10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

JOINT QUARTERLY REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Quarterly Period Ended

December 31, 2001

Commission File No. 1-6776

Centex Corporation

A Nevada Corporation

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

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

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

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

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

Indicate the number of shares of each of the registrants’ classes of common stock (or other similar equity securities) outstanding as of the close of business on January 31, 2001:

Centex Corporation	Common Stock	61,211,372 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	201,351 units

TABLE OF CONTENTS

Part I – Financial Information
	Item 1. Financial Statements
		Condensed Consolidated Statements of Earnings
		Condensed Consolidated Balance Sheets
		Condensed Consolidated Statements of Cash Flows
		Notes to Condensed Consolidated Financial Statements
	ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
	ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Part II. Other Information
	ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
	ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Signatures
Part I – Financial Information
	Item 1. Financial Statements
		Condensed Combining Statements of Operations
		Condensed Combining Balance Sheets
		Condensed Combining Statements of Cash Flows
		Notes to Condensed Combining Financial Statements
	ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
	ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Part II. Other Information
	ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
	ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Signatures
EX-3.1 - Bylaws of 3333 Holdings Corp as Amended

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

Form 10-Q Table of Contents

December 31, 2001

Centex Corporation and Subsidiaries

			Page
Part I.	Financial Information
	Item 1.	Financial Statements
		Condensed Consolidated Statements of Earnings for the Three Months Ended December 31, 2001	1
		Condensed Consolidated Statements of Earnings for the Nine Months Ended December 31, 2001	2
		Condensed Consolidated Balance Sheets	3
		Condensed Consolidated Statements of Cash Flows for the Nine Months Ended December 31, 2001	5
		Notes to Condensed Consolidated Financial Statements	6
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	29
Part II.	Other Information
	Item 4.	Submission of Matters to a Vote of Security Holders	30
	Item 6.	Exhibits and Reports on Form 8-K	30
Signatures			31

i

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

			Page
Part I.	Financial Information
	Item 1.	Financial Statements
		Condensed Combining Statements of Operations for the Three Months Ended December 31, 2001	32
		Condensed Combining Statements of Operations for the Nine Months Ended December 31, 2001	33
		Condensed Combining Balance Sheets	34
		Condensed Combining Statements of Cash Flows for the Nine Months Ended December 31, 2001	35
		Notes to Condensed Combining Financial Statements	36
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	43
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	49
Part II.	Other Information
	Item 4.	Submission of Matters to a Vote of Security Holders	49
	Item 6.	Exhibits and Reports on Form 8-K	49
Signatures			50

ii

Part I – Financial Information
Item 1. Financial Statements

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

			For the Three Months Ended December 31,
			2001		2000
Revenues
	Home Building
		Conventional Homes	$	1,210,759	$	1,038,810
		Manufactured Homes		31,907		29,494
	Financial Services			182,800		121,308
	Construction Products			112,750		105,295
	Contracting and Construction Services			321,357		345,568
	Investment Real Estate			9,730		13,023
	Home Services			25,181		—
				1,894,484		1,653,498
Costs and Expenses
	Home Building
		Conventional Homes		1,076,248		938,170
		Manufactured Homes		31,226		32,031
	Financial Services			149,446		118,932
	Construction Products			91,353		84,282
	Contracting and Construction Services			312,254		337,412
	Investment Real Estate			5,137		(528	)
	Home Services and Other			23,448		(3,123	)
	Corporate General and Administrative			13,326		8,458
	Interest Expense			28,046		21,076
	Minority Interest			6,065		6,294
				1,736,549		1,543,004
Earnings Before Income Taxes				157,935		110,494
	Income Taxes			61,790		42,027
Net Earnings			$	96,145	$	68,467
Earnings Per Share
	Basic		$	1.59	$	1.16
	Diluted		$	1.54	$	1.12
Average Shares Outstanding
	Basic			60,554,328		59,080,788
	Common Share Equivalents
		Options		1,460,920		1,448,887
		Convertible Debenture/Restricted Stock		414,324		400,000
	Diluted			62,429,572		60,929,675
Cash Dividends Per Share			$	0.04	$	0.04

See notes to condensed consolidated financial statements.

-1-

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

			For the Nine Months Ended December 31,
			2001		2000
Revenues
	Home Building
		Conventional Homes	$	3,420,641	$	2,952,835
		Manufactured Homes		90,934		99,777
	Financial Services			511,366		323,717
	Construction Products			359,718		335,236
	Contracting and Construction Services			971,786		974,672
	Investment Real Estate			57,053		19,667
	Home Services			75,764		—
				5,487,262		4,705,904
Costs and Expenses
	Home Building
		Conventional Homes		3,065,032		2,690,086
		Manufactured Homes		91,744		103,504
	Financial Services			423,581		319,068
	Construction Products			302,848		245,481
	Contracting and Construction Services			947,904		953,446
	Investment Real Estate			21,071		(7,059	)
	Home Services and Other			69,530		(5,040	)
	Corporate General and Administrative			37,552		25,963
	Interest Expense			84,630		65,140
	Minority Interest			15,135		30,827
				5,059,027		4,421,416
Earnings Before Income Taxes				428,235		284,488
	Income Taxes			163,485		108,722
Net Earnings			$	264,750	$	175,766
Earnings Per Share
	Basic		$	4.38	$	2.98
	Diluted		$	4.26	$	2.91
Average Shares Outstanding
	Basic			60,433,456		58,946,795
	Common Share Equivalents
		Options		1,369,122		1,016,430
		Convertible Debenture/Restricted Stock		408,250		400,000
	Diluted			62,210,828		60,363,225
Cash Dividends Per Share			$	0.12	$	0.12

See notes to condensed consolidated financial statements.

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Centex Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(Dollars in thousands)

			Centex Corporation and Subsidiaries
			December 31,			March 31,
			2001*			2001**
Assets
Cash and Cash Equivalents			$	47,121		$	57,752
Restricted Cash				82,965			57,428
Receivables -
	Residential Mortgage Loans			3,278,290			1,996,746
	Other			549,311			606,069
Inventories				2,814,722			2,202,295
Investments -
	Centex Development Company, L.P.			262,459			210,807
	Joint Ventures and Other			87,738			72,035
	Unconsolidated Subsidiaries			—			—
Property and Equipment, net				727,634			729,099
Other Assets -
	Deferred Income Taxes			39,300			43,116
	Goodwill			369,709			323,971
	Mortgage Securitization Residual Interest			132,600			146,394
	Deferred Charges and Other			269,051			203,331
			$	8,660,900		$	6,649,043
Liabilities and Stockholders’ Equity
Accounts Payable and Accrued Liabilities			$	1,315,296		$	1,271,464
Debt -
	Non-Financial Services			1,851,401			1,464,993
	Financial Services			3,346,777			2,054,898
Payables to Affiliates				—			—
Minority Stockholders’ Interest				154,019			143,624
Stockholders’ Equity -
	Preferred Stock, Authorized 5,000,000
		Shares, None Issued		—			—
	Common Stock, $.25 Par Value; Authorized
		100,000,000 Shares; Issued and Outstanding
		60,907,968 and 59,929,344 Shares		15,283			14,982
	Capital in Excess of Par Value			62,801			25,779
	Unamortized Value of Restricted Stock			(2,605	)		—
	Retained Earnings			1,935,873			1,678,400
	Treasury Stock, at cost; 222,505 Shares
		and 0 Shares		(6,582	)		—
	Accumulated Other Comprehensive Loss			(11,363	)		(5,097	)
Total Stockholders’ Equity				1,993,407			1,714,064
			$	8,660,900		$	6,649,043

See notes to condensed consolidated financial statements.
*Unaudited
**Condensed from audited financial statements.

-3-

Centex Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(Dollars in thousands)

Centex Corporation						Financial Services
December 31,			March 31,			December 31,			March 31,
2001*			2001**			2001*			2001**
$	33,161		$	45,987		$	13,960		$	11,765
	4,432			5,442			78,533			51,986
	—			—			3,278,290			1,996,746
	388,824			486,816			160,487			119,253
	2,794,046			2,193,838			20,676			8,457
	262,459			210,807			—			—
	87,738			72,035			—			—
	380,329			314,868			—			—
	678,069			673,846			49,565			55,253
	(7,180	)		12,838			46,480			30,278
	343,687			307,369			26,022			16,602
	—			—			132,600			146,394
	182,947			149,917			86,104			53,414
$	5,148,512		$	4,473,763		$	3,892,717		$	2,490,148
$	1,152,049		$	1,153,215		$	163,247		$	118,249
	1,851,401			1,464,993			—			—
	—			—			3,346,777			2,054,898
	—			—			94,995			50,072
	151,655			141,491			2,364			2,133
	—			—			—			—
	15,283			14,982			1			1
	62,801			25,779			202,671			200,467
	(2,605	)		—			—			—
	1,935,873			1,678,400			92,226			64,328
	(6,582	)		—			—			—
	(11,363	)		(5,097	)		(9,564	)		—
	1,993,407			1,714,064			285,334			264,796
$	5,148,512		$	4,473,763		$	3,892,717		$	2,490,148
In the supplemental data presented above, “Centex Corporation” represents the adding together of all subsidiaries other than those included in Financial Services. Transactions between Centex Corporation and Financial Services have been eliminated from the Centex Corporation and Subsidiaries balance sheets.

-4-

Centex Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
(unaudited)

				For the Nine Months Ended December 31,
				2001			2000
Cash Flows – Operating Activities
	Net Earnings			$	264,750		$	175,766
	Adjustments -
		Depreciation and Amortization			66,470			44,717
		Deferred Income Taxes			(923	)		(6,440	)
		Equity in Earnings of Centex Development
			Company, L.P. and Joint Ventures		(25,816	)		(4,421	)
		Minority Interest, net of taxes			10,066			19,605
	Increase in Restricted Cash				(21,313	)		(28,883	)
	Decrease (Increase) in Receivables				57,266			(31,824	)
	Increase in Residential Mortgage Loans				(1,224,469	)		(1,162,093	)
	Increase in Inventories				(617,993	)		(310,971	)
	Increase (Decrease) in Payables and Accruals				31,890			(15,311	)
	Increase in Other Assets				(103,100	)		(72,693	)
	Other, net				329			(6,752	)
					(1,562,843	)		(1,399,300	)
Cash Flows – Investing Activities
	Increase in Advances to Centex Development
		Company, L.P. and Joint Ventures			(29,576	)		(30,845	)
	Acquisition of Construction Products Operations				—			(442,200	)
	Increase in Property and Equipment, net				(49,825	)		(46,286	)
					(79,401	)		(519,331	)
Cash Flows – Financing Activities
	Increase in Short-Term Debt, net				886,824			255,545
	Non-Financial Services
		Issuance of Long-Term Debt			658,330			794,364
		Repayment of Long-Term Debt			(674,734	)		(339,447	)
	Financial Services
		Issuance of Long-Term Debt			1,055,525			1,140,008
		Repayment of Long-Term Debt			(315,191	)		(22,482	)
	Retirement of Common Stock				—			(784	)
	Proceeds from Stock Option Exercises
		and Restricted Stock Activity			34,718			7,005
	Purchase of Treasury Stock				(6,582	)		—
	Dividends Paid				(7,277	)		(7,079	)
					1,631,613			1,827,130
Net Decrease in Cash and Cash Equivalents					(10,631	)		(91,501	)
Cash and Cash Equivalents at Beginning of Period					57,752			135,853
Cash and Cash Equivalents at End of Period				$	47,121		$	44,352

See notes to condensed consolidated financial statements.

-5-

Centex Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements
December 31, 2001
(Dollars in thousands)
(unaudited)

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

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

(B)  A summary of comprehensive income for the three and nine months ended December 31, 2001 and 2000 is presented below:

		For the Three Months						For the Nine Months
		Ended December 31,						Ended December 31,
		2001			2000			2001			2000
Net Earnings		$	96,145		$	68,467		$	264,750		$	175,766
Other Comprehensive (Loss) Income, net of tax:
	Foreign Currency Translation Adjustments		(3,006	)		73			5,828			(394	)
	Unrealized Loss on Hedging Instruments		(3,148	)		—			(12,361	)		—
	Unrealized Gain (Loss) on Investments		171			(586	)		267			1,152
Comprehensive Income		$	90,162		$	67,954		$	258,484		$	176,524

     The Foreign Currency Translation Adjustments are primarily the result of Centex’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 unrealized loss on swap agreements designated as cash flow hedges. The accounting for these derivative financial instruments is discussed in detail in Note (H) of this report. The Unrealized Gain (Loss) on Investments represents mark to market adjustments to securities available for sale by the Company.

-6-

(C)  A summary of changes in stockholders’ equity is presented below:

								Unamortized									Accumulated
						Capital in		Value of						Treasury			Other
		Preferred		Common		Excess of Par		Restricted			Retained			Shares - at			Comprehensive
		Stock		Stock		Value		Stock			Earnings			Cost			Loss			Total
Balance, March 31, 2001		$	—	$	14,982	$	25,779	$	—		$	1,678,400		$	—		$	(5,097	)	$	1,714,064
	Net Earnings		—		—		—		—			264,750			—			—			264,750
	Issuance of Restricted Stock		—		19		3,133		(3,152	)		—			—			—			—
	Amortization of Restricted Stock		—		—		—		547			—			—			—			547
	Exercise of Stock Options		—		282		33,889		—			—			—			—			34,171
	Cash Dividends		—		—		—		—			(7,277	)		—			—			(7,277	)
	Purchases of Common Stock for Treasury		—		—		—		—			—			(6,658	)		—			(6,658	)
	Treasury Stock Issued for Service Awards		—		—		—		—			—			76			—			76
	Unrealized Loss on Hedging Instruments		—		—		—		—			—			—			(12,361	)		(12,361	)
	Foreign Currency Translation Adjustments		—		—		—		—			—			—			5,828			5,828
	Unrealized Gain on Investments		—		—		—		—			—			—			267			267
Balance, December 31, 2001		$	—	$	15,283	$	62,801	$	(2,605	)	$	1,935,873		$	(6,582	)	$	(11,363	)	$	1,993,407

(D)  Centex Development Company, L.P. (the “Partnership”) is a master limited partnership formed by Centex in 1987 to broaden Centex’s business to include general real estate development. Centex believed that this expansion would improve stockholder value through longer-term real estate investments, real estate developments and the benefits of the partnership form of business. Because the real estate development business generally requires a longer time horizon to maximize value than Centex’s core home building operations and typically involves substantial acquisition and development indebtedness, Centex concluded that this new line of business could best be conducted through the Partnership, an independent, publicly-traded entity that is not consolidated with Centex for financial reporting purposes. The Partnership is managed by its general partner, 3333 Development Corporation, a wholly-owned subsidiary of 3333 Holding Corporation (“Holding”). The common stock of Holding is held by the stockholders of Centex through a nominee arrangement and trades in tandem with the common stock of Centex.

     The 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 units in connection with the acquisition of real property and other assets. No Class B units have been issued. However, warrants to purchase approximately 80% of the Class B units are also held by the stockholders of Centex through a nominee arrangement and trade in tandem with the common stock of Centex.

-7-

     As holder of the Class A and Class C units, Centex is entitled to a cumulative preferred return of 9% per annum on the average outstanding balance of its capital contributions to the Partnership, adjusted for cash and other distributions representing return of capital. As of December 31, 2001, these adjusted capital contributions were $234.1 million and preference payments in arrears totaled $36.1 million. No preference payments have been made since fiscal 1998.

     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 and the independent board of Holding, including its non-executive Chairman, manage how the Partnership conducts its activities, including the acquisition, development, maintenance, operation and sale of properties, without the consent of the limited partners. The limited partners cannot remove the general partner. As a result, the Company accounts for its limited partner’s interest in the Partnership using the equity method of accounting for investments.

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

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

		December 31,		March 31,
		2001		2001*
Assets
	Cash and Cash Equivalents	$	47,364	$	60,786
	Restricted Cash		87,965		57,428
	Receivables		3,833,047		2,613,035
	Inventories		3,379,753		2,629,733
	Investments in Joint Ventures and Other		92,735		72,679
	Property and Equipment, net		730,880		732,490
	Other Assets		861,460		757,882
		$	9,033,204	$	6,924,033
Liabilities and Stockholders’ Equity
	Accounts Payable and Accrued Liabilities	$	1,412,865	$	1,352,467
	Non-Financial Services Debt		2,124,861		1,658,894
	Financial Services Debt		3,346,777		2,054,898
	Minority Stockholders’ Interest		155,294		143,710
	Stockholders’ Equity		1,993,407		1,714,064
		$	9,033,204	$	6,924,033

     *     Condensed from audited financial statements.

-8-

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

	For the Nine Months Ended
	December 31,
	2001			2000
Revenues	$	5,740,840		$	4,882,572
Costs and Expenses		5,311,660			4,598,955
Earnings Before Income Taxes		429,180			283,617
Income Taxes		164,430			107,851
Net Earnings		264,750			175,766
Other Comprehensive (Loss) Earnings		(6,266	)		758
Comprehensive Income	$	258,484		$	176,524

(E)  The Company conducts its land acquisition and development activities directly and through its participation in joint ventures in which the Company holds less than a majority interest. The Company’s investment in these joint ventures was $87.7 million and $72.0 million at December 31, 2001 and March 31, 2001, respectively. These non-consolidated joint ventures had total debt outstanding of approximately $168 million as of December 31, 2001 and $137 million as of March 31, 2001. The Company’s liability is limited to approximately $32 million and $46 million, respectively.

     The Company has paid $66 million for options, which expire at various dates through 2007, toward the purchase of undeveloped land and developed lots having a total purchase price of approximately $1.4 billion in order to ensure the future availability of land for home building. The Company has committed to purchase land and developed lots totaling approximately $2.5 million.

(F)  Interest expenses relating to the Financial Services segments are included in its costs and expenses. Interest expense related to segments other than Financial Services is included as a separate line on the Condensed Consolidated Statement of Earnings. For the three and nine month periods ending December 31, 2001, $12.2 million and $36.0 million, respectively, of interest incurred was capitalized to qualifying assets, principally within the Home Building segment compared to $10.7 million and $35.5 million for the three and nine months ended December 31, 2000, respectively. For the three and nine months ended December 31, 2001, $9.9 million and $25.3 million, respectively, of previously capitalized interest was charged to interest expense compared to $5.1 million and $27.1 million for the three and nine months ended December 31, 2000, respectively.

	For the Three Months Ended
	December 31,
	2001			2000
Total Interest Incurred	$	70,988		$	54,108
Capitalized Interest, net		(2,250	)		(5,600	)
Less – Financial Services		(40,692	)		(27,432	)
Interest Expense, net	$	28,046		$	21,076

-9-

	For the Nine Months Ended
	December 31,
	2001			2000
Total Interest Incurred	$	211,812		$	133,900
Capitalized Interest, net		(10,697	)		(8,350	)
Less – Financial Services		(116,485	)		(60,410	)
Interest Expense, net	$	84,630		$	65,140

(G)  The Company operates in six principal business segments: Home Building, Financial Services, Construction Products, Contracting and Construction Services, Investment Real Estate, and Home Services. 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 $262 million) is included in the Investment Real Estate segment.

     The following tables set forth financial information relating to the business segments.

HOME BUILDING

Conventional Homes

     Conventional Homes’ operations involve the purchase and development of land or lots as well as the construction and sale of single-family homes.

	For the Three Months Ended
	December 31,
	2001			2000
	(Dollars in millions)
Revenues	$	1,210.8		$	1,038.8
Cost of Sales		(898.3	)		(782.4	)
Selling, General & Administrative Expenses		(178.0	)		(155.8	)
Operating Earnings	$	134.5		$	100.6

	For the Nine Months Ended
	December 31,
	2001			2000
	(Dollars in millions)
Revenues	$	3,420.6		$	2,952.8
Cost of Sales		(2,539.3	)		(2,251.2	)
Selling, General & Administrative Expenses		(525.7	)		(438.9	)
Operating Earnings	$	355.6		$	262.7

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Manufactured Homes

     Manufactured Homes’ operations involve the construction in factories of single-family homes and, to a lesser degree, commercial structures and the sale of these products through a network of company-owned and independent dealers.

	For the Three Months Ended
	December 31,
	2001			2000
	(Dollars in millions)
Revenues	$	31.9		$	29.5
Cost of Sales		(26.1	)		(24.4	)
Selling, General & Administrative Expenses		(5.1	)		(7.6	)
Operating Earnings (Loss)	$	0.7		$	(2.5	)

	For the Nine Months Ended
	December 31,
	2001			2000
	(Dollars in millions)
Revenues	$	90.9		$	99.8
Cost of Sales		(76.0	)		(82.0	)
Selling, General & Administrative Expenses		(15.7	)		(21.5	)
Operating Loss	$	(0.8	)	$	(3.7	)

FINANCIAL SERVICES

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

	For the Three Months Ended
	December 31,
	2001			2000
	(Dollars in millions)
Revenues*	$	182.8		$	121.3
Selling, General & Administrative Expenses		(108.7	)		(91.5	)
Interest Expense		(40.7	)		(27.4	)
Operating Earnings	$	33.4		$	2.4

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	For the Nine Months Ended
	December 31,
	2001			2000
	(Dollars in millions)
Revenues*	$	511.4		$	323.7
Selling, General & Administrative Expenses		(307.1	)		(258.6	)
Interest Expense		(116.5	)		(60.4	)
Operating Earnings	$	87.8		$	4.7

     * Revenues include interest income of $73.9 million and $36.8 million for the three months and $188.1 million and         $78.9 million for the nine months ended December 31, 2001 and 2000, respectively.

CONSTRUCTION PRODUCTS

     Construction Products' operations involve the manufacture, production, distribution, and sale of cement, gypsum wallboard, recycled paperboard, aggregates and readymix concrete. Centex’s ownership interest in Construction Products was 65.2% as of December 31, 2001 and 65.3% as of December 31, 2000.

	For the Three Months Ended
	December 31,
	2001			2000
	(Dollars in millions)
Revenues	$	112.7		$	105.3
Cost of Sales		(90.0	)		(82.7	)
Selling, General & Administrative Expenses		(1.3	)		(1.6	)
Operating Earnings†	$	21.4		$	21.0

	For the Nine Months Ended
	December 31,
	2001			2000
	(Dollars in millions)
Revenues	$	359.7		$	335.2
Cost of Sales		(299.0	)		(240.6	)
Selling, General & Administrative Expenses		(3.8	)		(4.9	)
Operating Earnings†	$	56.9		$	89.7

     † Operating earnings are shown before Minority Interest.

CONTRACTING AND CONSTRUCTION SERVICES

     Contracting and Construction Services’ operations involve the construction of buildings for both private and government interests, including office, commercial and industrial buildings, hospitals, hotels, correctional facilities, libraries, airport facilities and educational institutions. As this segment generates significant positive cash flow (payables and accruals consistently exceed identifiable assets), intercompany interest income (credited at the prime rate in effect) is reflected in this segment; however, this amount is eliminated in consolidation.

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	For the Three Months Ended
	December 31,
	2001			2000
	(Dollars in millions)
Revenues	$	321.4		$	345.6
Construction Contract Costs		(296.8	)		(322.8	)
Selling, General & Administrative Expenses		(15.5	)		(14.6	)
Operating Earnings, as reported		9.1			8.2
Intercompany Interest Income		1.8			2.5
Total Economic Return	$	10.9		$	10.7

	For the Nine Months Ended
	December 31,
	2001			2000
	(Dollars in millions)
Revenues	$	971.8		$	974.7
Construction Contract Costs		(904.1	)		(911.9	)
Selling, General & Administrative Expenses		(43.8	)		(41.5	)
Operating Earnings, as reported		23.9			21.3
Intercompany Interest Income		5.6			6.9
Total Economic Return	$	29.5		$	28.2

INVESTMENT REAL ESTATE

     Investment Real Estate’s operations involve the acquisition, development and sale of land, primarily for industrial, office, multi-family, retail and mixed-use projects and investments in other real estate operations.

	For the Three Months Ended
	December 31,
	2001			2000
	(Dollars in millions)
Revenues	$	9.7		$	13.0
Cost of Sales		(1.3	)		(1.8	)
Selling, General & Administrative Expenses		(3.8	)		(1.6	)
Negative Goodwill Amortization		—			4.0
Operating Earnings	$	4.6		$	13.6

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	For the Nine Months Ended
	December 31,
	2001			2000
	(Dollars in millions)
Revenues	$	57.1		$	19.7
Cost of Sales		(11.2	)		(2.2	)
Selling, General & Administrative Expenses		(9.9	)		(2.8	)
Negative Goodwill Amortization		—			12.0
Operating Earnings	$	36.0		$	26.7

HOME SERVICES

     Home Services’ operations include pest management, electronic security monitoring and chemical lawn care.

	For the Three Months Ended
		December 31,
		2001
	(Dollars in millions)
Revenues		$	25.2
Cost of Sales			(9.2	)
Selling, General & Administrative Expenses			(14.3	)
Operating Earnings		$	1.7	*

	For the Nine Months Ended
		December 31,
		2001
	(Dollars in millions)
Revenues		$	75.8
Cost of Sales			(28.6	)
Selling, General & Administrative Expenses			(41.0	)
Operating Earnings		$	6.2	*

* Before fiscal 2002, revenues and operating expenses of Home Services were included in the Other, net segment and were reflected on a net basis, as this segment was not considered material for purposes of segment reporting.

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

     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 in the condensed consolidated balance sheets. To the extent the hedging relationship is effective, gains or losses in the fair value of the derivative are

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deferred as a component of Stockholders’ Equity through Other Comprehensive (Loss) Income. Fluctuations in the fair value of the ineffective portion of the derivative would be reflected in the current period earnings.

     Centex Corporation and Centex Construction Products, Inc. each have interest rate swap agreements which, in effect, fix the variable interest rate on a portion of their outstanding debt at December 31, 2001. During the three and nine months ended December 31, 2001, 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 December 31, 2001 related to these derivatives, the Company would estimate increases in interest incurred over the next 12 months to be approximately $3 million. As of December 31, 2001, the liability and the balance in Accumulated Other Comprehensive Loss related to these derivatives was $5.9 million ($3.8 million net of tax).

     Financial Services, through Centex Home Equity Company, LLC (“CHEC”), uses interest rate swaps to hedge the market risk associated with the anticipated issuance of fixed rate securitization debt used to finance subprime 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. CHEC also uses interest rate swaps which, in effect, fix the interest rate on its variable interest rate debt. Amounts to be received or paid as a result of these swap agreements are recognized as adjustments to interest incurred on the related debt instrument. During the three and nine months ended December 31, 2001, there was no hedge ineffectiveness related to these interest rate swaps. These swaps expire at varying times through December 2007. Based on the balance in Accumulated Other Comprehensive Loss at December 31, 2001 related to these derivatives, the Company would estimate adjustments to interest incurred over the next 12 months to be approximately $0.8 million. In accordance with SFAS 133, the loss of $0.6 million ($0.4 million net of tax) on these interest rate swaps is recognized in Accumulated Other Comprehensive Loss as of December 31, 2001.

     Financial Services, through CTX Mortgage Company, LLC, enters into interest rate lock commitments (“IRLCs”) with its customers under which CTX Mortgage Company agrees to make mortgage loans at agreed upon rates within a period of time, generally from 10 to 60 days, if certain conditions are met within the terms of the IRLCs. In order to hedge the risk of fluctuations in the value of these IRLCs and mortgage loans held by CTX Mortgage Company, CTX Mortgage Company 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 a swap agreement, to protect against certain interest rate risk, non-credit related market risk and prepayment risk related to mortgage loans held by Harwood Street Funding I, LLC, an unaffiliated entity which is not consolidated with Financial Services or the Company. The Company has elected not to utilize hedge accounting treatment under SFAS 133 for these derivatives. Initially, the fair value of the IRLCs is recorded on the balance sheet as a deferred item. Subsequent changes in the fair value of the IRLCs, mandatory forward trades and swaps are recorded as an adjustment to earnings. The gain resulting from the net change in the estimated fair value of these derivative positions was $10.0 million for the three months and $13.3 million for the nine months ended December 31, 2001.

(I)  Statement of Financial Accounting Standards No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities” (“SFAS 140”), was issued in September 2000 to replace Statement of Financial Accounting Standards No. 125 (“SFAS 125”). SFAS 140 revises the standards for accounting for securitizations and other transfers of financial assets and collateral and requires certain disclosures, but carries most of SFAS 125’s provisions without reconsideration. The implementation of

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SFAS 140 on April 1, 2001 did not have a material impact on the Company’s results of operations or financial position.

(J)  The Company has adopted, effective April 1, 2001, Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets” (“SFAS 142”), which provides that intangible assets, including goodwill, that are not subject to amortization must be tested for impairment as of the beginning of the fiscal year in which this statement is initially applied and annually thereafter at the reporting unit level using a two-step impairment assessment. Impairment testing must be performed more frequently if events or changes in circumstances indicate that the asset might be impaired. The Company has completed the assessment of impairment as of the beginning of the fiscal year, and has determined that there is no impairment.

     The pro forma adoption of SFAS 142 for the nine month period ended December 31, 2000, which included amortization of goodwill and negative goodwill, would have resulted in a decrease in net earnings of $2.7 million and a decrease of $0.04 in both basic and diluted earnings per share. The pro forma adoption of SFAS 142 for the three month period ended December 31, 2000 would not have been material. Goodwill was $369.7 million at December 31, 2001 and $324.0 million at March 31, 2001. The increase primarily relates to acquisitions made in the first quarter of fiscal 2002.

(K)  Certain prior year balances have been reclassified to be consistent with the December 31, 2001 presentation.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
               OF OPERATIONS

     For the three months ended December 31, 2001, Centex Corporation and Subsidiaries’ (“Centex” or the “Company”) consolidated revenues were $1.9 billion, a 15% increase over $1.7 billion for the same period last year; earnings before income taxes were $157.9 million, a 43% increase over $110.5 million last year; and net earnings were $96.1 million, a 40% increase over $68.5 million for the same period last year.

     For the nine months ended December 31, 2001, consolidated revenues totaled $5.5 billion, a 17% increase over $4.7 billion for the same period last year; earnings before income taxes were $428.2 million, a 51% increase over $284.5 million for the same period last year; and net earnings were $264.8 million, a 51% increase over $175.8 million for the same period last year.

HOME BUILDING

Conventional Homes

     The following summarizes Conventional Homes’ results for the three and nine months ended December 31, 2001 compared to the same periods last year (dollars in millions, except per unit data):

		For the Three Months Ended December 31,
		2001					2000
Revenues		$	1,210.8		100.0	%	$	1,038.8		100.0	%
Cost of Sales			(898.3	)	(74.2	%)		(782.4	)	(75.3	%)
Selling, General & Administrative Expenses			(178.0	)	(14.7	%)		(155.8	)	(15.0	%)
Operating Earnings		$	134.5		11.1	%	$	100.6		9.7	%
Units Closed			5,567					4,893
	% Change		13.8	%				8.9	%
Unit Sales Price		$	212,400				$	208,328
	% Change		2.0	%				10.0	%
Operating Earnings Per Unit		$	24,162				$	20,568
	% Change		17.5	%				26.1	%
Backlog Units			9,476					8,603
	% Change		10.1	%				16.1	%

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		For the Nine Months Ended December 31,
		2001					2000
Revenues		$	3,420.6		100.0	%	$	2,952.8		100.0	%
Cost of Sales			(2,539.3	)	(74.2	%)		(2,251.2	)	(76.2	%)
Selling, General & Administrative Expenses			(525.7	)	(15.4	%)		(438.9	)	(14.9	%)
Operating Earnings		$	355.6		10.4	%	$	262.7		8.9	%
Units Closed			15,835					14,202
	% Change		11.5	%				10.5	%
Unit Sales Price		$	212,445				$	203,071
	% Change		4.6	%				7.7	%
Operating Earnings Per Unit		$	22,457				$	18,501
	% Change		21.4	%				17.3	%
Backlog Units			9,476					8,603
	% Change		10.1	%				16.1	%

     Conventional Homes’ revenues for the three and nine months ended December 31, 2001 increased 16.6% and 15.8%, respectively, compared to revenues for the same periods last year. These improvements resulted from an increased number of operating neighborhoods along with an increase in units closed per neighborhood, and a higher average unit selling price compared to fiscal 2001.

     Operating earnings for the three and nine months ended December 31, 2001 were 11.1% and 10.4% as a percentage of revenue and approximately $24,162 and $22,457 on a per-unit basis, compared to operating earnings of 9.7% and 8.9% of revenue and approximately $20,568 and $18,501 on a per-unit basis for the same periods last year. The operating earnings increase was primarily attributable to a higher average unit selling price and continued cost reductions due to increased productivity and process design improvements.

     Home sales (orders) totaled 5,065 units during the three months ended December 31, 2001 compared to 4,351 units during the same period last year, a 16.4% increase. Home sales (orders) totaled 15,967 units during the nine months ended December 31, 2001 compared to 15,226 units for the same period last year, a 4.9% increase. The backlog of homes sold but not closed at December 31, 2001 was 9,476 units, compared to 8,603 units as of December 31, 2000, a 10.1% increase.

Manufactured Homes

     The following summarizes Manufactured Homes’ results for the three and nine months ended December 31, 2001 compared to the same periods last year (dollars in millions):

	For the Three Months Ended December 31,
	2001						2000
Revenues	$	31.9		100.0	%	$	29.5		100.0	%
Cost of Sales		(26.1	)	(81.9	%)		(24.4	)	(82.8	%)
Selling, General & Administrative		(5.1	)	(15.9	%)		(7.6	)	(25.8	%)
Operating Earnings (Loss)	$	0.7		2.2	%	$	(2.5	)	(8.6	%)
Units Sold		955					1,004

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	For the Nine Months Ended December 31,
	2001					2000
Revenues	$	90.9		100.0	%	$	99.8		100.0	%
Cost of Sales		(76.0	)	(83.6	%)		(82.0	)	(82.2	%)
Selling, General & Administrative		(15.7	)	(17.3	%)		(21.5	)	(21.5	%)
Operating Loss	$	(0.8	)	(0.9	%)	$	(3.7	)	(3.7	%)
Units Sold		2,854					3,328

     For the three and nine months ended December 31, 2001, revenues increased 8.2% and decreased 8.9%, respectively, from the same periods last year; and operating earnings increased $3.2 million and operating losses decreased $2.9 million, respectively, from the same periods last year.

     Due to higher than normal retailer inventories and the reduced availability and higher cost of financing for purchasers of manufactured homes, Manufactured Homes’ revenues declined for the nine months ended December 31, 2001 compared to the same period last year. Revenues for the three months ended December 31, 2001 increased compared to the same period in the prior year due to the reduced inventory positions of independent dealers in the manufactured housing markets. Production efficiencies and successful cost reduction measures improved operating results for both the three and nine months ended December 31, 2001.

FINANCIAL SERVICES

     The following summarizes Financial Services’ results for the three and nine months ended December 31, 2001 compared to the same periods last year (dollars in millions):

			For the Three Months Ended
			December 31,
			2001		2000
Revenues			$	182.8	$	121.3
Operating Earnings			$	33.4	$	2.4
Origination Volume			$	4,096	$	2,461
Number of Loans Originated
	CTX Mortgage Company, LLC
		Centex-built Homes (“Builder”)		3,797		2,956
		Non-Centex-built Homes (“Retail”)		18,763		10,610
				22,560		13,566
	Centex Home Equity Company, LLC			7,136		6,564
				29,696		20,130

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			For the Nine Months Ended
			December 31,
			2001		2000
Revenues			$	511.4	$	323.7
Operating Earnings			$	87.8	$	4.7
Origination Volume			$	11,232	$	7,316
Number of Loans Originated
	CTX Mortgage Company, LLC
		Centex-built Homes (“Builder”)		10,612		8,261
		Non-Centex-built Homes (“Retail”)		51,847		33,572
				62,459		41,833
	Centex Home Equity Corporation, LLC			21,201		20,310
				83,660		62,143

     For the three and nine months ended December 31, 2001, Financial Services’ revenues increased 50.7% and 58.0%, respectively, and operating earnings increased significantly from the same periods last year. The increase in revenues and operating earnings is due primarily to increased mortgage refinancings at CTX Mortgage Company, LLC and related companies (“CTX Mortgage”) as a result of lower mortgage rates and to the impact of the portfolio method of accounting as described below.

     The operating earnings of CTX Mortgage are derived primarily from gains on the sale of mortgage loans to investors and Harwood Street Funding I, LLC (“HSF-I”), an unaffiliated entity that is not consolidated with Financial Services or the Company, and, to a lessor extent, net interest income and other fees. HSF-I purchases mortgage loans from CTX Mortgage with the proceeds from the issuance of certain debt securities, and then sells or securitizes the mortgage loans. The debt, interest income and interest expense of HSF-I are not reflected in the financial statements of Financial Services or the Company. For additional information regarding HSF-I, see “Financial Information and Liquidity” below.

     CTX Mortgage’s operating earnings for the three and nine months ended December 31, 2001 were $25.0 million and $73.1 million compared to $5.9 million and $16.7 million for the same periods last year. 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 three months ended December 31, 2001, originations totaled 22,560 compared to 13,566 for the same period last year; loan volume was $3.5 billion compared to $2.0 billion for the same period last year; the per-loan profit was $1,127, an increase of 159% compared to the same period last year; and total mortgage applications increased 46% to 18,545 from 12,723 applications for the same period last year. For the nine months ended December 31, 2001, originations totaled 62,459 compared to 41,833 for the same period last year; loan volume was $9.6 billion compared to $6.0 billion for the same period last year; the per-loan profit was $1,194, an increase of 199% as compared to the same period last year; and total mortgage applications increased 36% to 59,766 from 43,919 applications for the same period last year. The results of operations of CTX Mortgage depend to a significant extent on mortgage rates, which are currently at levels that approximate historic lows. Any significant increases in mortgage rates above currently prevailing levels could significantly reduce refinancings and adversely affect the volume of loan originations. There can be no assurance that mortgage rates will remain at the current level in the future.

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     Centex Home Equity Company, LLC and related companies (“CHEC”) returned to profitability after having begun to account for its securitizations completed subsequent to March 31, 2000 as borrowings rather than as sales (as discussed further below), reporting operating earnings for the three and nine months ended December 31, 2001 of $8.3 million and $14.7 million compared to operating losses of $3.5 million and $12.1 million for the same periods last year. The increase in CHEC’s operating earnings is primarily the result of an increase in volume of loans originated and the change in the method of accounting for securitizations beginning in fiscal 2001. As a result of this change, no securitization gains were recognized in fiscal 2001. Instead, interest income and interest expense related to the securitizations accounted for as borrowings began to be recognized. As the balance of securitizations accounted for as borrowings increases, the operating earnings should continue to be positively affected. For the three months ended December 31, 2001, originations totaled 7,136 compared to 6,564 for the same period last year; loan volume was $584.6 million compared to $442.8 million for the same period last year; and total applications increased 29.3% to 45,391 from 35,105 applications for the same period last year. For the nine months ended December 31, 2001, originations totaled 21,201 compared to 20,310 for the same period last year; loan volume was $1.6 billion compared to $1.3 billion for the same period last year; and total applications increased 16.3% to 127,759 from 109,853 applications for the same period last year.

     Prior to fiscal 2001, CHEC’s securitizations were structured in a manner that caused them to be accounted for as sales and the resulting gains were reported as revenues during the month in which the securitizations closed. In fiscal 2001, CHEC changed the transaction structure which resulted in the securitizations being accounted for as borrowings, which requires that residential mortgage loans and securitization debt be reflected on the Company’s balance sheet and the interest income and interest expense associated with the securitized loan portfolio be reflected in the Company’s income statements. Net interest income, rather than gain on sale of loans, is now CHEC’s primary source of operating income. For the three and nine months ended December 31, 2001, CHEC’s interest income was $66.6 million and $172.2 million, respectively, compared to $32.6 million and $65.5 million for the same periods last year. CHEC’s interest expense was $37.8 million and $105.5 million, respectively, compared to $22.9 million and $46.1 million for the same periods last year. The increase in interest income and interest expense for the three and nine months ended December 31, 2001 compared to the same periods in the prior year is primarily a result of the change in the method of accounting for securitizations.

     At December 31, 2001, CHEC’s servicing portfolio, which includes residential mortgage loan securitizations accounted for as sales and borrowings, consisted of 60,811 loans totaling $4.2 billion, compared to 45,377 loans totaling $3.0 billion at December 31, 2000. For the three and nine months ended December 31, 2001, service fee income related to this long-term servicing, which is not included in interest income, was $10.1 million and $27.9 million, respectively, compared to $6.8 million and $17.8 million, respectively, for the same period a year ago.

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CONSTRUCTION PRODUCTS

     The following summarizes Construction Products’ results for the three and nine months ended December 31, 2001 compared to the same periods last year (dollars in millions):

	For the Three Months Ended
	December 31,
	2001			2000
Revenues	$	112.7		$	105.3
Interest Income		0.5			1.8
Cost of Sales		(90.5	)		(84.5	)
Selling, General & Administrative Expenses		(1.3	)		(1.6	)
Operating Earnings†	$	21.4		$	21.0

	For the Nine Months Ended
	December 31,
	2001			2000
Revenues	$	359.7		$	335.2
Interest Income		2.6			5.6
Cost of Sales		(301.6	)		(246.2	)
Selling, General & Administrative Expenses		(3.8	)		(4.9	)
Operating Earnings†	$	56.9		$	89.7

† Operating Earnings are shown before Minority Interest.

     For the three months ended December 31, 2001, Construction Products’ revenues increased 7.1% and operating earnings increased 1.8% from the same period last year. For the nine months ended December 31, 2001, Construction Products’ revenues increased 7.3% and operating earnings decreased 36.6% from the same period last year. Construction Products’ revenues for the three and nine month periods ending December 31, 2001 increased primarily due to the November 2000 purchase of recycled paperboard operations and a wallboard plant. Operating earnings for the nine months ended December 31, 2001 were negatively impacted by lower gypsum wallboard prices. Gypsum wallboard prices rebounded in the third quarter of fiscal 2002, resulting in a slight increase in earnings from the same period last year.

CONTRACTING AND CONSTRUCTION SERVICES

     The following summarizes Contracting and Construction Services’ results for the three and nine months ended December 31, 2001 compared to the same periods last year (dollars in millions):

	For the Three Months Ended
	December 31,
	2001		2000
Revenues	$	321.4	$	345.6
Operating Earnings	$	9.1	$	8.2
New Contracts Executed	$	433.6	$	318.5
Backlog of Uncompleted Contracts	$	2,262	$	1,445

-22-

	For the Nine Months Ended
	December 31,
	2001		2000
Revenues	$	971.8	$	974.7
Operating Earnings	$	23.9	$	21.3
New Contracts Executed	$	1,211.6	$	1,037.6
Backlog of Uncompleted Contracts	$	2,262	$	1,445

     For the three and nine months ended December 31, 2001, Contracting and Construction Services’ revenue declined 7.0% and 0.3%, respectively, compared to the same period last year. This decline was primarily the result of a short delay in the timing of construction contracts in the hospitality industry due to the events of September 11, 2001. For the three and nine months ended December 31, 2001, Contracting and Construction Services’ operating earnings increased 11.6% and 12.5%, respectively, from the same periods last year. This increase was primarily the result of a continuing shift in recent years to higher-margin private negotiated projects from lower-margin public bid work and efficiency improvements. The increase in operating earnings was somewhat offset by the previously mentioned decline in revenues. New Contracts Executed increased 36.1% and 16.8% for the three and nine months ended December 31, 2001, as compared to the same period last year. Backlog of Uncompleted Contracts increased 56.5% to $2.3 billion as of December 31, 2001, as compared to $1.4 billion at December 31, 2000.

     The Contracting and Construction Services operations provided a positive average net cash flow in excess of Centex’s investment in the group of $132.6 million and $116.3 million for the three and nine months ended December 31, 2001, compared to $99.3 million and $95.1 million for the same periods last year.

INVESTMENT REAL ESTATE

     The following summarizes Investment Real Estate’s results for the three and nine months ended December 31, 2001 compared to the same periods last year (dollars in millions):

	For the Three Months Ended
	December 31,
	2001		2000
Revenues	$	9.7	$	13.0
Operating Earnings	$	4.6	$	13.6

	For the Nine Months Ended
	December 31,
	2001		2000
Revenues	$	57.1	$	19.7
Operating Earnings	$	36.0	$	26.7

     For the three and nine months ended December 31, 2001, Investment Real Estate operations had operating earnings of $4.6 million and $36.0 million, respectively, a decrease of 66.1% and an increase of 34.6% compared to operating earnings of $13.6 million and $26.7 million for the same periods a year ago. Included in Investment Real Estate’s revenues and operating earnings was $5.5 million and $12.0 million for the three and nine month periods ended December 31, 2001 derived from its investment in the Partnership, which is not consolidated and is accounted for on the equity method of accounting. For the three and nine months ended December 31, 2001, Investment Real Estate operations had revenues of $9.7 million and $57.1

-23-

million, respectively, a decrease of 25.3% and an increase of 190.1% compared to the same periods in the prior year. The decrease in revenues and operating earnings for the three months ended December 31, 2001 and the increase in revenues and operating earnings for the nine months ended December 31, 2001 is the result of the timing of land sales. The timing of land sales is uncertain and can vary significantly from period to period. Negative goodwill amortization was zero for the three and nine months ended December 31, 2001, and was $4 million and $12 million for the three and nine months ended December 31, 2000.

     The largest component of the Partnership is its International Home Building segment, which operates through Fairclough Homes Group Limited (“Fairclough”), a London, England-based home builder. Investment Real Estate’s investment in Fairclough, through the Partnership, resulted in operating earnings of $2.4 million and $8.0 million for the three and nine months ended December 31, 2001 as compared to a loss of $0.9 million and $1.1 million for the same periods in the prior year. The increase in operating earnings occurred primarily because the loss for the three and nine months ended December 31, 2001 included a preferred distribution due to the seller of Fairclough in connection with preference shares issued at acquisition. The preferred distribution was not included in the operating earnings for the current year periods. For the three months ended December 31, 2001 and 2000, Fairclough closed 317 units at an average sales price per unit of $193,915 and 243 units at an average sales price per unit of $204,914, respectively. Operating earnings (loss) per unit (before interest) were $9,006 and $(3,918) for the three months ended December 31, 2001 and 2000, respectively. For the nine months ended December 31, 2001 and 2000, Fairclough closed 931 units at an average sales price per unit of $195,716 and 841 units at an average sales price per unit of $206,502. Operating earnings per unit (before interest) were $10,107 and $3,742 for the nine months ended December 31, 2001 and 2000, respectively.

HOME SERVICES

     The following summarizes Home Services’ results for the three and nine months ended December 31, 2001 (dollars in millions):

	For the Three Months Ended
		December 31,
		2001
Revenues		$	25.2
Operating Earnings		$	1.7

	For the Nine Months Ended
		December 31,
		2001
Revenues		$	75.8
Operating Earnings		$	6.2

     Prior to fiscal 2002, revenues and operating expenses of Home Services were included in the Other, net segment and were reflected on a net basis, as this segment was not considered material for purposes of segment reporting.

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FINANCIAL CONDITION AND LIQUIDITY

     At December 31, 2001, the Company had cash and cash equivalents of $47.1 million including $11.6 million belonging to the Company’s 65.2%-owned Construction Products subsidiary. The net cash used in or provided by the operating, investing, and financing activities for the nine months ended December 31, 2001 and 2000 is summarized below (dollars in thousands):

			For the Nine Months Ended
			December 31,
			2001			2000
Net cash provided by (used in)
	Non-Financial Services*
		Operating Activities	$	(328,362	)	$	(146,667	)
		Investing Activities		(74,728	)		(514,282	)
		Financing Activities		391,617			572,084
				(11,473	)		(88,865	)
	Financial Services
		Operating Activities		(1,234,481	)		(1,252,633	)
		Investing Activities		(4,673	)		(5,049	)
		Financing Activities		1,239,996			1,255,046
				842			(2,636	)
Net decrease in cash			$	(10,631	)	$	(91,501	)

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

     The Company generally funds its Non-Financial Services operating and other short-term needs through cash from operations, borrowings from commercial paper and other short-term credit arrangements and, the issuances of medium-term notes and other debt securities. During the nine months ended December 31, 2001, cash was primarily used in Non-Financial Services-Operating Activities to finance increases in housing inventories relating to the increased level of sales and resulting units under construction during the year, and for the acquisition of land for development. The funds provided by Non-Financial Services-Financing Activities included new debt used to fund the increased home building activity.

     The Company generally funds its Financial Services operating and other short-term needs through cash flows from operations, credit facilities, securitizations and proceeds from the sale of mortgage loans to Harwood Street Funding I, LLC (“HSF-I”) (described below). During the nine months ended December 31, 2001, cash was used in Financial Services-Operating Activities to finance increases in residential mortgage loans. The funds provided by Financial Services-Financing Activities included new debt used to fund the increased residential mortgage loan activity.

     The Company currently has an investment grade credit rating from each of the principal credit rating agencies. The ability of the Company to finance its activities on favorable terms is dependent to a significant extent on whether it is able to maintain its investment-grade credit rating. The Company attempts to manage its debt levels in order to maintain an investment-grade rating. If, however, the Company’s debt rating were downgraded to below investment grade, it would not have access to the commercial paper markets and would need to make alternative financing arrangements.

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     The Company’s existing credit facilities and available capacity as of December 31, 2001 is summarized below (dollars in thousands):

		Existing
		Credit		Available
		Facilities		Capacity
Non-Financial Services
	Centex Corporation
	Multi-Bank Revolving Credit Facility	$	600,000	$	600,000	(1)
	Uncommitted Bank Lines		60,000		40,000
	Construction Products
	Senior Revolving Credit Facility		275,000		92,300	(2)
	Annually Renewable Commercial Paper Conduit		50,000		27,238	(2)
			985,000		759,538
Financial Services
	Unsecured Credit Facilities		170,000		—	(3)
	Secured Credit Facilities		860,000		524,798	(4)
	Harwood Street Funding II, LLC Facility		550,000		5,683
	Line of Credit		14,545		13,091	(5)
			1,594,545		543,572
		$	2,579,545	$	1,303,110	(6)

(1)	This is a committed, multi-bank revolving credit facility, maturing in August 2005, which serves as backup for commercial paper borrowings. As of December 31, 2001, there were no borrowings under this facility, and the company had outstanding commercial paper of $360 million.
(2)	These committed facilities were entered into by Construction Products and have no recourse to Centex Corporation. The Senior Revolving Credit Facility matures in November 2003 and the Annually Renewable Commercial Paper Conduit matures in June 2002.
(3)	Financial Services maintains a $45 million uncommitted facility, which is allocated evenly between CTX Mortgage and CHEC. All borrowings under this facility are guaranteed by Centex Corporation. Centex Corporation, CTX Mortgage and CHEC share in a $125 million uncommitted, unsecured credit facility.
(4)	CTX Mortgage and CHEC share in $200 million committed and $175 million uncommitted secured credit facilities to finance mortgage inventory. CHEC has a $325 million committed secured mortgage warehouse facility maturing in April 2002 to finance sub-prime mortgages not financed through its other facilities. Financial Services maintains a $55 million secured mortgage warehouse facility which expires in February 2002. CTX Mortgage maintains $105 million of committed secured mortgage warehouse facilities maturing in October 2002 to finance mortgages not sold to HSF-I. Centex Corporation has guaranteed $7.5 million of these facilities.
(5)	The United Kingdom mortgage operation maintains a £10 million uncommitted unsecured line of credit guaranteed by Centex Corporation.
(6)	The amount of available capacity includes $178 million of uncommitted borrowings. Although the Company believes that this capacity is currently available, there can be no assurance that the lenders under the applicable facilities would elect to make advances to the Company or its subsidiaries if and when requested to do so.

     CTX Mortgage sells, at closing, substantially all of the Conforming, Jumbo A, and GNMA eligible mortgages it originates (“Eligible Mortgages”) to HSF-I, an unaffiliated entity which is not consolidated with Financial Services or the Company. This arrangement allows the Company to reduce its cost of financing mortgages and improves the Company’s access to liquidity. The Eligible Mortgages are sold under a revolving sales agreement, which expires in November 2004 with certain renewal options. HSF-I acquires the Eligible Mortgages, holds them for a period averaging 45 to 60 days and sells them into the secondary market. CTX Mortgage is the sole manager of HSF-I and, in that capacity, acts as servicer of the loans owned by HSF-I and arranges for the sale of the Eligible Mortgages into the secondary market. HSF-I funds

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Eligible Mortgages with (i) securitized debt that is rated AAA/A1+ by Standard & Poors (“S&P”) and Aaa/P1 by Moody’s Investors Service (“Moody’s”) and (ii) subordinated certificates which are rated BBB by S&P and Baa2 by Moody’s. This arrangement, whereby HSF-I has committed to buy all Eligible Mortgages from CTX Mortgage, gives CTX Mortgage daily access to HSF-I’s $2.0 billion of capacity. HSF-I’s purchase commitment is subject to termination upon the occurrence of certain events of default and other termination events described in the revolving sales agreement, including a downgrade in Centex Corporation’s credit ratings below BB+ by S&P and Ba1 by Moody’s. In the event CTX Mortgage were unable to sell loans to HSF-I, it would be obliged to make other arrangements to finance its activities. Although the Company believes that it could arrange for alternative financing, 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.

     As of December 31, 2001, HSF-I owned $1.8 billion in securitized residential mortgage loans sold to it by CTX Mortgage and had $1.7 billion of outstanding debt and $0.1 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. Centex Corporation has (i) an obligation, created through a swap agreement, to protect against certain interest rate risk, non-credit related market risk and prepayment risk related to mortgage loans held by HSF-I, and (ii) guaranteed the performance by CTX Mortgage of its obligations as servicer of HSF-I’s mortgage loans. These servicer obligations include the obligation of the servicer to repurchase a mortgage loan from HSF-I in the event of a breach of the servicer’s representations and warranties which materially and adversely affects the value of the mortgage loan. CTX Mortgage also has the obligation to repurchase mortgage loans from HSF-I if it is determined that any mortgage loan sold by CTX Mortgage to HSF-I did not comply with certain eligibility representations.

     CHEC finances its inventory of mortgage loans through Harwood Street Funding II, LLC (“HSF-II”), a wholly-owned, consolidated entity, under a revolving sales agreement, which expires February 2006 with certain renewal options. This arrangement, where HSF-II has committed to finance all eligible loans, gives CHEC daily access to HSF-II’s capacity of $550 million. HSF-II obtains funds through the sale of five-year subordinated notes and short-term secured liquidity notes. Because HSF-II is a consolidated entity, the debt, interest income and interest expense of HSF-II are reflected on the financial statements of Financial Services and the Company.

     Short-term debt as of December 31, 2001 was $1.4 billion, which included $1.0 billion of debt applicable to the Financial Services operation. Excluding Financial Services and Construction Products, the Company’s short-term borrowings are generally financed at prevailing market interest rates from the Company’s commercial paper programs and from uncommitted bank facilities.

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     Debt outstanding as of December 31, 2001 was as follows (dollars in thousands)⁽¹⁾:

Non-Financial Services:
	Short-Term Notes Payable		$	402,812
	Senior Debt:
		Medium-Term Note Programs, 2.72% to 7.95%, due through 2007		418,000
		Long-Term Notes, 6.40% to 9.75%, due through 2011		614,956
		Other Indebtedness, weighted-average 2.43%, due through 2027		216,183
	Subordinated Debt:
		Subordinated Debentures, 7.38%, due in 2006		99,833
		Subordinated Debentures, 8.75%, due in 2007		99,617
				1,851,401
Financial Services:
	Short-Term Debt:
		Short-Term Bank Notes Payable		356,817
		Harwood Street Funding II, LLC Secured Liquidity Notes		516,817
		Other Short-Term Debt		156,941
	Home Equity Loans Asset-Backed Certificates, 3.34% to 8.48%, due through 2032			2,288,702
	Harwood Street Funding II, LLC, Variable Rate, Subordinated Notes, due 2006			27,500
				3,346,777
Total			$	5,198,178

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

     Financial Services debt related to securitized residential mortgage loans structured as collateralized borrowings (Home Equity Loans Asset-Backed Certificates) was $2.3 billion at December 31, 2001. 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 is based on contractual maturities adjusted for projected repayments and prepayments of principal. Maturities of Non-Financial Services and Financial Services long-term debt (in thousands) during the next five fiscal years are:

	Non-Financial		Financial		Total
2002	$	7,069	$	131,281	$	138,350
2003		179,567		552,765		732,332
2004		210,629		415,576		626,205
2005		30,267		296,696		326,963
2006		325,032		242,607		567,639
Thereafter		696,025		677,277		1,373,302
	$	1,448,589	$	2,316,202	$	3,764,791

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     The Company conducts its land acquisition and development activities directly and through its participation in joint ventures in which the Company holds less than a majority interest. The Company’s investment in Joint Ventures and Other was $87.7 million and $72.0 million at December 31, 2001 and March 31, 2001, respectively. These non-consolidated joint ventures had total debt outstanding of approximately $168 million as of December 31, 2001 and $137 million as of March 31, 2001. The Company’s liability is limited to approximately $32 million and $46 million, respectively.

FORWARD-LOOKING STATEMENTS

     The Management’s Discussion and Analysis of Financial Condition and Results of Operations, the Other Developments and Outlook and other sections of this report on Form 10-Q 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 the Company is discussing its 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 forecast in such forward-looking statements. The principal risks and uncertainties that may affect the Company’s actual performance and results of operations include the following: general economic conditions and interest rates; the cyclical and seasonal nature of the Company’s businesses; adverse weather; changes in property taxes and energy costs; changes in federal income tax laws and federal mortgage financing programs; governmental regulations; changes in governmental and public policy; changes in economic conditions specific to any one or more of the Company’s markets and businesses; competition; availability of raw materials; and unexpected operations difficulties. Other risks and uncertainties may also affect the outcome of the Company’s actual performance and results of operations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

     There have been no material changes in the Company’s market risk from March 31, 2001. For further information regarding the Company’s market risk, refer to the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2001.

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Part II.	Other Information
ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(1) Exhibits

None

(2) Reports on Form 8-K

Current Report on Form 8-K of Centex Corporation dated October 23, 2001 and filed with the SEC on that date, announcing earnings for the quarter ended September 30, 2001.

Current Report on Form 8-K of Centex Corporation dated December 5, 2001 and filed with the SEC on that date, providing earnings guidance for fiscal year 2002, 2003 and 2004.

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Signatures

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

	CENTEX CORPORATION
	Registrant
February 13, 2002	/s/ Leldon E. Echols
	by Leldon E. Echols Executive Vice President and Chief Financial Officer
February 13, 2002	/s/ Mark A. Blinn
	Mark A. Blinn Vice President – Controller and Financial Strategy (chief accounting officer)

-31-

Part I – Financial Information
Item 1. Financial Statements

3333 Holding Corporation and Subsidiary
and Centex Development Company, L.P. and Subsidiaries
Condensed Combining Statements of Operations

(Dollars in thousands, except per unit/share data)
(unaudited)

	For the Three Months Ended December 31,
	2001						2000
			Centex							Centex
			Development							Development
			Company, L.P.		3333 Holding					Company, L.P.			3333 Holding
			and		Corporation					and			Corporation
	Combined		Subsidiaries		and Subsidiary		Combined			Subsidiaries			and Subsidiary
Revenues	$	95,866	$	95,041	$	838	$	80,752		$	80,752		$	—
Costs and Expenses		90,092		90,053		52		78,031			77,894			137
Earnings (Loss) Before Income Taxes		5,774		4,988		786		2,721			2,858			(137	)
Income Taxes		236		210		26		(928	)		(928	)		—
Net Earnings (Loss)	$	5,538	$	4,778	$	760	$	3,649		$	3,786		$	(137	)
Net Earnings Allocable to Limited Partners			$	4,778						$	3,786
Earnings (Loss) Per Unit/Share			$	24.25	$	760				$	53.57		$	(137	)
Weighted-Average Units/Shares Outstanding				197,016		1,000					70,669			1,000

See notes to condensed combining financial statements.

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

	For the Nine Months Ended December 31,
	2001						2000
			Centex							Centex
			Development							Development
			Company, L.P.		3333 Holding					Company, L.P.			3333 Holding
			and		Corporation					and			Corporation
	Combined		Subsidiaries		and Subsidiary		Combined			Subsidiaries			and Subsidiary
Revenues	$	266,108	$	264,673	$	1,548	$	222,510		$	222,509		$	1
Costs and Expenses		253,168		253,058		223		219,517			219,157			360
Earnings (Loss) Before Income Taxes		12,940		11,615		1,325		2,993			3,352			(359	)
Income Taxes		945		919		26		(871	)		(871	)		—
Net Earnings (Loss)	$	11,995	$	10,696	$	1,299	$	3,864		$	4,223		$	(359	)
Net Earnings Allocable to Limited Partners			$	10,696						$	4,223
Earnings (Loss) Per Unit/Share			$	56.81	$	1,299				$	60.70		$	(359	)
Weighted-Average Units/Shares Outstanding				188,287		1,000					69,573			1,000

See notes to condensed combining financial statements.

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

			December 31, 2001*							March 31, 2001**
					Centex								Centex
					Development								Development
					Company, L.P.		3333 Holding						Company, L.P.		3333 Holding
					and		Corporation						and		Corporation
			Combined		Subsidiaries		and Subsidiary				Combined		Subsidiaries		and Subsidiary
Assets
Cash and Cash Equivalents			$	243	$	235	$	8			$	3,034	$	3,029	$	5
Restricted Cash				5,000		5,000		—				—		—		—
Accounts Receivable				5,438		10,462		150				10,185		15,353		—
Notes Receivable				—		—		—				14		14		—
Inventories				451,733		451,584		149				340,827		339,455		1,372
Investments -
	Commercial Properties, net			104,412		104,412		—				83,649		83,649		—
	Real Estate Joint Ventures			6,413		6,413		—				2,699		2,699		—
	Affiliate			—		—		1,716				—		—		1,716
Property and Equipment, net				3,246		3,246		—				3,391		3,331		60
Other Assets -
	Goodwill			28,293		28,293		—				27,616		27,616		—
	Deferred Charges and Other			21,959		20,188		1,771				13,235		13,135		100
			$	626,737	$	629,833	$	3,794			$	484,650	$	488,281	$	3,253
Liabilities, Stockholders’ Equity and Partners’ Capital
Accounts Payable and Accrued Liabilities			$	107,903	$	108,451	$	5,200			$	81,536	$	81,320	$	5,958
Notes Payable				265,460		265,460		—				187,301		187,301		—
		Total Liabilities		373,363		373,911		5,200				268,837		268,621		5,958
Stockholders’ Equity and Partners’ Capital				253,374		255,922		(1,406	)			215,813		219,660		(2,705	)
			$	626,737	$	629,833	$	3,794			$	484,650	$	488,281	$	3,253

*     Unaudited.

**   Condensed from audited financial statements.

See notes to condensed combining financial statements.

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

		For the Nine Months Ended December 31,
		2001									2000
					Centex										Centex
					Development										Development
					Company, L.P.			3333 Holding							Company, L.P.			3333 Holding
					and			Corporation							and			Corporation
		Combined			Subsidiaries			and Subsidiary				Combined			Subsidiaries			and Subsidiary
Cash Flows – Operating Activities
Net Earnings (Loss)		$	11,995		$	10,696		$	1,299			$	3,864		$	4,223		$	(359	)
Adjustments:
	Depreciation and Amortization		2,957			2,957			—				3,622			3,592			30
	Equity in Earnings from Joint Ventures		(145	)		(145	)		—				(446	)		(446	)		—
Decrease (Increase) in Receivables			4,812			4,962			(150	)			2,149			2,144			5
Increase in Restricted Cash			(5,000	)		(5,000	)		—				—			—			—
Decrease in Notes Receivable			14			14			—				2,112			2,112			—
(Increase) Decrease in Inventories			(103,342	)		(104,565	)		1,223				(84,340	)		(83,717	)		(623	)
Increase in Commercial Properties			(22,884	)		(22,884	)		—				(10,064	)		(10,064	)		—
(Increase) Decrease in Other Assets			(8,282	)		(6,611	)		(1,671	)			(8,273	)		(8,298	)		25
Increase (Decrease) in Payables
	and Accruals		25,236			25,995			(759	)			6,238			5,326			912
			(94,639	)		(94,581	)		(58	)			(85,138	)		(85,128	)		(10	)
Cash Flows – Investing Activities
Increase in Advances to Joint Venture
	and Investment in Affiliate		(3,569	)		(3,569	)		—				(28	)		(28	)		—
(Increase) Decrease in Property and
	Equipment, net		(83	)		(144	)		61				(175	)		(174	)		(1	)
			(3,652	)		(3,713	)		61				(203	)		(202	)		(1	)
Cash Flows – Financing Activities
Increase in Notes Payable			76,446			76,446			—				39,341			39,341			—
Issuance of Class C Units			19,400			19,400			—				—			—			—
			95,846			95,846			—				39,341			39,341			—
Effect of Exchange Rate Changes
	on Cash		(346	)		(346	)		—				(2,172	)		(2,172	)		—
Net (Decrease) Increase in Cash			(2,791	)		(2,794	)		3				(48,172	)		(48,161	)		(11	)
Cash at Beginning of Period			3,034			3,029			5				58,314			58,298			16
Cash at End of Period		$	243		$	235		$	8			$	10,142		$	10,137		$	5
Supplemental Disclosures:
Issuance of Class C Units in
	Exchange for Assets	$	757		$	757		$	—			$	3,327		$	3,327		$	—

See notes to condensed combining financial statements.

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3333 Holding Corporation and Subsidiary
and Centex Development Company, L.P. and Subsidiaries
Notes to Condensed Combining Financial Statements
December 31, 2001

(Dollars in thousands)
(unaudited)

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

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

(B)  The Partnership is a master limited partnership formed by Centex Corporation (“Centex”) in 1987 to broaden Centex’s business to include general real estate development. Centex believed that this expansion would improve stockholder value through longer-term real estate investments, real estate developments and the benefits of the partnership form of business. Because the real estate development business generally requires a longer time horizon to maximize value than Centex’s core home building operations and typically involves substantial acquisition and development indebtedness, Centex concluded that this new line of business could best be conducted through the Partnership, an independent, publicly-traded entity that is not consolidated with Centex for financial reporting purposes. The Partnership is managed by its general partner, 3333 Development Corporation, a wholly-owned subsidiary of 3333 Holding Corporation (“Holding”). The common stock of Holding is held by the stockholders of Centex through a nominee arrangement and trades in tandem with the common stock of Centex.

     The 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 units in connection with the acquisition of real property and other assets. No Class B units have been issued. However, warrants to purchase approximately 80% of the Class B units are also held by the stockholders of Centex through a nominee arrangement and trade in tandem with the common stock of Centex.

     As holder of the Class A and Class C units, Centex is entitled to a cumulative preferred return of 9% per annum on the average outstanding balance of its capital contributions to the Partnership, adjusted for cash and other distributions representing return of capital. As of December 31, 2001, these adjusted capital

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contributions were $234.1 million and preference payments in arrears totaled $36.1 million. No preference payments have been made since fiscal 1998.

     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 and the independent board of Holding, including its non-executive Chairman, manage how the Partnership conducts its activities, including the acquisition, development, maintenance, operation and sale of properties, without the consent of the limited partners. The limited partners cannot remove the general partner.

(C) During the quarter ended December 31, 2001, the Partnership issued 4,383 Class C Units to Centex Homes in exchange for assets with a fair market value of $4.4 million.

     During the quarter ended December 31, 2001, the Partnership purchased a total of approximately 300 acres in Palm Coast, Florida and Myrtle Beach, South Carolina from unaffiliated third parties. The aggregate total consideration of $32.5 million consisted of $20.4 million in non-recourse purchase money mortgage notes, $4.7 million in limited recourse purchase money mortgage notes and $7.4 million in cash payments. Concurrently, Centex Homes has entered into option agreements with the Partnership for the purchase of these properties. During the quarter, the Partnership received $7.4 million in option deposits and $173 thousand from Centex Homes as reimbursement for interest expense and other costs incurred by the Partnership in connection with land holdings subject to these option agreements.

     In addition to the current quarter purchases, the Companies own 49 acres of land in Las Vegas, Nevada and Waikoloa, Hawaii. The aggregate consideration was $39 million consisting of $37.5 million in non-recourse purchase money mortgage notes and $1.5 million in cash payments. Centex Homes has entered into option agreements for the purchase of these properties and has made option deposits of $1.5 million.

(D) A summary of comprehensive income for the three and nine months ended December 31, 2001 and 2000 is presented below:

		For the Three Months					For the Nine Months
		Ended December 31,					Ended December 31,
		2001			2000		2001		2000
Net Earnings		$	5,538		$	3,649	$	11,995	$	3,864
Other Comprehensive (Loss) Income, net of tax:
	Foreign Currency Translation Adjustments		(2,973	)		73		5,031		(394	)
	Unrealized Gain on Hedging Instruments		378			—		378		—
Comprehensive Income		$	2,943		$	3,722	$	17,404	$	3,470

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(E)      A summary of changes in stockholders’ equity and partners’ capital is presented below:

					Centex Development Company,						3333 Holding Corporation
					L.P. and Subsidiaries						and Subsidiary
					Class B		General		Limited				Capital in		Retained
					Unit		Partner’s		Partner’s		Stock		Excess of		Earnings
			Combined		Warrants		Capital		Capital		Warrants		Par Value		(Deficit)
Balance at March 31, 2001			$	215,813	$	500	$	1,142	$	218,018	$	1	$	800	$	(3,506	)
	Partnership Units Issued in Exchange for Assets			20,157		—		—		20,157		—		—		—
	Net Earnings			11,995		—		—		10,696		—		—		1,299
	Accumulated Other Comprehensive Income:
		Foreign Currency Translation Adjustments		5,031		—		—		5,031		—		—		—
		Unrealized Gain on Hedging Instruments		378		—		—		378		—		—		—
Balance at December 31, 2001			$	253,374	$	500	$	1,142	$	254,280	$	1	$	800	$	(2,207	)

(F)      In April 1999, Centex Development Company UK Limited (“CDCUK”), a United Kingdom company and a wholly-owned subsidiary, acquired all of the voting shares of Fairclough Homes Group Limited, a British home builder (“Fairclough”), with the purchase price paid by the delivery of non-interest-bearing promissory notes. On March 31, 2001, CDCUK repaid in full (less the holdback described below) the promissory notes from a combination of bank borrowings, equity contributions to CDCUK from the Partnership, and a loan to CDCUK from the Partnership. CDCUK has retained a $7.0 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.

(G)      The Companies operate in four principal business segments: International Home Building, Commercial Development, Multi-Family Communities (formerly known as Multi-Family Development), and Corporate-Other (formerly known as Land Sales and Other). All of the segments operate in the United States, except for International Home Building, which acquires and develops residential properties and constructs single and multi-family housing units in the United Kingdom.

            In prior years, the Companies operated a Domestic Home Building segment which was sold in fiscal year 2001 to Centex Homes. The Domestic Home Building segment had revenues of $9.8 million and $21.5 million, respectively, and operating earnings of $1.1 million and $1.7 million, respectively, for the three and nine months ended December 31, 2000.

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The following tables set forth financial information relating to the business segments for the three and nine months ended December 31, 2001 and 2000.

INTERNATIONAL HOME BUILDING

	For the Three Months Ended
	December 31,
	2001			2000
Revenues	$	61,591		$	49,939
Cost of Sales		(52,659	)		(45,301	)
Selling, General & Administrative Expenses		(6,077	)		(5,590	)
Interest		(489	)		62
Operating Earnings (Loss)	$	2,366		$	(890	)

	For the Nine Months Ended
	December 31,
	2001			2000
Revenues	$	186,130		$	173,813
Cost of Sales		(159,238	)		(153,892	)
Selling, General & Administrative Expenses		(17,482	)		(16,774	)
Interest		(1,460	)		(4,234	)
Operating Earnings (Loss)	$	7,950		$	(1,087	)

COMMERCIAL DEVELOPMENT

	For the Three Months Ended
	December 31,
	2001			2000
Sales Revenues	$	95		$	17,383
Rental Income and Other		4,970			2,791
Cost of Sales		(13	)		(14,833	)
Selling, General & Administrative Expenses		(1,635	)		(1,354	)
Interest		(1,699	)		(1,112	)
Operating Earnings Before Depreciation		1,718			2,875
Depreciation		(887	)		(543	)
Operating Earnings	$	831		$	2,332

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	For the Nine Months Ended
	December 31,
	2001			2000
Sales Revenues	$	12,597		$	17,383
Rental Income and Other		13,779			7,709
Cost of Sales		(11,190	)		(14,833	)
Selling, General & Administrative Expenses		(5,063	)		(3,332	)
Interest		(4,956	)		(3,137	)
Operating Earnings Before Depreciation		5,167			3,790
Depreciation		(2,551	)		(1,500	)
Operating Earnings	$	2,616		$	2,290

MULTI-FAMILY COMMUNITIES

	For the Three Months Ended
	December 31,
	2001			2000
Revenues	$	28,957		$	654
Cost of Sales		(25,150	)		—
Selling, General & Administrative Expenses		(785	)		(574	)
Operating Earnings	$	3,022		$	80

	For the Nine Months Ended
	December 31,
	2001			2000
Revenues	$	52,578		$	1,662
Cost of Sales		(46,832	)		—
Selling, General & Administrative Expenses		(1,989	)		(1,605	)
Operating Earnings	$	3,757		$	57

CORPORATE-OTHER

	For the Three Months Ended
	December 31,
	2001			2000
Revenues	$	253		$	234
Selling, General & Administrative Expenses		(698	)		(170	)
Operating (Loss) Earnings	$	(445	)	$	64

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	For the Nine Months Ended
	December 31,
	2001			2000
Revenues	$	1,024		$	493
Cost of Sales		(707	)		—
Selling, General & Administrative Expenses		(1,700	)		(480	)
Operating (Loss) Earnings	$	(1,383	)	$	13

(H)     The Companies are exposed to the risk of interest rate fluctuations on their debt obligations. As part of their strategy to manage the obligations that are subject to changes in interest rates, the Companies have entered into an interest rate swap agreement, designated as a cash flow hedge. The swap agreement is recorded at its fair value in Other Assets in the condensed combining balance sheets. To the extent the hedging relationship is effective, fluctuations in the fair value of the derivative are deferred as a component of Accumulated Other Comprehensive Income. Fluctuations in the fair value of the ineffective portion of the derivative would be reflected in the current period earnings.

          The Companies have an interest rate swap agreement, which, in effect, fixes the variable interest rate on a portion of their outstanding debt at December 31, 2001. During the three months ended December 31, 2001, 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. Based on the balance in Accumulated Other Comprehensive Income at December 31, 2001, the Companies anticipate adjustments to interest incurred over the next 12 months to be approximately $0.2 million. As of December 31, 2001, the asset and Accumulated Other Comprehensive Income was $540 thousand ($378 thousand net of tax).

(I)      The Companies have adopted, effective April 1, 2001, Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets” (“SFAS 142”), which provides that intangible assets, including goodwill, that are not subject to amortization must be tested for impairment as of the beginning of the fiscal year in which this statement is initially applied and annually thereafter at the reporting unit level using a two-step impairment assessment. Impairment testing must be performed more frequently if events or changes in circumstances indicate that the asset might be impaired. The Companies have completed the assessment of impairment as of the beginning of the fiscal year and have determined that there is no impairment.

          The pro forma adoption of SFAS 142 for the three and nine month periods ended December 31, 2000, which included amortization of goodwill, would have resulted in an increase in net earnings of $393 thousand and $1.35 million, respectively, and an increase of $5.56 and $19.46 in earnings per unit. Goodwill was $28.3 million at December 31, 2001 and $27.6 million at March 31, 2001. The increase relates to the impact of foreign currency translation.

(J)      In August 2001, Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS 144”) was issued. The Companies have not yet determined the impact SFAS 144 will have on their results of operations or financial position.

(K)      The Companies conduct certain operations through their participation in joint ventures in which the Companies hold less than a majority interest. The Companies’ Investment in Joint Ventures was $6.4 million and $2.7 million at December 31, 2001 and March 31, 2001, respectively. These non-consolidated joint

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ventures had total debt outstanding of approximately $21.8 million as of December 31, 2001 and $15.3 million as of March 31, 2001. The Companies’ liability is limited to approximately $10.5 million and $7.6 million, respectively.

(L)      Certain prior year balances have been reclassified to be consistent with the December 31, 2001 presentation.

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ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
 OPERATIONS

RESULTS OF OPERATIONS

     On a combined basis, the Companies’ revenues were $95.9 million for the three months ended December 31, 2001, an 18.7% increase over $80.7 million for the same period last year; operating earnings were $5.8 million, a 112.2% increase over $2.7 million for the same period last year; and net earnings were $5.5 million, a 51.8% increase over $3.6 million for the same period last year.

     On a combined basis, the Companies’ revenues were $266.1 million for the nine months ended December 31, 2001, a 19.6% increase over $222.5 million for the same period last year; operating earnings were $12.9 million, a 332.3% increase over $3.0 million for the same period last year; and net earnings were $12.0 million, a 210.4% increase over $3.9 million for the same period last year.

INTERNATIONAL HOME BUILDING

     The following summarizes International Home Building’s results for the three and nine months ended December 31, 2001 compared to the same periods last year (dollars in thousands, except per unit data):

		For the Three Months Ended December 31,
		2001					2000
Revenues – Home Building		$	61,471		99.8	%	$	49,757		99.7	%
Revenues – Land Sales & Other			120		.2	%		182		.3	%
Cost of Sales – Home Building			(52,549	)	(85.3	%)		(45,159	)	(90.4	%)
Cost of Sales – Land Sales			(110	)	(.2	%)		(142	)	(.3	%)
General & Administrative Expenses			(6,077	)	(9.9	%)		(5,590	)	(11.2	%)
Operating Earnings (Loss) Before Interest			2,855		4.6	%		(952	)	(1.9	%)
Interest			(489	)	(.8	%)		62		.1	%
Operating Earnings (Loss) Before Taxes		$	2,366		3.8	%	$	(890)		(1.8	%)
Units Closed			317					243
	% Change		30.5	%				(35.5	%)
Unit Sales Price		$	193,915				$	204,914
	% Change		(5.4	%)				8.6	%
Operating Earnings (Loss) Per Unit (Before Interest)		$	9,006				$	(3,918	)
	% Change		329.9	%				(157.4	%)

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		For the Nine Months Ended December 31,
		2001					2000
Revenues – Home Building		$	182,212		97.9	%	$	173,668		99.9	%
Revenues – Land Sales & Other			3,918		2.1	%		145		.1	%
Cost of Sales – Home Building			(156,108	)	(83.9	%)		(153,750	)	(88.4	%)
Cost of Sales – Land Sales			(3,130	)	(1.7	%)		(142	)	(.1	%)
General & Administrative Expense			(17,482	)	(9.4	%)		(16,774	)	(9.7	%)
Operating Earnings Before Interest			9,410		5.0	%		3,147		1.8	%
Interest			(1,460	)	(.8	%)		(4,234	)	(2.4	%)
Operating Earnings (Loss) Before Taxes		$	7,950		4.2	%	$	(1,087	)	(.6	%)
Units Closed			931					841
	% Change		10.7	%				(26.7	%)
Unit Sales Price		$	195,716				$	206,502
	% Change		(5.2	%)				13.7	%
Operating Earnings Per Unit (Before Interest)		$	10,107				$	3,742
	% Change		170.1	%				(50.5	%)

     The increase in International Home Building revenues for the three and nine months ended December 31, 2001 is attributable to an increase in the number of units sold compared to the same periods last year, offset by a lower per-unit sales price and a reduction in the average exchange rate used for foreign currency translation. Revenues from land sales also increased for the nine months ended December 31, 2001 as compared to the same period last year, primarily as the result of a sale of a portion of International Home Building’s interest in a Yorkshire development.

     Interest expense for the three and nine months ended December 31, 2001 represents interest expense incurred on bank debt, reduced by capitalized external interest expense of $2.7 million. Interest expense for the same periods last year represents preferred distributions due to the seller in connection with preference shares issued at acquisition, which entitled the seller to receive substantially all of the net after-tax earnings of Fairclough Homes Group Limited until March 31, 2001. Although preference shares are ordinarily treated as an equity security, in this case the preference shares had the essential characteristics of debt and, among other things, had a nominal residual interest value that was subject to redemption. Therefore, the preference shares were treated as debt and the preferred distributions were recorded as interest expense.

     For the three and nine months ended December 31, 2001, home sales (orders) totaled 300 and 1,024 units, respectively, as compared to 250 and 858 units for the same periods last year. The backlog of homes sold but not closed as of December 31, 2001 was 412 units, as compared to 334 units at December 31, 2000.

     International Home Building, whose functional currency is the British pound sterling, translates its operating results into U.S. dollars using the average exchange rate for the period. For the three months ended December 31, 2001 and 2000, respectively, the average exchange rate used for translation was 1.44 and 1.45, representing a decrease of 0.3%. For the nine months ended December 31, 2001 and 2000, respectively, the average exchange rate used for translation was 1.44 and 1.49, representing a decrease of 3.5%.

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DOMESTIC HOME BUILDING

     Results for the Domestic Home Building segment for the three and nine months ended December 31, 2000, were revenues of $9.8 million and $21.5 million, respectively, and operating earnings of $1.1 million and $1.7 million, respectively. On March 31, 2001, the Partnership sold its Domestic Home Building segment to Centex Homes.

COMMERCIAL DEVELOPMENT

     The following summarizes Commercial Development’s results for the three and nine months ended December 31, 2001, compared to the same periods last year (dollars and square feet in thousands):

	For the Three Months Ended
	December 31,
	2001			2000
Sales Revenues	$	95		$	17,383
Rental Income and Other		4,970			2,791
Cost of Sales		(13	)		(14,833	)
Selling, General & Administrative Expenses		(1,635	)		(1,354	)
Interest Expense		(1,699	)		(1,112	)
Operating Earnings Before Depreciation		1,718			2,875
Depreciation		(887	)		(543	)
Operating Earnings	$	831		$	2,332
Rentable Square Feet for Operating Properties		1,933			1,512

	For the Nine Months Ended
	December 31,
	2001			2000
Sales Revenues	$	12,597		$	17,383
Rental Income and Other		13,779			7,709
Cost of Sales		(11,190	)		(14,833	)
Selling, General & Administrative Expenses		(5,063	)		(3,332	)
Interest Expense		(4,956	)		(3,137	)
Operating Earnings Before Depreciation		5,167			3,790
Depreciation		(2,551	)		(1,500	)
Operating Earnings	$	2,616		$	2,290
Rentable Square Feet for Operating Properties		1,933			1,512

     As detailed below, at December 31, 2001, Commercial Development owned, either directly or through interests in joint ventures, 1,933,000 square feet of industrial, office and medical office space in California, Florida, Massachusetts, Michigan, North Carolina and Texas, and interests in projects under construction totaling 1,225,000 square feet of industrial, manufacturing, office, medical office and retail space in Arizona, California, Florida, Mississippi, North Carolina and Texas.

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     Sales Revenues and Cost of Sales for the three and nine months ended December 31, 2001, reflect the sale of two industrial projects and the sale of approximately two acres of land. Sales Revenues and Cost of Sales for the three and nine months ended December 31, 2000, reflect the sale of land in Texas and California. Rental income for the three and nine months ended December 31, 2001, increased as a result of an increase in the number of operating properties, offset by a decline in the weighted average portfolio occupancy. Selling, General and Administrative Expenses, Interest Expense and Depreciation for the three and nine months ended December 31, 2001, increased as a result of an increase in the number of operating properties.

Operating Properties

	December 31, 2001					December 31, 2000
	(000's)		Weighted			(000's)		Weighted
	Rentable		Average			Rentable		Average
	Square Ft.		Occupancy			Square Ft.		Occupancy
Industrial		1,394		88.6	%		1,085		90.0	%
Office/Medical Office		539		83.2	%		427		97.1	%
		1,933		87.1	%		1,512		92.0	%
Projects Under Development
	(000's)					(000's)
	Rentable					Rentable
	Square Ft.					Square Ft.
Industrial/Manufacturing		969					446
Office/Medical Office		62					—
Retail		194					—
		1,225					446

MULTI-FAMILY COMMUNITIES

     The following summarizes Multi-Family Communities’ (“Multi-Family”) results for the three and nine months ended December 31, 2001, compared to the same periods last year (dollars in thousands):

	For the Three Months Ended
	December 31,
	2001			2000
Revenues	$	28,957		$	654
Cost of Sales		(25,150	)		—
Selling, General & Administrative Expenses		(785	)		(574	)
Operating Earnings	$	3,022		$	80

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	For the Nine Months Ended
	December 31,
	2001			2000
Revenues	$	52,578		$	1,662
Cost of Sales		(46,832	)		—
Selling, General & Administrative Expenses		(1,989	)		(1,605	)
Operating Earnings	$	3,757		$	57

     During the nine months ended December 31, 2001, Multi-Family closed on the sale of a 382-unit apartment complex in St. Petersburg, Florida and a 400-unit apartment complex in Grand Prairie, Texas. During the nine months ended December 31, 2000, a joint venture in which Multi-Family had an interest closed on the sale of a 182-unit apartment complex in College Station, Texas, and Multi-Family received an earn-out payment related to the 1999 sale of an apartment complex located in The Colony, Texas.

CORPORATE-OTHER

     The following summarizes Corporate-Other’s results for the three and nine months ended December 31, 2001, compared to the same periods last year (dollars in thousands):

	For the Three Months Ended
	December 31,
	2001			2000
Revenues	$	253		$	234
Selling, General & Administrative Expenses		(698	)		(170	)
Operating (Loss) Earnings	$	(445	)	$	64

	For the Nine Months Ended
	December 31,
	2001			2000
Revenues	$	1,024		$	493
Cost of Sales		(707	)		—
Selling, General & Administrative Expenses		(1,700	)		(480	)
Operating (Loss) Earnings	$	(1,383	)	$	13

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     The Corporate-Other (formerly known as Land Sales and Other) segment is involved in the acquisition and disposition of land and other assets of the Partnership not identified with another business segment. For the three months ended December 31, 2001 and 2000, revenues included $225,000 and $0 in other income, respectively, $0 and $86,000 from earnings in joint ventures, respectively, and $28,000 and $148,000 in interest income, respectively. For the nine months ended December 31, 2001 and 2000, revenues included $655,000 and $0 in sales revenues, $221,000 and $0 in other income, respectively, $0 and $231,000 from earnings in joint ventures, respectively, and $148,000 and $262,000 in interest income, respectively.

LIQUIDITY AND CAPITAL RESOURCES

     The Companies 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 (comprised largely of proceeds from the sale of real estate).

     Properties under development are typically financed 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. Commercial and multi-family construction loans totaled $37.2 million at December 31, 2001. As properties are completed, the properties are either sold or refinanced with long-term fixed-rate debt. In both instances, the proceeds are used to repay the short-term borrowings. Permanent commercial project loans outstanding at December 31, 2001 totaled $74.4 million. Seller-financed land acquisition loans totaled $62.6 million at December 31, 2001.

     The International Home Building segment has a secured revolving bank credit facility of £100 million. The term of this facility expires in fiscal 2004. Advances under this facility totaled £58 million, or $84 million, at December 31, 2001.

     During the three and nine months ended December 31, 2001, the Partnership issued 4,383 and 20,157 Class C limited partnership units in exchange for assets valued at $4.4 million and $20.2 million.

     The Companies believe that the revenues, earnings, and liquidity from the sale of single-family homes, land sales, and the sale and permanent financing of development projects will be sufficient to provide the necessary funding for their current and future needs.

FORWARD-LOOKING STATEMENTS

     The 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 the Companies are discussing their 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 such forward-looking statements. The principal risks and uncertainties that may affect the Companies’ actual performance and results of operations include the following: general economic conditions and interest rates; the cyclical and seasonal nature of the Companies’ businesses; adverse weather; changes in property taxes; changes in

-48-

federal income tax laws; government regulation; changes in governmental and public policy; changes in economic conditions specific to any one or more of the Companies’ markets and businesses; competition; availability of raw materials; and unexpected operations difficulties. Other risks and uncertainties may also affect the outcome of the Companies’ actual performance and results of operations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     There have been no material changes in the Companies’ market risk from March 31, 2001. For more information regarding the Companies’ market risk, refer to the Companies’ Annual Report on Form 10-K for the fiscal year ended March 31, 2001.

Part II. Other Information

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

     None

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (1) Exhibits

     Exhibit 3.1 Bylaws of 3333 Holding Corporation as Amended

     (2) Reports on Form 8-K

     The Registrant filed no reports on Form 8-K during the quarter ended December 31, 2001.

-49-

Signatures

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

	3333 HOLDING CORPORATION
	Registrant
February 13, 2001	/s/ Stephen M. Weinberg
	by Stephen M. Weinberg
	President and Chief Executive Officer
	(principal executive officer)
February 13, 2001	/s/ Todd D. Newman
	Todd D. Newman
	Senior Vice President, Chief Financial
	Officer and Treasurer
	(principal financial officer and
	chief accounting officer)

-50-

Signatures

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

	CENTEX DEVELOPMENT COMPANY, L.P.
	Registrant
	By: 3333 Development Corporation,
	General Partner
February 13, 2001	/s/ Stephen M. Weinberg
	by Stephen M. Weinberg
	President and Chief Executive Officer
	(principal executive officer)
February 13, 2001	/s/ Todd D. Newman
	Todd D. Newman
	Senior Vice President, Chief Financial
	Officer and Treasurer
	(principal financial officer and
	chief accounting officer)

-51-

INDEX TO EXHIBITS

EXHIBIT NUMBER	DESCRIPTION
3.1	Bylaws of 3333 Holding Corporation as Amended

EX-3.1

                                                                     EXHIBIT 3.1

                                     BY-LAWS
                                       OF
                            3333 HOLDING CORPORATION
                             (a Nevada corporation)

            [Amended and restated effective as of November 27, 2001]

                                      * * *

                                    ARTICLE I
                                     OFFICES

         Section 1. The registered office of 3333 Holding Corporation (the
"Corporation") shall be located in Carson City, County of Washoe, State of
Nevada.

         Section 2. The Corporation may also have its executive offices and
other offices at such other places, within and without the State of Nevada, as
the Board of Directors may from time to time determine or as the business of the
Corporation may require.

                                   ARTICLE II
                            MEETINGS OF STOCKHOLDERS

         Section 1. All annual meetings of stockholders shall be held at the
offices of the Corporation in the City of Dallas, State of Texas, or at such
other place, within or without the State of Texas, as may be designated by the
Board of Directors and stated in the notice of the meeting or in a duly executed
waiver of notice thereof. Special meetings of stockholders may be held at such
place, within or without the State of Texas, and at such time as shall be stated
in the notice of the meeting or in a duly executed waiver of notice thereof.

         Section 2. Annual meetings of stockholders, commencing with the year
2002 shall be held on such business day in July at 10:00 a.m. as may be
designated by the Board of Directors, or if the Board of Directors does not so
designate an annual meeting date for any year then the annual meeting for that
year shall be held on the last Thursday of July if not a legal holiday, and if a
legal holiday, then on the next secular day following at 10:00 a.m.. At such
annual meeting, the stockholders shall elect by a plurality vote a board of
directors, and transact such other business as may properly be brought before
the meeting.


                                       -1-




         Section 3. Special meetings of the stockholders may be called only by
the Chairman of the Board of Directors or a majority of the directors of the
Board of Directors.

         Section 4. Written or printed notice signed by the Chairman of the
Board, the President, a Vice President, the Secretary, or an Assistant Secretary
and stating the place, day and hour of the meeting of the stockholders and the
purpose or purposes for which the meeting is called shall be given to each
stockholder of record entitled to vote at such meeting either by delivering such
notice personally to such stockholder or by depositing such notice in the United
States mail addressed to the stockholder at the stockholder's address as it
appears on the stock transfer books of the Corporation, with proper postage
prepaid, not less than 10 nor more than 60 days before the day of the meeting,
by or at the direction of the Chairman of the Board, the President, the
Secretary, or the officer or person calling the meeting.

         Section 5. Business transacted at any special meeting shall be confined
to the purposes stated in the notice thereof.

         Section 6. The holders of a majority of the shares entitled to vote,
represented in person or by proxy, shall constitute a quorum at meetings of
stockholders except as otherwise provided in the Articles of Incorporation (the
"Articles of Incorporation"). If, however, a quorum shall not be present or
represented at any meeting of the stockholders, the stockholders present in
person or represented by proxy shall have power to adjourn the meeting from time
to time, without notice other than announcement at the meeting, until a quorum
shall be present or represented. At such adjourned meeting at which a quorum
shall be present or represented, any business may be transacted that might have
been transacted at the meeting as originally notified and called. The
stockholders present at a duly organized meeting may continue to transact
business until adjournment, notwithstanding the withdrawal of some stockholders
prior to adjournment.

         Section 7. The vote of the holders of a majority of the shares entitled
to vote and represented at a meeting at which a quorum is present shall be the
act of the meeting of stockholders, unless the vote of


                                       -2-





a greater number is required by applicable and governing law or by the Articles
of Incorporation for the particular proposed action.

         Section 8. Each outstanding share, regardless of class, shall be
entitled to one vote on each matter submitted to a vote at a meeting of
stockholders, except to the extent that the voting rights of the shares of any
class or series within a class are limited or denied by the Articles of
Incorporation or by the resolutions of the Board of Directors establishing such
class or series pursuant to the Articles of Incorporation. At any election for
directors, every stockholder entitled to vote at any such election shall have
the right to vote, in person or by proxy, the number of shares owned by such
stockholder for as many persons as there are directors to be elected and for
whose election such stockholder has a right to vote. Stockholders the
Corporation are expressly prohibited from cumulating their votes in any election
for directors of the Corporation.

         Section 9. A stockholder may vote in person or may be represented and
vote by a proxy or proxies appointed by such stockholder by an instrument in
writing. In the event that any such instrument in writing shall designate two or
more persons to act as proxies, and such instrument does not specify the manner
in which such proxies may exercise the powers conferred by such instrument, then
a majority of such persons present at the meeting, or, if only one shall be
present, then that one shall have and may exercise all of the powers conferred
by such written instrument upon all of the persons so designated. No such
appointment of proxy shall be valid except for the meeting (including all
adjourned sessions thereof) for which it was given. No such appointment of proxy
shall be valid after the expiration of 6 months following the date of its
execution, unless coupled with an interest, or unless the person executing it
specifies therein the length of time for which it is to continue in force, which
in no case shall exceed the earlier of 11 months following the date of its
execution or the conclusion of the meeting (including all adjourned sessions
thereof) for which such appointment of proxy was given. Subject to the above,
any appointment of proxy duly executed is not revoked and continues in full
force and effect until an instrument revoking it or a duly


                                       -3-





executed appointment of proxy bearing a later date is filed with the Secretary
of the Corporation. Each appointment of proxy shall be revocable unless
expressly provided therein to be irrevocable.

         Section 10. The officer or agent having charge of the stock transfer
books shall make, at least ten days before each meeting of stockholders, a
complete list of the stockholders entitled to vote at such meeting or any
adjournment thereof, arranged in alphabetical order, with the address of and
number of shares held by each. For a period of 10 days prior to such meeting,
shall be kept on file at the registered office of the Corporation and shall be
subject to inspection by any stockholder at any time during the usual business
hours. Such list shall also be produced and kept open at the time and place of
the meeting and shall be subject to the inspection of any stockholder during the
entire meeting. The original stock transfer books shall be prima facie evidence
as to who are the stockholders entitled to examine such list or transfer book or
to vote at any such meeting of stockholders.

         Section 11. Subject to the rights of the holders of the preferred stock
or any other class or series of stock that may have a preference over the common
stock as to dividends or upon liquidation, any action required or permitted to
be taken by the stockholders of the Corporation must be effected at a duly
called annual or special meeting of stockholders of the Corporation and may not
be effected by any consent in writing by such stockholders.

         Section 12. Voting at meetings of stockholders may be oral or by ballot
at the discretion of the Chairman of the meeting, except that such voting shall
be by written ballot if a vote by written ballot is demanded by a majority of
the stockholders present at such meeting.

         Section 13. Subject to the rights of the holders of any class or series
of stock having a preference over the common stock as to dividends or upon
liquidation, nominations for the election of directors may be made by the Board
of Directors or by any stockholder entitled to vote for the election or
directors. Any stockholder entitled to vote for the election of directors at a
meeting may nominate persons for election as directors only if written notice of
such stockholder's intent to make such nomination is given, either by


                                       -4-



personal delivery or by United States mail, postage prepaid, to the Secretary of
the Corporation not later than (i) with respect to an election to be held at an
annual meeting of stockholders, 90 days in advance of such meeting, and (ii)
with respect to an election to be held at a special meeting of stockholders for
the election of directors, the close of business on the 7th day following the
date on which notice of such meeting is first given to stockholders. Each such
notice shall set forth: (a) the name and address of the stockholder who intends
to make the nomination and of the person or persons to be nominated; (b) a
representation that the stockholder is a holder of record of stock of the
Corporation entitled to vote at such meeting and intends to appear in person or
by proxy at the meeting to nominate the person or persons specified in the
notice; (c) a description of all arrangements or understandings between the
stockholder and each nominee and any other person or persons (naming such person
or persons) pursuant to which the nomination or nominations are to be made by
the stockholder; (d) such other information regarding each nominee proposed by
such stockholder as would have been required to be included in a proxy statement
filed pursuant to the proxy rules of the Securities and Exchange Commission had
each nominee been nominated, or intended to be nominated by the Board of
Directors; and (e) the consent of each nominee to serve as a director of the
Corporation if so elected. The Chairman of the meeting may refuse to acknowledge
the nomination of any person not made in accordance with the foregoing
procedure.

         Section 14. The Chairman of the Board shall have the power and
authority to limit attendance at any meeting of the stockholders to (a) the
Corporation's stockholders and (b) their validly appointed proxies.

         Section 15. The Chairman of the Board or, in the Chairman's absence,
the Chief Executive Officer, shall be the chairman of any meeting of the
stockholders and shall determine the order of business and rules for the conduct
of any such meeting.


                                       -5-



                                   ARTICLE III
                                    DIRECTORS

         Section 1. The number of directors of the Corporation shall be not
fewer than 3 nor more than 13 as shall be established from time to time by
resolution of the Board of Directors of the Corporation. The directors shall be
elected at the annual meeting of the stockholders, except as provided in Section
2 of this Article, and each director elected shall hold office until the next
succeeding annual meeting of the stockholders of the Corporation or until such
person's successor is duly elected or until such person's earlier death or
resignation or removal from such office. Directors need not be residents of the
State of Nevada or stockholders of the Corporation.

         Section 2. All vacancies occurring in the Board of Directors, including
those resulting from an increase in the number of directors and any vacancies on
the Board of Directors resulting from death, resignation, disqualification,
removal or other cause shall be filled by the affirmative vote of a majority of
the remaining directors then in office, even though such remaining directors may
constitute less than a quorum of the Board of Directors, or by the sole
remaining director. If not filled in that manner, any vacancy shall be filled by
election at an annual meeting or a special meeting of the stockholders entitled
to vote called for that purpose. Any director elected in accordance with the
preceding sentence shall hold office for the remainder of the full term of the
class of directors in which the new directorship was created or the vacancy
occurred and until such director's successor shall have been elected and
qualified. No decrease in the number of directors constituting the Board of
Directors shall shorten the term of any incumbent director.

         Section 3. The business and affairs of the Corporation shall be managed
by its Board of Directors. The Board of Directors may exercise all such powers
of the Corporation and do all such lawful acts and things as are not by statute
or by the Articles of Incorporation or by these By-laws directed or required to
be exercised and done by the stockholders.

         Section 4. Any director of the Corporation may be removed or discharged
with or without cause by the affirmative vote therefor by stockholders
representing not less than two-thirds of the issued and outstanding capital
stock entitled to vote in the election of directors.


                                       -6-



                       MEETINGS OF THE BOARD OF DIRECTORS

         Section 5. Meetings of the Board of Directors, regular or special, may
be held either within or without the State of Nevada.

         Section 6. The first meeting of each newly elected Board of Directors
shall be at such time and place as shall be fixed by the vote of the
stockholders at the annual meeting of stockholders and no notice of such meeting
shall be necessary to the newly elected directors in order legally to constitute
the meeting, provided a quorum shall be present. In the event of the failure of
the stockholders to fix the time and place of such first meeting of the newly
elected Board of Directors, or in the event such meeting of the newly elected
Board of Directors is not held at the time and place so fixed by the
stockholders, the meeting may be held at such time and place as shall be
specified in a notice given as hereinafter provided for special meetings of the
Board of Directors, or as shall be specified in a written waiver signed by all
of the directors.

         Section 7. Regular meetings of the Board of Directors, commencing in
October 2001, shall be held on the third Tuesday of February, May, July and
October in each year, if not a legal holiday, and if a legal holiday, then on
the next secular day following, and in addition a fifth flexible meeting date
may be determined from time to time by the Board of Directors. However, the
Chairman of the Board may designate a day in each such month other than the
third Tuesday as the date for any such regular meeting. Each such meeting shall
be held at such time as shall be designated by the Chairman of the Board. At
such meetings, the Board of Directors may transact such business as may properly
come before the meetings

         Section 8. Special meetings of the Board of Directors may be called by
the Chairman of the Board of Directors or the President and shall be called by
the Secretary on the written request of two of the directors. Written notice of
special meetings of the Board of Directors shall be given to each director at
least 24 hours before the day of the meeting. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the Board
of Directors need be specified in the notice or waiver of notice of such
meeting.


                                       -7-



         Section 9. A majority of the directors shall constitute a quorum for
the transaction of business. The act of at least a majority of the directors
present at a meeting at which a quorum is present shall be required to
constitute the act of the Board of Directors, unless a greater number is
required or a lesser number is permitted by the Articles of Incorporation. If a
quorum shall not be present at any meeting of the Board of Directors, the
directors present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.
At such adjourned meeting at which a quorum shall be present, any business may
be transacted that might have been transacted at the meeting as originally
notified and called.

         Section 10. Any director may resign at any time by mailing or
delivering or by transmitting written notice of resignation by mail, telegram,
cable or other electronic transmission to the Board of Directors, the Chairman
of the Board, the President, or to the Secretary of the Corporation. Any such
resignation shall take effect at the time specified therein or, if no time is
specified therein, then such resignation shall take effect immediately upon the
receipt thereof.

         Section 11. Any action required or permitted to be taken at any meeting
of the Board of Directors, or of any committee thereof, may be taken without a
meeting if a consent in writing, setting forth the action so taken, shall be
signed by all of the members of the Board of Directors or of such committee, as
the case may be, and such consent shall have the same force and effect as a
unanimous vote at a duly called and constituted meeting of the Board of
Directors or such committee. All such unanimous written consents shall be filed
with the minutes of the proceedings of the Board of Directors or such committee.

         Section 12. Members of the Board of Directors, or of any committee
thereof, may participate in a meeting of such Board of Directors or committee by
means of a conference telephone network by which all persons participating in
the meeting can hear each other.


                                      -8-



                             COMMITTEES OF DIRECTORS

         Section 13. The Board of Directors may, by resolution adopted by a
majority of the Board of Directors, designate one or more directors to
constitute an Executive Committee that, to the extent provided in such
resolution (if not expressly denied by applicable law or the Articles of
Incorporation) shall have and may exercise the powers of the Board of Directors
in the management of the business and affairs of the Corporation and may have
power to authorize the seal of the Corporation to be affixed to all papers that
may require it. Vacancies in the membership of the Executive Committee shall be
filled by resolution adopted by a majority of the Board of Directors at a
regular or special meeting of the Board of Directors. The Executive Committee
shall keep regular minutes of its proceedings and report such minutes to the
Board of Directors when required. The designation of such committee and the
delegation of authority thereto shall not operate to relieve the Board of
Directors or any member thereof of any responsibility imposed on the Board of
Directors or such member by law.

         Section 14. The Board of Directors may, by resolution adopted by a
majority of the Board of Directors, designate one or more committees in addition
to the Executive Committee, each such other committee to consist of one or more
directors of the Corporation, which committee or committees, to the extent
provided in such resolution or resolutions (if not theretofore granted to the
Executive Committee and if not expressly denied by applicable law or the
Articles of Incorporation), shall have and may exercise all of the authority of
the Board of Directors in the business and affairs of the Corporation, and may
have power to authorize the seal of the Corporation to be affixed to all papers
that may require it. Vacancies in the membership of any such committees shall be
filled by resolution adopted by a majority of the Board of Directors at a
regular or special meeting of the Board of Directors. Each committee shall keep
regular minutes of its proceedings and report such minutes to the Board of
Directors when required. The designation of such committees and the delegation
of authority thereto shall not operate to relieve the Board of Directors, or any
member thereof, or any responsibility imposed upon the Board of Directors or
such member by law.


                                       -9-



                            COMPENSATION OF DIRECTORS

         Section 15. The directors may be paid their expenses, if any, of
attendance at each meeting of the Board of Directors and may be paid a fixed sum
for attendance at each meeting of the Board of Directors or a stated salary as
director. No such payment shall preclude any director from serving the
Corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed similar compensation for
attending committee meetings.

                                   ARTICLE IV
                                     NOTICES

         Section 1. Notices to directors and stockholders shall be in writing
and delivered personally or mailed to the directors or stockholders at their
respective addresses appearing on the books of the Corporation. Notice by mail
shall be deemed to be given at the time when such notice shall be mailed. Notice
to directors may also be given by telegram, facsimile or other electronic
transmission, and shall be deemed delivered when such notice shall be deposited
at a telegraph office for transmission and all appropriate fees therefor have
been paid or upon receipt of confirmation of other electronic transmission.

         Section 2. Whenever any notice is required to be given to any
stockholder or director under the provisions of applicable law or of the
Articles of Incorporation or of these By-laws, a waiver thereof in writing
signed by the person or persons entitled to such notice, whether before or after
the time stated therein, shall be equivalent to the giving of such notice.

         Section 3. Attendance of a director at a meeting shall constitute a
waiver of notice of such meeting, except where a director attends a meeting for
the express purpose of objecting to the transaction of any business on the
ground that the meeting is not lawfully called or convened.

                                    ARTICLE V
                                    OFFICERS

         Section 1. The officers of the Corporation shall consist of a Chairman
of the Board, a Chief Executive Officer, a President, one or more Vice
Presidents (one or more of which may be designated Executive Vice President or
Senior Vice President), a Secretary and a Treasurer, each of whom shall be


                                      -10-



elected by the Board of Directors. Any two or more offices may be held by the
same person, except that one person shall not simultaneously hold the offices of
Chairman of the Board and Secretary, Chief Executive Officer and Secretary, or
President and Secretary.

         Section 2. The Board of Directors, at its first meeting after each
annual meeting of stockholders, shall elect a Chairman of the Board, a Chief
Executive Officer, a President, one or more Vice Presidents (one or more of
which may be designated Executive Vice President or Senior Vice President), a
Secretary and a Treasurer, none of whom need be a member of the Board of
Directors, except the Chairman of the Board.

         Section 3. The Board of Directors or the Chairman of the Board may from
time to time elect or appoint a Controller and such assistant officers as the
Board of Directors or the Chairman of the Board, as the case may be, may deem
necessary or desirable. Any such elections or appointments made by the Chairman
of the Board shall be reported to the Board of Directors at its next succeeding
regular meeting.

         Section 4. The salaries of all executive officers of the Corporation
shall be fixed by the Board of Directors.

         Section 5. Each officer and assistant officer of the Corporation shall
hold office until the next annual meeting of the Board of Directors or until a
successor is duly elected or appointed, or until such person's death,
resignation, or removal from such office. Any officer or member of any committee
elected or appointed by the Board of Directors may be removed by the Board of
Directors whenever in its judgment the best interests of the Corporation will be
served thereby, but such removal shall be without prejudice to the contract
rights, if any, of the person so removed. Any vacancy occurring in any office of
the Corporation by death, resignation, removal or otherwise shall be filled by
the Board of Directors.

                            THE CHAIRMAN OF THE BOARD
                       AND THE VICE CHAIRMAN OF THE BOARD

         Section 6. The Chairman of the Board shall be selected from the members
of the Board of Directors of the Corporation. The Chairman of the Board, or in
the Chairman's absence, the Chief Executive


                                      -11-



Officer or the President, shall preside at meetings of the stockholders and the
Board of Directors. The Chairman of the Board shall advise and counsel the Chief
Executive Officer and the President and other officers and shall exercise such
powers and perform such duties as shall be assigned to or required of the
Chairman of the Board from time to time by the Board of Directors or these
By-laws. The Chairman of the Board does not have the general and active
management of the business and does not have authority to execute and deliver on
behalf of the Corporation contracts and other instruments and documents relating
to the usual and ordinary business of the Corporation, except where required by
law to be otherwise executed, and except where the execution thereof shall be
expressly delegated by the Board of Directors to the Chairman of the Board. The
Board may, in its discretion, create the office of Vice Chairman of the Board.
The Vice Chairman of the Board shall be selected from the members of the Board
of the Corporation and shall have such authority, powers and duties as the Board
shall provide. During the absence or disability of the Chairman of the Board,
the Vice Chairman of the Board shall perform the duties of the Chairman of the
Board.

                           THE CHIEF EXECUTIVE OFFICER

         Section 7. The Chief Executive Officer of the Corporation shall have
general and active management of the business of the Corporation and, subject to
the Chairman of the Board if a different person holds such office, shall see
that all orders and resolutions of the Board of Directors are carried into
effect. The Chief Executive Officer shall have such additional duties as may be
assigned to the Chief Executive Officer from time to time by the Board of
Directors or the Chairman of the Board. The Chief Executive Officer shall have
authority, without further authorization from the Board, to execute and deliver
on behalf of the Corporation all bonds, deeds, mortgages and other instruments
(and if any such instrument requires a seal of the Corporation, then under such
seal) relating to the usual and ordinary business of the Corporation.


                                      -12-



                                  THE PRESIDENT

         Section 8. The President shall be the Chief Operating Officer of the
Corporation and shall assist the Chief Executive Officer in the general and
active management of the operations of the Corporation. The President shall have
such additional duties as may be assigned to the President from time to time by
the Board of Directors, the Chairman of the Board or the Chief Executive
Officer. The President shall have the same authority as the Chief Executive
Officer to execute on behalf of the Corporation bonds, deeds, mortgages and
other instruments requiring a seal and contracts and other documents. During any
absence or disability of the Chief Executive Officer, the President shall
perform the duties of the Chief Executive Officer.

                               THE VICE PRESIDENTS

         Section 9. The Vice Presidents, in the order of their seniority, unless
otherwise determined by the Board of Directors, shall, in the absence or
disability of the President, perform the duties and exercise the powers of the
President. Executive Vice Presidents shall be senior to Senior Vice Presidents
and Vice Presidents. Senior Vice Presidents shall be senior to Vice Presidents.
They shall perform such other duties and have such other powers as the Board of
Directors, the Chairman of the Board, the Chief Executive Officer and the
President shall from time to time prescribe. The Vice Presidents shall have the
same authority as the Chairman of the Board and the President to execute on
behalf of the Corporation bonds, deeds, mortgages and other instruments
requiring a seal and contracts and other documents.

                      THE SECRETARY AND ASSISTANT SECRETARY

         Section 10. The Secretary shall attend all meetings of the Board of
Directors and all meetings of the stockholders and record all the proceedings of
the meetings of the stockholders of the Corporation and of the Board of
Directors in a book or books to be kept for that purpose and shall perform
similar duties for any committees of the Board of Directors when required. The
Secretary shall give, or cause to be given, notice of all meetings of the
stockholders and special meetings of the Board of Directors, and shall perform
such other duties as may be prescribed by the Board of Directors, the Chairman
of the Board, the Chief


                                      -13-



Executive Officer or the President. The Secretary shall keep in safe custody the
seal of the Corporation and, when authorized by the Board of Directors, affix
such seal to any instrument requiring it and, when so affixed, it may be
attested by the Secretary's signature or by the signature of the Treasurer or an
Assistant Secretary.

         Section 11. The Assistant Secretaries in the order of their seniority,
unless otherwise determined by the Board of Directors, shall, in the absence or
disability of the Secretary, perform the duties and exercise the powers of the
Secretary. They shall perform such other duties and have such other powers as
the Board of Directors, the Chairman of the Board, the Chief Executive Officer,
the President or the Secretary may from time to time prescribe.

                     THE TREASURER AND ASSISTANT TREASURERS

         Section 12. The Treasurer shall have the custody of the corporate funds
and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the Corporation in
such depositories as may be designated by the Board of Directors.

         Section 13. The Treasurer shall disburse the funds of the Corporation
as may be ordered or authorized by the Board of Directors, taking proper
vouchers of such disbursements, and shall render to the Chairman of the Board,
the Chief Executive Officer, the President and the Board of Directors at its
regular meetings or when the Board of Directors so requires an account of all of
the Treasurer's transactions as Treasurer and of the financial condition of the
Corporation. The Treasurer shall have such other duties as may be prescribed
from time to time by the Board of Directors, the Chairman of the Board, the
Chief Executive Officer and the President.

         Section 14. If required by the Board of Directors, the Treasurer shall
give the Corporation a bond in such sum and with such surety or sureties as
shall be satisfactory to the Board of Directors for the faithful performance of
the duties of the Treasurer's office and for the restoration to the Corporation,
in case of death,


                                      -14-



resignation, retirement or removal from office, of all books, papers, vouchers,
money and other property of whatever kind in the Treasurer's possession or under
the Treasurer's control belonging to the Corporation.

         Section 15. The Assistant Treasurers in the order of their seniority,
unless otherwise determined by the Board of Directors, shall, in the absence or
disability of the Treasurer, perform the duties and exercise the powers of the
Treasurer. They shall perform such other duties and have such other powers as
the Board of Directors, the Chairman of the Board, the Chief Executive Officer,
the President or the Treasurer may from time to time prescribe.

                                   ARTICLE VI
                       ELIMINATION OF DIRECTOR AND OFFICER
                        LIABILITY AND INDEMNIFICATION OF
                         OFFICERS, DIRECTORS AND OTHERS

         Section 1. Elimination of Director or Officer Liability. No director or
officer of the Corporation shall be personally liable to the Corporation or any
of its stockholders for damages for breach of fiduciary duty as a director or
officer involving any act or omission of any such director or officer occurring
on or after July 15, 1987; provided, however, that the foregoing provision shall
not eliminate or limit the liability of a director or officer (a) for acts or
omissions that involve intentional misconduct, fraud or a knowing violation of
law, or (b) the payment of dividends in violation of Section 78.300 of the
Nevada Revised Statutes.

         Section 2. Indemnification. The Corporation shall indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
Corporation), by reason of the fact that such person is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, or other enterprise, or by
reason of the fact that such person is or was a director, officer or employee of
the Corporation serving in any fiduciary capacity with respect to any profit
sharing pension or other type of welfare plan or trust for the benefit of
employees of the


                                      -15-



Corporation or any subsidiary of the Corporation, against expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlement actually and
reasonably incurred by such person in connection with the action, suit or
proceeding, if such person acted in good faith and in a manner which such person
reasonably believed to be in or not opposed to the best interests of the
Corporation or of such employee benefit plan or trust, and, with respect to any
criminal action or proceeding had no reasonable cause to believe such person's
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement or conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which such person reasonably believed to
be in or not opposed to the best interests of the Corporation, or of such
employee benefit plan or trust, and that, with respect to any criminal action or
proceeding, such person had reasonable cause to believe that such person's
conduct was unlawful.

         Section 3. The Corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation or by or in the
right of any employee benefit plan or trust to procure a judgment in its favor
by reason of the fact that such person is or was a director, officer, employee
or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, or by reason of the fact
that such person is or was a director, officer or employee of the Corporation
serving in any fiduciary capacity with respect to any profit sharing pension or
other type of welfare plan or trust for the benefit of employees of the
Corporation or any subsidiary of the Corporation, against expenses, including
amounts paid in settlement and attorneys' fees, actually and reasonably incurred
by such person in connection with the defense or settlement of the action or
suit if such person acted in good faith and in a manner such person reasonably
believed to be in or not opposed to the best interests of the Corporation or of
such employee benefit plan or trust. Indemnification may not be made for any
claim, issue or matter as to which such a person has been adjudged by a court of
competent


                                      -16-



jurisdiction, after exhaustion of all appeals therefrom, to be liable to the
Corporation or of such employee benefit plan or trust, or for amounts paid in
settlement to the Corporation, unless and only to the extent that the court in
which the action or suit was brought or other court of competent jurisdiction
determines upon application that in view of all the circumstances of the case,
the person is fairly and reasonably entitled to indemnity for such expenses as
the court deems proper.

         Section 4. To the extent that a director, officer, employee or agent of
the Corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Sections 2 and 3 of this Article VI,
or in defense of any claim, issue or matter therein, such person must be
indemnified by the Corporation against expenses (including attorneys' fees)
actually and reasonably incurred by such person in connection with the defense.

         Section 5. Any indemnification under Sections 2 and 3 of this Article
VI, unless ordered by a court or advanced pursuant to Section 6 of this Article
VI, must be made by the Corporation only as authorized in the specific case upon
a determination that indemnification of the director, officer, employee or agent
is proper in the circumstances. The determination must be made (a) by the Board
of Directors by majority vote of a quorum consisting of directors who were not
parties to the action, suit or proceeding, or (b) if a majority vote of a quorum
consisting of directors who were not parties to the action, suit or proceeding
so orders, by independent legal counsel in a written opinion, or (c) if a quorum
consisting of directors who were not parties to the action, suit or proceeding
cannot be obtained, by independent legal counsel in a written opinion, or (d) by
the stockholders.

         Section 6. The expenses of officers and directors incurred in defending
a civil or criminal action, suit or proceeding must be paid by the Corporation
as they are incurred and in advance of the final disposition of the action, suit
or proceeding upon receipt of an undertaking by or on behalf of the director or
officer to repay the amount if it shall be determined by a court of competent
jurisdiction that such person is not entitled to be indemnified by the
Corporation. The provisions of this Section 6 do not affect any rights


                                      -17-



to advancement of expenses to which corporate personnel other than directors or
officers may be entitled under any contract or otherwise.

         Section 7. The indemnification and advancement of expenses authorized
in or ordered by a court pursuant to this Article VI: (a) shall not be deemed
exclusive of any other rights to which a person seeking indemnification or
advancement of expenses may be entitled under any By-law, agreement, vote of
stockholders, disinterested directors, or otherwise, for either an action in
such person's official capacity or an action in another capacity while holding
office, except that indemnification, unless ordered by a court pursuant to
Section 3 of this Article VI, or for the advancement of expenses made pursuant
to Section 6 of this Article VI, may not be made to or on behalf of any director
or officer if a final adjudication establishes that such person's acts or
omissions involved intentional misconduct, fraud or a knowing violation of the
law and was material to the cause of action; and (b) continues for a person who
has ceased to be a director, officer, employee or agent and inures to the
benefit of the heirs, executors and administrators of such a person.

         Section 8. The Corporation shall have power to purchase and maintain
insurance or make other financial arrangements on behalf of any person who is or
was a director, officer, employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise or is or was a director, officer or employee of the Corporation
serving in any fiduciary capacity with respect to any profit sharing, pension or
other type of welfare plan or trust for the benefit of employees of the
Corporation or any subsidiary of the Corporation, for any liability asserted
against such person and any liability and expenses incurred by such person in
any such capacity or arising out of such person's status as such.

                                   ARTICLE VII
                             CERTIFICATES FOR SHARES

         Section 1. The Corporation shall deliver certificates representing all
shares to which stockholders are entitled. Such certificates shall be signed by
the Chairman of the Board, or the President,


                                      -18-



or a Vice President, and the Secretary or an Assistant Secretary of the
Corporation, and may be sealed with the seal of the Corporation or a facsimile
thereof. No certificate shall be issued for any share until the consideration
therefor has been fully paid. Such certificate representing shares shall state
upon the face thereof that the Corporation is organized under the laws of the
State of Nevada, the name of the person to whom issued, the number and class and
the designation of the series, if any, which such certificate represents, and
may, in addition, state upon the face thereof the par value of each share
represented by such certificate or that the shares are without par value.

         Section 2. The signatures of the Chairman of the Board, the President
or Vice President and the Secretary or Assistant Secretary upon a certificate
may be facsimiles, if the certificate is countersigned by a transfer agent and
registered by a registrar, other than the Corporation itself or an employee of
the Corporation. In case any officer who has signed or whose facsimile signature
has been placed upon such certificate shall have ceased to be such officer
before such certificate is issued, it may be issued by the Corporation with the
same effect as if such person were such officer at the date of issuance.

                                LOST CERTIFICATES

         Section 3. The Board of Directors may direct a new certificate or
certificates to be issued or empower the Corporation's transfer agent to issue a
new certificate or certificates in place of any certificate or certificates
theretofore issued by the Corporation that are alleged to have been lost or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost or destroyed. When authorizing such issue of
a new certificate or certificates, the Board of Directors may, in its discretion
and as a condition precedent to the issuance thereof, require the owner of such
lost or destroyed certificate or certificates, or such person's legal
representative, to advertise the same in such manner as it shall require and/or
to give the Corporation a bond in such sum as it may direct as indemnity against
any claim that may be made against the Corporation with respect to the
certificate alleged to have been lost or destroyed.


                                      -19-



         Section 4. Upon surrender to the Corporation or the transfer agent of
the Corporation of a certificate for shares duly endorsed or accompanied by
proper evidence of succession, assignment or authority to transfer, it shall be
the duty of the Corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.

                CLOSING OF TRANSFER BOOKS AND FIXING RECORD DATE

         Section 5. For the purpose of determining stockholders entitled to of
or to vote at any meeting of stockholders or any adjournment thereof, or
entitled to receive payment of any dividend, or in order to make a determination
of stockholders for any other purpose, the Board of Directors may provide that
the stock transfer books shall be closed for a stated period not to exceed, in
any case, 60 days. If the stock transfer books shall be closed for the purpose
of determining stockholders entitled to notice of or to vote at a meeting of
stockholders, such books shall be closed for at least 10 days immediately
preceding such meeting. In lieu of closing the stock transfer books, the Board
of Directors may fix in advance a date as the record date for any such
determination of stockholders, such date in any case to be not more than 60
days, and, in case of a meeting of stockholders, not less than 10 days, prior to
the date on which the particular action requiring such determination of
stockholders is to be taken. If the stock transfer books are not closed and no
record date is fixed for the determination of stockholders entitled to notice of
or to vote at a meeting of stockholders, or stockholders entitled to receive
payment of a dividend, the date on which the notice of the meeting is mailed or
the date on which the resolution of the Board of Directors declaring such
dividend is adopted, as the case may be, shall be the record date for such
determination of stockholders. When a determination of stockholders entitled to
vote at any meeting of stockholders has been made as provided in this section,
such determination shall apply to any adjournment thereof, except where the
determination has been made through the closing of stock transfer books and the
stated period of closing has expired.


                                      -20-



                             REGISTERED STOCKHOLDERS

         Section 6. The Corporation shall be entitled to recognize the exclusive
rights of a person registered on its books as the owner of shares to receive
dividends, and to vote as such owner, and shall not be bound to recognize any
equitable or other claim to or interest in such share or shares on the part of
any other person, whether or not it shall have express or other notice thereof,
except as otherwise provided by the laws of the State of Nevada.

                                  ARTICLE VIII
                               GENERAL PROVISIONS

         Section 1. The Board of Directors may declare and the Corporation may
pay dividends on its outstanding shares in cash, property, or its own shares
pursuant to law and subject to the provisions of its Articles of Incorporation.

         Section 2. The Board of Directors may by resolution create a reserve or
reserves out of earned surplus for any proper purpose or purposes, and may
abolish any such reserve in the same manner.

                             REPORT TO STOCKHOLDERS

         Section 3. The Board of Directors must, when required by the holders of
at least 1/3 of the outstanding shares of the Corporation, present written
reports of the situation and amount of business of the Corporation.

                                     CHECKS

         Section 4. All checks or demands for money and notes of the Corporation
shall be signed by such officer or officers or such other person or persons as
may from time to time be designated by the Board of Directors or by such
officers of the Corporation who may be authorized by the Board of Directors to
make such designations.

                                  FISCAL YEAR

         Section 5. The fiscal year of the Corporation shall be fixed by the
resolution of the Board of Directors.


                                      -21-



                                      SEAL

         Section 6. The corporate seal shall have inscribed thereon the name of
the Corporation, the year of its organization and the words "Corporate Seal,
Nevada". The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or in any other manner reproduced.

                                   ARTICLE IX
                                   AMENDMENTS

         Section 1. These By-laws may be altered, amended or repealed or
rescinded, or new by-laws may be adopted, by the vote of a majority of the
entire Board of Directors at any meeting thereof, provided that such proposed
action in respect thereof shall be stated in the notice of such meeting. The
stockholders of the Corporation shall have the power to alter, amend, repeal or
rescind any provision of these By-laws, or adopt new by-laws, only to the extent
and in the manner provided in the following sentence. In addition to any
requirements of law and any other provision of these By-laws or the
Corporation's Articles of Incorporation or any resolution or resolutions of the
Board of Directors adopted pursuant to Article IV of the Corporation's Articles
of Incorporation (and notwithstanding the fact that a lesser percentage may be
specified by law, these By-laws, the Corporation's Articles of Incorporation or
any such resolution or resolutions), the affirmative vote of the holders of 66
2/3 percent or more of the combined voting power of the then outstanding shares
of stock entitled to vote generally in the election of directors, voting
together as a single class, shall be required to alter, amend, repeal or rescind
any provision of these By-laws, or adopt new by-laws.


                                      -22-