COMPANY COLORS
Blue:
R = 0
G = 0
B = 255
Beige:
R = 251
G = 248
B = 216
LONGBOW RESEARCH
CONSTRUCTION MATERIALS CONFERENCE
FEBRUARY 21, 2008
DRAFT
FORWARD-LOOKING STATEMENT
Certain statements contained in this presentation are “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to
risks, uncertainties and other factors, which could cause actual results to differ materially from
future results expressed or implied by such forward-looking statements. Potential risks and
uncertainties include, but are not limited to, the impact of competitive pressures and changing
economic and financial conditions on the Company’s business, construction activity in the
Company’s markets, abnormal periods of inclement weather, changes in the cost of raw
materials, fuel and energy, unscheduled plant shutdowns and the impact of environmental laws
and other regulations.
1
TXI – A BUILDING MATERIALS COMPANY
Cement, Aggregate and Concrete
Used in all types of construction
Cement accounts for approximately 75% of Earnings
2
TXI – CEMENT PLANT
3
TXI - QUARRY
4
TXI -KILN
5
TXI - READYMIX CONCRETE
6
PRIMARY EARNINGS DRIVERS
Significant Margin Expansion
Cement Capacity Expansion
From 5 million tons per year to 7.9 million tons per year
in 3 – 4 years
Three Projects
7
TXI – IN SUMMARY
The U.S. cement industry is favorably structured
Flexible capital structure provides foundation for growth
Texas and California are attractive cement markets
TXI is the largest cement supplier in Texas – and a low cost producer
TXI’s California cement plant project is underway
Texas cement expansion projects will enhance competitive position
TXI earnings power example
8
CEMENT INDUSTRY - DEMAND DRIVERS
Source: Portland Cement Association
Cement Demand Drivers
Public Works
Construction
50%
Residential
Construction
25%
Non-
Residential
Construction
25%
9
FAVORABLE U.S. INDUSTRY STRUCTURE
U.S. Cement Consumption and Capacity
Source: Portland Cement Association, U.S. Geological Survey, Company Reports
U.S. Cement Consumption Exceeds Domestic Capacity
60
70
80
90
100
110
120
130
140
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005 2006
Consumption
Capacity
10
FAVORABLE INDUSTRY STRUCTURE (continued)
U.S. cement capacity and import terminals are largely owned or controlled by
international producers
High barriers to entry exist for new cement capacity
The Supply of Cement Should Continue To Be Constrained
Cement Consumption Should Continue to Exceed Cement Capacity
11
STRONG POSITIONS IN ATTRACTIVE MARKETS
Texas and California:
Are the two largest U.S. cement markets,
accounting for over 23% of U.S. cement demand
Will continue to receive the largest shares of
Federal transportation funding
Have very favorable population growth trends
TXI is the:
Largest producer of cement in Texas with 30% of
state’s total capacity
Fourth largest cement producer in California with
10% market share
Second largest supplier of aggregates and a leading
supplier of ready-mix concrete in Texas
Largest supplier of expanded shale and clay
aggregates west of the Mississippi River
A leading supplier of sand, gravel and ready-mix
concrete in Louisiana
Cement
Aggregates
CA
TX
LA
12
LOW COST OPERATIONS ARE KEY
13
High Productivity and Efficiency
North
Texas
1
PCA
Comps
2
Labor Productivity
Tons per man hour
6.2
3.6
Energy Efficiency
Mmbtu/ton
3.
4
3.3
kwh/ton
1
11
136
Notes:
1
North Texas numbers are for the t
welve months ended May 31, 2007
2
U.S. and Canadian Labor
–
Ener
gy Input Survey for 2006, Portland Cement
Association
CALIFORNIA PLANT MODERNIZATION AND EXPANSION
Will make TXI the second largest cement producer in the Southern California market
Will make TXI a low cost supplier
Adds 2.3 million tons of state-of-the-art cement capacity
Replaces 1.3 million tons of 50 year-old production capacity
Investment of approximately $400 million
Required permits and permissions are in place
Project is similar to the successful North Texas expansion completed in 2001
Identical kiln production of 6,000 tons per day
Transferable experience in design, construction and commissioning (North Texas plant fully
commissioned within 6 months of start-up)
Significant pre-selling of new capacity already underway
Currently in commissioning phase
14
CENTRAL TEXAS CEMENT PLANT EXPANSION
Enhances TXI’s market-leading position in Texas
Adds 1.4 million tons of state-of-the-art cement capacity
Existing .9 million ton cement facility will remain in operation
Investment of $325 – 350 million
Required permits and permissions are in place
Scheduled to begin operation the winter of fiscal year 2010
15
CEMENT PLANT EXPANSION PROJECTS
* Millions of tons per year
7.9
5.0
TOTAL TXI CAPACITY
3.3
2.8
North Texas Plant Incremental Expansion
2.3
0.9
Central Texas Plant Expansion
2.3
1.3
California Plant Modernization and Expansion
FUTURE
CURRENT
CAPACITY*
16
T X I E A R N I N G S P O T E N T I A L
17
TXI EARNINGS POTENTIAL (continued)
Notes:
1 The October 2006 gain from the cement anti-dumping settlement has been removed.
2 For illustrative purposes only; actual change in margins will depend on the mix of price increases, input costs and efficiency improvements.
3 Under current market conditions and expected operating improvements for the new California facility.
4 Under current market conditions and expected operating improvements for the new Central Texas facility.
280
230
170
145
EBIT
85
70
55
46
D&A
365
300
225
191
EBITDA
Column (3)
Column (2)
Are Attained
FY 2007
($mm)
Project to
Project to
Margin Goals
(1)
Central Texas
California
Assuming
Add
Add
(2)
(4)
(3)
18
PRIMARY EARNINGS DRIVERS
Significant Margin Expansion
Cement Capacity Expansion
From 5 million tons per year to 7.9 million tons per year
in 3 – 4 years
Three Projects
19
20
