           |   |           | 720,285   |          
|                                     | Other Assets                            |                                                                                                                         |            |                                     |           |   |           |           |          
|                                     |                                          | Deferred Income Taxes                                                                                                   |            |                                     | 52,929    |   |           |           | 76,167    |  
|                                     |                                          | Goodwill                                                                                                                |            |                                     | 372,125   |   |           |           | 349,712   |  
|                                     |                                          | Mortgage Securitization Residual Interest                                                                               |            |                                     | 108,102   |   |           |           | 125,272   |  
|                                     |                                          | Deferred Charges and Other, net                                                                                         |            |                                     | 238,609   |   |           |           | 256,976   |  
|                                     |                                          |                                                                                                                         |            |                                     |           |  
|                                     |                                          | $                                                                                                                       | 11,610,536 |                                     |           | $ | 8,985,455 |          
|                                     |                                          |                                                                                                                         |            |                                     |           |  
|Liabilities and Stockholders Equity |                                          |                                                                                                                         |            |                                     |           |   |           |          
|                                     | Accounts Payable and Accrued Liabilities |                                                                                                                         | $          | 1,677,764                           |           |   | $         | 1,438,613 |          
|                                     | Debt                                    |                                                                                                                         |            |                                     |           |   |           |           |          
|                                     |                                          | Centex                                                                                                                  |            |                                     | 2,105,880 |   |           |           | 1,791,752 |  
|                                     |                                          | Financial Services                                                                                                      |            |                                     | 4,998,819 |   |           |           | 3,485,027 |  
|                                     | Payables to Affiliates                   |                                                                                                                         |            |                                    |           |   |           |          |          
|                                     | Minority Stockholders Interest          |                                                                                                                         |            | 170,227                             |           |   |           | 153,290   |          
|                                     | Stockholders Equity                    |                                                                                                                         |            |                                     |           |   |           |           |          
|                                     |                                          | Preferred Stock, Authorized 5,000,000 Shares, None Issued                                                               |            |                                     |          |   |           |           |          |  
|                                     |                                          | Common Stock, $.25 Par Value; Authorized 100,000,000 Shares;
Outstanding 60,836,091 and 61,171,149 Shares, Respectively |            |                                     | 15,483    |   |           |           | 15,348    |  
|                                     |                                          | Capital in Excess of Par Value                                                                                          |            |                                     | 98,711    |   |           |           | 72,446    |  
|                                     |                                          | Unamortized Value of Restricted Stock                                                                                   |            |                                     | (2,398    | ) |           |           | (2,408    | )
|                                     |                                          | Retained Earnings                                                                                                       |            |                                     | 2,597,078 |   |           |           | 2,050,902 |  
|                                     |                                          | Treasury Stock, at cost; 1,096,844 and 221,854 Shares, Respectively                                                     |            |                                     | (45,037   | ) |           |           | (6,559    | )
|                                     |                                          | Accumulated Other Comprehensive Loss                                                                                    |            |                                     | (5,991    | ) |           |           | (12,956   | )
|                                     |                                          |                                                                                                                         |            |                                     |           |  
|                                     | Total Stockholders Equity               |                                                                                                                         |            | 2,657,846                           |           |   |           | 2,116,773 |          
|                                     |                                          |                                                                                                                         |            |                                     |           |  
|                                     |                                          | $                                                                                                                       | 11,610,536 |                                     |           | $ | 8,985,455 |          
|                                     |                                          |                                                                                                                         |            |                                     |           |  



| |  | See Notes to Consolidated Financial Statements.
| |  | -----------------------------------------------

62



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

|          |           |   |                    |   |           |      |  |   |           |   |  |   |           |  
|--------- | --------- | - | ------------------ | - | --------- | ---- |  | - | --------- | - |  | - | --------- | -
|Centex*   |           |   | Financial Services |  
|          |           |   |                    |  
|March 31, |           |   | March 31,          |  
|          |           |   |                    |  
|2003      |           |   | 2002               |   |           | 2003 |  |   | 2002      |  
|          |           |   |                    |   |           |      |  |   |           |  
|          |           |  
|$         | 456,971   |   |                    | $ | 192,591   |      |  | $ | 15,082    |   |  | $ | 27,125    |  
|          | 8,349     |   |                    |   | 4,760     |      |  |   | 163,972   |   |  |   | 101,510   |  
|          |           |  
|          |          |   |                    |   |          |      |  |   | 4,642,826 |   |  |   | 3,279,450 |  
|          |          |   |                    |   |          |      |  |   | 303,328   |   |  |   | 241,793   |  
|          | 251,024   |   |                    |   | 221,705   |      |  |   |          |   |  |   |          |  
|          | 214,007   |   |                    |   | 197,613   |      |  |   | 198,304   |   |  |   | 147,698   |  
|          |           |  
|          | 3,315,947 |   |                    |   | 2,513,168 |      |  |   |          |   |  |   |          |  
|          | 106,057   |   |                    |   | 85,997    |      |  |   |          |   |  |   |          |  
|          | 58,254    |   |                    |   | 54,220    |      |  |   |          |   |  |   |          |  
|          | 16,679    |   |                    |   | 22,186    |      |  |   | 8,446     |   |  |   | 3,440     |  
|          |           |  
|          | 281,100   |   |                    |   | 269,178   |      |  |   |          |   |  |   |          |  
|          | 102,277   |   |                    |   | 94,609    |      |  |   |          |   |  |   |          |  
|          | 405,407   |   |                    |   | 498,117   |      |  |   |          |   |  |   |          |  
|          | 654,052   |   |                    |   | 672,165   |      |  |   | 42,096    |   |  |   | 48,120    |  
|          |           |  
|          | (36,534   | ) |                    |   | (3,456    | )    |  |   | 89,463    |   |  |   | 79,623    |  
|          | 355,070   |   |                    |   | 332,897   |      |  |   | 17,055    |   |  |   | 16,815    |  
|          |          |   |                    |   |          |      |  |   | 108,102   |   |  |   | 125,272   |  
|          | 156,969   |   |                    |   | 179,810   |      |  |   | 81,640    |   |  |   | 77,166    |  
|          |           |   |                    |   |           |      |  |   |           |  
|$         | 6,345,629 |   |                    | $ | 5,335,560 |      |  | $ | 5,670,314 |   |  | $ | 4,148,012 |  
|          |           |   |                    |   |           |      |  |   |           |  
|          |           |  
|$         | 1,413,412 |   |                    | $ | 1,275,720 |      |  | $ | 264,352   |   |  | $ | 162,893   |  
|          |           |  
|          | 2,105,880 |   |                    |   | 1,791,752 |      |  |   |          |   |  |   |          |  
|          |          |   |                    |   |          |      |  |   | 4,998,819 |   |  |   | 3,485,027 |  
|          |          |   |                    |   |          |      |  |   | 25,736    |   |  |   | 187,764   |  
|          | 168,491   |   |                    |   | 151,315   |      |  |   | 1,736     |   |  |   | 1,975     |  
|          |           |  
|          |          |   |                    |   |          |      |  |   |          |   |  |   |          |  
|          |           |  
|          | 15,483    |   |                    |   | 15,348    |      |  |   | 1         |   |  |   | 1         |  
|          | 98,711    |   |                    |   | 72,446    |      |  |   | 200,467   |   |  |   | 202,671   |  
|          | (2,398    | ) |                    |   | (2,408    | )    |  |   |          |   |  |   |          |  
|          | 2,597,078 |   |                    |   | 2,050,902 |      |  |   | 198,145   |   |  |   | 116,748   |  
|          | (45,037   | ) |                    |   | (6,559    | )    |  |   |          |   |  |   |          |  
|          | (5,991    | ) |                    |   | (12,956   | )    |  |   | (18,942   | ) |  |   | (9,067    | )
|          |           |   |                    |   |           |      |  |   |           |  
|          | 2,657,846 |   |                    |   | 2,116,773 |      |  |   | 379,671   |   |  |   | 310,353   |  
|          |           |   |                    |   |           |      |  |   |           |  
|$         | 6,345,629 |   |                    | $ | 5,335,560 |      |  | $ | 5,670,314 |   |  | $ | 4,148,012 |  
|          |           |   |                    |   |           |      |  |   |           |  



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

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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,       |           
|                                                     |                                                                                                       |                                                                                 |            |                                     |           
|                                                     |                                                                                                       |                                                                                 |            | 2003                                |            |   | 2002       |            |           | 2001 |           
|                                                     |                                                                                                       |                                                                                 |            |                                     |            |   |            |            |           |      |           
|Cash
Flows  Operating Activities                    |                                                                                                       |                                                                                 |            |                                     |            |   |            |            |           |      |            |           
|                                                     | Net Earnings                                                                                          |                                                                                 | $          | 555,919                             |            |   | $          | 382,226    |           |      | $          | 281,977    |          
|                                                     | Adjustments                                                                                           |                                                                                 |            |                                     |            |   |            |            |           |      |            |            |          
|                                                     |                                                                                                       | Depreciation, Depletion and Amortization                                        |            |                                     | 113,213    |   |            |            | 90,659    |      |            |            | 40,509    |  
|                                                     |                                                                                                       | Provision for Losses on Residential Mortgage Loans Held for
Investment          |            |                                     | 34,859     |   |            |            | 17,415    |      |            |            | 4,453     |  
|                                                     |                                                                                                       | Deferred Income Taxes Provision (Benefit)                                       |            |                                     | 23,687     |   |            |            | (16,307   | )    |            |            | 8,019     |  
|                                                     |                                                                                                       | Equity in Earnings of Centex Development Company, L.P. and
Joint Ventures       |            |                                     | (42,672    | ) |            |            | (29,918   | )    |            |            | (4,958    | )
|                                                     |                                                                                                       | Equity in Earnings of Unconsolidated Subsidiaries                               |            |                                     |           |   |            |            |          |      |            |            |          |  
|                                                     |                                                                                                       | Asset Impairments                                                               |            |                                     | 11,487     |   |            |            |          |      |            |            |          |  
|                                                     |                                                                                                       | Minority Interest, net of Taxes                                                 |            |                                     | 20,201     |   |            |            | 13,818    |      |            |            | 20,881    |  
|                                                     | Changes
in Assets and Liabilities, Excluding Effect of Acquisitions                                   |                                                                                 |            |                                     |            |   |            |            |           |      |            |            |          
|                                                     |                                                                                                       | (Increase) Decrease in Restricted Cash                                          |            |                                     | (66,051    | ) |            |            | (44,618   | )    |            |            | (53,718   | )
|                                                     |                                                                                                       | (Increase) Decrease in Receivables                                              |            |                                     | (90,071    | ) |            |            | 39,561    |      |            |            | (61,116   | )
|                                                     |                                                                                                       | (Increase) Decrease in Residential Mortgage Loans Held for Sale                 |            |                                     | (61,535    | ) |            |            | 40,197    |      |            |            | 184,782   |  
|                                                     |                                                                                                       | Increase in Housing Projects and Land Held for Development
and Sale Inventories |            |                                     | (734,666   | ) |            |            | (484,157  | )    |            |            | (159,858  | )
|                                                     |                                                                                                       | (Increase) Decrease in Construction Products and Other Inventories              |            |                                     | (2,164     | ) |            |            | (23,213   | )    |            |            | (978      | )
|                                                     |                                                                                                       | Increase in Accounts Payable and Accrued Liabilities                            |            |                                     | 210,162    |   |            |            | 138,577   |      |            |            | 110,149   |  
|                                                     |                                                                                                       | Decrease (Increase) in Other Assets, net                                        |            |                                     | 19,867     |   |            |            | (52,202   | )    |            |            | (151,490  | )
|                                                     |                                                                                                       | (Decrease) Increase in Payables to Affiliates                                   |            |                                     |           |   |            |            |          |      |            |            |          |  
|                                                     |                                                                                                       | Other                                                                           |            |                                     | 2,255      |   |            |            | (4,152    | )    |            |            | (4,109    | )
|                                                     |                                                                                                       |                                                                                 |            |                                     |            |   |            |            |          
|                                                     |                                                                                                       |                                                                                 | (5,509     | )                                   |            |   | 67,886     |            |           |      | 214,543    |           
|                                                     |                                                                                                       |                                                                                 |            |                                     |            |   |            |            |          
|Cash Flows  Investing Activities                    |                                                                                                       |                                                                                 |            |                                     |            |   |            |            |           |      |            |           
|                                                     | Increase in Residential Mortgage Loans Held for Investment                                            |                                                                                 |            | (1,398,235                          | )          |   |            | (1,499,601 | )         |      |            | (1,776,284 | )        
|                                                     | Decrease (Increase) in Investment and Advances to Centex
Development Company, L.P. and Joint Ventures |                                                                                 |            | 52,792                              |            |   |            | (37,327    | )         |      |            | (153,846   | )        
|                                                     | Decrease (Increase) in Investment and Advances to Unconsolidated
Subsidiaries                         |                                                                                 |            |                                    |            |   |            |           |           |      |            |           |          
|                                                     | Acquisitions, net of Cash Acquired                                                                    |                                                                                 |            |                                     |            |   |            |            |           |      |            |            |          
|                                                     |                                                                                                       | Construction Products Operations                                                |            |                                     |           |   |            |            |          |      |            |            | (342,200  | )
|                                                     |                                                                                                       | Home Building Operations                                                        |            |                                     | (137,733   | ) |            |            |          |      |            |            | (100,097  | )
|                                                     |                                                                                                       | Other                                                                           |            |                                     |           |   |            |            | (39,411   | )    |            |            |          |  
|                                                     | Purchases of Property and Equipment, net                                                              |                                                                                 |            | (62,701                             | )          |   |            | (60,380    | )         |      |            | (52,442    | )        
|                                                     |                                                                                                       |                                                                                 |            |                                     |            |   |            |            |          
|                                                     |                                                                                                       |                                                                                 | (1,545,877 | )                                   |            |   | (1,636,719 | )          |           |      | (2,424,869 | )         
|                                                     |                                                                                                       |                                                                                 |            |                                     |            |   |            |            |          
|Cash Flows  Financing Activities                    |                                                                                                       |                                                                                 |            |                                     |            |   |            |            |           |      |            |           
|                                                     | Increase (Decrease) in Short-Term Debt, net                                                           |                                                                                 |            | 534,231                             |            |   |            | (213,308   | )         |      |            | (83,205    | )        
|                                                     | Centex                                                                                                |                                                                                 |            |                                     |            |   |            |            |           |      |            |            |          
|                                                     |                                                                                                       | Issuance of Long-Term Debt                                                      |            |                                     | 605,992    |   |            |            | 1,007,699 |      |            |            | 943,491   |  
|                                                     |                                                                                                       | Repayment of Long-Term Debt                                                     |            |                                     | (298,491   | ) |            |            | (699,570  | )    |            |            | (329,658  | )
|                                                     | Financial Services                                                                                    |                                                                                 |            |                                     |            |   |            |            |           |      |            |            |          
|                                                     |                                                                                                       | Issuance of Long-Term Debt                                                      |            |                                     | 1,999,374  |   |            |            | 2,053,238 |      |            |            | 1,652,500 |  
|                                                     |                                                                                                       | Repayment of Long-Term Debt                                                     |            |                                     | (1,013,186 | ) |            |            | (458,704  | )    |            |            | (76,632   | )
|                                                     | Retirement of Common Stock                                                                            |                                                                                 |            |                                    |            |   |            |           |           |      |            | (784       | )        
|                                                     | Proceeds from Stock Option Exercises                                                                  |                                                                                 |            | 24,024                              |            |   |            | 57,725     |           |      |            | 35,985     |          
|                                                     | Purchase of Treasury Stock                                                                            |                                                                                 |            | (38,478                             | )          |   |            | (6,559     | )         |      |            |           |          
|                                                     | Dividends Paid                                                                                        |                                                                                 |            | (9,743                              | )          |   |            | (9,724     | )         |      |            | (9,472     | )        
|                                                     |                                                                                                       |                                                                                 |            |                                     |            |   |            |            |          
|                                                     |                                                                                                       |                                                                                 | 1,803,723  |                                     |            |   | 1,730,797  |            |           |      | 2,132,225  |           
|                                                     |                                                                                                       |                                                                                 |            |                                     |            |   |            |            |          
|Net Increase (Decrease) in Cash and Cash Equivalents |                                                                                                       |                                                                                 | 252,337    |                                     |            |   | 161,964    |            |           |      | (78,101    | )         
|Cash and Cash Equivalents at Beginning of Year       |                                                                                                       |                                                                                 | 219,716    |                                     |            |   | 57,752     |            |           |      | 135,853    |           
|                                                     |                                                                                                       |                                                                                 |            |                                     |            |   |            |            |          
|Cash and Cash Equivalents at End of Year             |                                                                                                       | $                                                                               | 472,053    |                                     |            | $ | 219,716    |            |           | $    | 57,752     |           
|                                                     |                                                                                                       |                                                                                 |            |                                     |            |   |            |            |          

See Notes to Consolidated Financial Statements.

64



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##### Table of Contents



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

|                          |          |   |                           |   |           |      |  |   |          |   |  |      |            |   |      |   |            |   |  |   |            |  
|------------------------- | -------- | - | ------------------------- | - | --------- | ---- |  | - | -------- | - |  | ---- | ---------- | - | ---- | - | ---------- | - |  | - | ---------- | -
|Centex*                   |          |   | Financial Services        |  
|                          |          |   |                           |  
|For Years Ended March 31, |          |   | For Years Ended March 31, |  
|                          |          |   |                           |  
|2003                      |          |   | 2002                      |   |           | 2001 |  |   | 2003     |   |  | 2002 |            |   | 2001 |  
|                          |          |   |                           |   |           |      |  |   |          |   |  |      |            |   |      |  
|                          |          |   |                           |   |           |      |  |   |          |   |  |     
|$                         | 555,919  |   |                           | $ | 382,226   |      |  | $ | 281,977  |   |  | $    | 152,970    |   |      | $ | 80,512     |   |  | $ | 11,865     |  
|                          |          |   |                           |   |           |      |  |   |          |   |  |     
|                          | 96,214   |   |                           |   | 74,816    |      |  |   | 25,220   |   |  |      | 16,999     |   |      |   | 15,843     |   |  |   | 15,289     |  
|                          |         |   |                           |   |          |      |  |   |         |   |  |      | 34,859     |   |      |   | 17,415     |   |  |   | 4,453      |  
|                          | 23,687   |   |                           |   | (16,307   | )    |  |   | 8,019    |   |  |      | (2,430     | ) |      |   | (41,293    | ) |  |   | (3,858     | )
|                          |          |   |                           |   |           |      |  |   |          |   |  |     
|                          | (42,672  | ) |                           |   | (29,918   | )    |  |   | (4,958   | ) |  |      |           |   |      |   |           |   |  |   |           |  
|                          | (152,970 | ) |                           |   | (80,512   | )    |  |   | (11,865  | ) |  |      |           |   |      |   |           |   |  |   |           |  
|                          | 11,487   |   |                           |   |          |      |  |   |         |   |  |      |           |   |      |   |           |   |  |   |           |  
|                          | 20,201   |   |                           |   | 13,818    |      |  |   | 20,881   |   |  |      |           |   |      |   |           |   |  |   |           |  
|                          |          |   |                           |   |           |      |  |   |          |   |  |     
|                          | (3,589   | ) |                           |   | 682       |      |  |   | (1,732   | ) |  |      | (62,462    | ) |      |   | (45,300    | ) |  |   | (51,986    | )
|                          | (39,465  | ) |                           |   | 67,482    |      |  |   | (6,434   | ) |  |      | (50,606    | ) |      |   | (27,921    | ) |  |   | (54,114    | )
|                          |         |   |                           |   |          |      |  |   |         |   |  |      | (61,535    | ) |      |   | 40,197     |   |  |   | 184,782    |  
|                          |          |   |                           |   |           |      |  |   |          |   |  |     
|                          | (734,666 | ) |                           |   | (484,157  | )    |  |   | (159,858 | ) |  |      |           |   |      |   |           |   |  |   |           |  
|                          | 2,842    |   |                           |   | (2,797    | )    |  |   | (659     | ) |  |      | (5,006     | ) |      |   | (20,416    | ) |  |   | (319       | )
|                          | 108,703  |   |                           |   | 98,412    |      |  |   | 79,597   |   |  |      | 91,584     |   |      |   | 30,968     |   |  |   | 36,319     |  
|                          | 18,931   |   |                           |   | (8,861    | )    |  |   | (132,719 | ) |  |      | 3,397      |   |      |   | 139        |   |  |   | (31,876    | )
|                          |         |   |                           |   |          |      |  |   |         |   |  |      | (155,879   | ) |      |   | 135,692    |   |  |   | (3,546     | )
|                          | 2,494    |   |                           |   | (3,994    | )    |  |   | (4,420   | ) |  |      | (239       | ) |      |   | (158       | ) |  |   | 311        |  
|                          |          |   |                           |   |           |      |  |   |          |   |  |      |            |   |      |  
|                          | (132,884 | ) |                           |   | 10,890    |      |  |   | 93,049   |   |  |      | (38,348    | ) |      |   | 185,678    |   |  |   | 107,320    |  
|                          |          |   |                           |   |           |      |  |   |          |   |  |      |            |   |      |  
|                          |          |   |                           |   |           |      |  |   |          |   |  |     
|                          |         |   |                           |   |          |      |  |   |         |   |  |      | (1,398,235 | ) |      |   | (1,499,601 | ) |  |   | (1,776,284 | )
|                          |          |   |                           |   |           |      |  |   |          |   |  |     
|                          | 52,761   |   |                           |   | (37,327   | )    |  |   | (153,846 | ) |  |      |           |   |      |   |           |   |  |   |           |  
|                          |          |   |                           |   |           |      |  |   |          |   |  |     
|                          | 239,531  |   |                           |   | (102,762  | )    |  |   | (35,826  | ) |  |      |           |   |      |   |           |   |  |   |           |  
|                          |          |   |                           |   |           |      |  |   |          |   |  |     
|                          |         |   |                           |   |          |      |  |   | (342,200 | ) |  |      |           |   |      |   |           |   |  |   |           |  
|                          | (137,733 | ) |                           |   |          |      |  |   | (100,097 | ) |  |      |           |   |      |   |           |   |  |   |           |  
|                          |         |   |                           |   | (38,904   | )    |  |   |         |   |  |      |           |   |      |   | (507       | ) |  |   |           |  
|                          | (47,226  | ) |                           |   | (53,494   | )    |  |   | (27,448  | ) |  |      | (15,475    | ) |      |   | (6,886     | ) |  |   | (24,994    | )
|                          |          |   |                           |   |           |      |  |   |          |   |  |      |            |   |      |  
|                          | 107,333  |   |                           |   | (232,487  | )    |  |   | (659,417 | ) |  |      | (1,413,710 | ) |      |   | (1,506,994 | ) |  |   | (1,801,278 | )
|                          |          |   |                           |   |           |      |  |   |          |   |  |      |            |   |      |  
|                          |          |   |                           |   |           |      |  |   |          |   |  |     
|                          | 6,627    |   |                           |   | 18,630    |      |  |   | (146,908 | ) |  |      | 527,604    |   |      |   | (231,938   | ) |  |   | 63,703     |  
|                          |          |   |                           |   |           |      |  |   |          |   |  |     
|                          | 605,992  |   |                           |   | 1,007,699 |      |  |   | 943,491  |   |  |      |           |   |      |   |           |   |  |   |           |  
|                          | (298,491 | ) |                           |   | (699,570  | )    |  |   | (329,658 | ) |  |      |           |   |      |   |           |   |  |   |           |  
|                          |          |   |                           |   |           |      |  |   |          |   |  |     
|                          |         |   |                           |   |          |      |  |   |         |   |  |      | 1,999,374  |   |      |   | 2,053,238  |   |  |   | 1,652,500  |  
|                          |         |   |                           |   |          |      |  |   |         |   |  |      | (1,013,186 | ) |      |   | (458,704   | ) |  |   | (76,632    | )
|                          |         |   |                           |   |          |      |  |   | (784     | ) |  |      |           |   |      |   |           |   |  |   |           |  
|                          | 24,024   |   |                           |   | 57,725    |      |  |   | 35,985   |   |  |      | 1,223      |   |      |   | 2,080      |   |  |   | 50,000     |  
|                          | (38,478  | ) |                           |   | (6,559    | )    |  |   |         |   |  |      |           |   |      |   |           |   |  |   |           |  
|                          | (9,743   | ) |                           |   | (9,724    | )    |  |   | (9,472   | ) |  |      | (75,000    | ) |      |   | (28,000    | ) |  |   |           |  
|                          |          |   |                           |   |           |      |  |   |          |   |  |      |            |   |      |  
|                          | 289,931  |   |                           |   | 368,201   |      |  |   | 492,654  |   |  |      | 1,440,015  |   |      |   | 1,336,676  |   |  |   | 1,689,571  |  
|                          |          |   |                           |   |           |      |  |   |          |   |  |      |            |   |      |  
|                          | 264,380  |   |                           |   | 146,604   |      |  |   | (73,714  | ) |  |      | (12,043    | ) |      |   | 15,360     |   |  |   | (4,387     | )
|                          | 192,591  |   |                           |   | 45,987    |      |  |   | 119,701  |   |  |      | 27,125     |   |      |   | 11,765     |   |  |   | 16,152     |  
|                          |          |   |                           |   |           |      |  |   |          |   |  |      |            |   |      |  
|$                         | 456,971  |   |                           | $ | 192,591   |      |  | $ | 45,987   |   |  | $    | 15,082     |   |      | $ | 27,125     |   |  | $ | 11,765     |  
|                          |          |   |                           |   |           |      |  |   |          |   |  |      |            |   |      |  



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

65



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##### Table of Contents



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, 2000 |                                                  |                                          | 58,806 |              |   | $ | 14,702    |     |   | $          |       |            |       | $ |         |            
|                        | Exercise of Stock Options, Including Tax Benefit |                                          |        | 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, Including Tax Benefit |                                          |        | 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   | )          
|                        | Issuance of Restricted Stock                     |                                          |        | 20           |   |   |           | 5   |   |            |        | 995        |       |   |          | (1,000      | )
|                        | Amortization of Restricted Stock                 |                                          |        |             |   |   |           |    |   |            |        |           |       |   |          | 1,010       |  
|                        | Exercise of Stock Options, Including Tax Benefit |                                          |        | 520          |   |   |           | 130 |   |            |        | 19,751     |       |   |          |            |  
|                        | Cash Dividends                                   |                                          |        |             |   |   |           |    |   |            |        |           |       |   |          |            |  
|                        | Purchases of Common Stock for Treasury           |                                          |        | (875         | ) |   |           |    |   |            |        |           |       |   |          |            |  
|                        | Other                                            |                                          |        |             |   |   |           |    |   |            |        | 5,519      |       |   |          |            |  
|                        | Net Earnings                                     |                                          |        |             |   |   |           |    |   |            |        |           |       |   |          |            |  
|                        |                                                  | Unrealized Loss on Hedging Instruments   |        |              |  |   |           |     |  |            |        |            |      |   |          |             |  | 
|                        |                                                  | Foreign Currency Translation Adjustments |        |              |  |   |           |     |  |            |        |            |      |   |          |             |  | 
|                        |                                                  | Other Comprehensive Income Items         |        |              |  |   |           |     |  |            |        |            |      |   |          |             |  | 
|                        |                                                  |                                          |        |              |   |   |           |     |   |            |        |            |       |  
|                        | Comprehensive Income                             |                                          |        |              |   |   |           |     |   |            |        |            |       |   |          |             |  
|                        |                                                  |                                          |        |              |   |   |           |     |   |            |        |            |       |  
|Balance, March 31, 2003 |                                                  |                                          | 60,836 |              |   | $ | 15,483    |     |   | $          | 98,711 |            |       | $ | (2,398   | )          
|                        |                                                  |                                          |        |              |   |   |           |     |   |            |        |           

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   |  
|         |           |   |         |          |         |               |       |             |         |  
|$        | 1,405,895 |   |         | $        |        |               |       | $           | (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 |  
|         |          |   |         |          |        |               |       |             |        |   |  |   |          |  
|         |          |   |         |          |        |               |       |             |        |   |  |   | 1,010     |  
|         |          |   |         |          |        |               |       |             |        |   |  |   | 19,881    |  
|         | (9,743    | ) |         |          |        |               |       |             |        |   |  |   | (9,743    | )
|         |          |   |         |          | (38,478 | )             |       |             |        |   |  |   | (38,478   | )
|         |          |   |         |          |        |               |       |             |        |   |  |   | 5,519     |  
|         | 555,919   |   |         |          |        |               |       |             |        |   |  |   | 555,919   |  
|         |          |   |         |          |        |               |       |             | (10,849 | ) |  |   | (10,849   | )
|         |          |   |         |          |        |               |       |             | 19,330  |   |  |   | 19,330    |  
|         |          |   |         |          |        |               |       |             | (1,516  | ) |  |   | (1,516    | )
|         |           |   |         |          |         |               |       |             |         |   |  |   |          
|         |           |   |         |          |         |               |       |             |         |   |  |   | 562,884   |  
|         |           |   |         |          |         |               |       |             |         |  
|$        | 2,597,078 |   |         | $        | (45,037 | )             |       | $           | (5,991  | ) |  | $ | 2,657,846 |  
|         |           |   |         |          |         |               |       |             |         |  

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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 (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, Financial Services and all of their
consolidated subsidiaries. The effects of transactions among related
companies within the consolidated group have been eliminated.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Centex.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 to a
third-party purchaser.

Interest revenues on residential mortgage loans receivable are recognized
as revenue using the interest (actuarial) method. Revenue accruals are
suspended, except for revenue accruals related to insured mortgage loans, 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, 2003 and 2002, residential
mortgage loans, on which revenue was not being accrued, were approximately
$167.1 million and $83.5 million, respectively.

Revenue from the sale of cement, wallboard, paperboard and concrete and
aggregates is recognized when goods are shipped.

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

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retainage withheld by the customer until contract completion. As a general
contractor, the Company withholds similar retainages from each subcontractor.
Retainages of $87.5 million and $72.9 million included in construction
contracts receivable and $99.9 million and $76.1 million included in accounts
payable at March 31, 2003 and 2002, respectively, 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 $0, $1.8 million and $0
are included in revenues for the fiscal years ended March 31, 2003, 2002 and
2001 (fiscal 2003, fiscal 2002 and fiscal 2001), respectively.

Revenue for manufactured homes is recognized at the time of shipment, which is when title passes, for
the manufacturing company and when homes are sold and shipped and title passes for home sales by the
retail operations. For the Companys home services operations, revenue is
recognized at the time the services are rendered.

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 a
convertible debenture.

The computation of diluted earnings per share excludes anti-dilutive
options to purchase 852,000 shares of Common Stock at an average price of
$50.43 for the year ended March 31, 2003. 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. Anti-dilutive options at March 31, 2003, have
expiration dates ranging from July 2008 to December 2009.

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 are 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

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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.

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

Home Equity believes that the allowance for losses is sufficient to provide for credit losses in the existing residential
mortgage loans held for investment, which include real estate owned. Home Equity evaluates 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 Home Equity's judgment of the present loss exposure at the end of the reporting period.
A range of expected credit losses is estimated using historical losses, static pool loss curves and delinquency modeling. These tools take into consideration historical information
regarding delinquency and loss severity experience and apply that information to the portfolio at each reporting date.

CTX Mortgage has established a liability for anticipated losses associated
with loans originated and sold to HSF-I or other unaffiliated third parties.
This liability includes losses associated with certain borrower payment
defaults, credit quality issues or misrepresentation.

CTX Mortgage estimates the losses that may be incurred for certain loan
originations based on, among other factors, historical loss rates and current
trends in loan originations. This liability reflects managements judgment of
the loss exposure at the end of the reporting period.

Although Home Equity and CTX Mortgage consider the allowance for losses on
residential mortgage loans held for investment and the loan origination reserve
reflected in the consolidated balance sheet at March 31, 2003 to be adequate,
there can be no assurance that this allowance or reserve will prove to be
adequate over time to cover ultimate losses. This allowance and reserve may
prove to be inadequate due to unanticipated adverse changes in the economy or
discrete events adversely affecting specific customers or industries.

Trade Accounts and Notes Receivable

Trade accounts receivable primarily consist of accrued interest, amounts
related to securitizations, sale of servicing rights, closed unfunded home
sales receivables and trade sales related to the Companys Financial Services,
Home Building and Construction Products segments and are net of an allowance
for doubtful accounts. Notes receivable at March 31, 2003 are collectible
primarily over four years with $18.4 million being due within one year. The
weighted-average interest rate on notes receivable at March 31, 2003 was 4.5%.

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.

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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. See Note (G), Centex
Development Company, L.P., 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 investment in the Partnership and
joint ventures are included in the appropriate business segment.

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.

Impairment of Long-Lived Assets

The Company assesses housing projects, land held for development and sale
and property and equipment for recoverability in accordance with the provisions
of Statement of Financial Accounting Standards No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets (SFAS No. 144). SFAS No. 144
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.

In fiscal 2003 the Company recorded impairments of
$11.5 million, comprised of $4.9 million related to Manufactured Homes and $2.4
million related to Construction Services, both for the impairment of property
and equipment, $2.2 million related to the write-down of
inventory to market by
Manufactured Homes and $2.0 million related to the impairment of property held
for sale by Investment Real Estate.

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Goodwill

Goodwill represents the excess of purchase price over net assets of
businesses acquired. The Company adopted the provisions of Statement of
Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets
(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
at least an annual assessment for impairment, at the reporting unit level, by
applying a fair value-based test. If the carrying amount exceeds the fair
value, an impairment would occur. The Company continually evaluates whether
events and circumstances have occurred that indicate the remaining balance of goodwill may
not be recoverable. Fair value is estimated using a discounted cash flow or
market valuation approach. 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. The Company had no impairment of
goodwill in fiscal 2003. See further discussion of goodwill at Note (E),
Goodwill.

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 book value of the Vista portfolio of properties was reduced 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 tax benefits were realized and the land was
developed and/or sold. During fiscal 2001, 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.

Changes in Home Equitys MSRI were as follows:

|                    |  |                               |         |   |      |   |         |      |  |   |         |  
|------------------- |  | ----------------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                    |  | For the Years Ended March 31, |        
|                    |  |                               |        
|                    |  | 2003                          |         |   | 2002 |   |         | 2001 | 
|                    |  |                               |         |   |      |   |         |      | 
|Beginning Balance   |  | $                             | 122,316 |   |      | $ | 146,394 |      |  | $ | 160,999 |  
|Cash Received       |  |                               | (17,193 | ) |      |   | (32,281 | )    |  |   | (24,937 | )
|Accretion and Other |  |                               | 1,250   |   |      |   | 8,203   |      |  |   | 10,332  |  
|                    |  |                               |         |   |      |   |         |      | 
|Ending Balance      |  | $                             | 106,373 |   |      | $ | 122,316 |      |  | $ | 146,394 |  
|                    |  |                               |         |   |      |   |         |      | 

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.

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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.

At March 31, 2003, Home Equity used the following assumptions in monitoring
the fair value of the MSRI: cumulative credit losses of 3.98% to 5.24%;
Constant Prepayment Rate (CPR) for fixed rate loans of 22% to 25% per annum (life to date); a CPR of 25% to 30% per annum (life to
date) for variable rate loans; and a discount rate of 15% simple interest. At March 31, 2003, the
expected weighted-average life of Home Equitys MSRI balance was 2.8 years,
with individual transactions ranging from 1.4 years to 3.3 years.

Home Equity had MSRI of $106.4 million and $122.3 million at March 31,
2003 and 2002, respectively. The outstanding principal amount of the related
securitized loans was $785.8 million and $1.09 billion at March 31, 2003 and 2002, respectively. Delinquencies related to MSRI were $51.0 million and $61.2
million at March 31, 2003 and 2002, respectively. Net credit losses for fiscal
2003, 2002 and 2001 were $22.4 million, $17.3 million and $13.2 million, respectively.

At March 31, 2003, 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, 2003.

|                         |  |                                           |       |  |     |   |       | 
|------------------------ |  | ----------------------------------------- | ----- |  | --- | - | ----- | 
|                         |  | Impact on fair value of an adverse change |      
|                         |  |                                           |      
|Assumption               |  | 10%                                       |       |  | 20% |  
|                         |  |                                           |       |  |     |  
|Credit Losses            |  | $                                         | 2,404 |  |     | $ | 4,812 | 
|Constant Prepayment Rate |  | $                                         | 3,342 |  |     | $ | 6,298 | 
|Discount Rate            |  | $                                         | 4,034 |  |     | $ | 7,873 | 

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.

In addition to Home Equitys MSRI, CTX Mortgage also had MSRI of $1.7
million and $3.0 million at March 31, 2003 and 2002, respectively. CTX
Mortgages MSRI resulted from an acquisition in fiscal 2002.

Deferred Charges and Other

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

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Advertising Costs

Advertising costs are expensed as incurred. The advertising costs for
fiscal 2003, 2002 and 2001 were $78.6 million, $78.9 million and $67.0 million,
respectively.

Off-Balance-Sheet Obligations

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

Insurance Accruals

The Company has certain deductible limits under its workers compensation,
automobile and general liability insurance policies for which reserves are
actuarially determined based on claims filed and an estimate of claims incurred
but not yet reported. Projection of losses concerning these liabilities is
subject to a high degree of variability due to factors such as claim settlement
patterns, litigation trends and legal interpretations. Expenses associated with insurance claims up to our deductible limits were $21.0 million, $24.8 million and $11.4 million
for fiscal 2003, 2002, and 2001, respectively.

Stock-Based Employee Compensation Arrangements

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

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The following pro forma information reflects the Companys net earnings
and earnings per share had compensation cost for stock option plans been
determined based upon the fair value at the date of grant for awards in fiscal
2003, 2002 and 2001 consistent with the provisions of SFAS No. 123.

|                                                                                                                            |                       |   |                               |      |  |      |         |      |      |   |         |      | 
|--------------------------------------------------------------------------------------------------------------------------- | --------------------- | - | ----------------------------- | ---- |  | ---- | ------- | ---- | ---- | - | ------- | ---- | 
|                                                                                                                            |                       |   | For the Years Ended March 31, |     
|                                                                                                                            |                       |   |                               |     
|                                                                                                                            |                       |   | 2003                          |      |  | 2002 |         |      | 2001 |  
|                                                                                                                            |                       |   |                               |      |  |      |         |      |      |  
|Net
Income  as Reported                                                                                                    |                       | $ | 555,919                       |      |  | $    | 382,226 |      |      | $ | 281,977 |     
|Stock-Based Employee Compensation Expense Included
in Reported Net
       Income, net of Related Tax Effects                |                       |   | 4,244                         |      |  |      | 484     |      |      |   |        |     
|Total Stock-Based Employee Compensation Expense
Determined Under
       Fair Value Based Method, net of
Related Tax Effects |                       |   | (24,512                       | )    |  |      | (24,957 | )    |      |   | (24,473 | )   
|                                                                                                                            |                       |   |                               |      |  |      |         |      |      |  
|Pro Forma Net Income                                                                                                        |                       | $ | 535,651                       |      |  | $    | 357,753 |      |      | $ | 257,504 |     
|                                                                                                                            |                       |   |                               |      |  |      |         |      |      |  
|Earnings Per Share:                                                                                                         |                       |   |                               |      |  |      |         |      |      |   |         |     
|                                                                                                                            | Basic  as Reported   |   | $                             | 9.15 |  |      | $       | 6.31 |      |   | $       | 4.77 | 
|                                                                                                                            | Basic  Pro Forma     |   | $                             | 8.81 |  |      | $       | 5.91 |      |   | $       | 4.36 | 
|                                                                                                                            | Diluted  as Reported |   | $                             | 8.83 |  |      | $       | 6.11 |      |   | $       | 4.65 | 
|                                                                                                                            | Diluted  Pro Forma   |   | $                             | 8.49 |  |      | $       | 5.72 |      |   | $       | 4.24 | 

Income Taxes

The Company accounts for income taxes on the deferral method whereby
deferred tax assets and liabilities are recognized for the consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax basis.

Interest Expense

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

|                                         |  |                               |          |   |      |   |          |      |  |   |         |  
|---------------------------------------- |  | ----------------------------- | -------- | - | ---- | - | -------- | ---- |  | - | ------- | -
|                                         |  | For the Years Ended March 31, |         
|                                         |  |                               |         
|                                         |  | 2003                          |          |   | 2002 |   |          | 2001 | 
|                                         |  |                               |          |   |      |   |          |      | 
|Total Interest Incurred                  |  | $                             | 328,133  |   |      | $ | 287,628  |      |  | $ | 197,679 |  
|Interest Capitalized                     |  |                               | (73,572  | ) |      |   | (53,568  | )    |  |   | (41,153 | )
|Capitalized Interest Relieved to Expense |  |                               | 49,450   |   |      |   | 40,851   |      |  |   | 35,115  |  
|Less  Financial Services                |  |                               | (184,451 | ) |      |   | (159,145 | )    |  |   | (92,572 | )
|                                         |  |                               |          |   |      |   |          |      | 
|Interest Expense, net                    |  | $                             | 119,560  |   |      | $ | 115,766  |      |  | $ | 99,069  |  
|                                         |  |                               |          |   |      |   |          |      | 

Statements of Consolidated Cash Flows  Supplemental Disclosures

The following table provides supplemental disclosures related to the
Statements of Consolidated Cash Flows:

|                        |  |                               |         |  |      |   |         |      |  |   |         | 
|----------------------- |  | ----------------------------- | ------- |  | ---- | - | ------- | ---- |  | - | ------- | 
|                        |  | For the Years Ended March 31, |        
|                        |  |                               |        
|                        |  | 2003                          |         |  | 2002 |   |         | 2001 | 
|                        |  |                               |         |  |      |   |         |      | 
|Cash Paid for Interest  |  | $                             | 318,607 |  |      | $ | 262,488 |      |  | $ | 193,088 | 
|                        |  |                               |         |  |      |   |         |      | 
|Net Cash Paid for Taxes |  | $                             | 204,368 |  |      | $ | 199,366 |      |  | $ | 172,130 | 
|                        |  |                               |         |  |      |   |         |      | 

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Recent Accounting Pronouncements

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

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

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

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

Reclassifications

Certain prior year balances have been reclassified to conform to the
fiscal 2003 presentation.

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(B)  RESIDENTIAL MORTGAGE LOANS HELD FOR INVESTMENT

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

|                                                                            |  |           |           |   |      |   |           |  
|--------------------------------------------------------------------------- |  | --------- | --------- | - | ---- | - | --------- | -
|                                                                            |  | March 31, |          
|                                                                            |  |           |          
|                                                                            |  | 2003      |           |   | 2002 |  
|                                                                            |  |           |           |   |      |  
|Residential Mortgage Loans Held for Investment                              |  | $         | 4,671,210 |   |      | $ | 3,293,556 |  
|Allowance for Losses on Residential Mortgage Loans
Held for Investment      |  |           | (28,384   | ) |      |   | (14,106   | )
|                                                                            |  |           |           |   |      |  
|Residential Mortgage Loans Held for Investment,
net of Allowance for Losses |  | $         | 4,642,826 |   |      | $ | 3,279,450 |  
|                                                                            |  |           |           |   |      |  

At March 31, 2003, contractual maturities of residential mortgage loans
held for investment were as follows:

|                    |  |           |           | 
|------------------- |  | --------- | --------- | 
|2004                |  | $         | 50,169    | 
|2005                |  |           | 54,233    | 
|2006                |  |           | 58,904    | 
|2007                |  |           | 63,996    | 
|2008 and thereafter |  | 4,443,908 |          
|                    |  |           |          
|                    |  | $         | 4,671,210 | 
|                    |  |           |          

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, |        
|                                                              |                                 |   |                               |        
|                                                              |                                 |   | 2003                          |         |   | 2002 |        |        | 2001 |  
|                                                              |                                 |   |                               |         |   |      |        |        |      |  
|Balance at Beginning of Period                                |                                 | $ | 14,106                        |         |   | $    | 2,814  |        |      | $ |      |       
|                                                              | Provision for Losses            |   |                               | 34,859  |   |      |        | 17,415 |      |   |       | 4,453  |  
|                                                              | Recoveries on Loans Charged Off |   |                               | 160     |   |      |        | 259    |      |   |       | 11     |  
|                                                              | Losses Sustained                |   |                               | (20,741 | ) |      |        | (6,382 | )    |   |       | (1,650 | )
|                                                              |                                 |   |                               |         |   |      |        |        |     
|Balance at End of Period                                      |                                 | $ | 28,384                        |         |   | $    | 14,106 |        |      | $ | 2,814 |       
|                                                              |                                 |   |                               |         |   |      |        |        |     
|Allowance as a Percentage of Gross Loans Held
for Investment  |                                 |   | 0.6                           | %       |   |      | 0.4    | %      |      |   | 0.2   | %     
|Allowance as a Percentage of 90+ Days
Contractual Delinquency |                                 |   | 23.2                          | %       |   |      | 16.9   | %      |      |   | 10.0  | %     
|90+ Days Contractual Delinquency                              |                                 |   |                               |         |   |      |        |        |      |   |       |       
|                                                              | Total Dollars Delinquent        |   | $                             | 122,479 |   |      | $      | 83,490 |      |   | $     | 28,013 |  
|                                                              | % Delinquent                    |   |                               | 2.6     | % |      |        | 2.6    | %    |   |       | 1.6    | %

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(D) PROPERTY AND EQUIPMENT

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

|                                 |  |           |           |   |      |   |           |  
|-------------------------------- |  | --------- | --------- | - | ---- | - | --------- | -
|                                 |  | March 31, |          
|                                 |  |           |          
|                                 |  | 2003      |           |   | 2002 |  
|                                 |  |           |           |   |      |  
|Land, Buildings and Improvements |  | $         | 146,818   |   |      | $ | 144,515   |  
|Machinery, Equipment and Other   |  |           | 268,972   |   |      |   | 239,064   |  
|Plants                           |  |           | 693,157   |   |      |   | 701,514   |  
|                                 |  |           |           |   |      |  
|                                 |  |           | 1,108,947 |   |      |   | 1,085,093 |  
|Accumulated Depreciation         |  |           | (412,799  | ) |      |   | (364,808  | )
|                                 |  |           |           |   |      |  
|                                 |  | $         | 696,148   |   |      | $ | 720,285   |  
|                                 |  |           |           |   |      |  

The Company had depreciation expense related to property and equipment of
$73.1 million, $69.4 million and $53.4 million for fiscal 2003, 2002 and 2001,
respectively.

(E) GOODWILL

A summary of changes in goodwill by segment for the year ended March 31,
2003 is presented below:

|                                      |  |          |         |  |           |   |        |              |  |   |              |   |  |       |       |  |       |   |         |   |  |   |         |  
|------------------------------------- |  | -------- | ------- |  | --------- | - | ------ | ------------ |  | - | ------------ | - |  | ----- | ----- |  | ----- | - | ------- | - |  | - | ------- | -
|                                      |  | Home     |         |  | Financial |   |        | Construction |  |   | Construction |   |  |       |       |  |       |   |         |  
|                                      |  | Building |         |  | Services  |   |        | Products     |  |   | Services     |   |  | Other |       |  | Total |  
|                                      |  |          |         |  |           |   |        |              |  |   |              |   |  |       |       |  |       |  
|Balance as of March 31, 2002          |  | $        | 84,151  |  |           | $ | 16,815 |              |  | $ | 41,088       |   |  | $     | 1,007 |  |       | $ | 206,651 |   |  | $ | 349,712 |  
|Goodwill Acquired                     |  |          | 38,860  |  |           |   | 240    |              |  |   |             |   |  |       |      |  |       |   | 3,466   |   |  |   | 42,566  |  
|Sale of Chemical Lawn Care
Operations |  |          |        |  |           |   |       |              |  |   |             |   |  |       |      |  |       |   | (17,393 | ) |  |   | (17,393 | )
|Other                                 |  |          |        |  |           |   |       |              |  |   | (798         | ) |  |       |      |  |       |   | (1,962  | ) |  |   | (2,760  | )
|                                      |  |          |         |  |           |   |        |              |  |   |              |   |  |       |       |  |       |  
|Balance as of March 31, 2003          |  | $        | 123,011 |  |           | $ | 17,055 |              |  | $ | 40,290       |   |  | $     | 1,007 |  |       | $ | 190,762 |   |  | $ | 372,125 |  
|                                      |  |          |         |  |           |   |        |              |  |   |              |   |  |       |       |  |       |  

Goodwill for the Other segment at March 31, 2003 includes $67.7 million
related to the Companys manufactured housing operations, $71.5 million related
to the Companys home services operations and $51.6 million related to the
Companys investment in Construction Products.

The Company made several acquisitions during fiscal 2003 that resulted in
an increase to goodwill.The largest fiscal 2003 acquisition was Centex Homes
acquisition of substantially all of the St. Louis and Indianapolis home
building operations of The Jones Company on January 2, 2003 for
a total purchase price of $141.3 million. Operations of The Jones Company are included in our results of operations for
the three months ended March 31, 2003, contributing revenues of $47.7 million
and an operating loss of $0.4 million. However, Centex pro forma financial
information is not presented as the pro forma impact of the fiscal 2003
acquisitions on the results of operations was not significant.

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The Company adopted SFAS No. 142 effective April 1, 2001. SFAS No. 142
eliminated the amortization of goodwill. Net income and basic and diluted
earnings per share excluding goodwill amortization for the year ended March 31,
2001 are as follows:

|                            |  |                    |         |  
|--------------------------- |  | ------------------ | ------- | -
|                            |  | For the Year Ended |        
|                            |  |                    |        
|                            |  | March 31, 2001     |        
|                            |  |                    |        
|Reported Net Earnings       |  | $                  | 281,977 |  
|Goodwill Amortization       |  |                    | 26,799  |  
|Negative Goodwill Accretion |  |                    | (50,837 | )
|                            |  |                    |        
|Adjusted Net Earnings       |  | $                  | 257,939 |  
|                            |  |                    |        

|                       |  |                          |       |   |                            |   |       |  
|---------------------- |  | ------------------------ | ----- | - | -------------------------- | - | ----- | -
|                       |  | Basic
Earnings
Per Share |       |   | Diluted
Earnings
Per Share |  
|                       |  |                          |       |   |                            |  
|Reported Net Earnings  |  | $                        | 4.77  |   |                            | $ | 4.65  |  
|Net Goodwill Accretion |  |                          | (0.41 | ) |                            |   | (0.40 | )
|                       |  |                          |       |   |                            |  
|Adjusted Net Earnings  |  | $                        | 4.36  |   |                            | $ | 4.25  |  
|                       |  |                          |       |   |                            |  

(F) INDEBTEDNESS

Short-term Debt

Balances of short-term debt at March 31 were:

|                             |  |           |        |   |      |   |         |  |          |           |         |        |  |   |        |   |  |   |          |  |           |   |         |   
|---------------------------- |  | --------- | ------ | - | ---- | - | ------- |  | -------- | --------- | ------- | ------ |  | - | ------ | - |  | - | -------- |  | --------- | - | ------- | --
|                             |  | March 31, |       
|                             |  |           |       
|                             |  | 2003      |        |   | 2002 |  
|                             |  |           |        |   |      |  
|                             |  |           |        |   |      |   |         |  |          | Financial |         |        |  |   |        |   |  |   |          |  | Financial |  
|                             |  | Centex    |        |   |      |   |         |  | Services |           |         | Centex |  |   |        |   |  |   | Services | 
|                             |  |           |        |   |      |   |         |  |          |           |         |        |  |   |        |   |  |   |          | 
|Financial Institutions       |  | $         | 25,257 | * |      |   |         |  |          | $         | 283,146 |        |  | $ | 18,630 | * |  |   |          |  |           | $ | 212,042 |   
|Commercial Paper             |  |           |       |   |      |   |         |  |          |           |        |        |  |   |       |   |  |   |          |  |           |   |        |   
|Secured Liquidity Notes      |  |           |       |   |      |   |         |  |          |           | 559,083 | **     |  |   |       |   |  |   |          |  |           |   | 102,583 | **
|                             |  |           |        |   |      |   |         |  |          |           |         |        |  |   |        |   |  |   |          | 
|                             |  | $         | 25,257 |   |      |   |         |  |          | $         | 842,229 |        |  | $ | 18,630 |   |  |   |          |  |           | $ | 314,625 |   
|                             |  |           |        |   |      |   |         |  |          |           |         |        |  |   |        |   |  |   |          | 
|Consolidated
Short-term Debt |  |           |        |   |      | $ | 867,486 |  |          |           |         |        |  |   |        |   |  | $ | 333,255  |  |           |   |         |   
|                             |  |           |        |   |      |   |         |  |          |           |         |        |  |   |        |   |  |   |          |  |           |   |         |   



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

The Company borrows on a short-term basis from banks under uncommitted
lines that bear interest at prevailing market rates. The weighted-average
interest rates of balances outstanding at March 31, 2003 and 2002 were 1.6% and
2.4%, respectively.

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Long-term Debt

Balances of long-term debt and weighted-average interest rates at March 31 were:

|                   |                                                                                      |                                      |           |           |        |  |      |      |      |   |           |           |        |  |  |      |      |  
|------------------ | ------------------------------------------------------------------------------------ | ------------------------------------ | --------- | --------- | ------ |  | ---- | ---- | ---- | - | --------- | --------- | ------ |  |  | ---- | ---- | -
|                   |                                                                                      |                                      |           | March 31, |       
|                   |                                                                                      |                                      |           |           |       
|                   |                                                                                      |                                      |           | 2003      |        |  | 2002 |     
|                   |                                                                                      |                                      |           |           |        |  |      |     
|Centex             |                                                                                      |                                      |           |           |        |  |      |      |      |   |           |           |        |  |  |     
|                   | Medium-Term Note Programs, due through 2007                                          |                                      | $         | 281,000   |        |  |      | 4.79 | %    |   | $         | 418,000   |        |  |  | 4.47 | %   
|                   | Long-Term Notes, due through 2012                                                    |                                      |           | 1,508,116 |        |  |      | 7.05 | %    |   |           | 962,892   |        |  |  | 8.11 | %   
|                   | Other Indebtedness, due through 2010                                                 |                                      |           | 91,919    |        |  |      | 2.81 | %    |   |           | 192,753   |        |  |  | 3.98 | %   
|                   | Subordinated Debt:                                                                   |                                      |           |           |        |  |      |      |      |   |           |           |        |  |  |      |     
|                   |                                                                                      | Subordinated Debentures, due in 2006 |           |           | 99,894 |  |      |      | 7.38 | % |           |           | 99,845 |  |  |      | 7.38 | %
|                   |                                                                                      | Subordinated Debentures, due in 2007 |           |           | 99,694 |  |      |      | 8.75 | % |           |           | 99,632 |  |  |      | 8.75 | %
|                   |                                                                                      |                                      |           |           |        |  |      |      |      |   |           |           |        | 
|                   |                                                                                      |                                      | 2,080,623 |           |        |  |      |      |      |   | 1,773,122 |           |        |  |  |     
|                   |                                                                                      |                                      |           |           |        |  |      |      |      |   |           |           |        | 
|Financial Services |                                                                                      |                                      |           |           |        |  |      |      |      |   |           |           |        |  |  |     
|                   | Home Equity Loans Asset-Backed Certificates,
due through 2033                        |                                      |           | 4,081,590 |        |  |      | 4.52 | %    |   |           | 3,120,402 |        |  |  | 5.51 | %   
|                   | Harwood Street Funding II, L.L.C. Variable
Rate Subordinated Notes, due through 2008 |                                      |           | 75,000    |        |  |      | 3.38 | %    |   |           | 50,000    |        |  |  | 5.53 | %   
|                   |                                                                                      |                                      |           |           |        |  |      |      |      |   |           |           |        | 
|                   |                                                                                      |                                      | 4,156,590 |           |        |  |      |      |      |   | 3,170,402 |           |        |  |  |     
|                   |                                                                                      |                                      |           |           |        |  |      |      |      |   |           |           |        | 
|Total              |                                                                                      | $                                    | 6,237,213 |           |        |  |      |      |      | $ | 4,943,524 |           |        |  |  |     
|                   |                                                                                      |                                      |           |           |        |  |      |      |      |   |           |           |        | 

The weighted-average interest rates for Centex long-term debt during the
years ended March 31, 2003, 2002 and 2001 were the following, respectively.
Medium-term note programs weighted-average interest rates were 5.31%, 6.56%
and 7.27%. Long-term notes weighted-average interest rates were 7.72%, 8.48%
and 9.43%. Other indebtedness weighted-average interest rates were 3.15%,
5.19% and 7.41%. Subordinated debentures weighted-average interest rates were
8.09%, 8.07% and 8.06%.

The weighted-average interest rates for Financial Services long-term debt
during the years ended March 31, 2003, 2002 and 2001 were 4.50%, 5.49% and
6.76%, respectively.

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

|           |  |   |           |  |  |          |           |  |       |   |           |  | 
|---------- |  | - | --------- |  |  | -------- | --------- |  | ----- | - | --------- |  | 
|           |  |   |           |  |  |          | Financial |  |       |   |           | 
|           |  |   | Centex    |  |  | Services |           |  | Total |  
|           |  |   |           |  |  |          |           |  |       |  
|2004       |  | $ | 27,571    |  |  | $        | 1,085,397 |  |       | $ | 1,112,968 | 
|2005       |  |   | 32,444    |  |  |          | 877,255   |  |       |   | 909,699   | 
|2006       |  |   | 395,124   |  |  |          | 666,675   |  |       |   | 1,061,799 | 
|2007       |  |   | 290,414   |  |  |          | 632,240   |  |       |   | 922,654   | 
|2008       |  |   | 359,341   |  |  |          | 771,340   |  |       |   | 1,130,681 | 
|Thereafter |  |   | 975,729   |  |  |          | 123,683   |  |       |   | 1,099,412 | 
|           |  |   |           |  |  |          |           |  |      
|           |  | $ | 2,080,623 |  |  | $        | 4,156,590 |  |       | $ | 6,237,213 | 
|           |  |   |           |  |  |          |           |  |      

Financial Services debt related to securitized residential mortgage loans
structured as collateralized borrowings (Home Equity Loans Asset-Backed
Certificates) was $4.08 billion at March 31, 2003 and has no recourse to Home
Equity or Centex Corporation. The principal and interest on these notes are
paid using the cash flow from the underlying residential mortgage loans, which
serve as collateral for the debt.
Accordingly, the timing of the principal payments on these notes is dependent
upon the payment received on the underlying residential mortgage loans. The
expected maturities of this component of long-term debt are based on
contractual maturities adjusted for projected repayments and prepayments of
principal. As is common in these structures, Home Equity remains liable for
customary loan representations.

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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.
For further discussion of this debenture, see Note (P), Subsequent Events.

Under the Companys debt covenants, the Company is required to maintain
certain leverage and interest coverage ratios and a minimum tangible net worth.
At March 31, 2003, the Company was in compliance with all of these covenants.

Credit Facilities

The Companys existing credit facilities and available capacity as of
March 31, 2003 are summarized below:

|                   |                                             |   |                 |           |  |           |           |         |    
|------------------ | ------------------------------------------- | - | --------------- | --------- |  | --------- | --------- | ------- | ---
|                   |                                             |   | Existing Credit |           |  | Available |          
|                   |                                             |   | Facilities      |           |  | Capacity  |          
|                   |                                             |   |                 |           |  |           |          
|Centex             |                                             |   |                 |           |  |           |           |        
|                   | Centex Corporation                          |   |                 |           |  |           |           |         |    
|                   | Multi-Bank Revolving Credit Facility        |   | $               | 700,000   |  |           | $         | 700,000 | (1)
|                   | Uncommitted Bank Lines                      |   |                 | 60,000    |  |           |           | 60,000  |    
|                   |                                             |   |                 |           |  |           |           |         |    
|                   | Construction Products                       |   |                 |           |  |           |           |         |    
|                   | Senior Revolving Credit Facility            |   |                 | 155,000   |  |           |           | 91,200  | (2)
|                   | Annually Renewable Commercial Paper Conduit |   |                 | 50,000    |  |           |           | 24,743  | (2)
|                   |                                             |   |                 |           |  |          
|                   |                                             |   | 965,000         |           |  |           | 875,943   |        
|                   |                                             |   |                 |           |  |          
|Financial Services |                                             |   |                 |           |  |           |           |        
|                   | Unsecured Credit Facilities                 |   |                 | 125,000   |  |           |           | 53,500  | (3)
|                   | Secured Credit Facilities                   |   |                 | 415,000   |  |           |           | 202,806 | (4)
|                   | Harwood Street Funding II, L.L.C. Facility  |   |                 | 1,500,000 |  |           |           | 865,917 |    
|                   |                                             |   |                 |           |  |          
|                   |                                             |   | 2,040,000       |           |  |           | 1,122,223 |        
|                   |                                             |   |                 |           |  |          
|                   |                                             | $ | 3,005,000       |           |  | $         | 1,998,166 | (5)    
|                   |                                             |   |                 |           |  |          



|(1) |  | This is a committed, multi-bank revolving credit facility, maturing in
August 2005, which serves as backup for commercial paper borrowings. As
of March 31, 2003, there were no borrowings under this backup facility,
and the Companys $600 million commercial paper program had no issuance
outstanding. There have been no borrowings 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 March 2006 and the Annually Renewable Commercial Paper
Conduit matures in June 2004.                                                                                                                            
|   
|(3) |  | Centex Corporation, CTX Mortgage and Home Equity, on a joint and several
basis, share in a $125 million uncommitted, unsecured credit facility.                                                                                                                                                                                                                                   
|   
|(4) |  | CTX Mortgage and Home Equity share in a $250 million committed secured
credit facility to finance mortgage inventory. CTX Mortgage also
maintains $155 million of committed secured mortgage warehouse facilities
to finance mortgages not sold to HSF-I. Home Equity also maintains a $10
million committed secured mortgage warehouse facility to finance
mortgages.            

|(5) |  | The amount of available capacity consists of $1.88 billion of committed
borrowings and $113.5 million of uncommitted borrowings as of March 31,
2003. Although the Company believes that the uncommitted 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.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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Home Equity finances its inventory of mortgage loans held for investment
through Harwood Street Funding II, L.L.C. (HSF-II), a wholly-owned,
consolidated entity, under a revolving sales agreement that expires upon final
payment of the senior and subordinated debt issued by HSF-II. This
arrangement, where HSF-II has committed to finance all eligible loans, gives
Home Equity daily access to HSF-IIs capacity of $1.50 billion. HSF-II obtains
funds through the sale of subordinated notes that are rated BBB by Standard &
Poors (S&P), Baa2 by Moodys Investors Service (Moodys) and BBB by Fitch
Ratings (Fitch) and short-term secured liquidity notes that are rated A1+ by
S&P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
in the financial statements of Financial Services.

Harwood Street Funding I, L.L.C.

CTX Mortgage finances its inventory of mortgage loans held for sale
principally through sales of Jumbo A and conforming loans to HSF-I, an
unaffiliated entity established in 1999 that is not consolidated with Financial
Services or Centex at March 31, 2003, pursuant to a mortgage loan purchase
agreement (the HSF-I Purchase Agreement). Since 1999, CTX Mortgage has sold
substantially all of the Jumbo A and conforming mortgage loans that it
originates to HSF-I in accordance with the HSF-I Purchase Agreement. When
HSF-I acquires these loans, it typically holds them for a period averaging
between 45 and 60 days and then resells them into the secondary market. HSF-I
obtains the funds needed to purchase eligible mortgage loans from CTX Mortgage
by issuing (1) securitized medium-term debt that is currently rated AAA by S&P
and Aaa by Moodys, (2) short-term secured liquidity notes that are currently
rated A1+ by S&P and P1 by Moodys and (3) subordinated certificates maturing
in September 2004 and November 2005, extendable for up to five years, that are
rated BBB by S&P and Baa2 by Moodys. This arrangement provides CTX Mortgage
with reduced financing cost for eligible mortgage loans it originates and
improves its liquidity.

Under the terms of the HSF-I Purchase Agreement, CTX Mortgage may elect to
sell to HSF-I, and HSF-I is obligated to purchase from CTX Mortgage, mortgage
loans that satisfy certain eligibility criteria and portfolio requirements.
At March 31, 2003, 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 $2.50 billion.

HSF-Is commitment to purchase eligible mortgage loans continues in effect
until the occurrence of certain termination events described in the HSF-I
Purchase Agreement. These termination events primarily relate to events of
default under, or other failure to comply with, the provisions, including loan
portfolio limitations, of the agreements that govern the mortgage loan
warehouse program but also include a downgrade in Centex Corporations credit
ratings below BB+ by S&P or Ba1 by Moodys. In the event CTX Mortgage was
unable to sell loans to HSF-I, it would draw on existing credit facilities
currently held in addition to HSF-I. In addition, it might need to make other
customary financing arrangements to fund its mortgage loan origination
activities. Although the Company believes that CTX Mortgage could arrange for
alternative financing that is common for non-investment grade mortgage
companies, there can be no assurance that such financing would be available on
satisfactory terms, and any delay in obtaining such financing could adversely
affect the results of operations of CTX Mortgage.

In accordance with the HSF-I Purchase Agreement, CTX Mortgage acts as
servicer of the loans owned by HSF-I and arranges for the sale of the eligible
mortgage loans into the secondary market. In its capacity as servicer, CTX
Mortgage must act in the best interest of HSF-I so as to maximize the proceeds
of sales of eligible mortgage loans. The performance of obligations of CTX
Mortgage, in its capacity as servicer, is guaranteed by Centex. CTX Mortgage received $13.3 million, $9.8
million and $5.0 million in fees for servicing loans owned by HSF-I in fiscal
2003, 2002 and 2001, respectively. These servicer obligations include
repurchasing a mortgage loan from HSF-I in the
event of a breach of the servicers

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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 counterparty having a
short-term credit rating of A1+ from S&P and P1 from Moodys. Additionally,
the Company has entered into a separate swap arrangement with the bank pursuant
to which the Company 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 the Company all amounts that the bank receives from HSF-I
pursuant to the Harwood Swap. Accordingly, the Company effectively bears all
interest rate risks, non-credit related market risks and prepayment risks that
are the subject of 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 the Companys risk as the counterparty to the swap supporting
the payment requirements of HSF-I. The Company is also required to reimburse
the bank for certain expenses, costs and damages that it may incur.

As of March 31, 2003, HSF-I owned $2.27 billion in securitized residential
mortgage loans sold to it by CTX Mortgage and had $2.16 billion of outstanding
securitized term debt and $0.11 billion of outstanding subordinated
certificates. The Company does not guarantee the payment of any debt or
subordinated certificates of HSF-I and is not liable for credit losses relating
to securitized residential mortgage loans sold to HSF-I. 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. CTX
Mortgages obligation to repurchase such loans is guaranteed by Centex
Corporation. CTX Mortgage records a liability for its estimated losses for
these obligations and such amount is included in its loan origination reserve.
CTX Mortgage sold $10.55 billion, $10.20 billion and $6.69 billion of mortgage
loans to HSF-I and repurchased $6.9 million, $1.1 million and $0.3 million of
delinquent or foreclosed mortgage loans from HSF-I during the years ended March
31, 2003, 2002 and 2001, respectively. CTX Mortgage recognized gains
on the sale of mortgage loans of $254.6 million, $188.9 million
and $153.6 million for the years ended March 31, 2003, 2002
and 2001, respectively.

In January 2003, the
FASB issued FIN 46, which clarifies accounting for
certain entities in which equity investors do not have a
controlling financial interest or the
entity is unable to finance its activities without additional subordinated financial
support from other parties. The Company believes it is probable that its
interest in HSF-I will qualify as a variable interest under FIN 46, resulting
in the consolidation of HSF-I in its financial statements beginning July 1,
2003. The consolidation of HSF-I will increase the Companys residential
mortgage loans held for sale, with a corresponding increase to the Companys
financial services debt. The impact on the Companys financial
position and results will be
dependent upon the amount of residential mortgage loans and debt held by HSF-I
upon adoption of FIN 46.

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(G) CENTEX DEVELOPMENT COMPANY, L.P.

Centex Development Company, L.P. (the Partnership) is a master limited
partnership formed by the Company in March 1987 to broaden the range of
business activities that may be conducted for the benefit of the Companys
stockholders to include general real estate development. The Company 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.

The Partnership is authorized to issue three classes of limited
partnership interest. The Company 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 the Company 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
Corporation.

As holder of the Class A and Class C Units, the Company 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, 2003, these
adjusted capital contributions, or Unrecovered Capital, were $241.1 million.
Preference payments in arrears totaled $42.0 million after a preference payment
of $21.1 million on March 31, 2003.

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 the Company through
a nominee arrangement and trades in tandem with the common stock of Centex
Corporation. The stockholders of the Company elect the four-person board of
directors of Holding, three of whom are independent outside directors who are
not directors, affiliates or employees of the Company. Thus, through Holding,
the stockholders of the Company 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, at March 31, 2003, the Company accounts for its limited
partnership interest in the Partnership using the equity method of accounting
for investments. The Companys accounting for its investment in the
Partnership may be impacted by FIN 46. Management is in the process of
evaluating the applicability of FIN 46 and the related accounting for this
investment.

Supplementary condensed combined financial statements for Centex
Corporation 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 Corporation and Subsidiaries, Holding and Subsidiary and Partnership and Subsidiaries

|                                     |                                             |   |            |           |  |      |           |           | 
|------------------------------------ | ------------------------------------------- | - | ---------- | --------- |  | ---- | --------- | --------- | 
|                                     |                                             |   | March 31,  |          
|                                     |                                             |   |            |          
|                                     |                                             |   | 2003       |           |  | 2002 |          
|                                     |                                             |   |            |           |  |      |          
|Assets                               |                                             |   |            |           |  |      |           |          
|                                     | Cash and Cash Equivalents                   |   | $          | 477,166   |  |      | $         | 242,254   | 
|                                     | Restricted Cash                             |   |            | 172,321   |  |      |           | 106,270   | 
|                                     | Receivables                                 |   |            | 5,640,302 |  |      |           | 4,066,133 | 
|                                     | Inventories                                 |   |            | 4,052,597 |  |      |           | 3,221,931 | 
|                                     | Investments in Joint Ventures and Other     |   |            | 106,250   |  |      |           | 99,962    | 
|                                     | Assets Held for Sale                        |   |            |          |  |      |           | 65,111    | 
|                                     | Property and Equipment, net                 |   |            | 698,456   |  |      |           | 723,497   | 
|                                     | Other Assets                                |   |            | 823,073   |  |      |           | 859,525   | 
|                                     |                                             |   |            |           |  |     
|                                     |                                             | $ | 11,970,165 |           |  | $    | 9,384,683 |          
|                                     |                                             |   |            |           |  |     
|Liabilities and Stockholders Equity |                                             |   |            |           |  |      |           |          
|                                     | Accounts Payable and Accrued Liabilities    |   | $          | 1,814,744 |  |      | $         | 1,544,004 | 
|                                     | Liabilities Related to Assets Held for Sale |   |            |          |  |      |           | 51,527    | 
|                                     | Short-term Debt                             |   |            | 1,042,825 |  |      |           | 525,800   | 
|                                     | Long-term Debt                              |   |            | 6,283,366 |  |      |           | 4,990,908 | 
|                                     | Minority Stockholders Interest             |   |            | 171,384   |  |      |           | 155,671   | 
|                                     | Stockholders Equity                        |   |            | 2,657,846 |  |      |           | 2,116,773 | 
|                                     |                                             |   |            |           |  |     
|                                     |                                             | $ | 11,970,165 |           |  | $    | 9,384,683 |          
|                                     |                                             |   |            |           |  |     

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

|                                             |  |                               |           |  |      |   |           |      |  |   |           |  
|-------------------------------------------- |  | ----------------------------- | --------- |  | ---- | - | --------- | ---- |  | - | --------- | -
|                                             |  | For the Years Ended March 31, |          
|                                             |  |                               |          
|                                             |  | 2003                          |           |  | 2002 |   |           | 2001 | 
|                                             |  |                               |           |  |      |   |           |      | 
|Revenues                                     |  | $                             | 9,499,365 |  |      | $ | 8,109,124 |      |  | $ | 7,045,133 |  
|Cost and Expenses                            |  |                               | 8,712,256 |  |      |   | 7,489,159 |      |  |   | 6,608,946 |  
|                                             |  |                               |           |  |      |   |           |      | 
|Earnings Before Income Taxes                 |  |                               | 787,109   |  |      |   | 619,965   |      |  |   | 436,187   |  
|Income Taxes                                 |  |                               | 243,124   |  |      |   | 238,296   |      |  |   | 154,112   |  
|                                             |  |                               |           |  |      |   |           |      | 
|Earnings From Continuing Operations          |  |                               | 543,985   |  |      |   | 381,669   |      |  |   | 282,075   |  
|Earnings (Loss) From Discontinued Operations |  |                               | 11,934    |  |      |   | 557       |      |  |   | (98       | )
|                                             |  |                               |           |  |      |   |           |      | 
|Net Earnings                                 |  |                               | 555,919   |  |      |   | 382,226   |      |  |   | 281,977   |  
|Other Comprehensive Income (Loss)            |  |                               | 6,965     |  |      |   | (7,859    | )    |  |   | (3,849    | )
|                                             |  |                               |           |  |      |   |           |      | 
|Comprehensive Income                         |  | $                             | 562,884   |  |      | $ | 374,367   |      |  | $ | 278,128   |  
|                                             |  |                               |           |  |      |   |           |      | 

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(H) COMMITMENTS AND CONTINGENCIES

The Company conducts a portion of its land acquisition, development and
other activities through its participation in joint ventures in which the
Company holds less than a majority interest. These joint ventures are
typically large in nature, and partnering with other developers allows Centex
Homes to share the risks and rewards of ownership while providing for efficient
asset utilization. The Companys investment in these non-consolidated joint
ventures was $102.3 million and $94.6 million at March 31, 2003 and 2002,
respectively. These joint ventures had total outstanding secured construction
debt of approximately $232.5 million and $144.6 million at March 31, 2003 and
2002, respectively. The
Companys liability with respect to this debt, based on its ownership
percentage of the related joint ventures, is limited to approximately $56.4
million and $27.9 million at March 31, 2003 and 2002, respectively. Under the
structure of this debt, the Company becomes liable up to these amounts only to
the extent that the construction debt exceeds a certain percentage of the value
of the project. At March 31, 2003 and 2002, the Company was not liable for any
of this debt. The Companys accounting for its investment in non-consolidated
joint ventures may be impacted by FIN 46. Management is in the process of
evaluating the applicability of FIN 46 and the related accounting for these
investments.

In order to ensure the future availability of land for homebuilding, the
Company has deposited or invested with third parties $82.2 million, as of March
31, 2003, as options toward the purchase of undeveloped land and developed lots
having a total purchase price of approximately $2.03 billion. These options
include amounts related to agreements with the Partnership, as discussed in
Note (N), Related Party Transactions, below. These options, which do not
contain performance requirements from the Company, expire at various dates
through the year 2010.

In the normal course of its business, the Company issues certain
representations, warranties and guarantees related to its home sales, land
sales, building sales, commercial construction and mortgage loan originations
that may be affected by the Financial Accounting Standards Boards recent
issuance of Interpretation No. 45. Based on historical evidence, the Company
does not believe that any of these representations, warranties or guarantees
would result in a material effect on our consolidated financial condition or
operations. See further discussion on our warranty liability below. See
further discussion of Interpretation No. 45 in Note (A), Significant
Accounting Policies.

Centex Homes offers a ten-year limited warranty for most homes constructed
and sold in the United States. The warranty covers defects in materials or
workmanship in the first year of the home and certain designated components or
structural elements of the home in the second through tenth years. In
California, effective January 1, 2003, Centex Homes began following the
statutory provisions of Senate Bill 800 rather than issuing a specific
warranty. Centex Homes estimates the costs that may be incurred under its
warranty program for which it will be responsible and records a liability at
the time each home is closed. Factors that affect Centex Homes warranty
liability include the number of homes closed, historical and anticipated rates
of warranty claims and cost per claim. Centex Homes periodically assesses the
adequacy of its recorded warranty liability and adjusts the amounts as
necessary.

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Changes in Centex Homes contractual warranty liability during the three
months and fiscal year ended March 31, 2003 are as follows:

|                                                                       |  |                            |        |   |                    |   |         |  
|---------------------------------------------------------------------- |  | -------------------------- | ------ | - | ------------------ | - | ------- | -
|                                                                       |  | For the Three Months Ended |        |   | For the Year Ended |  
|                                                                       |  | March 31, 2003             |        |   | March 31, 2003     |  
|                                                                       |  |                            |        |   |                    |  
|Balance at Beginning of Period                                         |  | $                          | 13,216 |   |                    | $ | 15,097  |  
|Warranties Issued                                                      |  |                            | 7,587  |   |                    |   | 20,377  |  
|Settlements Made                                                       |  |                            | (4,123 | ) |                    |   | (18,307 | )
|Changes in Liability of Pre-Existing
Warranties, Including Expirations |  |                            | (555   | ) |                    |   | (1,042  | )
|                                                                       |  |                            |        |   |                    |  
|Balance at End of Period                                               |  | $                          | 16,125 |   |                    | $ | 16,125  |  
|                                                                       |  |                            |        |   |                    |  

CTX Mortgage has established a liability for anticipated losses associated
with loans originated and sold to HSF-I or other unaffiliated third parties, as further discussed above in Note (F), Indebtedness.

Changes in CTX Mortgages mortgage loan origination reserve for the three
months and fiscal periods ended March 31, 2003 are as follows:

|                               |  |                            |        |   |                          |   |        |  
|------------------------------ |  | -------------------------- | ------ | - | ------------------------ | - | ------ | -
|                               |  | For the Three Months Ended |        |   | For the Year Ended March |  
|                               |  | March 31, 2003             |        |   | 31, 2003                 |  
|                               |  |                            |        |   |                          |  
|Balance at Beginning of Period |  | $                          | 23,286 |   |                          | $ | 21,693 |  
|Provision for Losses           |  |                            | 5,700  |   |                          |   | 8,401  |  
|Settlements                    |  |                            | (392   | ) |                          |   | (1,500 | )
|                               |  |                            |        |   |                          |  
|Balance at End of Period       |  | $                          | 28,594 |   |                          | $ | 28,594 |  
|                               |  |                            |        |   |                          |  

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 leases certain office facilities and other equipment under
operating leases. Future minimum payments under the noncancelable leases are
as follows: 2004  $47.7 million; 2005  $39.9 million; 2006  $31.3 million;
2007  $25.0 million; 2008  $25.1 million and thereafter  $49.5 million.

Rental expense for the years ended March 31, 2003, 2002 and 2001 was $43.6
million, $49.7 million and $38.5 million, respectively.

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(I) COMPREHENSIVE INCOME

Comprehensive income is summarized below:

|                                               |                                          |   |                               |         |   |      |         |         |      |   |         |        |  
|---------------------------------------------- | ---------------------------------------- | - | ----------------------------- | ------- | - | ---- | ------- | ------- | ---- | - | ------- | ------ | -
|                                               |                                          |   | For the Years Ended March 31, |        
|                                               |                                          |   |                               |        
|                                               |                                          |   | 2003                          |         |   | 2002 |         |         | 2001 |  
|                                               |                                          |   |                               |         |   |      |         |         |      |  
|Net Earnings                                   |                                          | $ | 555,919                       |         |   | $    | 382,226 |         |      | $ | 281,977 |       
|Other Comprehensive Income (Loss), Net of Tax: |                                          |   |                               |         |   |      |         |         |      |   |         |       
|                                               | Unrealized Loss on Hedging Instruments   |   |                               | (10,849 | ) |      |         | (11,033 | )    |   |         |       |  
|                                               | Foreign Currency Translation Adjustments |   |                               | 19,330  |   |      |         | 2,622   |      |   |         | (5,001 | )
|                                               | Other                                    |   |                               | (1,516  | ) |      |         | 552     |      |   |         | 1,152  |  
|                                               |                                          |   |                               |         |   |      |         |         |     
|Comprehensive Income                           |                                          | $ | 562,884                       |         |   | $    | 374,367 |         |      | $ | 278,128 |       
|                                               |                                          |   |                               |         |   |      |         |         |     

The foreign currency translation adjustments are primarily the result of
the Companys investment in Centex Development Company, L.P. and its
subsidiaries, which have separate financial statements included elsewhere in
this Report. The unrealized loss on hedging instruments represents the
deferral in other comprehensive income of the unrealized loss on swap
agreements designated as cash flow hedges. The accounting for interest rate
swaps and other derivative financial instruments is discussed in detail in Note
(M), Derivatives and Hedging. The Unrealized Gain (Loss) on Investments
represents mark to market adjustments to securities available for sale by the
Company.

The components of accumulated other comprehensive loss are as follows:

|                                         |  |                      |         |   |                      |   |        |                  |  |   |         |  
|---------------------------------------- |  | -------------------- | ------- | - | -------------------- | - | ------ | ---------------- |  | - | ------- | -
|                                         |  | As of March 31, 2003 |        
|                                         |  |                      |        
|                                         |  | Before TaxAmount     |         |   | Tax
(Expense)Benefit |   |        | Net-of-TaxAmount | 
|                                         |  |                      |         |   |                      |   |        |                  | 
|Unrealized Loss on Hedging Instruments   |  | $                    | (33,665 | ) |                      | $ | 11,783 |                  |  | $ | (21,882 | )
|Foreign Currency Translation Adjustments |  |                      | 25,931  |   |                      |   | (9,076 | )                |  |   | 16,855  |  
|Other                                    |  |                      | (1,483  | ) |                      |   | 519    |                  |  |   | (964    | )
|                                         |  |                      |         |   |                      |   |        |                  | 
|Accumulated Other Comprehensive Loss     |  | $                    | (9,217  | ) |                      | $ | 3,226  |                  |  | $ | (5,991  | )
|                                         |  |                      |         |   |                      |   |        |                  | 

(J) BUSINESS SEGMENTS

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

Intersegment revenues and investments in joint ventures are not material
and are not shown in the following tables. The investment in the Partnership
(approximately $281.1 million as of March 31, 2003) is included in the
Investment Real Estate segment.

Home Building

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

88



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Financial Services

Financial Services mortgage 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 the Companys subsidiaries and
others. Financial Services revenues include interest income of $356.8
million, $266.9 million and $123.8 million in fiscal 2003, 2002 and 2001,
respectively. Substantially all of the Company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 and sub-prime home equity lending activities.

Construction Products

Construction Products operations involve the manufacture, production,
distribution and sale of cement, gypsum wallboard, recycled paperboard,
aggregates and readymix concrete. The Company owned 65.1%, 65.2% and 65.2% of
Centex Construction Products, Inc. at March 31, 2003, 2002 and 2001,
respectively. Construction Products results are shown before minority
interest in the tables presented below.

Construction Services

Construction Services operations involve the construction of buildings
for both private and government interests including office, commercial and
industrial buildings, hospitals, hotels, correctional facilities, educational
institutions, museums, libraries, airport facilities and sports facilities. As
this segment generates positive cash flow, intercompany interest income
(credited at the prime rate in effect) of $6.2 million, $7.1 million and $9.1 million for fiscal 2003, 2002 and 2001,
respectively, is included in managements evaluation of this segment. However,
the intercompany interest income is eliminated in consolidation and excluded
from the tables presented below.

Investment Real Estate

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

Other

The Company's Other
segment includes Corporate general and administrative expenses, interest expense and minority interest. Also included in the Other segment are the Company's
manufactured housing and home services operations, which are not
material for purposes of segment reporting. See Note (P), Subsequent Events.

89



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

|                                             |  |                               |        |   |      |   |        |      |  |   |        |  
|-------------------------------------------- |  | ----------------------------- | ------ | - | ---- | - | ------ | ---- |  | - | ------ | -
|                                             |  | For the Years Ended March 31, |       
|                                             |  |                               |       
|                                             |  | 2003                          |        |   | 2002 |   |        | 2001 | 
|                                             |  |                               |        |   |      |   |        |      | 
|Operating Loss from Manufactured Housing     |  | $                             | (9.2   | ) |      | $ | (0.9   | )    |  | $ | (26.1  | )
|Operating (Loss) Earnings from Home Services |  |                               | (9.6   | ) |      |   | 4.0    |      |  |   | 1.1    |  
|Operating Earnings from Other, net           |  |                               |       |   |      |   |       |      |  |   | 3.4    |  
|Corporate General & Administrative Expense   |  |                               | (60.3  | ) |      |   | (50.2  | )    |  |   | (36.9  | )
|Interest Expense                             |  |                               | (119.6 | ) |      |   | (115.7 | )    |  |   | (99.1  | )
|Minority Interest                            |  |                               | (30.3  | ) |      |   | (20.8  | )    |  |   | (32.4  | )
|                                             |  |                               |        |   |      |   |        |      | 
|                                             |  | $                             | (229.0 | ) |      | $ | (183.6 | )    |  | $ | (190.0 | )
|                                             |  |                               |        |   |      |   |        |      | 

|                                           |  |                                   |          |   |           |   |         |              |  |   |              |    |  |             |          |   |       |   |       |       |  |   |        |   |  |   |          |  
|------------------------------------------ |  | --------------------------------- | -------- | - | --------- | - | ------- | ------------ |  | - | ------------ | -- |  | ----------- | -------- | - | ----- | - | ----- | ----- |  | - | ------ | - |  | - | -------- | -
|                                           |  | For the Year Ended March 31, 2003 |         
|                                           |  | (Dollars in millions)             |         
|                                           |  |                                   |         
|                                           |  | Home                              |          |   | Financial |   |         | Construction |  |   | Construction |    |  | Investment  |          |   |       |   |       |       |  |   |       
|                                           |  | Building                          |          |   | Services  |   |         | Products     |  |   | Services     |    |  | Real Estate |          |   | Other |   |       | Total | 
|                                           |  |                                   |          |   |           |   |         |              |  |   |              |    |  |             |          |   |       |   |       |       | 
|Revenues                                   |  | $                                 | 5,934.5  |   |           | $ | 855.0   |              |  | $ | 501.3        |    |  | $           | 1,517.8  |   |       | $ | 66.9  |       |  | $ | 241.7  |   |  | $ | 9,117.2  |  
|Cost of Sales                              |  |                                   | (4,388.5 | ) |           |   | (184.5  | )            |  |   | (399.3       | )  |  |             | (1,413.6 | ) |       |   | (3.0  | )     |  |   | (159.0 | ) |  |   | (6,547.9 | )
|Selling,
General &
Administrative Expenses |  |                                   | (865.2   | ) |           |   | (508.7  | )            |  |   | (5.7         | )+ |  |             | (73.5    | ) |       |   | (9.6  | )     |  |   | (311.7 | ) |  |   | (1,774.4 | )
|                                           |  |                                   |          |   |           |   |         |              |  |   |              |    |  |             |          |   |       |   |       |       | 
|Earnings (Loss) Before
Income Tax          |  | $                                 | 680.8    |   |           | $ | 161.8   |              |  | $ | 96.3         | *  |  | $           | 30.7     |   |       | $ | 54.3  |       |  | $ | (229.0 | ) |  | $ | 794.9    |  
|                                           |  |                                   |          |   |           |   |         |              |  |   |              |    |  |             |          |   |       |   |       |       | 
|Total Assets                               |  | $                                 | 3,984.1  |   |           | $ | 5,670.3 |              |  | $ | 630.5        |    |  | $           | 292.8    |   |       | $ | 309.5 |       |  | $ | 723.3  |   |  | $ | 11,610.5 |  
|Capital Expenditures                       |  | $                                 | 28.4     |   |           | $ | 16.6    |              |  | $ | 14.3         |    |  | $           | 2.0      |   |       | $ | 0.0   |       |  | $ | 28.3   |   |  | $ | 89.6     |  
|Depreciation and Amortization              |  | $                                 | 18.7     |   |           | $ | 17.0    |              |  | $ | 36.8         |    |  | $           | 2.5      |   |       | $ | 0.4   |       |  | $ | 37.8   |   |  | $ | 113.2    |  

There was no goodwill amortization or negative goodwill accretion in fiscal 2003.



|+ |  | Represents Construction Products' Corporate general and administrative expenses. General and administrative
expenses related to Construction Products' operating units of $23.4 million are classified as cost of sales.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |  |                                                                                                                                                                                                                         
|* |  | Before Minority Interest                                                                                                                                                                                                

|                                           |  |                                   |          |   |           |   |         |              |  |   |              |    |  |             |          |   |       |   |       |       |  |   |        |   |  |   |          |  
|------------------------------------------ |  | --------------------------------- | -------- | - | --------- | - | ------- | ------------ |  | - | ------------ | -- |  | ----------- | -------- | - | ----- | - | ----- | ----- |  | - | ------ | - |  | - | -------- | -
|                                           |  | 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    |  
|                                           |  |                                   |          |   |           |   |         |              |  |   |              |    |  |             |          |   |       |   |       |       | 
|Total 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.



|+ |  | Represents Construction Products' Corporate general and administrative
expenses. General and administrative expenses related to Construction
Products' operating units of $23.6 million are classified as cost of
sales.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|* |  | Before Minority Interest                                                                                                                                                                                                

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|                                           |  |                                   |          |   |           |   |         |              |  |   |              |    |  |             |          |   |       |   |       |       |  |   |        |   |  |   |          |  
|------------------------------------------ |  | --------------------------------- | -------- | - | --------- | - | ------- | ------------ |  | - | ------------ | -- |  | ----------- | -------- | - | ----- | - | ----- | ----- |  | - | ------ | - |  | - | -------- | -
|                                           |  | 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    |  
|                                           |  |                                   |          |   |           |   |         |              |  |   |              |    |  |             |          |   |       |   |       |       | 
|Total 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    | )



|+ |  | Represents Construction Products' Corporate general and administrative
expenses. General and administrative expenses related to Construction
Products' operating units of $19.2 million are classified as cost of
sales.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|* |  | Before Minority Interest                                                                                                                                                                                                

(K) INCOME TAXES

The provision for income taxes includes the following components:

|                             |         |   |                               |         |   |      |         |         |      |   |         |         |  
|---------------------------- | ------- | - | ----------------------------- | ------- | - | ---- | ------- | ------- | ---- | - | ------- | ------- | -
|                             |         |   | For the Years Ended March 31, |        
|                             |         |   |                               |        
|                             |         |   | 2003                          |         |   | 2002 |         |         | 2001 |  
|                             |         |   |                               |         |   |      |         |         |      |  
|Current Provision            |         |   |                               |         |   |      |         |         |      |   |         |        
|                             | Federal |   | $                             | 166,726 |   |      | $       | 219,160 |      |   | $       | 121,083 |  
|                             | State   |   |                               | 48,519  |   |      |         | 33,686  |      |   |         | 25,252  |  
|                             |         |   |                               |         |   |      |         |         |     
|                             |         |   | 215,245                       |         |   |      | 252,846 |         |      |   | 146,335 |        
|                             |         |   |                               |         |   |      |         |         |     
|Deferred Provision (Benefit) |         |   |                               |         |   |      |         |         |      |   |         |        
|                             | Federal |   |                               | 24,549  |   |      |         | (19,260 | )    |   |         | 15,313  |  
|                             | State   |   |                               | (862    | ) |      |         | 2,953   |      |   |         | (7,294  | )
|                             |         |   |                               |         |   |      |         |         |     
|                             |         |   | 23,687                        |         |   |      | (16,307 | )       |      |   | 8,019   |        
|                             |         |   |                               |         |   |      |         |         |     
|Provision for Income Taxes   |         | $ | 238,932                       |         |   | $    | 236,539 |         |      | $ | 154,354 |        
|                             |         |   |                               |         |   |      |         |         |     

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, |        
|                                              |                               |   |                               |        
|                                              |                               |   | 2003                          |         |   | 2002 |         |        | 2001 |  
|                                              |                               |   |                               |         |   |      |         |        |      |  
|Financial Income Before Taxes                 |                               | $ | 794,851                       |         |   | $    | 618,765 |        |      | $ | 436,331 |        
|Income Taxes at Statutory Rate                |                               | $ | 278,198                       |         |   | $    | 216,568 |        |      | $ | 152,716 |        
|Increases
(Decreases) in Tax Resulting from  |                               |   |                               |         |   |      |         |        |      |   |         |        
|                                              | State Income Taxes, net       |   |                               | 29,738  |   |      |         | 23,388 |      |   |         | 10,909  |  
|                                              | Change in Valuation Allowance |   |                               | (88,843 | ) |      |         | (8,235 | )    |   |         |        |  
|                                              | Negative Goodwill Accretion   |   |                               |        |   |      |         |       |      |   |         | (17,013 | )
|                                              | Other                         |   |                               | 19,839  |   |      |         | 4,818  |      |   |         | 7,742   |  
|                                              |                               |   |                               |         |   |      |         |        |     
|Provision for Income Taxes                    |                               | $ | 238,932                       |         |   | $    | 236,539 |        |      | $ | 154,354 |        
|                                              |                               |   |                               |         |   |      |         |        |     
|Effective Tax Rate                            |                               |   | 30                            | %       |   |      | 38      | %      |      |   | 35      | %      

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The deferred income tax provision (benefit) 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, |        
|                                         |  |                               |        
|                                         |  | 2003                          |         |   | 2002 |   |         | 2001 | 
|                                         |  |                               |         |   |      |   |         |      | 
|Basis in Long-Lived Assets               |  | $                             | 3,773   |   |      | $ | 2,935   |      |  | $ | 7,240   |  
|Uniform Capitalization for Tax Reporting |  |                               | (10,250 | ) |      |   | (3,384  | )    |  |   | (14,502 | )
|Excess Tax Depreciation and Amortization |  |                               | 15,480  |   |      |   | 32,383  |      |  |   | 21,242  |  
|Securitization Reporting Differences     |  |                               | 9,554   |   |      |   | (25,663 | )    |  |   | (12,196 | )
|Net Operating Loss Carryforwards         |  |                               | 90,008  |   |      |   | 7,191   |      |  |   |        |  
|Change in Valuation Allowance            |  |                               | (88,843 | ) |      |   | (8,235  | )    |  |   |        |  
|Financial Accrual Changes and Other      |  |                               | 3,965   |   |      |   | (21,534 | )    |  |   | 6,235   |  
|                                         |  |                               |         |   |      |   |         |      | 
|Deferred Income Tax Provision (Benefit)  |  | $                             | 23,687  |   |      | $ | (16,307 | )    |  | $ | 8,019   |  
|                                         |  |                               |         |   |      |   |         |      | 

Components of deferred income taxes are as follows:

|                               |                                                     |   |           |         |   |      |         |          |  
|------------------------------ | --------------------------------------------------- | - | --------- | ------- | - | ---- | ------- | -------- | -
|                               |                                                     |   | March 31, |        
|                               |                                                     |   |           |        
|                               |                                                     |   | 2003      |         |   | 2002 |        
|                               |                                                     |   |           |         |   |      |        
|Deferred Tax Assets            |                                                     |   |           |         |   |      |         |         
|                               | Basis in Long-Lived Assets                          |   | $         | 5,098   |   |      | $       | 8,871    |  
|                               | Net Operating Loss Carryforwards                    |   |           | 106,171 |   |      |         | 195,968  |  
|                               | Uniform Capitalization for Tax Reporting            |   |           | 60,440  |   |      |         | 50,053   |  
|                               | Financial Accruals                                  |   |           | 121,741 |   |      |         | 134,204  |  
|                               | State Income Taxes                                  |   |           | 15,553  |   |      |         | 10,228   |  
|                               | Securitization Reporting Differences                |   |           | 36,792  |   |      |         | 46,346   |  
|                               | All Other                                           |   |           | 15,768  |   |      |         | 13,299   |  
|                               |                                                     |   |           |         |   |     
|Total Deferred Tax Assets      |                                                     |   | 361,563   |         |   |      | 458,969 |         
|                               | Valuation Allowance for Deferred Tax Assets         |   |           | (93,004 | ) |      |         | (181,847 | )
|                               |                                                     |   |           |         |   |     
|Net Deferred Tax Assets        |                                                     |   | 268,559   |         |   |      | 277,122 |         
|                               |                                                     |   |           |         |   |     
|Deferred Tax Liabilities       |                                                     |   |           |         |   |      |         |         
|                               | Deferred Income and Expenses                        |   |           | 2,965   |   |      |         | 16,792   |  
|                               | Excess Tax Depreciation and Amortization            |   |           | 127,129 |   |      |         | 104,189  |  
|                               | Interest and Real Estate Taxes Expensed as Incurred |   |           | 28,323  |   |      |         | 21,895   |  
|                               | Investment in Construction Products                 |   |           | 38,850  |   |      |         | 36,398   |  
|                               | Consolidated Return Regulation Deferrals            |   |           | 7,174   |   |      |         | 6,872    |  
|                               | All Other                                           |   |           | 11,189  |   |      |         | 14,809   |  
|                               |                                                     |   |           |         |   |     
|Total Deferred Tax Liabilities |                                                     |   | 215,630   |         |   |      | 200,955 |         
|                               |                                                     |   |           |         |   |     
|Net Deferred Tax Assets        |                                                     | $ | 52,929    |         |   | $    | 76,167  |         
|                               |                                                     |   |           |         |   |     

At March 31, 2003, the Company had $303.3 million of net operating loss
carryforwards available to reduce future federal taxable income that, if
unused, expire in fiscal years 2006 to 2023. In connection with the Companys
2002 acquisition of NAB Asset Corporation (NAB), a 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 goodwill and an additional $8.2 million reduced the Companys income tax provision as a portion
of those deferred tax assets was utilized. The remainder of the NAB related
valuation allowance of $51.6 million was reduced to $0 in fiscal 2003 as the deferred tax assets
were utilized. In addition, in fiscal 2003 the

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Company utilized approximately $37.2 million of
other net operating loss carryforwards for which a valuation allowance had
previously been established.

(L) 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 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 Seventh 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. Under all three 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 has historically accounted for stock options using the intrinsic value
method of

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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. On April 1, 2003, the Company adopted the fair value measurement
provisions of SFAS No. 123 under which the Company will recognize compensation
expense of a stock-based award to an employee over the vesting period based on
the fair value of the award on the grant date. In accordance with SFAS No.
123, the fair value method will be applied only to awards granted or modified
after April 1, 2003, whereas awards granted prior to such date will continue to
be accounted for under APB No. 25.

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

|                                                               |                      |   |                               |           |  |          |           |       |           |   |            |           |  |           |           |       |  |          |            |           |           |   |       |       | 
|-------------------------------------------------------------- | -------------------- | - | ----------------------------- | --------- |  | -------- | --------- | ----- | --------- | - | ---------- | --------- |  | --------- | --------- | ----- |  | -------- | ---------- | --------- | --------- | - | ----- | ----- | 
|                                                               |                      |   | For the Years Ended March 31, |          
|                                                               |                      |   |                               |          
|                                                               |                      |   | 2003                          |           |  | 2002     |           |       | 2001      |  
|                                                               |                      |   |                               |           |  |          |           |       |           |  
|                                                               |                      |   |                               |           |  |          | 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                         |                      |   | 7,138,905                     |           |  | $        | 31.36     |       |           |   | 6,872,169  |           |  | $         | 27.52     |       |  |          | 7,370,571  |           |           | $ | 28.23 |      
|Options Granted                                                |                      |   |                               |           |  |          |           |       |           |   |            |           |  |           |           |       |  |          |            |           |           |   |       |      
|                                                               | At Fair Market Value |   |                               | 1,725,490 |  |          | $         | 50.42 |           |   |            | 1,702,710 |  |           | $         | 39.42 |  |          |            | 2,108,300 |           |   | $     | 24.01 | 
|Options Exercised                                              |                      |   | (520,082                      | )         |  | $        | 30.09     |       |           |   | (1,385,659 | )         |  | $         | 22.19     |       |  |          | (1,159,166 | )         |           | $ | 15.30 |      
|Options Cancelled                                              |                      |   | (239,220                      | )         |  | $        | 37.33     |       |           |   | (50,315    | )         |  | $         | 32.12     |       |  |          | (1,447,536 | )         |           | $ | 35.82 |      
|                                                               |                      |   |                               |           |  |          |           |       |           |   |            |           |  |           |           |       |  |          |            |           |          
|Options Outstanding, End of Year                               |                      |   | 8,105,093                     |           |  | $        | 35.32     |       |           |   | 7,138,905  |           |  | $         | 31.36     |       |  |          | 6,872,169  |           |           | $ | 27.52 |      
|                                                               |                      |   |                               |           |  |          |           |       |           |   |            |           |  |           |           |       |  |          |            |           |          
|Options Exercisable, End of Year                               |                      |   | 5,051,046                     |           |  |          |           |       |           |   | 3,776,873  |           |  |           |           |       |  |          | 3,418,766  |           |           |   |       |      
|                                                               |                      |   |                               |           |  |          |           |       |           |   |            |           |  |           |           |       |  |          |            |           |          
|Shares Available for Future Stock
Option Grants, End of Year   |                      |   | 2,388,743                     |           |  |          |           |       |           |   | 2,467,738  |           |  |           |           |       |  |          | 2,461,813  |           |           |   |       |      
|                                                               |                      |   |                               |           |  |          |           |       |           |   |            |           |  |           |           |       |  |          |            |           |          
|Weighted-Average Fair Value of
Options Granted During the
Year |                      | $ | 20.24                         |           |  |          |           |       |           | $ | 21.32      |           |  |           |           |       |  | $        | 13.14      |           |           |   |       |      

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, 2003 would have been 3.0%. This is
significantly less than appears on a gross basis when compared to the
60,836,091 shares of Common Stock outstanding as of March 31, 2003.

The following table summarizes information about stock options outstanding
at March 31, 2003:

|                         |  |                     |           |  |                     |           |      |          |           |   |             |  |  |          |           |           |  |   |       | 
|------------------------ |  | ------------------- | --------- |  | ------------------- | --------- | ---- | -------- | --------- | - | ----------- |  |  | -------- | --------- | --------- |  | - | ----- | 
|                         |  | 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        |  |                     | 2,504,785 |  |                     |           | 5.82 |          |           | $ | 21.20       |  |  |          | 1,749,345 |           |  | $ | 20.18 | 
|$
25.06 - $ 38.69        |  |                     | 2,403,686 |  |                     |           | 5.45 |          |           | $ | 37.04       |  |  |          | 2,112,546 |           |  | $ | 37.29 | 
|$ 39.36
- $ 50.40        |  |                     | 3,170,922 |  |                     |           | 5.55 |          |           | $ | 45.03       |  |  |          | 1,186,305 |           |  | $ | 43.28 | 
|$
50.99 - $ 54.75        |  |                     | 25,700    |  |                     |           | 6.50 |          |           | $ | 52.63       |  |  |          | 2,850     |           |  | $ | 54.75 | 
|                         |  |                     |           |  |                     |           |      |          |           |   |             |  |  |          |           |           |  |  
|                         |  |                     | 8,105,093 |  |                     |           | 5.60 |          |           | $ | 35.32       |  |  |          | 5,051,046 |           |  | $ | 32.78 | 
|                         |  |                     |           |  |                     |           |      |          |           |   |             |  |  |          |           |           |  |  

At March 31, 2003, the Company was following the disclosure-only
provisions of SFAS No. 123. Accordingly, no compensation cost had 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

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fiscal 2003, 2002 and 2001 consistent with the fair value
measurement provisions of SFAS No. 123, the Companys net earnings and earnings
per share would have been reduced to the pro forma amounts detailed in Note
(A), Significant Accounting Policies.

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, |     
|                        |  |                               |     
|                        |  | 2003                          |      |   | 2002 |  |      | 2001 | 
|                        |  |                               |      |   |      |  |      |      | 
|Expected Volatility     |  |                               | 38.6 | % |      |  | 47.0 | %    |  |  | 43.5 | %
|Risk-Free Interest Rate |  |                               | 4.7  | % |      |  | 5.4  | %    |  |  | 6.3  | %
|Dividend Yield          |  |                               | 0.3  | % |      |  | 0.4  | %    |  |  | 0.7  | %
|Expected Life (Years)   |  |                               | 5    |   |      |  | 7    |      |  |  | 8    |  

The following table summarizes information about equity compensation plans
as of March 31, 2003:

|                          |                          |             |                |            |         |         |                   |         |      |                          |       |       |                           |         |           |           | 
|------------------------- | ------------------------ | ----------- | -------------- | ---------- | ------- | ------- | ----------------- | ------- | ---- | ------------------------ | ----- | ----- | ------------------------- | ------- | --------- | --------- | 
|                          |                          |             |                |            |         |         | (a)               |         |      |                          |       |       |                           |         |           |          
|                          |                          |             |                |            |         |         | Number of         |         |      |                          |       |       |                           | (c)     |          
|                          |                          |             |                |            |         |         | securities to be  |         |      | (b)                      |       |       | Number of securities      |        
|                          |                          |             |                |            |         |         | issued upon       |         |      | Weighted-average         |       |       | remaining available for   |        
|                          |                          |             |                |            |         |         | exercise of       |         |      | exercise price of        |       |       | future issuance under     |        
|                          |                          |             |                |            |         |         | outstanding       |         |      | outstanding              |       |       | equity compensation plans |        
|                          |                          |             |                |            |         |         | options, warrants |         |      | options, warrants        |       |       | [excluding securities     |        
|Plan Category             |                          | Plan        |                | and rights |         |         | and rights        |         |      | reflected in column (a)] |      
|                          |                          |             |                |            |         |         |                   |         |      |                          |      
|Equity Compensation Plans |                          |             | 1987           |            |         |         | 3,789,435         |         |      | $                        | 30.21 |       |                           |         |          |          
|                          | Approved by
Stockholders |             |                | 2001       |         |         |                   | 590,040 |      |                          | $     | 50.05 |                           |         |           | 1,130,610 | 
|Equity Compensation Plans |                          |             | 1998           |            |         |         | 3,725,618         |         |      | $                        | 38.18 |       |                           |         | 1,258,133 |          
|                          | not Approved by          |             | Long-Term      |            |         |         |                   |         |      |                          |       |       |                           |         |          
|                          | Stockholders             |             | Incentive Plan |            |         | 109,602 |                   |         | $    |                         |       |       |                           | 390,398 |          
|                          |                          | Convertible |                |            |         |         |                   |         |      |                          |       |       |                           |        
|                          |                          | Debenture   |                |            | 400,000 |         |                   | $       | 5.25 |                          |       |       |                          |        
|                          |                          |             |                |            |         |         |                   |         |      |                          |       |       |                           |        
|Total                     |                          |             |                |            |         |         | 8,614,695         |         |      | $                        | 33.90 | (1)   |                           |         | 2,779,141 |          
|                          |                          |             |                |            |         |         |                   |         |      |                          |       |       |                           |        

(1)Weighted-average exercise price excludes any items with an exercise price
of $0.

See the discussion of the 1987 Plan, 1998 Plan and 2001 Plan above. The
Company grants stock units, which are converted into shares of Centex Common
Stock at payout, to employees under its Long-Term Incentive Plan. Awards vest
over a three-year period or upon a change in control, as defined in such Plan,
and are generally paid upon the earlier of seven years or retirement, although
the Compensation Committee is permitted to make an early payout at its
discretion. For more information on the convertible debenture held by a
corporate officer, see Note (F), Indebtedness and Note (P), Subsequent Events. The Company also issues
Restricted Stock under the 2001 Plan. At March 31, 2003 there were 96,850
shares of Restricted Stock outstanding.

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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 $28.7
million in fiscal 2003, $25.2 million in fiscal 2002 and $21.6 million in
fiscal 2001.

(M) 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 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 are reflected in the current
period earnings, although such amounts are insignificant.

Centex Corporation and Construction Products each have interest rate swap
agreements that, in effect, fix the variable interest rate at a
weighted-average rate of 5.2% on $80.0 million of their outstanding debt at
March 31, 2003. During the year ended March 31, 2003, 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, 2003 related to these derivatives, the Company would estimate
increases in interest incurred over the next 12 months to be approximately $1.9
million. As of March 31, 2003, the balance in Accumulated Other Comprehensive
Loss related to these derivatives was $3.8 million ($2.5 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, 2003, there was no hedge ineffectiveness
related to these interest rate swaps. At March 31, 2003, Home Equity was
hedging $1.18 billion of its outstanding debt with these interest rate swaps at
a weighted-average interest rate of 2.6%. These swaps expire at varying times
through March 2006. Based on the balance in Accumulated Other Comprehensive
Loss at March 31, 2003 related to these derivatives, the Company estimates
increases in interest incurred over the next 12 months to be approximately $8.8
million. As of March 31, 2003, the balance in Accumulated Other Comprehensive
Loss related to these derivatives was $11.1 million ($7.2 million net of tax).

Financial Services, through CTX Mortgage, enters into interest rate lock
commitments (IRLCs) with its customers under which CTX Mortgage agrees to
make mortgage loans at agreed upon rates within a period of time, generally
from 1 to 30 days, if certain conditions are met within the terms of the IRLCs.
In order to hedge the risk of fluctuations in the value of these IRLCs and
mortgage loans held by it, CTX Mortgage executes mandatory forward trades of
mortgage loans and mortgage-backed securities. CTX Mortgage also uses
mandatory forward trades to hedge the Companys obligation, created through the
Harwood Swap, to protect against certain interest rate risk and non-credit
related market risk related to mortgage loans held by HSF-I, an unaffiliated
entity that is not consolidated with Financial Services or the Company. The
Company has elected not to utilize hedge accounting treatment under SFAS 133
for these

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derivatives. Initially, the fair value of the IRLCs is recorded on
the balance sheet as a deferred item. Subsequent changes in the fair value of
the IRLCs, mandatory forward trades and swaps are recorded as an adjustment to
earnings. The net change in the estimated fair value of these derivative
positions resulted in a loss of $11.9 million for the year ended March 31,
2003.

(N) RELATED PARTY TRANSACTIONS

Centex Homes purchased land from the Partnership during fiscal 2003 and
2002 totaling $34.5 million and $1.7 million, respectively.

At March 31, 2003 and 2002, Centex Homes had $7.2 million and $9.1
million, respectively, deposited with the Partnership as option deposits for
the purchase of land. Centex Homes also entered into agreements to reimburse
the Partnership for certain costs and fees incurred by the Partnership in the
purchase and ownership of these tracts of land. During the years ended March
31, 2003 and 2002, Centex Homes paid $3.5 million and $1.4 million,
respectively, to the Partnership in fees and reimbursements pursuant to these
agreements. Centex Homes expects to pay an additional $31.6 million to the
Partnership to complete the purchase of these tracts of land over the next
three years.

In the last two years, Construction Services has executed contracts with
the Partnership for the construction of two industrial facilities. At March
31, 2003, all contracts were completed. At March 31, 2002, the total value of
such contracts was $15.0 million, of which $5.3 million was unpaid. During the
years ended March 31, 2003 and 2002, the Partnership paid $5.3 million and
$10.0 million, respectively, to Construction Services pursuant to these
contracts.

(O) 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.

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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, |          
|                      |                                                |  |           |          
|                      |                                                |  | 2003      |           |  | 2002  |  
|                      |                                                |  |           |           |  |       |  
|                      |                                                |  | Carrying  |           |  | Fair  |   |           | Carrying |  |   | Fair      | 
|                      |                                                |  | Value     |           |  | Value |   |           | Value    |  |   | Value     | 
|                      |                                                |  |           |           |  |       |   |           |          |  |   |           | 
|Financial Assets      |                                                |  |           |           |  |       |   |           |          |  |   |           |  |  |   |          
|                      | Residential Mortgage Loans Held for
Investment |  | $         | 4,642,826 |  |       | $ | 4,713,045 | (1)      |  | $ | 3,279,450 |  |  | $ | 3,293,504 | (1)
|                      | Residential Mortgage Loans Held for
Sale       |  | $         | 303,328   |  |       | $ | 306,765   | (1)      |  | $ | 241,793   |  |  | $ | 242,562   | (1)
|Financial Liabilities |                                                |  |           |           |  |       |   |           |          |  |   |           |  |  |   |          
|                      | Centex Long-term Debt                          |  | $         | 2,080,623 |  |       | $ | 2,295,103 | (2)      |  | $ | 1,773,122 |  |  | $ | 1,810,119 | (2)
|                      | Financial Services Long-term Debt              |  | $         | 4,156,590 |  |       | $ | 4,234,593 | (2)      |  | $ | 3,170,402 |  |  | $ | 3,199,150 | (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.

(P) SUBSEQUENT EVENTS

On April 22, 2003, the Company announced the tax-free spin-off of the
significant part of its manufactured homes operations to its shareholders. The
spin-off will not have a material impact on the Companys future earnings or
debt coverage ratios.

Subsequent to year end, the corporate officer holding the convertible
subordinated debenture decided to exercise his conversion right effective May
29, 2003. On the date of conversion, 400,000 shares of the Companys common
stock were issued to the corporate officer and the $2.1 million debenture was
terminated.

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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, 2003 and 2002, 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, 2003. 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, 2003 and 2002, and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended March 31, 2003, 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.

---

(Ernst & Young LLP)

Dallas, Texas
May 14, 2003

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

|               |                              |         |   |                               |            |  |      |           |            | 
|-------------- | ---------------------------- | ------- | - | ----------------------------- | ---------- |  | ---- | --------- | ---------- | 
|               |                              |         |   | For the Years Ended March 31, |           
|               |                              |         |   |                               |           
|               |                              |         |   | 2003                          |            |  | 2002 |          
|               |                              |         |   |                               |            |  |      |          
|First Quarter  |                              |         |   |                               |            |  |      |          
|               | Revenues                     |         | $ | 1,843,855                     |            |  | $    | 1,709,145 |           
|               | Earnings Before Income Taxes |         | $ | 125,472                       |            |  | $    | 117,986   |           
|               | Net Earnings                 |         | $ | 87,755                        |            |  | $    | 75,216    |           
|               | Earnings Per Share           |         |   |                               |            |  |      |           |           
|               |                              | Basic   |   | $                             | 1.43       |  |      | $         | 1.25       | 
|               |                              | Diluted |   | $                             | 1.38       |  |      | $         | 1.22       | 
|               | Average Shares Outstanding   |         |   |                               |            |  |      |           |           
|               |                              | Basic   |   |                               | 61,168,177 |  |      |           | 60,174,973 | 
|               |                              | Diluted |   |                               | 63,597,116 |  |      |           | 61,910,092 | 
|Second Quarter |                              |         |   |                               |            |  |      |          
|               | Revenues                     |         | $ | 2,083,769                     |            |  | $    | 1,883,633 |           
|               | Earnings Before Income Taxes |         | $ | 165,297                       |            |  | $    | 152,314   |           
|               | Net Earnings                 |         | $ | 115,609                       |            |  | $    | 93,389    |           
|               | Earnings Per Share           |         |   |                               |            |  |      |           |           
|               |                              | Basic   |   | $                             | 1.90       |  |      | $         | 1.54       | 
|               |                              | Diluted |   | $                             | 1.83       |  |      | $         | 1.50       | 
|               | Average Shares Outstanding   |         |   |                               |            |  |      |           |           
|               |                              | Basic   |   |                               | 60,875,672 |  |      |           | 60,568,258 | 
|               |                              | Diluted |   |                               | 63,036,290 |  |      |           | 62,289,902 | 
|Third Quarter  |                              |         |   |                               |            |  |      |          
|               | Revenues                     |         | $ | 2,304,872                     |            |  | $    | 1,894,484 |           
|               | Earnings Before Income Taxes |         | $ | 222,883                       |            |  | $    | 157,935   |           
|               | Net Earnings                 |         | $ | 155,884                       |            |  | $    | 96,145    |           
|               | Earnings Per Share           |         |   |                               |            |  |      |           |           
|               |                              | Basic   |   | $                             | 2.58       |  |      | $         | 1.59       | 
|               |                              | Diluted |   | $                             | 2.50       |  |      | $         | 1.54       | 
|               | Average Shares Outstanding   |         |   |                               |            |  |      |           |           
|               |                              | Basic   |   |                               | 60,447,468 |  |      |           | 60,554,328 | 
|               |                              | Diluted |   |                               | 62,467,665 |  |      |           | 62,429,572 | 
|Fourth Quarter |                              |         |   |                               |            |  |      |          
|               | Revenues                     |         | $ | 2,884,745                     |            |  | $    | 2,261,168 |           
|               | Earnings Before Income Taxes |         | $ | 281,199                       |            |  | $    | 190,530   |           
|               | Net Earnings                 |         | $ | 196,671                       |            |  | $    | 117,476   |           
|               | Earnings Per Share           |         |   |                               |            |  |      |           |           
|               |                              | Basic   |   | $                             | 3.24       |  |      | $         | 1.93       | 
|               |                              | Diluted |   | $                             | 3.12       |  |      | $         | 1.85       | 
|               | Average Shares Outstanding   |         |   |                               |            |  |      |           |           
|               |                              | Basic   |   |                               | 60,637,309 |  |      |           | 60,949,857 | 
|               |                              | Diluted |   |                               | 63,024,136 |  |      |           | 63,486,498 | 

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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 report on our financial statements as of and for
the fiscal years that ended March 31, 2000 and 2001 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 17, 2003 Annual Meeting of Stockholders:

|     |  |                                                               
|---- |  | --------------------------------------------------------------
|Item |  | Caption in the 2003 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.




ITEM 14. CONTROLS AND PROCEDURES

An evaluation has been performed under the supervision and with the
participation of our management, including our Chief Executive Officer and
Chief Financial Officer, of the effectiveness of the design and operation of
our disclosure controls and procedures as of March 31, 2003. Based on that
evaluation, our management, including our Chief Executive Officer and Chief
Financial Officer, concluded that our disclosure controls and procedures were
effective as of March 31, 2003, for the purpose of ensuring that information
required to be disclosed in this Report has been processed, summarized and
reported in a timely manner. There have been no significant changes in our
internal controls or in other factors that could significantly affect internal
controls subsequent to March 31, 2003.




PART IV




ITEM 15. 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, 2003 and 2002, and the related
consolidated statements of earnings, stockholders equity and cash
flows for each of the three years in the period ended March 31,
2003, together with the accompanying Notes to Consolidated Financial
Statements and the Report of Independent Auditors on pages 60-99 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 175-178 of this
Report.                                                                                                                                                                                                                                                                  

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|b) |  | Reports on Form 8-K:                                                                                                                                                                                                           
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | Current Report on Form 8-K of Centex Corporation dated January 22, 2003
announcing the Companys third quarter net earnings for the quarter ended
December 31, 2002.                                                           
|  
|   |  | Current Report on Form 8-K of Centex Corporation dated January 28, 2003
filing certain exhibits in connection with the public offering of
$300,000,000 aggregate principal amount of the Companys 4.75% Senior
Notes due 2008.
|  
|   |  | Current Report on Form 8-K of Centex Corporation dated March 6, 2003
announcing that Centex Homes unit sales for January and February 2003
were about 18% higher than sales during the same period a year ago.                




ITEM 16. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information called for by Item 16 is incorporated herein by reference
to the information included and referenced under the same caption in the
Companys Proxy Statement for the July 17, 2003 Annual Meeting of Stockholders.

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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                                   
|             |  |     |  |                                              
|May 30, 2003 |  | 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.

|             |            |     |                                                       |                                                      
|------------ | ---------- | --- | ----------------------------------------------------- | -----------------------------------------------------
|May 30, 2003 |            | By: |                                                       | /s/ LAURENCE E. HIRSCH                               
|             |            |     |                                                      
|             |            |     |                                                       | Laurence E. Hirsch, Chairman of the Board and        
|             |            |     |                                                       | Chief Executive Officer                              
|             |            |     |                                                       | (principal executive officer)                        
|             |            |     |                                                       |                                                      
|May 30, 2003 |            | By: |                                                       | /s/ LELDON E. ECHOLS                                 
|             |            |     |                                                      
|             |            |     |                                                       | Leldon E. Echols, Executive Vice President and       
|             |            |     |                                                       | Chief Financial Officer                              
|             |            |     |                                                       | (principal financial officer)                        
|             |            |     |                                                       |                                                      
|May 30, 2003 |            | By: |                                                       | /s/ MARK D. KEMP                                     
|             |            |     |                                                      
|             |            |     |                                                       | Mark D. Kemp, Vice President  Controller            
|             |            |     |                                                       | (principal accounting officer)                       
|             |            |     |                                                       |                                                      
|             | Directors: |     | Barbara T. Alexander, Dan W. Cook, III, Juan L. Elek,
|             |            |     |                                                       | Timothy R. Eller, Thomas J. Falk, Laurence E. Hirsch,
|             |            |     |                                                       | Clint W. Murchison, III, Charles H. Pistor, Jr.,     
|             |            |     |                                                       | Frederic M. Poses, David W. Quinn,                   
|             |            |     |                                                       | Thomas M. Schoewe, and Paul T. Stoffel               
|             |            |     |                                                       |                                                      
|May 30, 2003 |            | 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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Certifications

I, Laurence E. Hirsch, certify that:

1.     I have reviewed this annual report on Form 10-K of Centex Corporation;

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

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

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

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

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

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

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

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

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

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

Date: May 30, 2003

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

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Certifications

I, Leldon E. Echols, certify that:

1.     I have reviewed this annual report on Form 10-K of Centex Corporation;

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

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

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

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

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

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

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

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

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

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

Date: May 30, 2003

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

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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 108-184) 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 B,we 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.

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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, 2003, these adjusted capital contributions, or unrecovered capital, were
$241.1 million and preference payments in arrears totaled $42.0 million. The
Partnership made a preference payment of $21.1 million on March 31, 2003.

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), Stockholders Equity and Partners Capital,
of the Notes to Combining Financial Statements of Holding and the Partnership
included on pages 153-154 of this Report for more information regarding the
capital structure of Holding and the Partnership.

Description of the Securities

Note (L),
Business Segments, of the Notes to Combining Financial Statements of 3333 Holding Corporation and Subsidiary and Centex Development Company, L.P. and Subsidiaries on pages 150-152 of this Report contains additional information about our business segments for fiscal 2003, 2002 and 2001.

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 separately 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 together 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

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

Narrative Description of Business

The Partnership is 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, 2003, or fiscal 2003, the
Partnership operated in four segments: International Home Building, Commercial
Development, Multi-Family Communities and Corporate-Other.

As discussed below,
the operations of the Multi-Family Communities segment have been restructured. Due to the risks associated with an extended development timeframe and significant capital requirements, these operations have been restructured to focus on leasing and disposition of current projects rather than new development. Effective April 1, 2003, future operations will be reported in the
Corporate-Other segment.

It is not currently anticipated that any significant capital will be allocated to new business development. Instead, our focus going forward will be on completing and leasing up our existing portfolio and continuing to take advantage of strong investor demand.
We will continue to evaluate strategic portfolio acquisitions and strategic development opportunities. However, there are no assurances that we will be successful in locating and securing such opportunities.

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 operating earnings of $2.8
million for fiscal 2001.

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.

International Home Building operates in five geographical regions in the
United Kingdom and develops a range of products, from small single-family units
to executive houses and apartments. International Home Building currently has
98 developments located throughout England and delivered 1,492 units in fiscal
2003, with prices ranging from $59,000 to $1.13 million. The average selling
price was approximately $236,000.

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The following tables summarize, by geographic area, International Home
Buildings home closings, sales backlog and sales for fiscal 2003 and fiscal
2002.

Closings (in units):

|                               |                                            |   |                               |     |  |      |       |     | 
|------------------------------ | ------------------------------------------ | - | ----------------------------- | --- |  | ---- | ----- | --- | 
|                               |                                            |   | For the Years Ended March 31, |    
|                               |                                            |   |                               |    
|                               |                                            |   | 2003                          |     |  | 2002 |      
|                               |                                            |   |                               |     |  |      |      
|                               | CDC 2020 (formerly Southern Home Counties) |   |                               | 124 |  |      |       | 117 | 
|                               | Northern Home Counties                     |   |                               | 304 |  |      |       | 290 | 
|                               | North West                                 |   |                               | 441 |  |      |       | 436 | 
|                               | Yorkshire                                  |   |                               | 340 |  |      |       | 211 | 
|                               | Midlands                                   |   |                               | 283 |  |      |       | 333 | 
|                               |                                            |   |                               |     |  |     
|                               |                                            |   | 1,492                         |     |  |      | 1,387 |    
|                               |                                            |   |                               |     |  |     
|Average Sales Price (in 000s) |                                            | $ | 236                           |     |  | $    | 204   |    
|                               |                                            |   |                               |     |  |     

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

|                                           |  |                               |     |  |      |  |     | 
|------------------------------------------ |  | ----------------------------- | --- |  | ---- |  | --- | 
|                                           |  | For the Years Ended March 31, |    
|                                           |  |                               |    
|                                           |  | 2003                          |     |  | 2002 | 
|                                           |  |                               |     |  |      | 
|CDC 2020 (formerly Southern Home Counties) |  |                               | 103 |  |      |  | 9   | 
|Northern Home Counties                     |  |                               | 38  |  |      |  | 84  | 
|North West                                 |  |                               | 155 |  |      |  | 70  | 
|Yorkshire                                  |  |                               | 64  |  |      |  | 38  | 
|Midlands                                   |  |                               | 65  |  |      |  | 22  | 
|                                           |  |                               |     |  |      | 
|                                           |  |                               | 425 |  |      |  | 223 | 
|                                           |  |                               |     |  |      | 

Sales (contracts exchanged, in units):

|                                           |  |                               |       |  |      |  |       | 
|------------------------------------------ |  | ----------------------------- | ----- |  | ---- |  | ----- | 
|                                           |  | For the Years Ended March 31, |      
|                                           |  |                               |      
|                                           |  | 2003                          |       |  | 2002 | 
|                                           |  |                               |       |  |      | 
|CDC 2020 (formerly Southern Home Counties) |  |                               | 202   |  |      |  | 100   | 
|Northern Home Counties                     |  |                               | 264   |  |      |  | 338   | 
|North West                                 |  |                               | 527   |  |      |  | 485   | 
|Yorkshire                                  |  |                               | 357   |  |      |  | 236   | 
|Midlands                                   |  |                               | 328   |  |      |  | 333   | 
|                                           |  |                               |       |  |      | 
|                                           |  |                               | 1,678 |  |      |  | 1,492 | 
|                                           |  |                               |       |  |      | 

We define backlog units that have been sold, as indicated by a signed contract, but not closed. Substantially all of these orders are expected to be filled during fiscal 2004.

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COMMERCIAL DEVELOPMENT

The Commercial Development segment, on its own and in joint ventures with
third parties, develops office, industrial, retail and mixed-use projects for
sale and to hold for investment. Commercial Developments operations during
fiscal 2003 included:



| |  |  | sale of five pad sites at the Vista Ridge retail project in
Lewisville, Texas;                                                                                                                                                                                                                                            
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | completion of shell construction for a 228,000 square foot industrial
project in Grand Prairie, Texas;                                                                                                                                                                                                                    
|
| |  |  | completion of shell construction for a 58,000 square foot retail center in Lewisville, Texas;                                                                                                                                                                                                                             
|
| |  |  | completion and sale of a 40,000 square foot office project in Lewisville, Texas;                                                                                                                                                                                                                                          
|
| |  |  | completion and sale of a 45,000 square foot industrial project in Oxnard, California;                                                                                                                                                                                                                                     
|
| |  |  | sale of a 40,000 square foot industrial building in Oxnard, California;                                                                                                                                                                                                                                                   
|
| |  |  | sale of a 283,000 square foot industrial project in Tolleson, Arizona;                                                                                                                                                                                                                                                    
|
| |  |  | sale of two office buildings totaling 219,000 square feet in Plantation, Florida;                                                                                                                                                                                                                                         
|
| |  |  | completion and sale of two industrial buildings totaling 93,000
square feet in Camarillo, California;                                                                                                                                                                                                                     
|
| |  |  | sale of six acres of undeveloped land and three buildings with a
combined 134,000 square feet of office/industrial space in Pinellas
Park, Florida;                                                                                                                                                                       
|
| |  |  | sale of approximately 246 acres of undeveloped land in The Colony and
Lewisville, Texas; and                                                                                                                                                                                                                              
|
| |  |  | exchange of a majority interest in a limited liability company owning
a 123,000 square foot industrial building in Charlotte, North Carolina
for a joint venture partners minority interests in various limited
liability companies owning industrial buildings in Charlotte, North
Carolina and Gardener, Massachusetts.

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
|               |  |                                  |  |           |           |         
|California     |  | Industrial/Flex                  |  |           | 113,000   |          |  |  | 5   | %
|Massachusetts  |  | Industrial/Flex                  |  |           | 68,000    |          |  |  | 3   | %
|Michigan       |  | Office                           |  |           | 55,000    |          |  |  | 3   | %
|Mississippi    |  | Medical                          |  |           | 22,000    |          |  |  | 1   | %
|North Carolina |  | Industrial/Flex                  |  |           | 1,295,000 |          |  |  | 62  | %
|Texas          |  | Industrial/Office/Medical/Retail |  |           | 553,000   |          |  |  | 26  | %
|               |  |                                  |  |           |           |          |  |  |     |  
|               |  |                                  |  |           | 2,106,000 |          |  |  | 100 | %
|               |  |                                  |  |           |           |          |  |  |     |  

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MULTI-FAMILY COMMUNITIES

The Multi-Family Communities segment has developed multi-family rental
projects, which it has actively marketed for sale during the development
period. Multi-Family Communities operations during fiscal 2003 included:



| |  |  | completion and sale of a 323-unit rental apartment community in Lewisville, Texas;                                                                                                                                       
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | completion of a 381-unit rental apartment community in St. Petersburg, Florida;                                                                                                                                          
|
| |  |  | completion of a 398-unit rental apartment community in Haltom City,
Texas, as the developer for an unaffiliated owner;                                                                                                   
|
| |  |  | substantial completion of a 336-unit rental apartment community in
San Antonio, Texas, as the developer for an unaffiliated owner;                                                                                       
|
| |  |  | substantial completion of a 280-unit rental apartment community in
San Antonio, Texas; and                                                                                                                               
|
| |  |  | continued infrastructure development for a 21-acre mixed-use
development in Saint Paul, Minnesota, and sold five acres of the site to
third-party and affiliated developers for construction of for sale housing units.

Effective April 1, 2003, the operations of Multi-Family Communities were
restructured. The responsibilities for day-to-day operations, including the
completion, leasing and sale of the projects discussed above, have been assumed
by personnel within the Corporate-Other segment. The future operations of
remaining projects will be reflected in the Corporate-Other segment.

CORPORATE-OTHER

The Corporate-Other segment acquires and disposes of land and other assets
of the Partnership not identified with another specific business segment.
Corporate-Others operations during fiscal 2003 consisted of the sale of 477
residential lots to Centex Homes pursuant to various option agreements.

You should read Item 2. Properties for additional information concerning
material properties owned by the Partnership at March 31, 2003.

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
than the Partnership 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.

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

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In order to be able to compete successfully for the acquisition of
strategic land parcels, International Home Building has put in place procedures to ensure that
the company expands its strategic land portfolio. At March 31, 2003,
International Home Building 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.

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, 2003, the Partnership had 605 employees, 578 of whom are
employees of International Home Building, including 149 hourly-wage employees.
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), Related Party Transactions, of the Notes to the Combining Financial
Statements of Holding and the Partnership included on pages 155-156 of this
Report.

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AVAILABLE INFORMATION

Shareholders,
securities analysts and others seeking information about our business
operations and financial performance can receive copies of the 2003
Annual Report to Shareholders, Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q, Current Reports on Form 8-K, all amendments to
those reports and other publications filed with the Securities and
Exchange Commission in Washington, D.C., without charge, by
contacting our Corporate Communications office at (214) 981-6503; by
writing to Centex Corporation, Investor Relations, P.O. Box 199000,
Dallas, Texas 75219 or via email at ir@centex.com. In
addition, all filings with the Securities and Exchange Commission can
be accessed free of charge on our web site (www.centex.com).
We make our Annual Report on Form 10-K, Quarterly Reports on Form
10-Q, Current Reports on Form 8-K and amendments to those reports
filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange
Act available on our web site as soon as reasonably practicable
after we electronically file such material with, or furnish it to,
the Securities and Exchange Commission. To retrieve any of this
information, go to www.centex.com, select Investor
Relations and select SEC Filings.




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 California, Florida,
Hawaii, Texas, Minnesota, North Carolina, Massachusetts, Michigan, Mississippi,
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;
| | - |  | --------------------------------------------------------------------------------------------------------------
|
| |  |  | residential units under 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

International Home Building operates from six divisional offices and a
corporate office. International Home Building owns a building in Tamworth,
Staffordshire. International Home Building leases its remaining facilities
located in Sale, Cheshire; St. Albans, Hertfordshire; Crawley, Sussex and
Wakefield, Yorkshire. International Home Building also leases its corporate
office at Meirion House, Woking, Surrey. As of March 31, 2003, International
Home Buildings owned or controlled land inventory included 4,739 plots in 98
developments located throughout England.

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COMMERCIAL DEVELOPMENT

California



| |  |  | Camarillo Ranch Business
Park this property is located in
Camarillo, Ventura County, California and is zoned for light industrial
use. The Partnership currently owns 18 acres of undeveloped land
encumbered by a mortgage in favor of a third-party lender and is
developing a 62,000 square foot speculative industrial building.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | 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 subsequent to March 31, 2003, the Partnership began
constructing two light industrial buildings totaling approximately
79,000 square feet in an industrial business park located in Oxnard,
Ventura County, California.                                                                                                  
|
| |  |  | Rivermark this property is located in Santa Clara, California. The
Partnership, in a joint venture with two unaffiliated third parties, has
substantially completed construction of a 138,000 square foot
grocer-anchored community retail center. This project is encumbered by
construction financing.                            

Massachusetts



| |  |  | Summit I 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.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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



| |  |  | 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 seven buildings totaling
approximately 1.3 million square feet of office/industrial space. Each
of these buildings is encumbered by permanent or construction loan
financing.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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Texas



| |  |  | Citymark the Partnership owns a 218,000 square foot multi-tenant
office building located in Dallas. The building is encumbered by
permanent financing.                                                                                                                                                                                                                                                                                                                                  
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Hilltop in a joint venture with a third party, the Partnership owns
a 228,000 square foot industrial project located in Grand Prairie,
Texas. 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 planned 102,000 square foot, two-phase retail project in Vista
Ridge, a mixed-use development located in the cities of Lewisville and
Coppell. In fiscal 2003, the Partnership substantially completed
construction of the 58,000 square foot first phase of the project. The
project is encumbered by construction financing. The Partnership also
owns one acre of retail land adjacent to its retail project.

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 is substantially
complete and has been pre-sold to the buyer of the first phase. The
apartment complex is encumbered by construction financing.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Minnesota



| |  |  | Upper Landing this property is located in Saint Paul, Ramsey
County, Minnesota. The Partnership acquired this 21-acre property to
develop a mixed-use project containing for sale and for rent
housing units and related retail space. The Partnership has utilized
approximately ten acres for project infrastructure, has sold
approximately five acres as of March 31, 2003 and an additional one
acre subsequent to year-end, and is actively marketing the remaining
five acres for sale.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Texas



| |  |  | Dominion Park the Partnership commenced construction on this
280-unit apartment complex in San Antonio, Texas during fiscal 2002.
The apartment complex is substantially complete and 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 the remaining 32 lots in the project.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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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
the remaining 107 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 the remaining 1,060 lots in the project.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




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   |  |     | 50 |  |          | President, Centex Commercial Development
(a division of Development)(1)
|Todd D. Newman      |  |     | 46 |  |          | Senior Vice President, Chief Financial
Officer and Treasurer (2)       
|Stephen M. Weinberg |  |     | 55 |  |          | 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.                                                                                                                                                                                                                                               

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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), Related Party Transactions, of the Notes to the
Combining Financial Statements of Holding and the Partnership included on pages
155-156 of this Report. There are no family relationships among or between the
executive officers or the directors.




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 26 of this Report and (3) the information included in Note
(N), Stockholders Equity and Partners Capital, of the Notes to the
Combining Financial Statements of Holding and the Partnership on
pages 153-154
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.

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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, 2003, 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. As of March 31, 2003, the partners unrecovered capital totaled
$241.1 million, and preference payments in arrears amounted to $42.0 million.
The Partnership made a preference payment of $21.1 million on March 31, 2003.

Restrictions on Transfer

The nominee agreement restricts the Stockholder Warrants from being
transferred separately 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, |        
|                                                              |                                                           |  |                               |        
|                                                              |                                                           |  | 2003                          |         |  | 2002 |   |         | 2001 |  |   | 2000    |   |  | 1999 |        
|                                                              |                                                           |  |                               |         |  |      |   |         |      |  |   |         |   |  |      |        
|Revenues from Continuing Operations                           |                                                           |  |                               |         |  |      |   |         |      |  |   |         |   |  |      |         |   |  |   |        
|                                                              | 3333 Holding Corporation and Subsidiary                   |  | $                             | 350     |  |      | $ | 1,611   |      |  | $ | 1,001   |   |  | $    | 607     |   |  | $ | 1,103   |  
|                                                              | Centex Development Company, L.P. and
Subsidiaries         |  | $                             | 449,434 |  |      | $ | 379,378 |      |  | $ | 335,876 |   |  | $    | 378,048 |   |  | $ | 28,225  |  
|                                                              | Combined Revenues from Continuing Operations              |  | $                             | 449,559 |  |      | $ | 380,863 |      |  | $ | 335,877 |   |  | $    | 378,048 |   |  | $ | 28,615  |  
|Net Earnings (Loss) from Continuing Operations                |                                                           |  |                               |         |  |      |   |         |      |  |   |         |   |  |      |         |   |  |   |        
|                                                              | 3333 Holding Corporation and Subsidiary                   |  | $                             | 99      |  |      | $ | 1,337   |      |  | $ | (746    | ) |  | $    | (1,127  | ) |  | $ | (1,385  | )
|                                                              | Centex Development Company, L.P. and
Subsidiaries         |  | $                             | 17,329  |  |      | $ | 15,088  |      |  | $ | 5,460   |   |  | $    | 1,583   |   |  | $ | 1,815   |  
|                                                              | Combined Net Earnings                                     |  | $                             | 17,428  |  |      | $ | 16,425  |      |  | $ | 4,714   |   |  | $    | 456     |   |  | $ | 430     |  
|Net Earnings (Loss)                                           |                                                           |  |                               |         |  |      |   |         |      |  |   |         |   |  |      |         |   |  |   |        
|                                                              | 3333 Holding Corporation and Subsidiary                   |  | $                             | 99      |  |      | $ | 1,337   |      |  | $ | (746    | ) |  | $    | (1,127  | ) |  | $ | (1,385  | )
|                                                              | Centex Development Company, L.P. and
Subsidiaries         |  | $                             | 29,263  |  |      | $ | 15,645  |      |  | $ | 5,362   |   |  | $    | 1,583   |   |  | $ | 1,815   |  
|                                                              | Combined Net Earnings                                     |  | $                             | 29,362  |  |      | $ | 16,982  |      |  | $ | 4,616   |   |  | $    | 456     |   |  | $ | 430     |  
|Total Assets                                                  |                                                           |  |                               |         |  |      |   |         |      |  |   |         |   |  |      |         |   |  |   |        
|                                                              | 3333 Holding Corporation and Subsidiary                   |  | $                             | 3,231   |  |      | $ | 3,042   |      |  | $ | 3,253   |   |  | $    | 3,023   |   |  | $ | 2,522   |  
|                                                              | Centex Development Company, L.P. and
Subsidiaries         |  | $                             | 642,933 |  |      | $ | 670,953 |      |  | $ | 488,281 |   |  | $    | 515,188 |   |  | $ | 113,233 |  
|                                                              | Combined Assets                                           |  | $                             | 640,684 |  |      | $ | 668,436 |      |  | $ | 484,650 |   |  | $    | 511,618 |   |  | $ | 112,176 |  
|Total Debt                                                    |                                                           |  |                               |         |  |      |   |         |      |  |   |         |   |  |      |         |   |  |   |        
|                                                              | 3333 Holding Corporation and Subsidiary                   |  | $                             |        |  |      | $ |        |      |  | $ |        |   |  | $    |        |   |  | $ | 582     |  
|                                                              | Centex Development Company, L.P. and
Subsidiaries         |  | $                             | 221,492 |  |      | $ | 289,126 |      |  | $ | 187,301 |   |  | $    | 323,740 |   |  | $ | 41,896  |  
|                                                              | Combined Debt                                             |  | $                             | 221,492 |  |      | $ | 289,126 |      |  | $ | 187,301 |   |  | $    | 323,740 |   |  | $ | 42,478  |  
|Net Earnings (Loss) from Continuing Operations Per Share/Unit |                                                           |  |                               |         |  |      |   |         |      |  |   |         |   |  |      |         |   |  |   |        
|                                                              | 3333 Holding Corporation and Subsidiary                   |  | $                             | 99      |  |      | $ | 1,337   |      |  | $ | (746    | ) |  | $    | (1,127  | ) |  | $ | (1,385  | )
|                                                              | Centex Development Company, L.P. and
Subsidiaries         |  | $                             | 72.03   |  |      | $ | 67.42   |      |  | $ | 77.74   |   |  | $    | 25.08   |   |  | $ | 33.38   |  
|Net Earnings (Loss) Per Share/Unit                            |                                                           |  |                               |         |  |      |   |         |      |  |   |         |   |  |      |         |   |  |   |        
|                                                              | 3333 Holding Corporation and Subsidiary                   |  | $                             | 99      |  |      | $ | 1,337   |      |  | $ | (746    | ) |  | $    | (1,127  | ) |  | $ | (1,385  | )
|                                                              | Centex Development Company, L.P. and
Subsidiaries         |  | $                             | 121.63  |  |      | $ | 69.91   |      |  | $ | 76.34   |   |  | $    | 25.08   |   |  | $ | 33.38   |  
|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) |  |                               | 240,591 |  |      |   | 223,788 |      |  |   | 70,235  |   |  |      | 63,116  |   |  |   | 54,377  |  

Note that prior period amounts have been restated, where appropriate, to reflect the impact
of reclassification of operating components currently classified as discontinued operations.

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

FISCAL YEAR 2003 COMPARED TO FISCAL
YEAR 2002

On a combined basis, our revenues from continuing operations were $449.6
million for the year ended March 31, 2003, an 18.0% increase over our revenues
from continuing operations of $380.9 million for the same period last year.
The revenue increase is primarily related to Corporate-Others sale of
residential lots to Centex Homes and an increase in International Home
Buildings unit closings, average unit sales price and revenues from the sale
of certain land positions. However, the revenue increase was offset by a
decline in Commercial Developments and Multi-Family Communities sales
revenues, although the decline was attributable to an accounting change as
discussed below. Revenues from residential lot sales and land sales can vary
significantly from period to period.

Our operating earnings from continuing operations for the year ended March
31, 2003 were $21.6 million compared to $18.2 million for the same period last
year. Our net earnings from continuing operations for the year ended March 31,
2003 were $17.4 million compared to $16.4 million for the same period last
year. The increase in operating earnings and net earnings from continuing
operations for the year ended March 31, 2003 is primarily related to an
increase in International Home Buildings unit closings, average unit sales
price and earnings from the sale of certain land positions, offset by a decline
in Multi-Family Communities earnings from property sales.

Our net earnings from discontinued operations for the year ended March 31,
2003 were $11.9 million. In accordance with Statement of Financial Accounting
Standards No. 144, or SFAS 144, Accounting for the Impairment or Disposal of
Long-Lived Assets, effective for us beginning April 1, 2002, we now report
assets as discontinued operations if such assets are held for sale (as defined
by SFAS 144) or if such assets are sold in the current period. We sold ten
such properties during the year ended March 31, 2003. Land assets, and any
other assets sold prior to adoption of SFAS 144, are reported in continuing
operations.

We continued to take advantage of the strong investor demand for quality
properties, selling a number of matured assets and land positions during the
year. It is not currently anticipated that any significant capital will be
allocated to new business development. Instead, our focus going forward will
be on completing and leasing up our existing portfolio and continuing to take
advantage of strong investor demand. The International Home Building segment
will remain a focus as we continue to build on momentum in this segment. We
will continue to evaluate strategic portfolio acquisitions and strategic
development opportunities.

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

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INTERNATIONAL HOME BUILDING

The following summarizes International Home Buildings results for the
year ended March 31, 2003 compared to the same period last year (dollars in
thousands, except per unit data):

|                                    |  |                               |          |   |      |               |       |    |  |   |          |               |  |  |       |   
|----------------------------------- |  | ----------------------------- | -------- | - | ---- | ------------- | ----- | -- |  | - | -------- | ------------- |  |  | ----- | --
|                                    |  | For the Years Ended March 31, |         
|                                    |  |                               |         
|                                    |  | 2003                          |          |   | 2002 |              
|                                    |  |                               |          |   |      |              
|                                    |  |                               |          |   |      | % of Revenues |       |    |  |   |          | % of Revenues
|Revenues  Home Building            |  | $                             | 352,007  |   |      |               | 93.7  | %  |  | $ | 283,295  |               |  |  | 97.6  | % 
|Revenues  Land Sales & Other       |  |                               | 23,618   |   |      |               | 6.3   | %  |  |   | 7,111    |               |  |  | 2.4   | % 
|Cost of Sales  Home Building       |  |                               | (303,063 | ) |      |               | (80.7 | %) |  |   | (245,065 | )             |  |  | (84.4 | %)
|Cost of Sales  Land Sales          |  |                               | (16,258  | ) |      |               | (4.3  | %) |  |   | (5,945   | )             |  |  | (2.0  | %)
|General and Administrative Expenses |  |                               | (33,374  | ) |      |               | (8.9  | %) |  |   | (25,135  | )             |  |  | (8.7  | %)
|                                    |  |                               |          |   |      |               |       |    |  |   |          |              
|Operating Earnings                  |  |                               | 22,930   |   |      |               | 6.1   | %  |  |   | 14,261   |               |  |  | 4.9   | % 
|Interest                            |  |                               | (2,538   | ) |      |               | (0.7  | %) |  |   | (1,947   | )             |  |  | (0.7  | %)
|                                    |  |                               |          |   |      |               |       |    |  |   |          |              
|Earnings Before Income Taxes        |  | $                             | 20,392   |   |      |               | 5.4   | %  |  | $ | 12,314   |               |  |  | 4.2   | % 
|                                    |  |                               |          |   |      |               |       |    |  |   |          |              
|                                    |  |                               |          |   |      | % Change      |       |    |  |   |          | % Change     
|Units Closed                        |  |                               | 1,492    |   |      |               | 7.6   | %  |  |   | 1,387    |               |  |  | 11.6  | % 
|Unit Sales Price                    |  | $                             | 235,930  |   |      |               | 15.5  | %  |  | $ | 204,251  |               |  |  | 0.3   | % 
|Operating Earnings Per Unit         |  | $                             | 15,369   |   |      |               | 4.8   | %  |  | $ | 10,358   |               |  |  | 65.8  | % 
|Backlog Units                       |  |                               | 425      |   |      |               | 90.6  | %  |  |   | 223      |               |  |  | 65.2  | % 

International Home Buildings revenues for the year ended March 31, 2003
increased by $85.2 million from revenues for the same period last year. This
increase is comprised of $43.9 million from an increase in the average unit
sales price, $24.8 million from an increase in the number of units closed and
$16.5 million from increased sales of certain land positions. Home sales
totaled 1,492 units during the year ended March 31, 2003 compared to 1,387
units during the same period in the preceding year, representing a 7.6%
increase.

International Home Buildings gross homebuilding margins increased for the
year ended March 31, 2003 to 13.9% from 13.5% in the same period last year.
This improvement in gross margins was primarily due to sales price increases,
offset by increases in labor costs resulting from a shortage of skilled labor.

International Home Buildings general and administrative expenses, as a
percentage of revenues, increased to 8.9% for the year ended March 31, 2003
compared to 8.7% for the same period last year, primarily due to personnel
additions and an increase in incentive compensation resulting from improved
performance.

International Home Buildings financial statements are affected by
fluctuations in exchange rates. International Home Building, whose functional
currency is the British pound sterling, translates its financial statements
into U.S. dollars. Income statement accounts are translated using the average
exchange rate for the period, except for significant, non-recurring
transactions that are translated at the rate in effect as of the date of the
transaction. For the years ended March 31, 2003 and 2002, respectively, the
average exchange rate used for translation was 1.55 and 1.43, representing an
increase of 7.9%.

The backlog of homes sold but not closed at March 31, 2003 was 425 units,
90.6% more than the 223 units at the same point in the preceding year. We
define backlog units as units that have been sold, as indicated by a signed
contract, but not closed.

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COMMERCIAL DEVELOPMENT

The following summarizes Commercial Developments results for the year
ended March 31, 2003 compared to the same period last year (dollars and square
feet in thousands):

|                                          |  |                               |        |   |      |   |         |  
|----------------------------------------- |  | ----------------------------- | ------ | - | ---- | - | ------- | -
|                                          |  | For the Years Ended March 31, |       
|                                          |  |                               |       
|                                          |  | 2003                          |        |   | 2002 |  
|                                          |  |                               |        |   |      |  
|Sales Revenues                            |  | $                             | 16,439 |   |      | $ | 20,597  |  
|Rental Income & Other Revenues            |  |                               | 14,834 |   |      |   | 13,104  |  
|Cost of Sales                             |  |                               | (8,334 | ) |      |   | (16,750 | )
|Selling, General & Administrative Expense |  |                               | (9,957 | ) |      |   | (6,246  | )
|Interest                                  |  |                               | (5,266 | ) |      |   | (4,718  | )
|                                          |  |                               |        |   |      |  
|Operating Earnings Before Depreciation    |  |                               | 7,716  |   |      |   | 5,987   |  
|Depreciation                              |  |                               | (2,493 | ) |      |   | (2,029  | )
|                                          |  |                               |        |   |      |  
|Operating Earnings                        |  |                               | 5,223  |   |      |   | 3,958   |  
|Earnings from Discontinued Operations     |  |                               | 10,191 |   |      |   | 557     |  
|                                          |  |                               |        |   |      |  
|Earnings Before Income Taxes              |  | $                             | 15,414 |   |      | $ | 4,515   |  
|                                          |  |                               |        |   |      |  
|Operating Square Footage at March 31      |  |                               | 2,106  |   |      |   | 2,586   |  

Commercial Developments operations during the year ended March 31, 2003
included:



| |  |  | sale of five pad sites at the Vista Ridge retail project in
Lewisville, Texas;                        
| | - |  | ------------------------------------------------------------------------------------------------------
|
| |  |  | completion of shell construction for a 228,000 square foot industrial
project in Grand Prairie, Texas;
|
| |  |  | completion of shell construction for a 58,000 square foot retail center in Lewisville, Texas; and     
|
| |  |  | sale of approximately 246 acres of undeveloped land in The Colony and Lewisville, Texas.              

Commercial Developments discontinued operations during the year ended
March 31, 2003 included:



| |  |  | sale of a 40,000 square foot industrial building in Oxnard, California;                                                                                                                                                                                                                                                  
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | completion and sale of a 40,000 square foot office project in Lewisville, Texas;                                                                                                                                                                                                                                         
|
| |  |  | sale of a 283,000 square foot industrial project in Tolleson, Arizona;                                                                                                                                                                                                                                                   
|
| |  |  | completion and sale of two industrial buildings totaling 93,000
square feet in Camarillo, California;                                                                                                                                                                                                                    
|
| |  |  | sale of six acres of undeveloped land and three buildings with a
combined 134,000 square feet of office/industrial space in Pinellas
Park, Florida;                                                                                                                                                                      
|
| |  |  | exchange of a majority interest in a limited liability company owning
a 123,000 square foot industrial building in Charlotte, North Carolina
for a joint venture partners minority interests in various limited
liability companies owning industrial buildings in Charlotte, North
Carolina and Gardner, Massachusetts;
|
| |  |  | sale of two office buildings totaling 219,000 square feet in Plantation, Florida; and                                                                                                                                                                                                                                    
|
| |  |  | completion and sale of a 45,000 square foot industrial project in Oxnard, California.                                                                                                                                                                                                                                    

Sales revenues and cost of sales for fiscal 2003 reflect the sale of the
five pad sites and 246 acres of land referred to above. Sales revenues and
cost of sales for fiscal 2002 reflect the sale of two industrial projects and
approximately two acres of land. Rental income and other revenues; selling,
general and administrative expenses; interest expense and depreciation
increased compared to the same period in the preceding year as a result of the
increase in the average square footage of the operating portfolio. Fiscal

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2003 results also include an impairment charge of approximately $1.0 million
recorded in selling, general and administrative expense.

|                     |  |                               |       |  |           |  |      |          |  |  |           |  |  |  |      |  
|-------------------- |  | ----------------------------- | ----- |  | --------- |  | ---- | -------- |  |  | --------- |  |  |  | ---- | -
|                     |  | For the Years Ended March 31, |      
|                     |  |                               |      
|                     |  | 2003                          |       |  | 2002      | 
|                     |  |                               |       |  |           | 
|                     |  | (000's)                       |       |  | Weighted  |  |      | (000's)  |  |  | Weighted  | 
|                     |  | Rentable                      |       |  | Average   |  |      | Rentable |  |  | Average   | 
|                     |  | Sq. Ft.                       |       |  | Occupancy |  |      | Sq. Ft.  |  |  | Occupancy | 
|                     |  |                               |       |  |           |  |      |          |  |  |           | 
|Operating Properties |  |                               |       |  |           |  |      |          |  |  |           |  |  |  |      |  
|Industrial           |  |                               | 1,704 |  |           |  | 79.4 | %        |  |  | 2,024     |  |  |  | 92.4 | %
|Office/Medical       |  |                               | 344   |  |           |  | 80.2 | %        |  |  | 562       |  |  |  | 88.3 | %
|Retail               |  |                               | 58    |  |           |  | 83.2 | %        |  |  |          |  |  |  |     |  
|                     |  |                               |       |  |           |  |      |          |  |  |           |  |  | 
|                     |  |                               | 2,106 |  |           |  | 79.6 | %        |  |  | 2,586     |  |  |  | 91.5 | %
|                     |  |                               |       |  |           |  |      |          |  |  |           |  |  | 

|                           |  |          |     |  |  |  |  |          |  |  |     |  |  |  |  | 
|-------------------------- |  | -------- | --- |  |  |  |  | -------- |  |  | --- |  |  |  |  | 
|                           |  | (000's)  |     |  |  |  |  | (000's)  |  |  |     | 
|                           |  | Rentable |     |  |  |  |  | Rentable |  |  |     | 
|                           |  | Sq. Ft.  |     |  |  |  |  | Sq. Ft.  |  |  |     | 
|                           |  |          |     |  |  |  |  |          |  |  |     | 
|Projects Under Development |  |          |     |  |  |  |  |          |  |  |     |  |  |  |  | 
|Industrial                 |  |          | 62  |  |  |  |  |          |  |  | 308 |  |  |  |  | 
|Office/Medical             |  |          |    |  |  |  |  |          |  |  | 40  |  |  |  |  | 
|Retail                     |  |          | 138 |  |  |  |  |          |  |  | 194 |  |  |  |  | 
|                           |  |          |     |  |  |  |  |          |  |  |     |  |  | 
|                           |  |          | 200 |  |  |  |  |          |  |  | 542 |  |  |  |  | 
|                           |  |          |     |  |  |  |  |          |  |  |     |  |  | 

MULTI-FAMILY COMMUNITIES

The following summarizes the results of Multi-Family Communities for the
year ended March 31, 2003 compared to the same period last year (dollars in
thousands):

|                                           |  |                               |        |   |      |   |         |  
|------------------------------------------ |  | ----------------------------- | ------ | - | ---- | - | ------- | -
|                                           |  | For the Years Ended March 31, |       
|                                           |  |                               |       
|                                           |  | 2003                          |        |   | 2002 |  
|                                           |  |                               |        |   |      |  
|Revenues                                   |  | $                             | 6,171  |   |      | $ | 53,944  |  
|Cost of Sales                              |  |                               | (4,703 | ) |      |   | (46,866 | )
|Selling, General & Administrative Expenses |  |                               | (2,982 | ) |      |   | (3,923  | )
|                                           |  |                               |        |   |      |  
|Operating Earnings (Loss)                  |  |                               | (1,514 | ) |      |   | 3,155   |  
|Earnings from Discontinued Operations      |  |                               | 1,743  |   |      |   |        |  
|                                           |  |                               |        |   |      |  
|Earnings Before Income Taxes               |  | $                             | 229    |   |      | $ | 3,155   |  
|                                           |  |                               |        |   |      |  

During the year ended March 31, 2003, Multi-Family Communities revenues
from continuing operations consisted of development and related fees on various
development projects, an earn-out payment related to the prior sale of a
382-unit rental apartment complex in St. Petersburg, Florida and revenues from
the sale of five acres of the Upper Landing project in Saint Paul, Minnesota.
During the year ended March 31, 2002, Multi-Family Communities closed on the
sale of a 400-unit apartment complex 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.

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Multi-Family Communities discontinued operations during the year ended
March 31, 2003 consisted of the sale of a 323-unit rental apartment project in
Lewisville, Texas.

As of March 31, 2003, Multi-Family Communities owns 661 rental apartment
units under construction in Florida and Texas and is developing an additional
734 rental apartment units in Texas for unaffiliated owners. Multi-Family
Communities is also redeveloping a 21-acre site in downtown Saint Paul,
Minnesota into a mixed-use project containing for sale and for rent housing
units and related retail. As of March 31, 2003, ten acres has been utilized
for project infrastructure and five acres had been sold to Centex Homes and
third-party developers.

Effective April 1, 2003, the operations of Multi-Family Communities were
restructured. The responsibilities for day-to-day operations, including the
completion, leasing and sale of the projects discussed above, have been assumed
by personnel within the Corporate-Other segment. The future operations of
remaining projects will be reflected in the Corporate-Other segment. Fiscal
year 2003 results include a $574 thousand restructuring charge.

CORPORATE-OTHER

The following summarizes the results of Corporate-Other for the year ended
March 31, 2003, compared to the same period last year (dollars in thousands):

|                                           |  |                               |         |   |      |   |        |  
|------------------------------------------ |  | ----------------------------- | ------- | - | ---- | - | ------ | -
|                                           |  | For the Years Ended March 31, |        
|                                           |  |                               |        
|                                           |  | 2003                          |         |   | 2002 |  
|                                           |  |                               |         |   |      |  
|Revenues                                   |  | $                             | 36,491  |   |      | $ | 2,812  |  
|Cost of Sales                              |  |                               | (32,882 | ) |      |   | (1,209 | )
|Selling, General & Administrative Expenses |  |                               | (3,726  | ) |      |   | (2,013 | )
|Interest Expense                           |  |                               | (2,364  | ) |      |   | (835   | )
|                                           |  |                               |         |   |      |  
|Operating Loss                             |  | $                             | (2,481  | ) |      | $ | (1,245 | )
|                                           |  |                               |         |   |      |  

Our Corporate-Other segment acquires and disposes of land and other assets
that are not identified with another specific business segment. Fiscal 2003
revenues consist primarily of sales revenues, fees and other revenues derived
from sales of residential lots to Centex Homes. 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.

Selling, general and administrative expenses increased compared to the
same period in the preceding year due to the addition of internal legal and
marketing personnel and increased real estate taxes related to residential
lots. Interest expense increased primarily as a result of debt incurred to
finance the purchase of these residential lots.

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FISCAL YEAR 2002 COMPARED TO FISCAL YEAR 2001

On a combined basis, revenues from continuing operations for the
Partnership and Holding for fiscal year 2002 totaled $380.9 million compared to
$335.9 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 223 units, 65% more than the 135 units at the same point in the
preceding year. We define backlog units as units that have been sold, as
indicated by a signed contract, but not closed.

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                      |  |                               | 13,104  |   |      |   | 7,504   |  
|Cost of Sales                                |  |                               | (16,750 | ) |      |   | (18,398 | )
|Selling, General & Administrative Expenses   |  |                               | (6,246  | ) |      |   | (4,773  | )
|Interest Expense                             |  |                               | (4,718  | ) |      |   | (3,067  | )
|                                             |  |                               |         |   |      |  
|Operating Earnings before Depreciation       |  |                               | 5,987   |   |      |   | 3,410   |  
|Depreciation                                 |  |                               | (2,029  | ) |      |   | (1,159  | )
|                                             |  |                               |         |   |      |  
|Operating Earnings                           |  |                               | 3,958   |   |      |   | 2,251   |  
|Earnings (Loss) from Discontinued Operations |  |                               | 557     |   |      |   | (98     | )
|                                             |  |                               |         |   |      |  
|Earnings Before Income Taxes                 |  | $                             | 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.                                                                                                      

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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.

|                           |  |                               |       |  |           |  |      |          |  |  |           |  |  |  |      |  
|-------------------------- |  | ----------------------------- | ----- |  | --------- |  | ---- | -------- |  |  | --------- |  |  |  | ---- | -
|                           |  | 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.

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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.

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.

LIQUIDITY AND CAPITAL RESOURCES

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

We typically finance properties under development through short-term
variable and fixed-rate secured construction loans, and to a limited extent
depending on the timing of the project construction, cash flow from operations.
Construction loans totaled $74.0 million at March 31, 2003. Under the terms
of various construction loan agreements, we are required to maintain certain
minimum liquidity and net worth levels. At March 31, 2003, we were in
compliance with these covenants.

Permanent commercial project loans outstanding at March 31, 2003 totaled
$46.2 million compared to $76.6 million at March 31, 2002. The project loans
are collateralized by completed commercial properties and have original terms
ranging from ten to twenty-two years with fixed interest rates ranging from
7.20% to 8.72%. These loans are non-recourse to the Partnership and its
subsidiaries.

Seller-financed land loans of $57.1 million were obtained during fiscal
2002. Outstanding balances on seller-financed loans at March 31, 2003 totaled
$32.1 million, with terms of up to three years and fixed interest rates ranging
from 8.00% to 9.50%. These loans are non-recourse to the Partnership and its
subsidiaries.

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The International Home Building segment has secured a revolving bank
credit facility of 100 million in British pounds sterling. This facility
expires in April 2006, and may be extended for up to two years with lender
approval. Advances under this facility totaled £44.0 million, or $69.3
million, at March 31, 2003.
Under the terms of this facility, the International Home Building segment is
required to maintain certain leverage and interest coverage ratios and a
minimum tangible net worth. At March 31, 2003, the International Home Building
segment was in compliance with all of these covenants.

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

CERTAIN OFF-BALANCE-SHEET AND OTHER OBLIGATIONS

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

Joint Ventures

We conduct certain operations through our participation in joint ventures
in which we hold less than a majority interest. These non-consolidated joint
ventures had total debt outstanding of approximately $35.8 million as of March
31, 2003 and $16.1 million as of March 31, 2002. Our liability for the
obligations of these non-consolidated joint ventures is limited to
approximately $7.5 million as of March 31, 2003.

Letters of Credit, Guarantees
and Leases

At March 31, 2003, we had outstanding performance bonds and bank
guarantees of $28.0 million that relate to projects undertaken by International
Home Building and development obligations of International Home Building.

To obtain construction financing for commercial and multi-family projects
being developed by our subsidiaries, we are often required to guarantee, for
the benefit of the construction lender, the completion of the project. In some
instances, we have also executed recourse payment guarantees. At March 31,
2003, our subsidiaries had outstanding letters of credit of $3.9 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, our liability exposure will
be decreased and, eventually, we will not have any continuing obligations with
respect to these projects.

We have no material capital or operating leases.

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.

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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. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets,
or SFAS No. 144. SFAS No. 144 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.

RECENT ACCOUNTING PRONOUNCEMENTS

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

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

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

In January 2003, the Financial Accounting Standards Board issued
Interpretation No. 46, Consolidation of Variable Interest Entities, or FIN
46, which clarifies the application of Accounting Research Bulletin No. 51,
Consolidated Financial Statements, to certain entities in which equity
investors

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do not have the characteristics of a controlling financial interest
or do not have sufficient equity at risk for the entity to finance its
activities without additional subordinated financial support from other
parties. Certain disclosure requirements of FIN 46 are effective for financial
statements of interim or annual periods issued after January 31, 2003. FIN 46
applies immediately to variable interest entities created, or in which an
enterprise obtains an interest, after January 31, 2003. For variable interest
entities in which an enterprise holds a variable interest that it acquired
before February 1, 2003, FIN 46 applies to interim or annual periods beginning
after June 15, 2003. As discussed in Note (B), Organization, of our Notes to
Condensed Combining Financial Statements, Centex indirectly holds 100% of the
Partnerships Class A and Class C Units. The manner in which Centex reports
its interest in the Partnership may be affected by this interpretation. Centex
and the Companies are in the process of assessing the impact FIN 46 will have
on their respective financial statements. See Note (P), Recent Accounting
Pronouncements, to the consolidated financial statements of Centex included
elsewhere in this Report for further discussion regarding this interpretation.



---

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. In addition to
the specific uncertainties discussed elsewhere in this Report, the following
risks and uncertainties may affect the actual performance and results of
operations of the Companies:



| |  | Our homebuilding, commercial, multi-family and land sales
operations are somewhat cyclical and sensitive to changes in economic
conditions, including levels of employment, consumer confidence and
income, availability of financing, interest rate levels and changes in
the economic condition of the local markets in which we operate.                                                                              
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | Our homebuilding, commercial, multi-family and land sales
operations are also subject to other risks and uncertainties, including
seasonal variations, adverse weather conditions, the availability of
adequate land in desirable locations, the cost and availability of
labor and construction materials, labor disputes, the general demand
for housing and new construction and the resale market for existing
homes.
| 
| |  | All of our businesses operate in very competitive environments,
which are characterized by competition from a number of other
homebuilders, developers and landowners in each of the markets in which
we operate.                                                                                                                                                                                                        
| 
| |  | We are subject to various federal, state and local statutes, rules
and regulations that could affect our businesses, including those
concerning zoning, construction, protecting the environment and health.
In addition, our businesses could be affected by changes in federal
income tax policy, federal mortgage loan financing programs and by
other changes in regulation or policy.                               

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

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Partnership has utilized 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.

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, 2003, the Partnership, through its subsidiaries and joint
ventures, had $46.2 million in fixed-rate permanent debt with a
weighted-average interest rate of 8.10%. 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 $47.8 million in other fixed-rate debt at March 31, 2003 with
maturities ranging from fiscal 2004 to fiscal 2006. Also at March 31, 2003,
the Partnership, through its subsidiaries and joint ventures, had $127.5
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
be less than $1.0 million based on the balances outstanding at March 31, 2003.
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 80% of its debt outstanding at March 31, 2003. In addition,
Fairclough has issued promissory notes and incurred bank debt payable in
British pounds sterling. As of March 31, 2003, 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.

Pursuant to leases signed over the last several years, a single tenant
leases 1,029,000 square feet, or approximately 49%, of the Partnerships
current commercial projects. Fiscal 2003 revenues from this tenant were
approximately 30% of total rental revenues from commercial projects and
approximately 41% of total rental revenues from continuing operations.

Various Centex affiliates lease, pursuant to leases signed over the last
several years, an aggregate of 157,000 square feet, or approximately 7%, of the
Partnerships current commercial projects. Various Centex affiliates also
leased space in two commercial projects that were sold during fiscal 2003.
Fiscal 2003 revenues from these Centex affiliates were approximately 24% of
total rental revenues from commercial projects, and approximately 27% of total
rental revenues from continuing operations.

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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                                           |  |  | 136 | 
|                                                                   |  |  |     | 
|Combining Statements of Operations                                 |  |  | 137 | 
|                                                                   |  |  |     | 
|Combining Statements of Cash Flows                                 |  |  | 138 | 
|                                                                   |  |  |     | 
|Combining Statements of Stockholders Equity and Partners Capital |  |  | 140 | 
|                                                                   |  |  |     | 
|Notes to Combining Financial Statements                            |  |  | 141 | 
|                                                                   |  |  |     | 
|Report of Independent Auditors                                     |  |  | 159 | 
|                                                                   |  |  |     | 
|Quarterly Results                                                  |  |  | 160 | 

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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, |        
|                                                        |                                                  |   |                                                        |         |           |        
|                                                        |                                                  |   |                                                        |         | 2003      |         |         | 2002    |       |         |   |              |  |   | 2003       |         |                    | 2002    |         |                 | 2003  |         |       | 2002   |    
|                                                        |                                                  |   |                                                        |         |           |         |         |         |       |         |   |              |  |   |            |         |                    |         |         |                 |       |         |       |        |    
|                                                        |                                                  |   |                                                        |         |           |         |         |         |       |         |   |              |  |   |            |         | Centex Development |         |         | 3333 Holding    |      
|                                                        |                                                  |   |                                                        |         |           |         |         |         |       |         |   |              |  |   |            |         | Company, L.P. and  |         |         | Corporation and |      
|                                                        |                                                  |   |                                                        |         | Combined  |         |         |         |       |         |   | Subsidiaries |  |   | Subsidiary |        
|                                                        |                                                  |   |                                                        |         |           |         |         |         |       |         |   |              |  |   |            |        
|Assets                                                  |                                                  |   |                                                        |         |           |         |         |         |       |         |   |              |  |   |            |         |                    |         |         |                 |       |         |       |        |     |        |       |       
|                                                        | Cash and Cash Equivalents                        |   | $                                                      | 5,113   |           |         | $       | 22,538  |       |         |   |              |  |   | $          | 5,105   |                    |         | $       | 22,529          |       |         | $     | 8      |     |        | $     | 9      |   
|                                                        | Receivables                                     |   |                                                        |         |           |         |         |         |       |         |   |              |  |   |            |         |                    |         |         |                 |       |         |       |        |     |        |       |        |   
|                                                        |                                                  |   | Affiliates                                             |         |          |         |         |         |      |         |   |              |  |   |            |         | 4,289              |         |         |                 | 4,368 |         |       |        |    |        |       |        |   |       
|                                                        |                                                  |   | Centex Corporation and Subsidiaries                    |         | 7,793     |         |         |         |      |         |   |              |  |   |            |         | 7,793              |         |         |                 |      |         |       |        |    |        |       |        |   |       
|                                                        |                                                  |   | Notes                                                  |         | 5,885     |         |         |         |      |         |   |              |  |   |            |         | 5,885              |         |         |                 |      |         |       |        |    |        |       |        |   |       
|                                                        |                                                  |   | Other                                                  |         | 17,135    |         |         |         | 7,213 |         |   |              |  |   |            |         | 16,874             |         |         |                 | 7,142 |         |       |        | 261 |        |       |        | 71 |       
|                                                        | Inventories                                     |   |                                                        |         |           |         |         |         |       |         |   |              |  |   |            |         |                    |         |         |                 |       |         |       |        |     |        |       |        |   
|                                                        |                                                  |   | Housing Projects                                       |         |           | 349,489 |         |         |       | 317,186 |   |              |  |   |            |         |                    | 349,489 |         |                 |       | 317,186 |       |        |     |       |       |        |    |       |  
|                                                        |                                                  |   | Land Held for Development and Sale                     |         |           | 47,319  |         |         |       | 88,138  |   |              |  |   |            |         |                    | 47,319  |         |                 |       | 88,138  |       |        |     |       |       |        |    |       |  
|                                                        |                                                  |   | Commercial and Multi-Family
Projects Under Development |         |           | 51,752  |         |         |       | 28,751  |   |              |  |   |            |         |                    | 51,752  |         |                 |       | 28,751  |       |        |     |       |       |        |    |       |  
|                                                        | Investments                                     |   |                                                        |         |           |         |         |         |       |         |   |              |  |   |            |         |                    |         |         |                 |       |         |       |        |     |        |       |        |   
|                                                        |                                                  |   | Commercial Properties, net                             |         |           | 98,609  |         |         |       | 83,442  |   |              |  |   |            |         |                    | 98,609  |         |                 |       | 83,442  |       |        |     |       |       |        |    |       |  
|                                                        |                                                  |   | Real Estate Joint Ventures                             |         |           | 3,973   |         |         |       | 5,353   |   |              |  |   |            |         |                    | 3,973   |         |                 |       | 5,353   |       |        |     |       |       |        |    |       |  
|                                                        |                                                  |   | Affiliate                                              |         |           |        |         |         |       |        |   |              |  |   |            |         |                    |        |         |                 |       |        |       |        |     | 1,191  |       |        |    | 1,191  |  
|                                                        | Assets Held for Sale                             |   |                                                        |        |           |         |         | 65,111  |       |         |   |              |  |   |            |        |                    |         |         | 65,111          |       |         |       |       |     |        |       |       |   
|                                                        | Property and Equipment, net                      |   |                                                        | 2,308   |           |         |         | 3,212   |       |         |   |              |  |   |            | 2,308   |                    |         |         | 3,212           |       |         |       |       |     |        |       |       |   
|                                                        | Other Assets                                    |   |                                                        |         |           |         |         |         |       |         |   |              |  |   |            |         |                    |         |         |                 |       |         |       |        |     |        |       |        |   
|                                                        |                                                  |   | Goodwill, net                                          |         |           | 30,698  |         |         |       | 27,799  |   |              |  |   |            |         |                    | 30,698  |         |                 |       | 27,799  |       |        |     |       |       |        |    |       |  
|                                                        |                                                  |   | Deferred Charges and Other                             |         |           | 20,610  |         |         |       | 19,693  |   |              |  |   |            |         |                    | 18,839  |         |                 |       | 17,922  |       |        |     | 1,771  |       |        |    | 1,771  |  
|                                                        |                                                  |   |                                                        |         |           |         |         |         |       |         |   |              |  |   |            |         |                    |         |         |                 |       |        
|                                                        |                                                  | $ | 640,684                                                |         |           | $       | 668,436 |         |       |         |   |              |  | $ | 642,933    |         |                    | $       | 670,953 |                 |       | $       | 3,231 |        |     | $      | 3,042 |       
|                                                        |                                                  |   |                                                        |         |           |         |         |         |       |         |   |              |  |   |            |         |                    |         |         |                 |       |        
|                                                       
|Liabilities, Stockholders Equity and
Partners Capital |                                                  |   |                                                        |         |           |         |         |         |       |         |   |              |  |   |            |         |                    |         |         |                 |       |         |       |        |     |        |       |       
|                                                        | Accounts Payable and Accrued
Liabilities        |   |                                                        |         |           |         |         |         |       |         |   |              |  |   |            |         |                    |         |         |                 |       |         |       |        |     |        |       |        |   
|                                                        |                                                  |   | Affiliates                                             |         | $         |        |         |         | $     |        |   |              |  |   |            |         | $                  |        |         |                 | $     |        |       |        | $   | 4,289  |       |        | $  | 4,368  |  
|                                                        |                                                  |   | Centex Corporation and Subsidiaries                    |         |           |        |         |         |       | 7,061   |   |              |  |   |            |         |                    |        |         |                 |       | 7,061   |       |        |     |       |       |        |    |       |  
|                                                        |                                                  |   | Other                                                  |         |           | 130,344 |         |         |       | 107,772 |   |              |  |   |            |         |                    | 130,182 |         |                 |       | 107,779 |       |        |     | 211    |       |        |    | 42     |  
|                                                        | Liabilities Related to Assets Held for
Sale      |   |                                                        |        |           |         |         | 51,527  |       |         |   |              |  |   |            |        |                    |         |         | 51,527          |       |         |       |       |     |        |       |       |   
|                                                        | Notes Payable                                    |   |                                                        | 221,492 |           |         |         | 239,929 |       |         |   |              |  |   |            | 221,492 |                    |         |         | 239,929         |       |         |       |       |     |        |       |       |   
|                                                        | 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)                            |         |           | (2,070  | )       |         |       | (2,169  | ) |              |  |   |            |         |                    |        |         |                 |       |        |       |        |     | (2,070 | )     |        |    | (2,169 | )
|                                                        |                                                  |   | Partners Capital                                      |         |           | 273,180 |         |         |       | 264,994 |   |              |  |   |            |         |                    | 274,322 |         |                 |       | 266,136 |       |        |     |       |       |        |    |       |  
|                                                        |                                                  |   | Accumulated Other Comprehensive
Income (Loss):         |         |           |         |         |         |       |         |   |              |  |   |            |         |                    |         |         |                 |       |         |       |        |     |        |       |        |    |        |  
|                                                        |                                                  |   | Foreign Currency Translation Adjustments               | 16,903  |           |         |         | (2,367  | )     |         |   |              |  |   |            | 17,291  |                    |         |         | (2,367          | )     |         |       |       |     |        |       |       |   
|                                                        |                                                  |   | Unrealized Gain (Loss) on Hedging Instruments          | (466    | )         |         |         | 388     |       |         |   |              |  |   |            | (854    | )                  |         |         | 388             |       |         |       |       |     |        |       |       |   
|                                                        |                                                  |   |                                                        |         |           |         |         |         |       |         |   |              |  |   |            |         |                    |         |         |                 |       |        
|                                                        | Total Stockholders Equity and
Partners Capital |   |                                                        | 288,848 |           |         |         | 262,147 |       |         |   |              |  |   |            | 291,259 |                    |         |         | 264,657         |       |         |       | (1,269 | )   |        |       | (1,368 | ) 
|                                                        |                                                  |   |                                                        |         |           |         |         |         |       |         |   |              |  |   |            |         |                    |         |         |                 |       |        
|                                                        |                                                  | $ | 640,684                                                |         |           | $       | 668,436 |         |       |         |   |              |  | $ | 642,933    |         |                    | $       | 670,953 |                 |       | $       | 3,231 |        |     | $      | 3,042 |       
|                                                        |                                                  |   |                                                        |         |           |         |         |         |       |         |   |              |  |   |            |         |                    |         |         |                 |       |        

See Notes to Combining Financial Statements.

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

136



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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, |        
|                                                                                                                   |                                              |   |                               |        
|                                                                                                                   |                                              |   | 2003                          |         |                       | 2002 |            |         | 2001 |   |         | 2003    |   |                            | 2002    |                 |  | 2001 |         |         | 2003 |   |         | 2002    |   |   | 2001         |    
|                                                                                                                   |                                              |   |                               |         |                       |      |            |         |      |   |         |         |   |                            |         |                 |  |      |         |         |      |   |         |         |   |   |              |    
|                                                                                                                   |                                              |   |                               |         |                       |      |            |         |      |   |         |         |   |                            |         |                 |  |      |         |         |      |   |         |         |   |   | 3333 Holding |    
|                                                                                                                   |                                              |   |                               |         |                       |      |            |         |      |   |         |         |   | Centex Development Company |         | Corporation and | 
|                                                                                                                   |                                              |   | Combined                      |         | L.P. and Subsidiaries |      | Subsidiary |        
|                                                                                                                   |                                              |   |                               |         |                       |      |            |         |      |  
|Revenues                                                                                                           |                                              |   |                               |         |                       |      |            |         |      |   |         |         |   |                            |         |                 |  |      |         |         |      |   |         |         |   |   |              |     |  |   |       |       |  |   |       |      
|                                                                                                                   | Real Estate Sales                            |   | $                             | 427,964 |                       |      | $          | 364,162 |      |   | $       | 328,362 |   |                            | $       | 427,964         |  |      | $       | 364,162 |      |   | $       | 328,362 |   |   | $            |    |  |   | $     |      |  |   | $     |      | 
|                                                                                                                   | Interest and Other Income                    |   |                               | 21,595  |                       |      |            | 16,701  |      |   |         | 7,515   |   |                            |         | 21,470          |  |      |         | 15,216  |      |   |         | 7,514   |   |   |              | 350 |  |   |       | 1,611 |  |   |       | 1,001 | 
|                                                                                                                   |                                              |   |                               |         |                       |      |            |         |      |   |         |         |   |                            |         |                 |  |      |         |         |      |   |         |         |   |   |             
|                                                                                                                   |                                              |   | 449,559                       |         |                       |      | 380,863    |         |      |   | 335,877 |         |   |                            | 449,434 |                 |  |      | 379,378 |         |      |   | 335,876 |         |   |   | 350          |     |  |   | 1,611 |       |  |   | 1,001 |      
|                                                                                                                   |                                              |   |                               |         |                       |      |            |         |      |   |         |         |   |                            |         |                 |  |      |         |         |      |   |         |         |   |   |             
|Costs and Expenses                                                                                                 |                                              |   |                               |         |                       |      |            |         |      |   |         |         |   |                            |         |                 |  |      |         |         |      |   |         |         |   |   |              |     |  |   |       |       |  |   |       |      
|                                                                                                                   | Cost of Real Estate Sold                     |   |                               | 365,241 |                       |      |            | 315,835 |      |   |         | 285,612 |   |                            |         | 365,241         |  |      |         | 315,835 |      |   |         | 285,612 |   |   |              |    |  |   |       |      |  |   |       |      | 
|                                                                                                                   | Selling, General and
Administrative Expenses |   |                               | 49,204  |                       |      |            | 36,741  |      |   |         | 31,001  |   |                            |         | 49,178          |  |      |         | 36,593  |      |   |         | 30,292  |   |   |              | 251 |  |   |       | 274   |  |   |       | 1,709 | 
|                                                                                                                   | Interest                                     |   |                               | 10,168  |                       |      |            | 7,506   |      |   |         | 10,869  |   |                            |         | 10,168          |  |      |         | 7,506   |      |   |         | 10,869  |   |   |              |    |  |   |       |      |  |   |       |      | 
|                                                                                                                   | Depreciation and
Amortization                |   |                               | 3,326   |                       |      |            | 2,599   |      |   |         | 3,923   |   |                            |         | 3,326           |  |      |         | 2,599   |      |   |         | 3,885   |   |   |              |    |  |   |       |      |  |   |       | 38    | 
|                                                                                                                   |                                              |   |                               |         |                       |      |            |         |      |   |         |         |   |                            |         |                 |  |      |         |         |      |   |         |         |   |   |             
|                                                                                                                   |                                              |   | 427,939                       |         |                       |      | 362,681    |         |      |   | 331,405 |         |   |                            | 427,913 |                 |  |      | 362,533 |         |      |   | 330,658 |         |   |   | 251          |     |  |   | 274   |       |  |   | 1,747 |      
|                                                                                                                   |                                              |   |                               |         |                       |      |            |         |      |   |         |         |   |                            |         |                 |  |      |         |         |      |   |         |         |   |   |             
|Earnings (Loss) from
Continuing Operations
Before Income Taxes                                                     |                                              |   | 21,620                        |         |                       |      | 18,182     |         |      |   | 4,472   |         |   |                            | 21,521  |                 |  |      | 16,845  |         |      |   | 5,218   |         |   |   | 99           |     |  |   | 1,337 |       |  |   | (746  | )    
|                                                                                                                   | Income Taxes                                 |   |                               | 4,192   |                       |      |            | 1,757   |      |   |         | (242    | ) |                            |         | 4,192           |  |      |         | 1,757   |      |   |         | (242    | ) |   |              |    |  |   |       |      |  |   |       |      | 
|                                                                                                                   |                                              |   |                               |         |                       |      |            |         |      |   |         |         |   |                            |         |                 |  |      |         |         |      |   |         |         |   |   |             
|Net Earnings (Loss) from
Continuing Operations                                                                     |                                              |   | 17,428                        |         |                       |      | 16,425     |         |      |   | 4,714   |         |   |                            | 17,329  |                 |  |      | 15,088  |         |      |   | 5,460   |         |   |   | 99           |     |  |   | 1,337 |       |  |   | (746  | )    
|Discontinued Operations:                                                                                           |                                              |   |                               |         |                       |      |            |         |      |   |         |         |   |                            |         |                 |  |      |         |         |      |   |         |         |   |   |              |     |  |   |       |       |  |   |       |      
|Earnings (Loss) from
Discontinued Operations
(Including Gain on Sale
of $11,754 for the year
ended March 31, 2003) |                                              |   | 11,934                        |         |                       |      | 557        |         |      |   | (98     | )       |   |                            | 11,934  |                 |  |      | 557     |         |      |   | (98     | )       |   |   |             |     |  |   |      |       |  |   |      |      
|                                                                                                                   |                                              |   |                               |         |                       |      |            |         |      |   |         |         |   |                            |         |                 |  |      |         |         |      |   |         |         |   |   |             
|Net Earnings                                                                                                       |                                              | $ | 29,362                        |         |                       | $    | 16,982     |         |      | $ | 4,616   |         |   | $                          | 29,263  |                 |  | $    | 15,645  |         |      | $ | 5,362   |         |   | $ | 99           |     |  | $ | 1,337 |       |  | $ | (746  | )    
|                                                                                                                   |                                              |   |                               |         |                       |      |            |         |      |   |         |         |   |                            |         |                 |  |      |         |         |      |   |         |         |   |   |             
|Net Earnings Allocable to
Limited Partner                                                                          |                                              |   |                               |         |                       |      |            |         |      |   |         |         |   | $                          | 29,263  |                 |  | $    | 15,645  |         |      | $ | 5,362   |         |   |   |              |     |  |   |       |       |  |   |       |      
|                                                                                                                   |                                              |   |                               |         |                       |      |            |         |      |   |         |         |   |                            |         |                 |  |      |         |         |      |   |         |         |   |   |              |     |  |   |       |       | 
|Earnings from ContinuingOperations Per Unit/Share                                                                  |                                              |   |                               |         |                       |      |            |         |      |   |         |         |   | $                          | 72.03   |                 |  | $    | 67.42   |         |      | $ | 77.74   |         |   | $ | 99           |     |  | $ | 1,337 |       |  | $ | (746  | )    
|Earnings (Loss) From DiscontinuedOperations Per Unit/Share                                                         |                                              |   |                               |         |                       |      |            |         |      |   |         |         |   |                            | 49.60   |                 |  |      | 2.49    |         |      |   | (1.40   | )       |   |   |             |     |  |   |      |       |  |   |      |      
|                                                                                                                   |                                              |   |                               |         |                       |      |            |         |      |   |         |         |   |                            |         |                 |  |      |         |         |      |   |         |         |   |   |              |     |  |  
|Net Earnings (Loss) Per
Unit/Share                                                                                 |                                              |   |                               |         |                       |      |            |         |      |   |         |         |   | $                          | 121.63  |                 |  | $    | 69.91   |         |      | $ | 76.34   |         |   | $ | 99           |     |  | $ | 1,337 |       |  | $ | (746  | )    
|                                                                                                                   |                                              |   |                               |         |                       |      |            |         |      |   |         |         |   |                            |         |                 |  |      |         |         |      |   |         |         |   |   |              |     |  |  
|Weighted-Average Units/Shares Outstanding                                                                          |                                              |   |                               |         |                       |      |            |         |      |   |         |         |   |                            | 240,591 |                 |  |      | 223,788 |         |      |   | 70,235  |         |   |   | 1,000        |     |  |   | 1,000 |       |  |   | 1,000 |      
|                                                                                                                   |                                              |   |                               |         |                       |      |            |         |      |   |         |         |   |                            |         |                 |  |      |         |         |      |   |         |         |   |   |              |     |  |  

See Notes to Combining Financial Statements.

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

137



---



##### 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 |        
|                                               |                                                                               |                                        |         |          |        
|                                               |                                                                               |                                        |         | 2003     |         |   | 2002     |          |         | 2001 |        
|                                               |                                                                               |                                        |         |          |         |   |          |          |         |      |        
|                                               |                                                                               |                                        |         | Combined |        
|                                               |                                                                               |                                        |         |          |        
|Cash Flows  Operating Activities              |                                                                               |                                        |         |          |         |   |          |          |         |      |         |        
|                                               | Net Earnings (Loss)                                                           |                                        | $       | 29,362   |         |   | $        | 16,982   |         |      | $       | 4,616   |         
|                                               | Adjustments                                                                  |                                        |         |          |         |   |          |          |         |      |         |         |         
|                                               |                                                                               | Depreciation                           |         |          | 4,531   |   |          |          | 3,414   |      |         |         | 4,089    |  
|                                               |                                                                               | Amortization                           |         |          | 932     |   |          |          | 691     |      |         |         | 751      |  
|                                               |                                                                               | Deferred Tax Provision (Benefit)       |         |          | 1,257   |   |          |          | (1,262  | )    |         |         |         |  
|                                               |                                                                               | Equity in Earnings from Joint Ventures |         |          | (539    | ) |          |          | (161    | )    |         |         | (394     | )
|                                               | Decrease in Restricted Cash                                                   |                                        |         |         |         |   |          |         |         |      |         | 1,915   |         
|                                               | (Increase) Decrease in Receivables                                            |                                        |         | (16,893  | )       |   |          | 2,716    |         |      |         | 133     |         
|                                               | (Increase) Decrease in Notes Receivable                                       |                                        |         | (5,885   | )       |   |          | 14       |         |      |         | 3,117   |         
|                                               | Decrease (Increase) in Inventories                                            |                                        |         | 31,345   |         |   |          | (103,403 | )       |      |         | (36,126 | )       
|                                               | Decrease (Increase) in Commercial Properties                                  |                                        |         | 29,892   |         |   |          | (51,780  | )       |      |         | (24,143 | )       
|                                               | (Increase) Decrease in Other Assets                                           |                                        |         | (7       | )       |   |          | (8,108   | )       |      |         | (7,895  | )       
|                                               | Increase (Decrease) in Payables and Accruals                                  |                                        |         | 2,960    |         |   |          | 35,483   |         |      |         | (25,571 | )       
|                                               |                                                                               |                                        |         |          |         |   |          |          |        
|                                               |                                                                               |                                        | 76,955  |          |         |   | (105,414 | )        |         |      | (79,508 | )      
|                                               |                                                                               |                                        |         |          |         |   |          |          |        
|Cash Flows  Investing Activities              |                                                                               |                                        |         |          |         |   |          |          |         |      |         |        
|                                               | Decrease (Increase) in Advances to Joint Ventures and
Investment in Affiliate |                                        |         | 1,919    |         |   |          | (2,493   | )       |      |         | 290     |         
|                                               | Disposals (Additions) of Property and Equipment, net                          |                                        |         | 525      |         |   |          | (236     | )       |      |         | (633    | )       
|                                               |                                                                               |                                        |         |          |         |   |          |          |        
|                                               |                                                                               |                                        | 2,444   |          |         |   | (2,729   | )        |         |      | (343    | )      
|                                               |                                                                               |                                        |         |          |         |   |          |          |        
|Cash Flows  Financing Activities              |                                                                               |                                        |         |          |         |   |          |          |         |      |         |        
|                                               | (Decrease)
Increase in Notes Payable
 Centex Corporation and Subsidiaries    |                                        |         |         |         |   |          |         |         |      |         |        |         
|                                               |                                                                               | Other                                  |         |          | (76,840 | ) |          |          | 101,676 |      |         |         | (114,318 | )
|                                               | Issuance of Class C Units                                                     |                                        |         |         |         |   |          | 26,378   |         |      |         | 142,268 |         
|                                               | Preference Payments                                                           |                                        |         | (21,077  | )       |   |          |         |         |      |         |        |         
|                                               |                                                                               |                                        |         |          |         |   |          |          |        
|                                               |                                                                               |                                        | (97,917 | )        |         |   | 128,054  |          |         |      | 27,950  |        
|                                               |                                                                               |                                        |         |          |         |   |          |          |        
|                                               | Effect of Exchange Rate Changes on Cash                                       |                                        |         | 1,093    |         |   |          | (407     | )       |      |         | (1,464  | )       
|                                               |                                                                               |                                        |         |          |         |   |          |          |        
|Net (Decrease) Increase in Cash                |                                                                               |                                        | (17,425 | )        |         |   | 19,504   |          |         |      | (53,365 | )      
|Cash and Cash Equivalents at Beginning of Year |                                                                               |                                        | 22,538  |          |         |   | 3,034    |          |         |      | 56,399  |        
|                                               |                                                                               |                                        |         |          |         |   |          |          |        
|Cash and Cash Equivalents at End of Year       |                                                                               | $                                      | 5,113   |          |         | $ | 22,538   |          |         | $    | 3,034   |        
|                                               |                                                                               |                                        |         |          |         |   |          |          |        

See Notes to Combining Financial Statements.

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

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

| |  |                    |         |   |                 |   |          |      |  |   |          |   |  |      |      |   |      |   |        |   |  |  
| |  | ------------------ | ------- | - | --------------- | - | -------- | ---- |  | - | -------- | - |  | ---- | ---- | - | ---- | - | ------ | - |  | -
| |  | March 31,          |         |   | March 31,       |  
| |  |                    |         |   |                 |  
| |  | 2003               |         |   | 2002            |   |          | 2001 |  |   | 2003     |   |  | 2002 |      |   | 2001 |  
| |  |                    |         |   |                 |   |          |      |  |   |          |   |  |      |      |   |      |  
| |  | Centex Development |         |   | 3333 Holding    |  
| |  | Company, L.P. and  |         |   | Corporation and |  
| |  | Subsidiaries       |         |   | Subsidiary      |  
| |  |                    |         |   |                 |  
| | 
| |  | $                  | 29,263  |   |                 | $ | 15,645   |      |  | $ | 5,362    |   |  | $    | 99   |   |      | $ | 1,337  |   |  | $
| | 
| |  |                    | 4,531   |   |                 |   | 3,414    |      |  |   | 4,051    |   |  |      |     |   |      |   |       |   |  |  
| |  |                    | 932     |   |                 |   | 691      |      |  |   | 751      |   |  |      |     |   |      |   |       |   |  |  
| |  |                    | 1,257   |   |                 |   | (1,262   | )    |  |   |         |   |  |      |     |   |      |   |       |   |  |  
| |  |                    | (539    | ) |                 |   | (161     | )    |  |   | (394     | ) |  |      |     |   |      |   |       |   |  |  
| |  |                    |        |   |                 |   |         |      |  |   | 1,915    |   |  |      |     |   |      |   |       |   |  |  
| |  |                    | 16,703  |   |                 |   | 2,787    |      |  |   | 128      |   |  |      | (190 | ) |      |   | (71    | ) |  |  
| |  |                    | (5,885  | ) |                 |   | 14       |      |  |   | 3,117    |   |  |      |     |   |      |   |       |   |  |  
| |  |                    | 31,345  |   |                 |   | (105,299 | )    |  |   | (35,767  | ) |  |      |     |   |      |   | 1,896  |   |  |  
| |  |                    | 29,892  |   |                 |   | (51,780  | )    |  |   | (24,143  | ) |  |      |     |   |      |   |       |   |  |  
| |  |                    | (7      | ) |                 |   | (6,437   | )    |  |   | (7,970   | ) |  |      |     |   |      |   | (1,671 | ) |  |  
| |  |                    | 2,870   |   |                 |   | 37,031   |      |  |   | (26,547  | ) |  |      | 90   |   |      |   | (1,548 | ) |  |  
| |  |                    |         |   |                 |   |          |      |  |   |          |   |  |      |      |   |      |  
| |  |                    | 76,956  |   |                 |   | (105,357 | )    |  |   | (79,497  | ) |  |      | (1   | ) |      |   | (57    | ) |  |  
| |  |                    |         |   |                 |   |          |      |  |   |          |   |  |      |      |   |      |  
| | 
| |  |                    | 1,919   |   |                 |   | (2,493   | )    |  |   | 290      |   |  |      |     |   |      |   |       |   |  |  
| |  |                    | 525     |   |                 |   | (297     | )    |  |   | (633     | ) |  |      |     |   |      |   | 61     |   |  |  
| |  |                    |         |   |                 |   |          |      |  |   |          |   |  |      |      |   |      |  
| |  |                    | 2,444   |   |                 |   | (2,790   | )    |  |   | (343     | ) |  |      |     |   |      |   | 61     |   |  |  
| |  |                    |         |   |                 |   |          |      |  |   |          |   |  |      |      |   |      |  
| | 
| |  |                   |         |   |                |   |          |     |  |   |         |   |  |     |      |   |     |  
| |  |                    | (76,840 | ) |                 |   | 101,676  |      |  |   | (114,318 | ) |  |      |     |   |      |   |       |   |  |  
| |  |                    |        |   |                 |   | 26,378   |      |  |   | 142,268  |   |  |      |     |   |      |   |       |   |  |  
| |  |                    | (21,077 | ) |                 |   |         |      |  |   |         |   |  |      |     |   |      |   |       |   |  |  
| |  |                    |         |   |                 |   |          |      |  |   |          |   |  |      |      |   |      |  
| |  |                    | (97,917 | ) |                 |   | 128,054  |      |  |   | 27,950   |   |  |      |     |   |      |   |       |   |  |  
| |  |                    |         |   |                 |   |          |      |  |   |          |   |  |      |      |   |      |  
| |  |                    | 1,093   |   |                 |   | (407     | )    |  |   | (1,464   | ) |  |      |     |   |      |   |       |   |  |  
| |  |                    |         |   |                 |   |          |      |  |   |          |   |  |      |      |   |      |  
| |  |                    | (17,424 | ) |                 |   | 19,500   |      |  |   | (53,354  | ) |  |      | (1   | ) |      |   | 4      |   |  |  
| |  |                    | 22,529  |   |                 |   | 3,029    |      |  |   | 56,383   |   |  |      | 9    |   |      |   | 5      |   |  |  
| |  |                    |         |   |                 |   |          |      |  |   |          |   |  |      |      |   |      |  
| |  | $                  | 5,105   |   |                 | $ | 22,529   |      |  | $ | 3,029    |   |  | $    | 8    |   |      | $ | 9      |   |  | $
| |  |                    |         |   |                 |   |          |      |  |   |          |   |  |      |      |   |      |  

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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, 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 | )    
|                          | Preference Payments        |   |         | (21,077                          | )      |   |                            |        |  |         |           |  |         |           |         | (21,077  | )     |   |           |          |            |           |          |         |  |   |        |      |  
|                          | Net Earnings               |   |         | 29,362                           |        |   |                            |        |  |         |           |  |         |           |         | 29,263   |       |   |           |          |            |           |          |         |  |   |        | 99    |  
|                          | Other Comprehensive
Income |   |         | 18,416                           |        |   |                            |        |  |         |           |  |         |           |         | 18,416   |       |   |           |          |            |           |          |         |  |   |        |      |  
|                          |                            |   |         |                                  |        |   |                            |         |  |         |           |   |         |           |         |          |       |   |           |           |            |           |          |          |  |   |       
|                          | Comprehensive Income       |   |         | 47,778                           |        |   |                            |         |  |         |           |   |         |           |         |          |       |   |           |           |            |           |          |          |  |   |        |       |  
|                          |                            |   |         |                                  |        |   |                            |         |  |         |           |   |         |           |         |          |       |   |           |           |           
|Balance at March 31, 2003 |                            | $ | 288,848 |                                  |        | $ | 500                        |         |  | $       | 1,142     |   |         | $         | 289,617 |          |       | $ | 1         |           |            | $         | 800      |          |  | $ | (2,070 | )    
|                          |                            |   |         |                                  |        |   |                            |         |  |         |           |   |         |           |         |          |       |   |           |           |           

See Notes to Combining Financial Statements.

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

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

(A) BASIS OF PRESENTATION

The accompanying combining financial statements include the accounts of
3333 Holding Corporation (Holding) and subsidiary and Centex Development
Company, L.P. (the Partnership) and subsidiaries (collectively, the
Companies) as of March 31, 2003 and 2002 and results of operations for each
of fiscal 2003, 2002 and 2001 after 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.

(B) ORGANIZATION

The Partnership is a master limited partnership formed by Centex
Corporation and subsidiaries (Centex) in March 1987 to broaden the range of
business activities that may be conducted for the benefit of Centexs
stockholders to include general real estate development. Centex believed that
this expansion would improve stockholder value through longer-term real estate
investments, real estate developments and the benefits of the partnership form
of business.

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

As holder of the Class A and Class C Units, Centex is entitled to a
cumulative preferred return of 9% per annum on the average outstanding balance
of its capital contributions to the Partnership, adjusted for cash and other
distributions representing a return of capital. As of March 31, 2003, these
adjusted capital contributions, or Unrecovered Capital, were
$241.1 million. Preference payments in arrears totaled
$42.0 million after a
preference payment of $21.1 million on March 31, 2003.

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

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

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and subsidiaries, you should refer to the separate financial statements and
related footnotes included elsewhere in this Report.

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

|                                     |                                             |   |            |           |  |      |           |           | 
|------------------------------------ | ------------------------------------------- | - | ---------- | --------- |  | ---- | --------- | --------- | 
|                                     |                                             |   |            |          
|                                     |                                             |   | March 31,  |          
|                                     |                                             |   |            |          
|                                     |                                             |   | 2003       |           |  | 2002 |          
|                                     |                                             |   |            |           |  |      |          
|Assets                               |                                             |   |            |           |  |      |           |          
|                                     | Cash
and Cash Equivalents                   |   | $          | 477,166   |  |      | $         | 242,254   | 
|                                     | Restricted Cash                             |   |            | 172,321   |  |      |           | 106,270   | 
|                                     | Receivables                                 |   |            | 5,640,302 |  |      |           | 4,066,133 | 
|                                     | Inventories                                 |   |            | 4,052,597 |  |      |           | 3,221,931 | 
|                                     | Investments in Joint Ventures and Other     |   |            | 106,250   |  |      |           | 99,962    | 
|                                     | Assets Held for Sale                        |   |            |          |  |      |           | 65,111    | 
|                                     | Property
and Equipment, net                 |   |            | 698,456   |  |      |           | 723,497   | 
|                                     | Other Assets                                |   |            | 823,073   |  |      |           | 859,525   | 
|                                     |                                             |   |            |           |  |     
|                                     |                                             | $ | 11,970,165 |           |  | $    | 9,384,683 |          
|                                     |                                             |   |            |           |  |      |          
|Liabilities and Stockholders Equity |                                             |   |            |           |  |      |           |          
|                                     | Accounts
Payable and Accrued Liabilities    |   | $          | 1,814,744 |  |      | $         | 1,544,004 | 
|                                     | Liabilities Related to Assets Held for Sale |   |            |          |  |      |           | 51,527    | 
|                                     | Short-term Debt                             |   |            | 1,042,825 |  |      |           | 525,800   | 
|                                     | Long-term Debt                              |   |            | 6,283,366 |  |      |           | 4,990,908 | 
|                                     | Minority Stockholders Interest             |   |            | 171,384   |  |      |           | 155,671   | 
|                                     | Stockholders Equity                        |   |            | 2,657,846 |  |      |           | 2,116,773 | 
|                                     |                                             |   |            |           |  |     
|                                     |                                             | $ | 11,970,165 |           |  | $    | 9,384,683 |          
|                                     |                                             |   |            |           |  |      |          

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

|                                             |  |                               |           |  |      |   |           |      |  |   |           |  
|-------------------------------------------- |  | ----------------------------- | --------- |  | ---- | - | --------- | ---- |  | - | --------- | -
|                                             |  |                               |          
|                                             |  | For the Years Ended March 31, |          
|                                             |  |                               |          
|                                             |  | 2003                          |           |  | 2002 |   |           | 2001 | 
|                                             |  |                               |           |  |      |   |           |      | 
|Revenues                                     |  | $                             | 9,499,365 |  |      | $ | 8,109,124 |      |  | $ | 7,045,133 |  
|Cost of Sales                                |  |                               | 8,712,256 |  |      |   | 7,489,159 |      |  |   | 6,608,946 |  
|                                             |  |                               |           |  |      |   |           |      | 
|Earnings Before Income Taxes                 |  |                               | 787,109   |  |      |   | 619,965   |      |  |   | 436,187   |  
|Income Taxes                                 |  |                               | 243,124   |  |      |   | 238,296   |      |  |   | 154,112   |  
|                                             |  |                               |           |  |      |   |           |      | 
|Net Earnings From Continuing Operations      |  |                               | 543,985   |  |      |   | 381,669   |      |  |   | 282,075   |  
|Earnings (Loss) From Discontinued
Operations |  |                               | 11,934    |  |      |   | 557       |      |  |   | (98       | )
|                                             |  |                               |           |  |      |   |           |      | 
|Net Earnings                                 |  |                               | 555,919   |  |      |   | 382,226   |      |  |   | 281,977   |  
|Other Comprehensive Income (Loss)            |  |                               | 6,965     |  |      |   | (7,859    | )    |  |   | (3,849    | )
|                                             |  |                               |           |  |      |   |           |      | 
|Comprehensive Income                         |  | $                             | 562,884   |  |      | $ | 374,367   |      |  | $ | 278,128   |  
|                                             |  |                               |           |  |      |   |           |      | 

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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 240,591; 223,788 and 70,235
for fiscal 2003, 2002, and 2001 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.

Accounts and Notes Receivable

Accounts receivable primarily consist of accrued rents due from tenants,
closed unfunded home sales receivables and accrued reimbursements for costs
incurred at a multi-family project. See Note (K), Commitments and
Contingencies, for further discussion of this project. Non-cancelable minimum rentals (in thousands) from operating leases during the next five fiscal years are: 2004, $12,082; 2005, $12,034; 2006, $11,449; 2007, $11,258; 2008, $11,105; and $61,020 thereafter.

Notes receivable at March 31, 2003 are due within one year. The
weighted-average interest rate at March 31, 2003 was 5.25%.

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. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. An impairment charge of
approximately $1.0 million is included in Selling, General and
Administrative Expenses in fiscal year 2003 to reflect the
difference between cost and fair value for a commercial
project.

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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 |  | 5 to 39 years  
|Tenant Improvements        |  | Terms of leases

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

|                         |  |           |         |   |      |   |        |  
|------------------------ |  | --------- | ------- | - | ---- | - | ------ | -
|                         |  |           |        
|                         |  | March 31, |        
|                         |  |           |        
|                         |  | 2003      |         |   | 2002 |  
|                         |  |           |         |   |      |  
|Commercial Properties    |  | $         | 103,251 |   |      | $ | 86,137 |  
|Accumulated Depreciation |  |           | (4,642  | ) |      |   | (2,695 | )
|                         |  |           |         |   |      |  
|                         |  | $         | 98,609  |   |      | $ | 83,442 |  
|                         |  |           |         |   |      |  

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), Goodwill.

Advertising Costs

Advertising costs are expensed as incurred. The advertising costs for
fiscal 2003, 2002 and 2001 were $5.4 million, $4.3 million and $3.7 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

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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 2003 presentation.

Combining Statements of Cash Flows  Supplemental Disclosures

|                                                 |  |                               |        |  |      |   |        | 
|------------------------------------------------ |  | ----------------------------- | ------ |  | ---- | - | ------ | 
|                                                 |  | For the Years Ended March 31, |       
|                                                 |  |                               |       
|                                                 |  | 2003                          |        |  | 2002 |  
|                                                 |  |                               |        |  |      |  
|Cash Paid for Interest                           |  | $                             | 18,518 |  |      | $ | 14,605 | 
|                                                 |  |                               |        |  |      |  
|Net Cash Paid for Taxes                          |  | $                             | 2,657  |  |      | $ | 5,591  | 
|                                                 |  |                               |        |  |      |  
|Issuance of Class C Units
in Exchange for Assets |  | $                             |       |  |      | $ | 27,135 | 
|                                                 |  |                               |        |  |      |  

|                        |  |                               |        |  |      |   |        | 
|----------------------- |  | ----------------------------- | ------ |  | ---- | - | ------ | 
|                        |  | For the Years Ended March 31, |       
|                        |  |                               |       
|                        |  | 2003                          |        |  | 2002 |  
|                        |  |                               |        |  |      |  
|Total Interest Incurred |  | $                             | 19,256 |  |      | $ | 14,855 | 
|Interest Capitalized    |  |                               | 6,711  |  |      |   | 5,312  | 
|                        |  |                               |        |  |      |  
|Interest Expense        |  | $                             | 12,545 |  |      | $ | 9,543  | 
|                        |  |                               |        |  |      |  

Recent Accounting Pronouncements

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

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

In November 2002, the Financial Accounting Standards Board issued
Interpretation No. 45, Guarantors Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of

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Indebtedness of Others (FIN
45), which requires certain guarantees to be recorded at fair value. FIN 45
also requires a guarantor to make certain disclosures about guarantees,
including product warranties, even when the likelihood of making any payments
under the guarantee is remote. The disclosure requirements of FIN 45 are
effective for financial statements of interim or annual periods ending after
December 15, 2002. The initial recognition and measurement provisions are
applicable only for guarantees issued or modified after December 31, 2002. The implementation of FIN 45 did not have a
material impact on our results of operations or financial position.

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

(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 was
dedicated to fund repair costs and claims arising out of a project completed
prior to CDCUKs acquisition of Fairclough.

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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.

(E) PROPERTY AND EQUIPMENT

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

|                               |  |           |        |   |      |   |       |  
|------------------------------ |  | --------- | ------ | - | ---- | - | ----- | -
|                               |  |           |       
|                               |  | March 31, |       
|                               |  |           |       
|                               |  | 2003      |        |   | 2002 |  
|                               |  |           |        |   |      |  
|Land, Buildings & Improvements |  | $         | 1,531  |   |      | $ | 2,004 |  
|Machinery, Equipment & Other   |  |           | 1,874  |   |      |   | 1,659 |  
|                               |  |           |        |   |      |  
|                               |  |           | 3,405  |   |      |   | 3,663 |  
|Accumulated Depreciation       |  |           | (1,097 | ) |      |   | (451  | )
|                               |  |           |        |   |      |  
|                               |  | $         | 2,308  |   |      | $ | 3,212 |  
|                               |  |           |        |   |      |  

(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 $35.8 million as of March 31, 2003 and $16.1 million as of March
31, 2002. The Partnerships liability for the obligations of these
non-consolidated joint ventures is limited to approximately $7.5 million as of
March 31, 2003.

(G) NOTES PAYABLE

Non-recourse debt totaled $78.2 million at March 31, 2003. 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, 2003 totaling $74.0 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, | 
|                   |                       |  |                                   |  |   |        |           | 
|                   |                       |  |                                   |  |   |        | 2003      |  |   | 2002   |        
|                   |                       |  |                                   |  |   |        |           |  |   |        |        
|Non-Recourse Debt  |                       |  |                                   |  |   |        |           |  |   |        |         | 
|                   | Mortgage Notes(2)     |  | 7.20% to 8.72%                    |  | $ | 46,153 |           |  | $ | 76,592 |        
|                   | Land Notes(3)         |  | 8.00% to 9.50%                    |  |   | 32,076 |           |  |   | 62,370 |        
|                   |                       |  |                                   |  |   |        |           |  |   |       
|                   |                       |  |                                   |  |   |        | 78,229    |  |   |        | 138,962 | 
|                   |                       |  |                                   |  |   |        |           |  |   |       
|Limited-Recourse   |                       |  |                                   |  |   |        |           |  |   |        |         | 
|                   | Construction Notes(5) |  | LIBOR(1) + 2.00% - 2.35% to 7.08% |  |   | 50,506 |           |  |   | 40,868 |        
|                   |                       |  |                                   |  |   |        |           |  |   |       
|Full-Recourse Debt |                       |  |                                   |  |   |        |           |  |   |        |         | 
|                   | Construction Notes(6) |  | LIBOR(1) + 1.75% - 2.00%          |  |   | 23,461 |           |  |   | 15,167 |        
|                   | Other(4)              |  | LIBOR(1) + 1.00%                  |  |   | 69,296 |           |  |   | 94,129 |        
|                   |                       |  |                                   |  |   |        |           |  |   |       
|                   |                       |  |                                   |  |   |        | 92,757    |  |   |        | 109,296 | 
|                   |                       |  |                                   |  |   |        |           |  |   |       
|                   |                       |  |                                   |  |   | $      | 221,492   |  |   | $      | 289,126 | 
|                   |                       |  |                                   |  |   |        |           |  |   |       



|(1) |  | The 30-day LIBOR rate at March 31, 2003 and 2002 was 1.31% and 1.88%,
respectively.
|--- |  | -----------------------------------------------------------------------------------
|   
|(2) |  | Secured by assets with an aggregate book value of $53.8 million at
March 31, 2003. 
|   

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|   
|---
|(3)
|   
|(4)
|   
|(5)
|   
|(6)

Maturities of debt (in thousands) during the next five fiscal years are:
2004, $29,929; 2005, $35,193; 2006, $25,175; 2007, $69,296; 2008, $; and
$61,899 thereafter.

(H) COMPREHENSIVE INCOME

A summary of comprehensive income for the three-year period ended March
31, 2003 is presented below:

|                                               |                                               |   |                               |        |   |      |        |       |      |   |       |        |  
|---------------------------------------------- | --------------------------------------------- | - | ----------------------------- | ------ | - | ---- | ------ | ----- | ---- | - | ----- | ------ | -
|                                               |                                               |   |                               |       
|                                               |                                               |   | For the Years Ended March 31, |       
|                                               |                                               |   |                               |       
|                                               |                                               |   | 2003                          |        |   | 2002 |        |       | 2001 |  
|                                               |                                               |   |                               |        |   |      |        |       |      |  
|Net Earnings                                   |                                               | $ | 29,362                        |        |   | $    | 16,982 |       |      | $ | 4,616 |       
|Other Comprehensive Income (Loss), Net of Tax: |                                               |   |                               |        |   |      |        |       |      |   |       |       
|                                               | Foreign Currency Translation Adjustments      |   |                               | 19,270 |   |      |        | 1,829 |      |   |       | (4,100 | )
|                                               | Unrealized Gain (Loss) on Hedging Instruments |   |                               | (854   | ) |      |        | 388   |      |   |       |       |  
|                                               |                                               |   |                               |        |   |      |        |       |     
|Comprehensive Income                           |                                               | $ | 47,778                        |        |   | $    | 19,199 |       |      | $ | 516   |       
|                                               |                                               |   |                               |        |   |      |        |       |     

(I) DERIVATIVES AND HEDGING

The Partnership is exposed to the risk of interest rate fluctuations on
its debt obligations. As part of its strategy to manage the obligations that
are subject to changes in interest rates, the Partnership has entered into an
interest rate swap agreement, designated as a cash flow hedge, on a portion of
its debt. The swap agreement is recorded at its fair value in Other Assets or
Accrued Liabilities in the condensed combining balance sheets. To the extent
the hedging relationship is effective, fluctuations in the fair value of the
derivative are deferred as a component of Accumulated Other Comprehensive
Income. Fluctuations in the fair value of the ineffective portion of the
derivative would be reflected in the current period earnings. During fiscal
2003, 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, 2003, the Accumulated Other
Comprehensive Loss was $666 thousand ($466 thousand net of tax). If the cash
flow hedge is terminated, the net gain or loss remains in Accumulated Other
Comprehensive Income, and is reclassified into earnings in the same periods
during which the cash flows on the hedged item affect earnings.

(J) GOODWILL

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

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Partnership had no impairment of goodwill in fiscal
2003. Identifiable intangible assets, other than goodwill, are immaterial.
The Partnerships International Home Building segment carries all of the
Partnerships goodwill, which arose from the April 15, 1999 acquisition of all
of the voting shares of Fairclough. The carrying amount of goodwill was $30.7
million and $27.8 million at March 31, 2003 and 2002, respectively. The increase in fiscal 2003 reflects the impact of foreign
currency translation adjustments.

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

|                                                   |                       |   |           |        | 
|-------------------------------------------------- | --------------------- | - | --------- | ------ | 
|                                                   |                       |   | March 31, |       
|                                                   |                       |   |           |       
|                                                   |                       |   | 2001      |       
|                                                   |                       |   |           |       
|Reported Net Earnings Allocable to Limited Partner |                       | $ | 5,362     |       
|Goodwill Amortization                              |                       |   | 1,750     |       
|                                                   |                       |   |          
|Adjusted Net Earnings                              |                       | $ | 7,112     |       
|                                                   |                       |   |          
|Net Earnings (Loss) Per Unit:                      |                       |   |           |       
|                                                   | Reported Net Earnings |   | $         | 76.34  | 
|                                                   | Goodwill Amortization |   |           | 24.92  | 
|                                                   |                       |   |          
|                                                   | Adjusted Net Earnings |   | $         | 101.26 | 
|                                                   |                       |   |          

(K) COMMITMENTS AND CONTINGENCIES

As of March 31, 2003, the Partnership had remaining commitments of
approximately $10.2 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. In some instances,
the Partnership has also executed recourse payment guarantees. At March 31,
2003, our subsidiaries had outstanding letters of credit of $3.9 million that
primarily relate to development obligations of Multi-Family Communities.

Subsidiaries of the Partnership have also obtained demand notes or letters
of credit from Centex for up to 10% of the construction loan commitment amount.
These demand notes or letters of credit have been pledged or endorsed to the
lenders as additional collateral on the construction loans and may be called
only in the event of an uncured default by the Partnership. This additional
collateral totals approximately $1.1 million as of March 31, 2003.

A subsidiary of the Partnership has agreed to develop a mixed-use project
in Saint Paul, Minnesota consisting of various types of residential housing and
ancillary retail space. The subsidiary has performed a significant portion of
the infrastructure work and has sold several of the development sites to
reputable home builders (including a 1.5 acre site to Centex Homes) pursuant to
contracts that obligate the purchasers to fulfill certain of the sellers
development obligations at the project. The subsidiary of the Partnership (as
the seller) retains the right to repurchase the site if the purchaser fails to
commence the performance of such obligations. Ultimately, the Partnerships
subsidiary remains responsible for the development of the project.

The subsidiary anticipates that the costs expended for infrastructure work
will be reimbursed from the proceeds of a bond offering by a special taxing
district established to aid in the development of the project. These costs
will be reimbursed over time as improvements at the project generate property
taxes

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sufficient to fund debt service on the bonds. A receivable of
approximately $13.9 million is included in Other Receivables in the
accompanying Combining Balance Sheets. The subsidiary has deferred
recognition of this income as of March 31, 2003 as improvements
to the project that will generate property taxes have begun.

In the normal course of its business, the Partnership issues certain
representations, warranties and guarantees related to its home sales, land
sales and building sales that may be affected by the Financial

Accounting Standards Boards recent issuance of FIN 45. Based on
historical evidence, the Partnership does not believe that any of these
representations, warranties or guarantees would result in a material effect on
our consolidated financial condition or operations. See further discussion on
our warranty liability below. See further discussion of FIN 45 in Note (C),
Significant Accounting Policies.

International Home Building offers a ten-year limited warranty for most
homes constructed and sold in the United Kingdom. The warranty covers defects
in materials or workmanship in various components of the home for the first two
years and designated structural elements of the home in the third through tenth
years. International Home Building estimates the costs that may be incurred
under its warranty program for which it will be responsible and records a
liability at the time each home is closed. Factors that affect International
Home Buildings warranty liability include the number of homes closed,
historical and anticipated rates of warranty claims and cost per claim.
International Home Building periodically assesses the adequacy of its recorded
warranty liability and adjusts the amounts as necessary.

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

|                             |  |   |        |   | 
|---------------------------- |  | - | ------ | - | 
|Balance as of March 31, 2002 |  | $ | 2,279  |  
|Warranties Issued            |  |   | 5,323  |  
|Settlements Made             |  |   | (4,212 | )
|                             |  |   |       
|Balance as of March 31, 2003 |  | $ | 3,390  |  
|                             |  |   |       

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 $1.2 million in fiscal 2003, $1.0 million in
fiscal 2002 and $0.8 million in fiscal 2001. The employees rights to employer
contributions to these plans vest over a period of up to seven years.

(L) BUSINESS SEGMENTS

The Companies operate in four principal business segments: International
Home Building, Commercial Development, Multi-Family Communities and
Corporate-Other. All of the segments, except for International Home Building,
operate in the United States. International Home Buildings accounting
policies are the same as those described in the summary of significant
accounting policies. Segment information is presented after the
elimination of all inter-segment transactions and balances.

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

|                                                               |  |                                   |          |   |             |   |         |              |  |   |            |   |  |       |         |   |  |   |          |  
|-------------------------------------------------------------- |  | --------------------------------- | -------- | - | ----------- | - | ------- | ------------ |  | - | ---------- | - |  | ----- | ------- | - |  | - | -------- | -
|                                                               |  | For the Year Ended March 31, 2003 |         
|                                                               |  | (Dollars in thousands)            |         
|                                                               |  |                                  
|                                                               |  | Intl Home                        |          |   | Commercial  |   |         | Multi-Family |  |   | Corporate- |   |  |       |         |  
|                                                               |  | Building                          |          |   | Development |   |         | Communities  |  |   | Other      |   |  | Total |        
|                                                               |  |                                   |          |   |             |   |         |              |  |   |            |   |  |       |        
|Revenues                                                       |  | $                                 | 375,624  |   |             | $ | 31,273  |              |  | $ | 6,171      |   |  | $     | 36,491  |   |  | $ | 449,559  |  
|Cost of Sales                                                  |  |                                   | (319,322 | ) |             |   | (8,334  | )            |  |   | (4,703     | ) |  |       | (32,882 | ) |  |   | (365,241 | )
|Selling, General & Administrative Expenses                     |  |                                   | (33,372  | ) |             |   | (12,450 | )            |  |   | (2,982     | ) |  |       | (3,726  | ) |  |   | (52,530  | )
|Interest Expense                                               |  |                                   | (2,538   | ) |             |   | (5,266  | )            |  |   |           |   |  |       | (2,364  | ) |  |   | (10,168  | )
|                                                               |  |                                   |          |   |             |   |         |              |  |   |            |   |  |       |        
|Earnings (Loss) from Continuing Operations
Before Income Taxes |  |                                   | 20,392   |   |             |   | 5,223   |              |  |   | (1,514     | ) |  |       | (2,481  | ) |  |   | 21,620   |  
|Earnings from Discontinued Operations
Before Income Tax        |  |                                   |         |   |             |   | 10,191  |              |  |   | 1,743      |   |  |       |        |   |  |   | 11,934   |  
|                                                               |  |                                   |          |   |             |   |         |              |  |   |            |   |  |       |        
|Earnings (Loss) Before Income Tax                              |  | $                                 | 20,392   |   |             | $ | 15,414  |              |  | $ | 229        |   |  | $     | (2,481  | ) |  | $ | 33,554   |  
|                                                               |  |                                   |          |   |             |   |         |              |  |   |            |   |  |       |        
|Identifiable Assets                                            |  | $                                 | 396,428  |   |             | $ | 126,855 |              |  | $ | 65,389     |   |  | $     | 52,012  |   |  | $ | 640,684  |  
|Capital Expenditures                                           |  | $                                 | 295      |   |             | $ |        |              |  | $ |           |   |  | $     |        |   |  | $ | 295      |  
|Depreciation and Amortization                                  |  | $                                 | 782      |   |             | $ | 2,493   |              |  | $ | 28         |   |  | $     | 23      |   |  | $ | 3,326    |  
|Revenues from Discontinued Operations                          |  | $                                 |         |   |             | $ | 79,903  |              |  | $ | 25,200     |   |  | $     |        |   |  | $ | 105,103  |  





Effective April 1, 2003, the operations of Multi-Family Communities were
restructured. Due to the risks associated with an extended development time
frame and significant capital requirements, these operations have been
restructured to focus on leasing and disposition of current projects rather
than new development.

The responsibilities for day-to-day operations, including the completion,
leasing and sale of remaining projects have been assumed by personnel within
the Corporate-Other segment. The future operations of remaining projects will
be reflected in the Corporate-Other segment. A restructuring charge of
approximately $0.6 million is included in Multi-Family Communities selling,
general and administrative expenses for the year ended March 21, 2003.

Pursuant to leases signed over the last several years, a single tenant
leases 1,029,000 square feet, or approximately 49%, of the Partnerships
current commercial projects. Fiscal 2003 revenues from this tenant were
approximately 30% of total rental revenues from commercial project and
approximately 41% of total rental revenues from continuing operations.

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Various Centex affiliates lease, pursuant to leases signed over the last
several years, an aggregate of 157,000 square feet, or approximately 7%, of the
Partnerships current commercial projects. Various Centex affiliates also
leased space in two commercial projects that were sold during fiscal 2003.
Fiscal 2003 revenues from these Centex affiliates were approximately 24% of
total rental revenues from commercial projects, and approximately 27% of total
rental revenues from continuing operations.

|                                                               |  |                                   |          |   |             |   |         |              |  |   |            |   |  |       |        |   |  |   |          |  
|-------------------------------------------------------------- |  | --------------------------------- | -------- | - | ----------- | - | ------- | ------------ |  | - | ---------- | - |  | ----- | ------ | - |  | - | -------- | -
|                                                               |  | 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  |   |             | $ | 33,701  |              |  | $ | 53,944     |   |  | $     | 2,812  |   |  | $ | 380,863  |  
|Cost of Sales                                                  |  |                                   | (251,010 | ) |             |   | (16,750 | )            |  |   | (46,866    | ) |  |       | (1,209 | ) |  |   | (315,835 | )
|Selling, General & Administrative Expenses                     |  |                                   | (25,135  | ) |             |   | (8,275  | )            |  |   | (3,917     | ) |  |       | (2,013 | ) |  |   | (39,340  | )
|Interest Expense                                               |  |                                   | (1,947   | ) |             |   | (4,718  | )            |  |   | (6         | ) |  |       | (835   | ) |  |   | (7,506   | )
|                                                               |  |                                   |          |   |             |   |         |              |  |   |            |   |  |       |       
|Earnings (Loss) from Discontinued
Operations Before Income Tax |  |                                   | 12,314   |   |             |   | 3,958   |              |  |   | 3,155      |   |  |       | (1,245 | ) |  |   | 18,182   |  
|Earnings from Discontinued Operations
Before Income Tax        |  |                                   |         |   |             |   | 557     |              |  |   |           |   |  |       |       |   |  |   | 557      |  
|                                                               |  |                                   |          |   |             |   |         |              |  |   |            |   |  |       |       
|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 & Amortization                                    |  | $                                 | 540      |   |             | $ | 1,398   |              |  | $ | 28         |   |  | $     | 2      |   |  | $ | 1,968    |  
|Revenues
from Discontinued Operations                          |  | $                                 |         |   |             | $ | 5,767   |              |  | $ |           |   |  | $     |       |   |  | $ | 5,767    |  





|                                                               |  |                                   |          |   |          |          |         |             |  |   |              |   |  |            |        |   |       |   |         |   |  |   |          |  
|-------------------------------------------------------------- |  | --------------------------------- | -------- | - | -------- | -------- | ------- | ----------- |  | - | ------------ | - |  | ---------- | ------ | - | ----- | - | ------- | - |  | - | -------- | -
|                                                               |  | 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  |             |  | $ | 29,648       |   |  | $          | 1,664  |   |       | $ | 21,774  |   |  | $ | 335,877  |  
|Cost of Sales                                                  |  |                                   | (222,634 | ) |          |          | (24,002 | )           |  |   | (18,398      | ) |  |            |       |   |       |   | (20,578 | ) |  |   | (285,612 | )
|Selling, General &
Administrative Expenses                     |  |                                   | (22,085  | ) |          |          | (3,461  | )           |  |   | (5,932       | ) |  |            | (2,399 | ) |       |   | (1,047  | ) |  |   | (34,924  | )
|Interest Expense                                               |  |                                   | (7,802   | ) |          |          |        |             |  |   | (3,067       | ) |  |            |       |   |       |   |        |   |  |   | (10,869  | )
|                                                               |  |                                   |          |   |          |          |         |             |  |   |              |   |  |            |        |   |       |  
|Earnings (Loss) from Discontinued
Operations Before Income Tax |  |                                   | (34      | ) |          |          | 2,841   |             |  |   | 2,251        |   |  |            | (735   | ) |       |   | 149     |   |  |   | 4,472    |  
|Loss from Discontinued Operations
Before Income Tax            |  |                                   |         |   |          |          |        |             |  |   | (98          | ) |  |            |       |   |       |   |        |   |  |   | (98      | )
|                                                               |  |                                   |          |   |          |          |         |             |  |   |              |   |  |            |        |   |       |  
|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      |             |  | $ | 1,159        |   |  | $          | 41     |   |       | $ |        |   |  | $ | 3,923    |  
|Revenues from Discontinued Operations                          |  | $                                 |         |   |          | $        |        |             |  | $ | 3,440        |   |  | $          |       |   |       | $ |        |   |  | $ | 3,440    |  





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

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(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, |       
|                                      |  |           |       
|                                      |  | 2003      |        |  | 2002  |  
|                                      |  |           |        |  |       |  
|                                      |  | Carrying  |        |  | Fair  |   |        | Carrying |  |   | Fair    | 
|                                      |  | Value     |        |  | Value |   |        | Value    |  |   | Value   | 
|                                      |  |           |        |  |       |   |        |          |  |   |         | 
|Financial Liabilities
Fixed-Rate Debt |  | $         | 93,975 |  |       | $ | 99,793 | (1)      |  | $ | 152,616 |  |  | $ | 153,815 | (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, 27,135 Class C
Units were issued in exchange for cash and other assets with a fair market
value of $27.1 million. At March 31, 2003, 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. Preference
payments in arrears at March 31, 2003 amounted to $42.0 million, and
Unrecovered Capital for the holders of Class A Units and Class C Units at March
31, 2003 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.

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(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 $50 thousand
in service fees paid during fiscal 2003, the Partnership paid $.1 million and $1.0 million to Holding during
fiscal 2003 and 2001, 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 $50 thousand, $125 thousand and $1.0
million in fiscal 2003, 2002 and 2001 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 $34.5 million, $1.7
million and $21.1 million (from the sale of the Partnerships Domestic Home
Building operation) during fiscal 2003, 2002 and 2001, respectively.

During fiscal 2003, Centex Homes purchased a 1.5 acre site in Saint Paul,
Minnesota from a subsidiary of the Partnership for cash consideration of $1.6
million. 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.

At March 31, 2003 and March 31, 2002, Centex Homes had $7.2 million and
$9.1 million deposited with the Partnership as option deposits for the purchase
of land. Centex Homes also entered into agreements to reimburse the
Partnership for certain costs and fees incurred by the Partnership in the
purchase and ownership of these tracts of land. During the year ended March
31, 2003, Centex Homes paid $3.5 million to the Partnership in fees and
reimbursements pursuant to these agreements and $32.9 million for the purchase
of residential lots. Centex Homes expects to pay an additional $31.6 million
to the Partnership to complete the purchase of these tracts of land over the
next three years.

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 $3.5 million and $4.2 million during fiscal 2003 and 2002,
respectively.

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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
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.

During fiscal 2003 and 2002, 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 $244 thousand and $412 thousand, respectively, in title insurance
premiums and escrow fees to Centex title insurance subsidiaries.

In the last two years, Construction Services has executed contracts with
the Partnership for the construction of two industrial facilities. At March
31, 2003, all contracts were completed. At March 31, 2002, the total value of
such contracts was $15.0 million, of which $5.3 million was unpaid. During the
year ended March 31, 2003, the Partnership paid $5.3 million to Construction
Services pursuant to these contracts.

During fiscal 2003, the Partnership paid $65 thousand to a Centex
affiliate for marketing services provided to the Partnership by an employee of
such affiliate.

A subsidiary of the Partnership has leased approximately 157,450 square
feet, or 72% of leasable space, in the Citymark office building in Dallas,
Texas to Centex Service and other Centex affiliates.

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 a limited partner. Centex Homes is currently
the sole limited partner of the Partnership.

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. At March 31,
2003, unpaid preference accruals totaled $42.0 million, and Unrecovered Capital
for Class A Units and Class C Units totaled $32.8 million and $208.3 million,
respectively. The Partnership made a preference payment of $21.1 million on
March 31, 2003.

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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, |      
|                                     |         |   |                               |      
|                                     |         |   | 2003                          |       |  | 2002 |        |        | 2001 |  
|                                     |         |   |                               |       |  |      |        |        |      |  
|Current Provision (Benefit):         |         |   |                               |       |  |      |        |        |      |   |      |       
|                                     | Federal |   | $                             |      |  |      | $      |       |      |   | $    | (3,600 | )
|                                     | State   |   |                               |      |  |      |        |       |      |   |      |       |  
|                                     | Foreign |   |                               | 2,935 |  |      |        | 3,019  |      |   |      | 3,358  |  
|                                     |         |   |                               |       |  |      |        |        |     
|Total Current Provision (Benefit):   |         |   | 2,935                         |       |  |      | 3,019  |        |      |   | (242 | )     
|                                     |         |   |                               |       |  |      |        |        |     
|Deferred Provision (Benefit):        |         |   |                               |       |  |      |        |        |      |   |      |       
|                                     | Federal |   |                               |      |  |      |        |       |      |   |      |       |  
|                                     | State   |   |                               |      |  |      |        |       |      |   |      |       |  
|                                     | Foreign |   |                               | 1,257 |  |      |        | (1,262 | )    |   |      |       |  
|                                     |         |   |                               |       |  |      |        |        |     
|Total Deferred Provision (Benefit)   |         |   | 1,257                         |       |  |      | (1,262 | )      |      |   |     |       
|                                     |         |   |                               |       |  |      |        |        |     
|Total Income Tax Provision (Benefit) |         | $ | 4,192                         |       |  | $    | 1,757  |        |      | $ | (242 | )     
|                                     |         |   |                               |       |  |      |        |        |     

The effective tax rate differs from the federal statutory rate of 35% in
fiscal 2003, 2002 and 2001 due to the following items:

|                                                                                                    |                                   |   |                               |      |   |      |        |       |      |   |        |        |  
|--------------------------------------------------------------------------------------------------- | --------------------------------- | - | ----------------------------- | ---- | - | ---- | ------ | ----- | ---- | - | ------ | ------ | -
|                                                                                                    |                                   |   | For the Years Ended March 31, |     
|                                                                                                    |                                   |   |                               |     
|                                                                                                    |                                   |   | 2003                          |      |   | 2002 |        |       | 2001 |  
|                                                                                                    |                                   |   |                               |      |   |      |        |       |      |  
|Financial Income Before Taxes                                                                       |                                   | $ | 33,554                        |      |   | $    | 18,739 |       |      | $ | 4,374  |       
|                                                                                                    |                                   |   |                               |      |   |      |        |       |     
|Income Taxes at Statutory Rate                                                                      |                                   | $ | 11,744                        |      |   | $    | 6,559  |       |      | $ | 1,531  |       
|(Decreases)
Increases in Tax Resulting from -         Benefit of Pass-through Status of Partnership |                                   |   | (6,820                        | )    |   |      | (5,918 | )     |      |   | (1,765 | )     
|                                                                                                    | Preferred Share Distributions     |   |                               |     |   |      |        | 1,609 |      |   |        | 2,731  |  
|                                                                                                    | Goodwill Amortization             |   |                               |     |   |      |        |      |      |   |        | 613    |  
|                                                                                                    | Tax Allocation Agreement Payments |   |                               |     |   |      |        |      |      |   |        | (3,600 | )
|                                                                                                    | Other                             |   |                               | (732 | ) |      |        | (493  | )    |   |        | 248    |  
|                                                                                                    |                                   |   |                               |      |   |      |        |       |     
|Provision (Benefit) for Income Taxes                                                                |                                   | $ | 4,192                         |      |   | $    | 1,757  |       |      | $ | (242   | )     
|                                                                                                    |                                   |   |                               |      |   |      |        |       |     
|Effective Tax Rate                                                                                  |                                   |   | 12.49                         | %    |   |      | 9.38   | %     |      |   | (5.53  | %)    

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

|                               |                                   |   |           |        |   |      |       |       |  
|------------------------------ | --------------------------------- | - | --------- | ------ | - | ---- | ----- | ----- | -
|                               |                                   |   | March 31, |       
|                               |                                   |   |           |       
|                               |                                   |   | 2003      |        |   | 2002 |      
|                               |                                   |   |           |        |   |      |      
|Deferred
Tax Assets            |                                   |   |           |        |   |      |       |      
|                               | Accrued Interest                  |   | $         | 1,738  |   |      | $     | 1,738 |  
|                               | Other                             |   |           |       |   |      |       | 215   |  
|                               | Swap Agreement Market Adjustments |   |           | 200    |   |      |       |      |  
|                               | Net Operating Loss Carryforwards  |   |           | 682    |   |      |       | 717   |  
|                               |                                   |   |           |        |   |     
|Total Deferred Tax Assets      |                                   |   | 2,620     |        |   |      | 2,670 |      
|                               | Valuation Allowance               |   |           | (682   | ) |      |       | (717  | )
|                               |                                   |   |           |        |   |     
|Net Deferred Tax Assets        |                                   |   | 1,938     |        |   |      | 1,953 |      
|                               |                                   |   |           |        |   |     
|Deferred Tax Liabilities       |                                   |   |           |        |   |      |       |      
|                               | Other                             |   |           | (664   | ) |      |       |      |  
|                               | Interest Expensed as Incurred     |   |           | (1,069 | ) |      |       | (691  | )
|                               | Swap Agreement Market Adjustments |   |           |       |   |      |       | (166  | )
|                               |                                   |   |           |        |   |     
|Total Deferred Tax Liabilities |                                   |   | (1,733    | )      |   |      | (857  | )    
|                               |                                   |   |           |        |   |     
|Net Deferred Tax Assets        |                                   | $ | 205       |        |   | $    | 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, 2003, Holding had net operating loss carryforwards of $1.9
million. If unused, the loss carryforwards will expire in fiscal years 2019
through 2020. 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 under the terms of a
Tax Liability Allocation Agreement.

As of March 31, 2003, 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.

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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, 2003 and 2002, 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, 2003. Our
audits also included the financial statement schedules listed in the index at
Item 15 (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, 2003 and 2002, 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, 2003, 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 LLP)
|------------- |  | -----------------------
|              |  |                        
|Dallas, Texas |  |                        
|May 14, 2003  |  |                        

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##### Table of Contents



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

|               |                                     |  |                               |         |   |              |   |         |            |  |                    |         |   |                 |      |         |  |      |   |       |  |  |   |       |  
|-------------- | ----------------------------------- |  | ----------------------------- | ------- | - | ------------ | - | ------- | ---------- |  | ------------------ | ------- | - | --------------- | ---- | ------- |  | ---- | - | ----- |  |  | - | ----- | -
|               |                                     |  | For the Years Ended March 31, |        
|               |                                     |  |                               |        
|               |                                     |  | 2003                          |         |   | 2002         |   |         | 2003       |  |                    | 2002    |   |                 | 2003 |         |  | 2002 |  
|               |                                     |  |                               |         |   |              |   |         |            |  |                    |         |   |                 |      |         |  |      |  
|               |                                     |  |                               |         |   |              |   |         |            |  | Centex Development |         |   | 3333 Holding    |     
|               |                                     |  |                               |         |   |              |   |         |            |  | Company, L.P. and  |         |   | Corporation and |     
|               |                                     |  | Combined                      |         |   | Subsidiaries |   |         | Subsidiary | 
|               |                                     |  |                               |         |   |              |   |         |            | 
|First Quarter  |                                     |  |                               |         |   |              |   |         |            |  |                    |         |   |                 |      |         |  |      |   |       |  |  |   |      
|               | Revenues from Continuing
Operations |  | $                             | 87,393  |   |              | $ | 82,707  |            |  | $                  | 87,368  |   |                 | $    | 82,097  |  |      | $ | 88    |  |  | $ | 660   |  
|               | Earnings (Loss) Before Taxes        |  | $                             | (773    | ) |              | $ | 3,366   |            |  | $                  | (785    | ) |                 | $    | 2,790   |  |      | $ | 12    |  |  | $ | 576   |  
|               | Net Earnings (Loss)                 |  | $                             | (303    | ) |              | $ | 3,075   |            |  | $                  | (315    | ) |                 | $    | 2,499   |  |      | $ | 12    |  |  | $ | 576   |  
|               | Earnings (Loss) Per Unit/Share      |  |                               |         |   |              |   |         |            |  | $                  | (1.31   | ) |                 | $    | 11.70   |  |      | $ | 12    |  |  | $ | 576   |  
|               | Average Units Outstanding           |  |                               |         |   |              |   |         |            |  |                    | 240,591 |   |                 |      | 213,504 |  |      |   |      |  |  |   |      |  
|               | Average Shares Outstanding          |  |                               |         |   |              |   |         |            |  |                    |        |   |                 |      |        |  |      |   | 1,000 |  |  |   | 1,000 |  
|Second Quarter |                                     |  |                               |         |   |              |   |         |            |  |                    |         |   |                 |      |         |  |      |   |       |  |  |   |      
|               | Revenues from Continuing
Operations |  | $                             | 103,502 |   |              | $ | 84,941  |            |  | $                  | 103,477 |   |                 | $    | 84,941  |  |      | $ | 87    |  |  | $ | 50    |  
|               | Earnings (Loss) Before Taxes        |  | $                             | 4,386   |   |              | $ | 3,800   |            |  | $                  | 4,354   |   |                 | $    | 3,837   |  |      | $ | 32    |  |  | $ | (37   | )
|               | Net Earnings (Loss)                 |  | $                             | 3,607   |   |              | $ | 3,382   |            |  | $                  | 3,575   |   |                 | $    | 3,419   |  |      | $ | 32    |  |  | $ | (37   | )
|               | Earnings (Loss) Per Unit/Share      |  |                               |         |   |              |   |         |            |  | $                  | 14.86   |   |                 | $    | 15.63   |  |      | $ | 32    |  |  | $ | (37   | )
|               | Average Units Outstanding           |  |                               |         |   |              |   |         |            |  |                    | 240,591 |   |                 |      | 218,785 |  |      |   |      |  |  |   |      |  
|               | Average Shares Outstanding          |  |                               |         |   |              |   |         |            |  |                    |        |   |                 |      |        |  |      |   | 1,000 |  |  |   | 1,000 |  
|Third Quarter  |                                     |  |                               |         |   |              |   |         |            |  |                    |         |   |                 |      |         |  |      |   |       |  |  |   |      
|               | Revenues from Continuing
Operations |  | $                             | 105,614 |   |              | $ | 94,498  |            |  | $                  | 105,589 |   |                 | $    | 93,673  |  |      | $ | 87    |  |  | $ | 838   |  
|               | Earnings Before Taxes               |  | $                             | 14,303  |   |              | $ | 5,774   |            |  | $                  | 14,288  |   |                 | $    | 4,988   |  |      | $ | 15    |  |  | $ | 786   |  
|               | Net Earnings                        |  | $                             | 13,116  |   |              | $ | 5,538   |            |  | $                  | 13,101  |   |                 | $    | 4,778   |  |      | $ | 15    |  |  | $ | 760   |  
|               | Earnings Per Unit/Share             |  |                               |         |   |              |   |         |            |  | $                  | 54.45   |   |                 | $    | 20.84   |  |      | $ | 15    |  |  | $ | 760   |  
|               | Average Units Outstanding           |  |                               |         |   |              |   |         |            |  |                    | 240,591 |   |                 |      | 229,277 |  |      |   |      |  |  |   |      |  
|               | Average Shares Outstanding          |  |                               |         |   |              |   |         |            |  |                    |        |   |                 |      |        |  |      |   | 1,000 |  |  |   | 1,000 |  
|Fourth Quarter |                                     |  |                               |         |   |              |   |         |            |  |                    |         |   |                 |      |         |  |      |   |       |  |  |   |      
|               | Revenues from Continuing
Operations |  | $                             | 153,050 |   |              | $ | 118,717 |            |  | $                  | 153,000 |   |                 | $    | 118,667 |  |      | $ | 88    |  |  | $ | 63    |  
|               | Earnings Before Taxes               |  | $                             | 15,638  |   |              | $ | 5,799   |            |  | $                  | 15,598  |   |                 | $    | 5,787   |  |      | $ | 40    |  |  | $ | 12    |  
|               | Net Earnings                        |  | $                             | 12,942  |   |              | $ | 4,987   |            |  | $                  | 12,902  |   |                 | $    | 4,949   |  |      | $ | 40    |  |  | $ | 38    |  
|               | Earnings Per Unit/Share             |  |                               |         |   |              |   |         |            |  | $                  | 53.63   |   |                 | $    | 21.18   |  |      | $ | 40    |  |  | $ | 38    |  
|               | Average Units Outstanding           |  |                               |         |   |              |   |         |            |  |                    | 240,591 |   |                 |      | 233,689 |  |      |   |      |  |  |   |      |  
|               | Average Shares Outstanding          |  |                               |         |   |              |   |         |            |  |                    |        |   |                 |      |        |  |      |   | 1,000 |  |  |   | 1,000 |  

Note that prior
period amounts have been restated, where appropriate, to reflect the
impact of reclassification of operating components currently
classified as discontinued operations.




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.

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Arthur Andersens audit reports on the financial statements for Holding
and the Partnership as of and for the fiscal years that ended March 31, 2001
and 2000 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, 2001 and 2000, 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 17, 2003 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 2003 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.

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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 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
$12,500 per quarter from April 1, 2002, through March 31, 2003. During fiscal
2003, Holding received $150 thousand 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 2003 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 2003 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), Stockholders Equity and
Partners Capital, of the Notes to the Combining Financial Statements of
Holding and the Partnership included on pages 153-154 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 2003. 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 2003, each executive officer of
Development

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received remuneration from the Partnership or from Centex or one of
its subsidiaries in his capacity as an employee or officer of that entity.

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 2003 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 May 29,
2003 (except as otherwise specified in the footnotes to the table) 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 or   |  |  |     |  
|                             |  | Name of                                 |  | Warrants |            | Percent of
|Title of Class*              |  | Beneficial Owner**                      |  | Owned    |            | Class     
|                             |  |                                         |  |          |            |           
|General Partner Interest (1) |  | 3333 Development Corporation            |  |          | A11        |            |  |  | 100 | %
|                             |  | 2728 N. Harwood                         |  |          |            |            |  |  |     |  
|                             |  | Dallas, Texas 75201                     |  |          |            |            |  |  |     |  
|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)                   |  |          | 0.307      |            |  |  | *** |  
|                             |  | Josiah O. Low, III                      |  |          | 0.064      |            |  |  | *** |  
|                             |  | Todd D. Newman (4)                      |  |          | 0.047      |            |  |  | *** |  
|                             |  | David M. Sherer                         |  |          |           |            |  |  | *** |  
|                             |  | Stephen M. Weinberg (4)                 |  |          | 0.428      |            |  |  | *** |  
|                             |  | Roger O. West                           |  |          |           |            |  |  | *** |  
|                             |  | All directors and executive officers of |  |          | 0.846      |            |  |  | *** |  
|                             |  | Development as a group (6 persons) (4)  |  |          |            |            |  |  |     |  
|                             |  | AXA Assurances
I.A.R.D. (5)             |  |          | 94         |            |  |  | 9.4 | %
|                             |  | 370 Rue Saint
Honore                    |  |          |            |            |  |  |     |  
|                             |  | Paris, France 75001                     |  |          |            |            |  |  |     |  

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|                                 |  |                                 |  |          |             |            |  |  |     |   |  | 
|-------------------------------- |  | ------------------------------- |  | -------- | ----------- | ---------- |  |  | --- | - |  | 
|                                 |  |                                 |  |          |             | Number of  |  |  |     |  
|                                 |  |                                 |  |          |             | Units or   |  |  |     |  
|                                 |  | Name of                         |  | Warrants |             | Percent of
|Title of Class*                  |  | Beneficial Owner**              |  | Owned    |             | Class     
|                                 |  |                                 |  |          |             |           
|                                 |  | Greenhaven Associates, Inc. (6) |  |          | 69          |            |  |  | 7.0 | %
|                                 |  | Three Manhattanville Road       |  |          |             |            |  |  |     |  
|                                 |  | Purchase, NY  10577             |  |          |             |            |  |  |     |  
|Centex Class B Unit Warrants (7) |  | Centex Corporation              |  |          | 100         |            |  |  | 100 | %
|                                 |  | 2728 N. Harwood                 |  |          |             |            |  |  |     |  
|                                 |  | Dallas, Texas 75201             |  |          |             |            |  |  |     |  
|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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

164



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|
|
|
|
|
|
|
|
|
|
|
|

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|   
|---
|   
|   
|(8)
|   
|(9)




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 2003
Proxy Statement.

ITEM 14. CONTROLS AND PROCEDURES

An evaluation has been performed under the supervision and with the
participation of the management of 3333 Holding Corporation and of Centex
Development Company, L.P. (through its general partner, 3333 Holding
Corporation), including the Chief Executive Officer and Chief Financial Officer
of both 3333 Holding Corporation and 3333 Development Corporation, of the
effectiveness of the design and operation of our disclosure controls and
procedures as of March 31, 2003. Based on that evaluation, the management of
3333 Holding Corporation and of Centex Development Company, L.P. (through its
general partner, 3333 Holding Corporation), including the Chief Executive
Officer and Chief Financial Officer of both 3333 Holding Corporation and 3333
Development Corporation, concluded that our disclosure controls and procedures
were effective as of March 31, 2003. There have been no significant changes in
our internal controls or in other factors that could significantly affect
internal controls subsequent to March 31, 2003.

166



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PART IV




ITEM 15. 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, 2003 and 2002, 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, 2003, together with
the accompanying Notes to Combining Financial Statements and
the Report of Independent Auditors on pages 136 - 159 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 15.                                                                                                                                                                                                                       
|
| | (3) |  | Exhibits                                                                                                                                                                                                                                                                                                                                                                                                                                                 



| | (A) |  | Holding
| | --- |  | -------



| |     |  | The information on exhibits required by this Item 15 with
respect to Holding is set forth in the index to
Exhibits-3333 Holding Corporation and Subsidiary appearing
on pages 179 - 180 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 15 is set
forth in the Index to Exhibits-Centex Development Company,
L.P. and Subsidiaries appearing on pages 181 - 184 of this
Report.              



| | (b) |  | Reports on Form 8-K:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |     |  | Current Joint Report on Form 8-K of Centex Corporation, 3333 Holding
Corporation and Centex Development Company, L.P. dated November 12, 2002,
furnishing the certification of the Chief Executive Officer and the Chief
Financial Officer of 3333 Holding Corporation and the certification of the
Chief Executive Officer and the Chief Financial Officer of 3333
Development Corporation, as the general partner of Centex Development
Company, L.P., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.

167



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ITEM 16. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information called for by Item 16 is incorporated herein by reference
to the information included and referenced under the same caption in Holdings
2003 Proxy Statement.

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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
|             |  |     |                                      |                                                                     
|May 30, 2003 |  | 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.

|             |  |            |                                                                                                                                             | 
|------------ |  | ---------- | ------------------------------------------------------------------------------------------------------------------------------------------- | 
|May 30, 2003 |  |            | /s/ STEPHEN M. WEINBERG

Stephen M. Weinberg,
Director, President and Chief Executive Officer
(principal executive officer)                
|             |  |            |                                                                                                                                             | 
|May 30, 2003 |  |            | /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                                                                 
|             |  |            |                                                                                                                                             | 
|May 30, 2003 |  | 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.
|- |  | ----------------------------------------------------------------------------------------

169



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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                       
|             |  |     |                                                                      | 
|May 30, 2003 |  | 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.

|             |  |            |                                                                                                                                             | 
|------------ |  | ---------- | ------------------------------------------------------------------------------------------------------------------------------------------- | 
|May 30, 2003 |  |            | /s/ STEPHEN M. WEINBERG

Stephen M. Weinberg,
Director, President and Chief Executive Officer
(principal executive officer)                
|             |  |            |                                                                                                                                             | 
|May 30, 2003 |  |            | /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                                                                 
|             |  |            |                                                                                                                                             | 
|May 30, 2003 |  | 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.
|- |  | ----------------------------------------------------------------------------------------

170



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Certifications

I, Stephen M. Weinberg, certify that:

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

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

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

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

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

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

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

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

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

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

6.     The registrants other certifying officers and I have indicated in this
annual report whether there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: May 30, 2003

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

171



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Certifications

I, Todd D. Newman, certify that:

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

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

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

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

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

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

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

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

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

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

6.     The registrants other certifying officers and I have indicated in this
annual report whether there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: May 30, 2003

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

172



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Certifications

I, Stephen M. Weinberg, certify that:

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

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

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

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

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

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

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

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

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

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

6.     The registrants other certifying officers and I have indicated in this
annual report whether there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: May 30, 2003

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

173



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Certifications

I, Todd D. Newman, certify that:

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

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

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

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

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

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

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

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

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

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

6.     The registrants other certifying officers and I have indicated in this
annual report whether there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: May 30, 2003

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

174



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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                                                                                                                                                                                                                                                                                                           

175



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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    |  | Sixth Amended and Restated
1998 Centex Corporation
Employee Non-Qualified Stock
Option Plan*                                                                                                                                    |  | Filed herewith                                                                                                                                          
|10.3    |  | Amended and Restated 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                                                                                                                      

176



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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
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)
|10.7    |  | 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*                                                                                                                                               |  | Filed herewith                                                                                                                                                         
|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   |  | Amended and Restated 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                                                                              |  | Exhibit 10.12 of Centex to the
Joint Annual Report on Form 10-K of
Centex, Holding and the Partnership
for the fiscal year ended March 31,
2002                        
|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                                                                                                                                                         

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##### Table of Contents



|        |  |                                 |  |                          
|------- |  | ------------------------------- |  | -------------------------
|Exhibit |  |                                 |  | Filed Herewith or        
|Number  |  | Exhibit                         |  | Incorporated by Reference
|        |  |                                 |  |                          
|23A     |  | Consent of Independent Auditors |  | 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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##### Table of Contents



|        |  |                                                                                                                                          |  |                                                                                                                                
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------
|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) |  | Exhibit 10.1 of
Holding to the 2002
Form 10-K                                                                                  
|10.2    |  | Amended and Restated
Services Agreement,
dated as of April 1,
2001, by and between
the Partnership and
Holding                           |  | Exhibit 10.2 of
Holding to the 2002
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 Holding                                                                                                                  |  | Exhibit 21 of
Centex Exhibits
filed herewith                                                                                   
|23B     |  | Consent of Independent Auditors                                                                                                          |  | Filed herewith                                                                                                                 
|24.2    |  | Powers of Attorney                                                                                                                       |  | Filed herewith                                                                                                                 

180



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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                                                                           |  | Exhibit 3.2 of the Partnership to
2002 Form 10-K                                                                                                                                                                                                                                        
|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 10.1 of Holding to the
2002 Form 10-K                                                                                                               
|10.2    |  | Management Agreement, dated as of April 1, 2001, by
and between Centex Homes and the Partnership                                                                                                                                                  |  | Exhibit 10.2 of Holding to the
2002 Form 10-K                                                                                                               
|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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##### Table of Contents



|        |  |                                                                                                                                                                             |  |                                                                                                                                                                   
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                             |  | Filed Herewith or                                                                                                                                                 
|Number  |  | Exhibit                                                                                                                                                                     |  | Incorporated by Reference                                                                                                                                         
|        |  |                                                                                                                                                                             |  |                                                                                                                                                                   
|10.3A   |  | First Amendment to Employment Agreement, dated as of
December 19, 2002, by and between the Partnership and
Richard C. Decker                                                |  | Filed herewith                                                                                                                                                    
|10.3B   |  | Profits Agreement, dated as of April 1, 2003, by and
between the Partnership and Richard C. Decker                                                                          |  | Filed herewith                                                                                                                                                    
|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                                                                                                            
|10.6A   |  | Supplemental Agreement dated
March 21, 2003  £100,000,000
Credit Facility for Fairclough
and other related entities
arranged by The Royal Bank of
Scotland PLC             |  | Filed herewith                                                                                                                                                    
|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                                                                                                             
|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                                                                                                                      

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##### Table of Contents



|        |  |                                                         |  |                                               
|------- |  | ------------------------------------------------------- |  | ----------------------------------------------
|Exhibit |  |                                                         |  | Filed Herewith or                             
|Number  |  | Exhibit                                                 |  | Incorporated by Reference                     
|        |  |                                                         |  |                                               
|23      |  | Consent of Independent Auditors                         |  | Exhibit 23B of Holding Exhibits
filed herewith
|24.3    |  | Powers of Attorney                                      |  | Filed herewith                                
|99.1    |  | Real Estate and Accumulated Depreciation  Schedule III |  | Filed herewith                                

184