##### Table of Contents




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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 June 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 incorporation or organization)

(I.R.S. Employer 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 August 1, 20026,000,000





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CROSS TIMBERS ROYALTY TRUST





Form 10-Q for the Quarterly Period Ended June 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 June 30, 2002 and December 31, 2001

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

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

8Notes to Consolidated Financial Statements

9Item 2.

Trustees Discussion and Analysis

11Item 3.

Quantitative and Qualitative Disclosures about Market Risk

15PART II.

OTHER INFORMATIONItem 6.

Exhibits and Reports on Form 8-K

16Signatures

17




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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)
|--- | ---------------




|Bcf | Billion cubic feet (of natural gas)
|--- | -----------------------------------




|Mcf | Thousand cubic feet (of natural gas)
|--- | ------------------------------------




|MMBtu | One million British Thermal Units, a common energy measurement
|----- | --------------------------------------------------------------




|net 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
conveyances
|------------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------




|net 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 Mexico
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | 75% 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 Oklahoma
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|royalty 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 costs
|-------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------




|underlying 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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##### Table of Contents

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 June 30, 2002, and the distributable income and changes in trust corpus for the three- and six-month periods ended June 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 six-month periods ended June 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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##### Table of Contents

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 June 30, 2002 and the related condensed statements of distributable income and changes in trust
corpus for the three- and six-month periods ended June 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 generally accepted auditing standards, 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.





KPMG LLP





Dallas, Texas


August 5, 2002




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CROSS TIMBERS ROYALTY TRUST





Condensed Statements of Assets, Liabilities and Trust Corpus





June 30,2002

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

$
650,817

$
852,349Interest to be received


369


479Net profits interests in oil and gas propertiesnet


27,946,913


28,895,086$
28,598,099

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

$
651,186

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


27,946,913


28,895,086$
28,598,099

$
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 EndedJune 30

Six Months EndedJune 302002

2001

2002

2001Net profits income

$
1,816,119

$
4,221,331

$
3,695,669

$
8,328,790Interest income


934


6,236


1,860


13,272Total income


1,817,053


4,227,567


3,697,529


8,342,062Administration expense


93,505


48,597


169,235


114,190Distributable income

$
1,723,548

$
4,178,970

$
3,528,294

$
8,227,872Distributable income per unit (6,000,000 units)

$
0.287258

$
0.696495

$
0.588049

$
1.371312





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 EndedJune 30


Six Months EndedJune 302002


2001


2002


2001Trust corpus, beginning of period

$
28,410,542


$
30,246,883


$
28,895,086


$
30,755,456Amortization of net profits interests


(463,629
)


(374,522
)


(948,173
)


(883,095
)Distributable income


1,723,548



4,178,970



3,528,294



8,227,872Distributions declared


(1,723,548
)


(4,178,970
)


(3,528,294
)


(8,227,872
)Trust corpus, end of period

$
27,946,913


$
29,872,361


$
27,946,913


$
29,872,361





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




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##### Table of Contents

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 not 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 $33,153,536 as of June 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 $0.023 per unit for the quarter ended June 30, 2002 and $0.048 per unit for the six months
ended June 30, 2002. The actual coal seam tax credit per unit was $0.029 for the quarter ended June 30, 2001 and $0.054 for the six months ended June 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 second quarter 2002 or in 2001.




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##### Table of Contents




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 June 30, 2002, net profits
income was $1,816,119 compared to $4,221,331 for second quarter 2001. This 57% decrease in net profits income is the result of lower oil and gas prices. See Net Profits Income below.





After considering interest income of $934 and administration expense of $93,505, distributable income for the quarter ended June 30, 2002 was $1,723,548, or $0.287258
per unit of beneficial interest. Administration expense for the quarter increased 92% from the prior year quarter primarily because of the timing of expenditures. For second quarter 2001, distributable income was $4,178,970, or $0.696495 per unit.
Distributions to unitholders for the quarter ended June 30, 2002 were:





Record Date

Payment Date

Distributionper UnitApril 30, 2002

May 14, 2002

$0.099372May 31, 2002

June 14, 2002

0.079355June 28, 2002

July 15, 2002

0.108531$0.287258





Six Months





For the six months ended June 30, 2002, net profits income was $3,695,669 compared to $8,328,790 for the same 2001 period. This 56%
decrease in net profits income is the result of lower oil and gas prices. See Net Profits Income below.





After considering interest income of $1,860 and administration expense of $169,235, distributable income for the six months ended June 30, 2002 was $3,528,294, or $0.588049 per unit of beneficial interest. Administration expense for
the first half of 2002 increased 48% from the comparable 2001 period primarily because of the timing of expenditures. For the six months ended June 30, 2001, distributable income was $8,227,872, or $1.371312 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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##### Table of Contents

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





Three Months Ended June 30 (a)

Increase (Decrease)

Six Months Ended June 30 (a)

Increase (Decrease)2002

2001


2002


2001Sales VolumesOil (Bbls) (b)Underlying properties


82,374


79,269

4%


165,485



162,138

2%Average per day


926


891

4%


914



896

2%Net profits interests


28,479


23,495

21%


55,781



65,086

(14%)Gas (Mcf) (b)Underlying properties


706,430


705,915




1,487,151



1,369,103

9%Average per day


7,849


7,844




8,171



7,523

9%Net profits interests


613,470


622,786

(1%)


1,298,893



1,197,495

8%Average Sales PricesOil (per Bbl)

$
20.50

$
24.92

(18%)

$
18.88


$
26.87

(30%)Gas (per Mcf)

$
2.57

$
6.79

(62%)

$
2.55


$
6.46

(61%)RevenuesOil sales

$
1,688,643

$
1,975,278

(15%)

$
3,124,751


$
4,356,345

(28%)Gas sales


1,812,224


4,790,151

(62%)


3,796,590



8,839,856

(57%)Total Revenues


3,500,867


6,765,429

(48%)


6,921,341



13,196,201

(48%)CostsTaxes, transportation and other


511,715


892,619

(43%)


849,469



1,736,160

(51%)Production expense (c)


720,574


736,294

(2%)


1,471,105



1,447,514

2%Development costs


144,440


406,890

(65%)


426,988



569,697

(25%)Excess costs










(66,867
)




Recovery of excess costs and accrued interest


67,484







67,484





Total Costs


1,444,213


2,035,803

(29%)


2,748,179



3,753,371

(27%)Net Proceeds

$
2,056,654

$
4,729,626

(57%)

$
4,173,162


$
9,442,830

(56%)Net Profits Income

$
1,816,119

$
4,221,331

(57%)

$
3,695,669


$
8,328,790

(56%)


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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 June 30 generally
represent oil production for the period February through April and gas production for the period January through March and (2) oil and gas sales for the six months ended June 30 generally represent oil production for the period November through
April and gas production for the period October through March.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|(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 in disproportionate 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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##### Table of Contents

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





Sales Volumes





Oil sales volumes increased 4% for second quarter 2002 and 2% for the six-month period as compared with the same 2001 periods, while gas sales volumes remained
relatively flat for the quarter and increased 9% for the six-month period. Increased sales volumes are primarily because of the timing of cash receipts, partially offset by natural decline.





Sales Prices





Oil





The average oil price decreased 18% to $20.50 per Bbl for the second quarter and 30% to $18.88 for the six-month period. Trust
oil prices were significantly higher in the first half 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 half of 2002, and in June 2002, announced it would maintain the production cut
through September 2002. Oil prices have shown some strengthening during 2002, but are expected to remain volatile. The average NYMEX oil price for May through July 2002 was $26.52 per Bbl. At August 1, 2002, the average NYMEX futures price for the
following twelve months was $25.20. Recent trust oil prices have averaged approximately $2.60 lower than the NYMEX price.





Gas





Gas prices for the second quarter decreased 62% to $2.57 per Mcf and for the six-month
period decreased 61% to $2.55 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 increased
slightly during second quarter 2002. The average NYMEX gas price for April through June 2002 was $3.44 per MMBtu. Continuing mild weather and a weak economy have further reduced demand, causing current NYMEX prices again to drop below $3.00. At
August 1, 2002, the average NYMEX futures price for the following twelve months was $3.39 per MMBtu. Gas prices are expected to remain volatile. Recent trust gas prices have approximated the NYMEX price.





Costs





Taxes





Taxes, transportation and other decreased 43% for the second quarter and 51% for the six-month period
primarily because of lower production taxes related to decreased revenues. The six-month decrease also includes a reduction in property taxes.




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##### Table of Contents

Production Expenses





Production expenses remained relatively level with the comparable prior year periods. Fluctuations in production expense are generally related to the timing of maintenance projects.





Development





Development costs decreased for the second quarter and the six-month period primarily because of reduced carbon dioxide 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 second quarter 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 believes 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.





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.




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##### Table of Contents

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

Page(15)    Awarenessletter of KPMG LLP

18(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)(b
)

Reports on Form 8-K.On June 28, 2002, the trust filed a report on Form 8-K dated June 25, 2002, to report its
appointment of KPMG LLP as the trusts independent auditors for fiscal 2002 to replace Arthur Andersen LLP, effective with such appointment.




16




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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 INC.Date: August 14, 2002



By:

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




17