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UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





---




Form 10-Q





xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE


SECURITIES EXCHANGE ACT OF 1934





For the quarterly period ended
September 30, 2002





OR





 ̈ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE


SECURITIES EXCHANGE ACT OF 1934





Commission File Number: 1-10982





Cross Timbers Royalty Trust


(Exact name of registrant as specified in its charter)





Texas

75-6415930(State or other jurisdiction of

(I.R.S. Employerincorporation or organization)

Identification No.)Bank of America, N.A., P.O. Box 830650, Dallas, Texas

75283-0650(Address of principal executive offices)

(Zip Code)





(877) 228-5084


(Registrants telephone number, including area code)





NONE


(Former name, former address and former fiscal year, if change since last report)





Indicate by check mark whether the 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 the 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 the number of units of beneficial interest outstanding, as of the latest practicable date:





Outstanding as of October 1, 2002


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6,000,000





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CROSS TIMBERS ROYALTY TRUST





FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2002





TABLE OF CONTENTS





PageGlossary of Terms

3PART I.

FINANCIAL INFORMATIONItem 1.

Financial Statements

4Independent Accountants Review Report

5Condensed Statements of Assets, Liabilities and Trust Corpus at September 30, 2002 and December 31, 2001

6Condensed Statements of Distributable Income for the Three and Nine Months Ended September 30, 2002 and 2001

7Condensed Statements of Changes in Trust Corpus for the Three and Nine Months Ended September 30, 2002 and 2001

8Notes to Condensed Financial Statements

9Item 2.

Trustees Discussion and Analysis

11Item 3.

Quantitative and Qualitative Disclosures about Market Risk

16Item 4.

Controls and Procedures

16PART II.

OTHER INFORMATIONItem 6.

Exhibits and Reports on Form 8-K

17Signatures

18Certifications

19




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CROSS TIMBERS ROYALTY TRUST





GLOSSARY OF TERMS





The following are definitions of significant terms used in this Form
10-Q:





Bbl

Barrel (of oil)Mcf

Thousand cubic feet (of natural gas)MMBtu

One million British Thermal Units, a common energy measurementnet proceeds

Gross proceeds received by XTO Energy from sale of production from the underlying properties, less applicable costs, as defined in the net profits interest
conveyancesnet profits income

Net proceeds multiplied by the applicable net profits percentage of 75% or 90% and paid to the trust by XTO Energy. Net profits income is
referred to as royalty income for income tax purposes.net profits interest

An interest in an oil and gas property measured by net profits from the sale of production, rather than a specific portion of production. The following
defined net profits interests were conveyed to the trust from the underlying properties:90% net profits interests  interests that entitle the trust to receive 90% of the net proceeds from the underlying properties that are royalty
or overriding royalty interests in Texas, Oklahoma and New Mexico75% net profits interests interests that entitle the trust to receive 75% of the net proceeds from the underlying properties that are working
interests in Texas and Oklahomaroyalty interest (and overriding royalty interest)

A nonoperating interest in an oil and gas property that provides the owner a specified share of production without any production or development
costsunderlying properties

XTO Energys interest in certain oil and gas properties from which the net profits interests were conveyed. The underlying properties include royalty
and overriding royalty interests in producing and nonproducing properties in Texas, Oklahoma and New Mexico, and working interests in producing properties located in Texas and Oklahoma.working interest

An operating interest in an oil and gas property that provides the owner a specified share of production that is subject to all production and development
costs




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CROSS TIMBERS ROYALTY TRUST





PART IFINANCIAL INFORMATION





Item 1.    Financial Statements.





The condensed financial statements
included herein are presented, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in annual financial statements have been condensed or
omitted pursuant to such rules and regulations, although the trustee believes that the disclosures are adequate to make the information presented not misleading. These condensed financial statements should be read in conjunction with the financial
statements and the notes thereto included in the trusts latest annual report on Form 10-K. In the opinion of the trustee, all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the assets, liabilities and
trust corpus of the Cross Timbers Royalty Trust at September 30, 2002, and the distributable income and changes in trust corpus for the three- and nine-month periods ended September 30, 2002 and 2001, have been included. Distributable income for
such interim periods is not necessarily indicative of distributable income for the full year.





The financial data
for the three- and nine-month periods ended September 30, 2002 included herein have been subjected to a limited review by KPMG LLP, the registrants independent accountants. The accompanying review report of independent accountants is not a
report within the meaning of Sections 7 and 11 of the Securities Act of 1933 and the independent accountants liability under Section 11 does not extend to it. The trusts financial statements for the year ended December 31, 2001 were
audited by other independent accountants.




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INDEPENDENT ACCOUNTANTS REVIEW REPORT





Bank of America, N.A., as Trustee


for the Cross Timbers Royalty Trust:





We have reviewed the
accompanying condensed statement of assets, liabilities and trust corpus of the Cross Timbers Royalty Trust as of September 30, 2002 and the related condensed statements of distributable income and changes in trust corpus for the three- and
nine-month periods ended September 30, 2002. These condensed financial statements are the responsibility of the trustee.





We conducted
our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of
persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the United States of America, the objective of which is the expression of
an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.





The accompanying
condensed financial statements are prepared on a modified cash basis as described in Note 1 which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America.





Based on our review, we are not aware of any material modifications that should be made to the condensed financial statements referred to above for them to be in
conformity with the basis of accounting described in Note 1.





The financial statements of Cross Timbers Royalty Trust as of and for the
year ended December 31, 2001 were audited by other auditors who have ceased operations. Those auditors report, dated March 19, 2002, on those financial statements was unqualified, and included an explanatory paragraph that described the
Trusts basis of accounting discussed in Note 2 to the financial statements. Such financial statements were not audited by us and, accordingly, we do not express an opinion or any form of assurance on the information set forth in the
accompanying condensed statements of assets, liabilities and trust corpus as of December 31, 2001. Additionally, the condensed statements of distributable income for the three-month and nine-month periods ended September 30, 2001, and the related
condensed statements of changes in trust corpus for the three-month and nine-month periods ended September 30, 2001, were not reviewed or audited by us and, accordingly, we do not express an opinion or any form of assurance on them.





KPMG LLP





Dallas, Texas


October 9, 2002




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CROSS TIMBERS ROYALTY TRUST





Condensed Statements of Assets, Liabilities and Trust Corpus





September 30, 2002

December 31, 2001(Unaudited)ASSETSCash and short-term investments

$
798,382

$
852,349Interest to be received


542


479Net profits interests in oil and gas propertiesnet


27,295,991


28,895,086$
28,094,915

$
29,747,914LIABILITIES AND TRUST CORPUSDistribution payable to unitholders

$
798,924

$
852,828Trust corpus (6,000,000 units of beneficial interest authorized and outstanding)


27,295,991


28,895,086$
28,094,915

$
29,747,914





The accompanying notes to condensed financial statements are an integral
part of these statements.




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CROSS TIMBERS ROYALTY TRUST





Condensed Statements of Distributable Income (Unaudited)





Three Months Ended September 30

Nine Months Ended September 302002

2001

2002

2001Net profits income

$
2,526,363

$
3,451,168

$
6,222,032

$
11,779,958Interest income


1,468


4,479


3,328


17,751Total income


2,527,831


3,455,647


6,225,360


11,797,709Administration expense


33,397


57,007


202,632


171,197Distributable income

$
2,494,434

$
3,398,640

$
6,022,728

$
11,626,512Distributable income per unit (6,000,000 units)

$
0.415739

$
0.566440

$
1.003788

$
1.937752





The accompanying notes to condensed financial statements are an integral
part of these statements.




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CROSS TIMBERS ROYALTY TRUST





Condensed Statements of Changes in Trust Corpus (Unaudited)





Three Months Ended September 30


Nine Months Ended September 302002


2001


2002


2001Trust corpus, beginning of period

$
27,946,913


$
29,872,361


$
28,895,086


$
30,755,456Amortization of net profits interests


(650,922
)


(483,763
)


(1,599,095
)


(1,366,858
)Distributable income


2,494,434



3,398,640



6,022,728



11,626,512Distributions declared


(2,494,434
)


(3,398,640
)


(6,022,728
)


(11,626,512
)Trust corpus, end of period

$
27,295,991


$
29,388,598


$
27,295,991


$
29,388,598





The accompanying notes to condensed financial statements are an integral
part of these statements.




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CROSS TIMBERS ROYALTY TRUST





Notes to Condensed Financial Statements (Unaudited)





1.    Basis of Accounting





The financial statements of Cross Timbers Royalty Trust are prepared on the following basis and are not
intended to present financial position and results of operations in conformity with generally accepted accounting principles (GAAP):





| |  |  | Net profits income recorded for a month is the amount computed and paid by the interest owner, XTO Energy Inc., to Bank of America, N.A., as trustee for the
trust. Net profits income consists of net proceeds received by XTO Energy Inc. from the underlying properties in the prior month, multiplied by net profit percentages of 90% for the 90% net profits interests, and 75% for the 75% net profits
interests.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




Costs deducted in the calculation of net proceeds for the 90% net profits interests
generally include applicable taxes, transportation, marketing and legal costs, and do not include other production and development costs. For the 75% net profits interests, costs deducted in the calculation of net proceeds include production
expenses, development costs, applicable taxes, operating charges and other costs.





| |  |  | Net profits income is computed separately for each of five conveyances under which the net profits interests were conveyed to the trust. If monthly costs exceed
revenues for any conveyance, such excess costs must be recovered, with accrued interest, from future net proceeds of that conveyance and cannot reduce net proceeds from the other conveyances. See Note 3.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| |  |  | Interest income, interest to be received and distribution payable to unitholders include interest to be earned from the monthly record date (last business day
of the month) through the date of the next distribution to unitholders.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| |  |  | Trust expenses are recorded based on liabilities paid and cash reserves established by the trustee for liabilities and contingencies.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------




| |  |  | Distributions to unitholders are recorded when declared by the trustee.
| | - |  | -----------------------------------------------------------------------




The financial statements of the trust differ from those prepared in conformity with GAAP because revenues are recognized when received rather than accrued in the month of
production, expenses are recognized when paid rather than when incurred, and certain cash reserves may be established for contingencies which would not be accrued under GAAP.





The initial carrying value of the net profits interests of $61,100,449 represents XTO Energys historical net book value on February 12, 1991, the creation date of the
trust. Amortization of the net profits interests is calculated on a unit-of-production basis and is charged directly to trust corpus. Accumulated amortization was $33,804,458 as of September 30, 2002 and $32,205,363 as of December 31, 2001.




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2.    Coal Seam Tax Credit





XTO Energy has advised the trustee that the trust receives net profits income from coal seam gas wells. Production from coal seam gas
wells drilled after December 31, 1979, and prior to January 1, 1993, qualifies for the federal income tax credit for producing nonconventional fuels under Section 29 of the Internal Revenue Code. This tax credit, which was approximately $1.08 per
MMBtu of gas produced from qualifying wells for 2001, is recalculated annually based on each years qualified production through the year 2002. Such credit, based on the unitholders pro rata share of qualifying production, may not reduce
the unitholders regular tax liability (after the foreign tax credit and certain other nonrefundable credits) below his tentative minimum tax. Any part of the Section 29 credit not allowed for the tax year solely because of this limitation may
be carried over indefinitely as a credit against the unitholders regular tax liability, subject to the tentative minimum tax limitation. Unitholders should consult their tax advisors regarding use of this credit and other trust tax compliance
matters.





Congress is considering an extension of existing Section 29 tax credits beyond the scheduled December
31, 2002 expiration date, as well as the creation of similar new tax credits. During 2001, the U.S. House passed a bill that would extend existing Section 29 tax credits on certain production, while the U.S. Senate has passed a separate bill
proposing new Section 29 tax credits. The potential effect of any final legislation on unitholders is unknown.





Based on 2002 qualifying sales volumes and the factors used in the calculation of the 2001 coal seam tax credit, the credit is estimated to be $0.027 per unit for the quarter ended September 30, 2002 and $0.075 per unit for the nine
months ended September 30, 2002. The actual coal seam tax credit per unit was $0.029 for the quarter ended September 30, 2001 and $0.083 for the nine months ended September 30, 2001. Final 2002 coal seam tax credit data will be provided to
unitholders with year-end tax information.





3.    Excess Costs





During first quarter 2002, costs exceeded revenues by $66,867 ($50,150 net to the trust) for the Texas 75% net profits interests as a
result of lower oil prices. Total excess costs and accrued interest of $67,484 ($50,613 net to the trust) were fully recovered during the second quarter of 2002. There were no excess costs during the second or third quarters of 2002 or in 2001.




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Item 2.    Trustees Discussion and Analysis.





The following
discussion should be read in conjunction with the trustees discussion and analysis contained in the trusts 2001 annual report, as well as the condensed financial statements and notes thereto included in this quarterly report on Form
10-Q.





Distributable Income





Quarter





For the quarter ended September 30, 2002, net
profits income was $2,526,363 compared to $3,451,168 for third quarter 2001. This 27% decrease in net profits income is the result of lower gas prices. See Net Profits Income below.





After considering interest income of $1,468 and administration expense of $33,397, distributable income for the quarter ended September 30, 2002 was $2,494,434, or
$0.415739 per unit of beneficial interest. Administration expense for the quarter decreased 41% from the prior year quarter primarily because of the timing of expenditures. Decreased interest income over these periods was primarily because of the
decline in net profits income and interest rates. For third quarter 2001, distributable income was $3,398,640, or $0.566440 per unit. Distributions to unitholders for the quarter ended September 30, 2002 were:





Record Date

Payment Date

Distribution per UnitJuly 31, 2002

August 14, 2002

$0.133730August 30, 2002

September 16, 2002

0.148855September 30, 2002

October 15, 2002

0.133154$0.415739





Nine Months





For the nine months ended September 30, 2002, net profits income was $6,222,032 compared to $11,779,958 for the same 2001 period. This 47%
decrease in net profits income is the result of lower oil and gas prices. See Net Profits Income below.





After considering interest income of $3,328 and administration expense of $202,632, distributable income for the nine months ended September 30, 2002 was $6,022,728, or $1.003788 per unit of beneficial interest. Administration
expense for the first nine months of 2002 increased 18% from the comparable 2001 period primarily because of the timing of expenditures. Interest income decreased over these periods primarily because of the decrease in net profits income and
interest rates. For the nine months ended September 30, 2001, distributable income was $11,626,512, or $1.937752 per unit.







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Net Profits Income





Net profits income is recorded when received by the trust, which is the month following receipt by XTO Energy, and generally two months after oil production and three
months after gas production. Net profits income is generally affected by three major factors:





| |  |  | oil and gas sales volumes,
| | - |  | --------------------------




| |  |  | oil and gas sales prices, and
| | - |  | -----------------------------




| |  |  | costs deducted in the calculation of net profits income.
| | - |  | --------------------------------------------------------




Because properties underlying the 90% net profits interests are royalty and overriding royalty interests, they generally bear no costs other than production and property
taxes, related legal costs, and marketing and transportation charges. In addition to these costs, the 75% net profits interests are subject to production and development costs, since the properties underlying the 75% net profits interests are
working interests.




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The following is a summary of the calculation of net profits income received by
the trust:





Three Months Ended September 30 (a)

Increase (Decrease)


Nine Months Ended September 30
(a)

Increase (Decrease)2002

2001


2002


2001Sales VolumesOil (Bbls) (b)Underlying properties


82,098


89,767

(9%
)


247,583



251,905

(2%
)Average per day


892


976

(9%
)


907



923

(2%
)Net profits interests


35,086


31,251

12%



90,867



96,337

(6%
)Gas (Mcf) (b)Underlying properties


765,149


786,819

(3%
)


2,252,300



2,155,922

4%Average per day


8,408


8,646

(3%
)


8,250



7,897

4%Net profits interests


666,965


685,440

(3%
)


1,965,858



1,882,935

4%Average Sales PricesOil (per Bbl)

$
24.79

$
24.07

3%


$
20.84


$
25.87

(19%
)Gas (per Mcf)

$
3.05

$
4.77

(36%
)

$
2.72


$
5.84

(53%
)RevenuesOil sales

$
2,034,911

$
2,160,760

(6%
)

$
5,159,662


$
6,517,105

(21%
)Gas sales


2,333,566


3,753,686

(38%
)


6,130,156



12,593,542

(51%
)Total Revenues


4,368,477


5,914,446

(26%
)


11,289,818



19,110,647

(41%
)CostsTaxes, transportation and other


604,112


871,073

(31%
)


1,453,581



2,607,233

(44%
)Production expense (c)


790,719


729,289

8%



2,261,824



2,176,803

4%Development costs


79,575


400,964

(80%
)


506,563



970,661

(48%
)Excess costs











(66,867
)




Recovery of excess costs and accrued interest











67,484





Total Costs


1,474,406


2,001,326

(26%
)


4,222,585



5,754,697

(27%
)Net Proceeds

$
2,894,071

$
3,913,120

(26%
)

$
7,067,233


$
13,355,950

(47%
)Net Profits Income

$
2,526,363

$
3,451,168

(27%
)

$
6,222,032


$
11,779,958

(47%
)


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|(a) |  | Because of the interval between time of production and receipt of royalty income by the trust, (1) oil and gas sales for the quarter ended September 30
generally represent oil production for the period May through July and gas production for the period April through June and (2) oil and gas sales for the nine months ended September 30 generally represent oil production for the period November
through July and gas production for the period October through June.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|(b) |  | Oil and gas sales volumes are allocated to the net profits interests based upon a formula that considers oil and gas prices and the total amount of production
expenses and development costs. Changes in any of these factors may result indisproportionate fluctuations in volumes allocated to the net profits interests. Therefore, comparative discussion of oil and gas sales volumes is based on the underlying
properties.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|(c) |  | Includes an overhead fee which is deducted and retained by XTO Energy. This fee is currently $23,470 per month and is subject to adjustment each May based on an
oil and gas industry index.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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The following are explanations of significant variances from third quarter 2001
to third quarter 2002 and from the first nine months of 2001 to the comparable period in 2002:





Sales Volumes





Oil





Decreased oil sales volumes for the quarter are primarily because of natural production decline, prior period volume adjustments recorded in 2002 and timing of cash receipts. Decreased oil volumes for the nine-month period
are primarily because of natural production decline and timing of cash receipts.





Gas





Decreased gas sales volumes for the quarter are primarily because of natural production decline, partially offset by timing of
cash receipts and prior period volume adjustments recorded in 2002. Increased gas volumes for the nine-month period are primarily because of timing of cash receipts and prior period volume adjustments recorded in 2001, partially offset by natural
production decline.





Sales Prices





Oil





The average oil price increased 3% to $24.79 per Bbl
for the third quarter and decreased 19% to $20.84 for the nine-month period. Trust oil prices were significantly higher in the first nine months of 2001 as a result of global demand outpacing supply at the end of 2000 and early in 2001. Lagging
demand, resulting from a worldwide economic slowdown, caused oil prices to decline during the remainder of 2001. OPEC members agreed to cut daily production by one million barrels in April 2001 and an additional one million barrels in September 2001
to adjust for weak demand and excess supply. The economic decline was accelerated by the terrorist attacks in the U.S. on September 11, 2001, placing additional downward pressure on oil prices. OPEC cut an additional 1.5 million barrels per day for
the first nine months of 2002, and in September 2002, announced it would maintain the production cut through December 2002. Oil prices have been higher in recent months because of rising tension in the Middle East. The average NYMEX oil price for
August and September 2002 was $25.87 per Bbl. At October 15, 2002, the average NYMEX futures price for the following twelve months was $27.45. Recent trust oil prices have averaged approximately $2.20 lower than the NYMEX price.





Gas





Gas prices for the third quarter decreased 36% to $3.05 per Mcf and for the nine-month period decreased 53% to $2.72 per Mcf. Gas prices were unusually high at the beginning of 2001 as winter demand strained already low gas
supplies. Prices subsequently declined and gas storage levels increased in 2001 because of fuel switching due to higher prices, milder weather and a weaker economy, which reduced demand for gas to generate electricity. Although the winter of
2001-2002 was one of the warmest on record with resulting higher than average storage levels, gas prices have increased slightly during 2002. The average NYMEX gas price for July through September 2002 was $3.20 per MMBtu. Gas prices recently have
increased because of the threat of interruption of gas supplies by hurricanes in the Gulf of Mexico. At October 15,




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2002, the average NYMEX futures price for the following twelve months was $4.12 per MMBtu. Gas prices are expected to remain volatile. Recent
trust gas prices have been approximately $0.30 below the NYMEX price. This differential has increased from the second quarter because of lower West Coast demand for San Juan Basin gas.





Costs





Taxes





Taxes, transportation and other decreased 31% for the third quarter and 44% for the nine-month period primarily because of lower
production taxes related to decreased revenues and a reduction in property taxes.





Production Expenses





Production expenses increased 8% for the third quarter and 4% for the nine-month period primarily because of
timing of maintenance projects on properties underlying the Texas 75% net profits interests.





Development





Development costs decreased for the third quarter and the nine-month period primarily because of reduced
tertiary injectant cost on one of the properties underlying the Texas 75% net profits interests and reduced drilling activity on one of the properties underlying the Oklahoma 75% net profits interests.





Excess Costs





During first quarter 2002, costs exceeded revenues by $66,867 ($50,150 net to the trust) for the Texas 75% net profits interests as a result of lower oil prices. Total excess costs and accrued interest of $67,484 ($50,613
net to the trust) were fully recovered during the second quarter of 2002. There were no excess costs during the second or third quarters of 2002 or in 2001.





Forward-Looking Statements





This report on Form 10-Q includes
forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact included
in this Form 10-Q including, without limitation, statements regarding the net profits interests, underlying properties, development costs, oil and gas prices, and industry and market conditions, are forward-looking statements that are subject to
risks and uncertainties which are detailed in Part II, Item 7 of the trusts annual report on Form 10-K for the year ended December 31, 2001, which is incorporated by this reference as though fully set forth herein. Although XTO Energy and the
trustee believe that the expectations reflected in such forward-looking statements are reasonable, neither XTO Energy nor the trustee can give any assurance that such expectations will prove to be correct.




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Item 3.    Quantitative and Qualitative Disclosures about Market Risk





There have been no material changes in the trusts market risks, as disclosed in the trusts Form 10-K for the year ended December 31, 2001.





Item 4.    Controls and Procedures





Within the 90 days prior to the
date of this report, the trustee carried out an evaluation of the effectiveness of the design and operation of the trusts disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon that evaluation, the trustee
concluded that the trusts disclosure controls and procedures are effective in timely alerting the trustee to material information relating to the trust required to be included in the trusts periodic filings with the Securities and
Exchange Commission. No significant changes in the trusts internal controls or other factors that could affect these controls have occurred subsequent to the date of such evaluation.




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PART IIOTHER INFORMATION





Items 1 through 5.    Not Applicable.





Item 6.    Exhibits and Reports on Form 8-K.





(a) Exhibits.





Exhibit Number and Description(15)

Awareness letter of KPMG LLP(99)

Item 7a. to the Annual Report on Form 10-K for Cross Timbers Royalty Trust filed with the Securities and Exchange Commission on March 28, 2002 (incorporated
herein by reference)(99.1)

Trustee Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002





(b) Reports on Form 8-K.





On August 14, 2002, the trust filed a report on Form 8-K dated August 14, 2002, to furnish the trustees certification of the
trusts Quarterly Report on Form 10-Q for the period ended June 30, 2002 as required by 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.




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##### Table of Contents




SIGNATURES





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





CROSS TIMBERS ROYALTY TRUST BY BANK OF AMERICA, N.A., TRUSTEEBy

/s/    NANCY G. WILLISNancy G. Willis Assistant Vice
PresidentXTO ENERGY INCDate: October 25, 2002

By

/s/    LOUIS G. BALDWINLouis G. Baldwin Executive
Vice President and Chief Financial Officer




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CERTIFICATIONS





I, Nancy G. Willis, certify that on behalf of Bank of America, N.A., Trustee of Cross Timbers
Royalty Trust that:





|1. |  | I have reviewed this quarterly report on Form 10-Q of Cross Timbers Royalty Trust;
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|2. |  | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
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|3. |  | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the
financial condition, distributable income and changes in trust corpus of the registrant as of, and for, the periods presented in this quarterly report;
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|4. |  | I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
I have:
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| | a) |  | designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is
made known to me by others within those entities, particularly during the period in which this quarterly report is being prepared;
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| | b) |  | evaluated the effectiveness of the registrants disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly
report (the Evaluation Date); and
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| | c) |  | presented in this quarterly report my conclusions about the effectiveness of the disclosure controls and procedures based on my evaluation as of the Evaluation
Date;
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|5. |  | I have disclosed, based on my most recent evaluation, to the registrants auditors:
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| | 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
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| | b) |  | any fraud, whether or not material, that involves persons who have a significant role in the registrants internal controls; and
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|6. |  | I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect
internal controls subsequent to the date of my most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
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BANK OF AMERICA, N.A.Date: October 25, 2002

By:

/s/    NANCY G.
WILLISNancy G. Willis Assistant Vice
President


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