Texas Industries 8-K Txi Reports Fourth Quarter and Year-end Results

  

TXI REPORTS FOURTH QUARTER AND YEAR-END RESULTS

Dallas, TX - July 10, 2008 - Texas Industries, Inc. (NYSE-TXI) today reported financial results for the quarter and year ended May 31, 2008.

General Comments

“We are extremely pleased to have the new cement plant in California up and running,” stated Mel Brekhus, Chief Executive Officer. “The new plant, which was completed in May, will yield significant efficiencies in energy, labor and repair and maintenance compared to the plant that has been retired. In addition, the expansion of TXI’s cement plant in Central Texas is well under way. That plant is scheduled to begin operations in about 18 months.”

In the Texas market, which accounted for approximately 82% of total TXI revenues in FY08, overall construction activity continued to generate a level of cement consumption that exceeded cement production capacity. California cement consumption trends continued to follow the decline in overall construction activity in that state. As demand for cement has declined in California, imports of cement have fallen as well.

During the quarter ended May 31, 2008, average cement prices declined 3% on a year-over-year basis but sequentially increased 2% compared to the quarter ended February 29, 2008. Both price movements were primarily due to changes in the geographic mix of shipments between the Texas and California markets and product mix shifts within the markets. Cement price increases announced in April for Texas were partially successful. In addition, TXI has announced cement price increases for South and Central Texas of $5 per ton effective July 1, 2008 and announced another $5 per ton increase in both areas effective October 1, 2008.

“Despite increased diesel costs, aggregate and ready-mix operations were able to show marked improvements in financial performance during the fiscal year,” continued Brekhus. “TXI’s strategy to increase cement production and improve operating efficiencies throughout all operations remains our primary focus.”

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Fourth Quarter Ended May 31, 2008

Net sales for the quarter ended May 31, 2008 were up 2% compared to the same period last year. Average realized prices for aggregate and ready-mix concrete products increased 2% and 5%, respectively, while cement prices declined by 3%. Shipments for cement and ready-mix concrete both declined 3% while aggregate shipments declined 2%.

Net income for the quarter ended May 31, 2008 equaled $25.6 million ($.92 per share) while net income for the same period last year totaled $30.1 million ($1.09 per share). Net income for 2008 included after-tax gains from three transactions, discussed in more detail below, totaling $12.0 million ($.43 per share).

Declines in production and increased repair and maintenance costs associated with the old cement plant that has now been replaced in California reduced pre-tax income by approximately $12.9 million compared to the same quarter last year. At TXI’s Texas cement operations, higher energy expenses and planned outage maintenance costs reduced income by $5.2 million and $4.2 million, respectively, while increased diesel costs for aggregate and ready-mix concrete operations reduced pre-tax income by approximately $2.6 million.

Total selling, general and administrative expenses increased by $2.8 million as incentive expenses declined $3.1 million while stock-based compensation, insurance, retirement and other expenses increased. Interest expense increased by $1.9 million as capitalized interest related to the modernization and expansion of the California cement plant was stopped during the quarter with the completion of the project.

Other income increased by $18.8 million compared to last year’s fourth quarter. During the quarter, TXI sold its sand and gravel operations in Southern Louisiana. The transaction resulted in a pretax gain of $10.1 million. The sale consisted of five operations that had combined shipments of approximately 3 million tons in fiscal year 2008. During the same quarter, the Company sold surplus real estate associated with sand and gravel operations in the North Texas region which resulted in a pre-tax gain of $5.1 million and also sold emissions credits related to cement operations in California that resulted in a pre-tax gain of $3.9 million.

Fiscal Year Ended May 31, 2008

Net sales for fiscal year 2008 were up 3% compared to a year ago. Average realized prices for aggregate and ready-mix concrete products increased 6% and 7%, respectively, while cement prices declined by 2%. Ready-mix concrete shipments increased 5% and cement and aggregate shipments both declined 1%.

Net income for the year ended May 31, 2008 equaled $87.4 million ($3.14 per share). For the same period ended May 31, 2007 net income equaled $100.9 million ($3.80 per share). Net income for 2008 included after-tax gains from the aggregate and emission sale transactions mentioned previously totaling $12.0 million ($.43 per share). Net income for 2007 included an after-tax gain of $12.9 million ($.47 per share) that resulted from the settlement of the U.S. antidumping order on Mexican cement.

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Declining production and impaired efficiencies associated with the old cement plant in California reduced pre-tax income by approximately $33.6 million during fiscal year 2008 compared to 2007. Higher energy and maintenance outage costs related to Texas cement production reduced pre-tax income by $7.7 million and $9.2 million, respectively, while increased diesel costs for aggregate and ready-mix concrete operations reduced pre-tax income by approximately $6.1 million.

Total selling, general and administrative expenses declined $11.9 million, primarily due to an $8.8 million decline in stock-based compensation and a decline of $11.8 million in incentive expense offset somewhat by increased retirement, insurance and other expense. Interest expense declined $11.6 million as a result of capitalized interest related to cement plant modernization and expansion projects.

Other income declined $5.1 million compared to last year. Fiscal year 2007 other income included $19.8 million in income from distributions relating to the U.S. antidumping settlement on cement imports from Mexico. Fiscal year 2008 other income included gains totaling $19.1 million from the aggregate and emissions sale transactions already mentioned. The remaining difference in other income was primarily due to lower interest income in 2008.

A teleconference will be held today, July 10, 2008 at 1:00 p.m. Central Daylight Time to further discuss year-end results. A real-time webcast of the conference is available by logging on to TXI’s website at www.txi.com.

Certain statements contained in this press release 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, unexpected periods of equipment downtime, changes in costs of raw materials, fuel and energy, the impact of environmental laws, regulations and claims and risks and uncertainties described in the Company’s reports on SEC Forms 10-K, 10-Q and 8-K.

TXI is the largest producer of cement in Texas and a major cement producer in California. TXI is also a major supplier of construction aggregates, ready-mix concrete and concrete products.

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CONSOLIDATED STATEMENTS OF OPERATIONS

TEXAS INDUSTRIES, INC. AND SUBSIDIARIES

	Three months ended						Year ended
	May 31,						May 31,
In thousands except per share	2008			2007			2008			2007
NET SALES	$	266,392		$	261,995		$	1,028,854		$	996,250
Cost of products sold		218,331			191,063			835,019			760,160
GROSS PROFIT		48,061			70,932			193,835			236,090
Selling, general and administrative		32,256			29,425			96,220			108,106
Interest		2,505			600			2,505			14,074
Other income		(23,782	)		(4,983	)		(31,563	)		(36,581	)
		10,979			25,042			67,162			85,599
INCOME BEFORE INCOME TAXES		37,082			45,890			126,673			150,491
Income taxes		11,521			15,779			39,259			49,584
NET INCOME	$	25,561		$	30,111		$	87,414		$	100,907
Net income per share
Basic	$	.93		$	1.12		$	3.19		$	4.06
Diluted	$	.92		$	1.09		$	3.14		$	3.80
Average shares outstanding
Basic		27,456			26,860			27,383			24,815
Diluted		27,884			27,847			27,860			27,684
Cash dividends per share	$	.075		$	.075		$	.30		$	.30
Major product shipments
Cement (tons)		1,284			1,325			5,035			5,074
Stone, sand and gravel (tons)		5,427			5,553			21,851			22,114
Ready-mix concrete (cubic yards)		939			970			3,844			3,665
Major product prices
Cement ($/ton)	$	92.46		$	95.48		$	93.07		$	95.06
Stone, sand and gravel ($/ton)		7.69			7.51			7.44			7.03
Ready-mix concrete ($/cubic yard)		81.84			77.74			80.83			75.87

4

CONSOLIDATED BALANCE SHEETS

TEXAS INDUSTRIES, INC. AND SUBSIDIARIES

	May 31,
In thousands	2008			2007
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	39,527		$	15,138
Receivables - net		155,676			142,610
Inventories		130,181			121,467
Deferred income taxes and prepaid expenses		30,398			17,621
TOTAL CURRENT ASSETS		355,782			296,836
OTHER ASSETS
Goodwill		60,110			58,395
Real estate and investments		59,971			111,414
Deferred charges and other		11,332			11,369
		131,413			181,178
PROPERTY, PLANT AND EQUIPMENT
Land and land improvements		139,544			132,992
Buildings		56,976			41,485
Machinery and equipment		1,208,905			752,531
Construction in progress		137,083			362,646
		1,542,508			1,289,654
Less depreciation and depletion		514,744			505,432
		1,027,764			784,222
	$	1,514,959		$	1,262,236
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	128,497		$	109,749
Accrued interest, wages and other		47,846			57,891
Current portion of long-term debt		7,725			1,340
TOTAL CURRENT LIABILITIES		184,068			168,980
LONG-TERM DEBT		401,880			274,416
DEFERRED INCOME TAXES AND OTHER CREDITS		112,498			90,358
SHAREHOLDERS’ EQUITY
Common stock, $1 par value		27,493			27,323
Additional paid-in capital		459,877			448,289
Retained earnings		336,279			257,087
Accumulated other comprehensive loss		(7,136	)		(4,217	)
		816,513			728,482
	$	1,514,959		$	1,262,236

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CONSOLIDATED STATEMENTS OF CASH FLOWS

TEXAS INDUSTRIES, INC. AND SUBSIDIARIES

	Year Ended May 31,
In thousands	2008			2007			2006
OPERATING ACTIVITIES
Net income	$	87,414		$	100,907		$	8,102
Adjustments to reconcile net income to cash provided by continuing operating activities
Income from discontinued operations		--			--			(8,691	)
Depreciation, depletion and amortization		55,577			46,356			44,955
Gains on asset disposals		(19,410	)		(2,917	)		(34,768	)
Deferred income taxes		19,567			11,354			6,581
Stock-based compensation expense		2,395			13,866			4,368
Excess tax benefits from stock-based compensation		(3,299	)		(1,694	)		--
Loss on debt retirements		--			48			107,006
Other - net		2,475			3,234			(4,130	)
Changes in operating assets and liabilities
Receivables - net		(29,507	)		846			(5,060	)
Inventories		(8,714	)		(18,975	)		(18,761	)
Prepaid expenses		(2,033	)		1,392			(47	)
Accounts payable and accrued liabilities		(2,910	)		31,541			(2,186	)
Cash provided by continuing operating activities		101,555			185,958			97,369
Cash used by discontinued operating activities		--			--			(7,778	)
Net cash provided by operating activities		101,555			185,958			89,591
INVESTING ACTIVITIES
Capital expenditures - expansions		(247,552	)		(214,878	)		(73,384	)
Capital expenditures - other		(64,973	)		(102,780	)		(36,861	)
Cash designated for property acquisitions		(28,733	)		--			--
Proceeds from asset disposals		34,922			5,552			23,107
Purchases of short-term investments		--			(8,500	)		(50,500	)
Sales of short-term investments		--			59,000			--
Investments in life insurance contracts		99,203			(6,061	)		(4,366	)
Other - net		101			(336	)		612
Cash used by continuing investing activities		(207,032	)		(268,003	)		(141,392	)
Cash used by discontinued investing activities		--			--			(2,757	)
Net cash used by investing activities		(207,032	)		(268,003	)		(144,149	)
FINANCING ACTIVITIES
Long-term borrowings		366,000			38,000			250,000
Debt retirements		(232,366	)		(25,521	)		(600,700	)
Debt issuance costs		(2,160	)		--			(7,363	)
Debt retirement costs		--			(6	)		(96,029	)
Stock option exercises		3,315			6,394			7,510
Excess tax benefits from stock-based compensation		3,299			1,694			--
Common dividends paid		(8,222	)		(7,517	)		(6,908	)
Cash provided (used) by continuing financing activities		129,866			13,044			(453,490	)
Cash provided by discontinued financing activities		--			--			340,587
Net cash provided (used) by financing activities		129,866			13,044			(112,903	)
Increase (decrease) in cash and cash equivalents		24,389			(69,001	)		(167,461	)
Cash and cash equivalents at beginning of year		15,138			84,139			251,600
Cash and cash equivalents at end of year	$	39,527		$	15,138		$	84,139

6

Texas Industries, Inc.

Consolidated Statements of Operations

In $ Thousands

	FY2003			FY2004			FY2005			FY2006			FY2007															FY2008
													Q1			Q2			Q3			Q4			Total			Q1			Q2			Q3			Q4			Total
Shipments
Cement (Thousands of Tons)		4,900			5,298			5,394			5,136			1,388			1,239			1,122			1,325			5,074			1,290			1,319			1,142			1,284			5,035
Aggregates (Thousands of Tons)		19,003			22,282			23,616			25,246			6,461			5,573			4,527			5,553			22,114			5,551			5,863			5,010			5,427			21,851
Ready-mix (Thousands of Cubic Yards)		3,513			3,562			3,678			3,830			980			979			736			970			3,665			998			1,050	��		857			939			3,844
Price
Cement ($ per Ton)		68.90			68.48			75.05			87.14			94.48			94.85			95.50			95.51			95.06			95.69			92.88			91.01			92.49			93.07
Aggregates ($ per Ton)		5.55			5.43			5.68			6.08			6.61			6.83			7.30			7.51			7.03			7.17			7.39			7.52			7.69			7.44
Ready-mix ($ per Cubic Yard)		57.88			57.94			60.54			69.25			73.90			74.76			77.49			77.81			75.87			80.17			80.19			81.26			81.71			80.83
Net Sales		-
Cement		337,624			362,824			404,823			447,594			131,157			117,528			107,143			126,551			482,379			123,423			122,586			103,891			118,773			468,673
Aggregates		105,521			120,997			134,220			153,480			42,723			38,066			33,043			41,730			155,562			39,804			43,324			37,699			41,755			162,582
Ready-mix		203,349			206,394			222,680			265,254			72,442			73,142			57,007			75,476			278,067			79,990			84,233			69,699	��		76,730			310,652
Other		117,810			116,108			104,847			118,555			34,473			28,196			26,048			31,081			119,798			32,175			31,375			30,155			38,901			132,606
Interplant		(100,478	)		(98,353	)		(105,576	)		(121,127	)		(31,478	)		(30,046	)		(23,890	)		(32,992	)		(118,406	)		(32,432	)		(34,750	)		(30,488	)		(32,791	)		(130,461	)
Delivery Fees		54,292			59,209			73,809			80,166			22,335			18,946			17,420			20,149			78,850			20,494			21,705			19,579			23,024			84,802
Net Sales		718,118			767,179			834,803			943,922			271,652			245,832			216,771			261,995			996,250			263,454			268,473			230,535			266,392			1,028,854
Costs and Expenses (Income)
Cost of Products Sold		596,737			637,347			692,414			766,941			205,338			194,057			169,702			191,063			760,160			217,437			208,271			190,980			218,331			835,019
Selling, General and Administrative		70,666			74,814			78,434			88,663			21,058			30,147			27,476			29,425			108,106			22,183			21,064			20,717			32,256			96,220
Interest		14,827			24,102			23,533			31,155			5,542			4,643			3,289			600			14,074			-			-			-			2,505			2,505
Loss on Debt Retirements and Spin-off Charges					12,302			894			113,247			-			-			26			22			48			-			-			-						-
Other Income		(4,762	)		(40,482	)		(22,727	)		(47,270	)		(3,551	)		(24,800	)		(3,273	)		(5,005	)		(36,629	)		(2,253	)		(3,442	)		(2,086	)		(23,782	)		(31,563	)
		677,468			708,083			772,548			952,736			228,387			204,047			197,220			216,105			845,759			237,367			225,893			209,611			229,310			902,181
Income from Continuing Operations
Before Income Taxes		40,650			59,096			62,255			(8,814	)		43,265			41,785			19,551			45,890			150,491			26,087			42,580			20,924			37,082			126,673
Income Taxes		13,485			16,819			16,811			(8,225	)		13,834			13,133			6,838			15,779			49,584			8,173			13,265			6,300			11,521			39,259
Income from Continuing Operations		27,165			42,277			45,444			(589	)		29,431			28,652			12,713			30,111			100,907			17,914			29,315			14,624			25,561			87,414
Income (Loss) from Discontinued Operations - net
of Income Taxes		(51,362	)		(4,378	)		79,079			8,691															-															-
Income (Loss) before Accounting Change		(24,197	)		37,899			124,523			8,102			29,431			28,652			12,713			30,111			100,907			17,914			29,315			14,624			25,561			87,414
Cumulative Effect of Accounting Change - net of
Income Taxes		-			(1,551	)		-			-			-			-			-			-			-			-			-			-			-			-
Net Income		(24,197	)		36,348			124,523			8,102			29,431			28,652			12,713			30,111			100,907			17,914			29,315			14,624			25,561			87,414

7

Texas Industries, Inc.

Consolidated Balance Sheets

In $ Thousands

	5/31/2004		5/31/2005		5/31/2006		8/31/2006		11/30/2006		2/28/2007		5/31/2007		8/31/2007		11/30/2007		2/29/2008		5/31/2008
Cash		133,053		251,600		84,139		66,300		83,648		20,365		15,138		5,165		26,216		9,632		39,527
Short-term Investments		-		-		50,606		39,122		10,012		-		-		-		-
Accounts Receivable		108,364		117,363		132,849		160,569		129,517		126,527		142,610		160,079		163,990		151,708		155,676
Inventories		89,373		83,291		102,052		101,330		100,929		114,751		121,467		112,517		112,824		123,735		130,181
Deferred Income Taxes and Prepaid Expenses		31,553		28,754		33,599		26,820		15,475		18,779		17,621		13,047		19,785		22,482		30,398
Total Current Assets		362,343		481,008		403,245		394,141		339,581		280,422		296,836		290,808		322,815		307,557		355,782
Goodwill		61,307		61,307		58,395		58,395		58,395		58,395		58,395		58,395		60,110		60,110		60,110
Real Estate and Investments		42,430		100,200		125,913		107,604		131,513		132,884		111,414		112,217		48,037		23,834		59,971
Deferred Income Taxes, Intangibles and Other Charges		39,259		27,571		22,706		22,493		22,271		16,097		11,369		12,031		12,097		11,376		11,332
Net Assets of Discontinued Operations		798,353		836,100		-		-		-		-		-		-		-		-		-
		941,349		1,025,178		207,014		188,492		212,179		207,376		181,178		182,643		120,244		95,320		131,413
Property, Plant and Equipment		865,133		882,816		953,474		1,015,880		1,098,134		1,184,578		1,289,654		1,366,431		1,442,445		1,484,417		1,542,508
Accumulated Depreciation		452,324		470,163		483,163		492,569		503,070		511,406		505,432		510,881		517,557		525,274		514,744
Net Property, Plant and Equipment		412,809		412,653		470,311		523,311		595,064		673,172		784,222		855,550		924,888		959,143		1,027,764
Total Assets		1,716,501		1,918,839		1,080,570		1,105,944		1,146,824		1,160,970		1,262,236		1,329,001		1,367,947		1,362,020		1,514,959
Accounts Payable		53,497		58,022		63,581		69,866		75,557		74,810		109,749		94,516		115,408		89,895		128,497
Accrued Interest, Wages and Other Items		38,833		49,449		55,059		44,662		54,371		45,354		57,891		41,710		50,568		42,754		47,846
Current Portion of Long Term Debt		699		688		681		680		1,475		1,475		1,340		213		217		221		7,725
Total Current Liabilities		93,029		108,159		119,321		115,208		131,403		121,639		168,980		136,439		166,193		132,870		184,068
Long Term Debt		598,412		603,126		251,505		251,507		250,358		250,358		274,416		353,585		334,517		344,438		401,880
Convertible Subordinated Debentures		199,937		199,937		159,725		159,655		159,655		92,370		-		-		-		-		-
Deferred Income Taxes and Other Credits		63,139		80,050		76,955		81,204		78,186		87,987		90,358		89,400		89,014		90,274		112,498
Shareholders Equity		761,984		927,567		473,064		498,370		527,222		608,616		728,482		749,577		778,223		794,438		816,513
Total Liabilities and Shareholders Equity		1,716,501		1,918,839		1,080,570		1,105,944		1,146,824		1,160,970		1,262,236		1,329,001		1,367,947		1,362,020		1,514,959
		-		-		-		-		-						-		-		-		-

8

Texas Industries, Inc.

Consolidated Statements of Cash Flows

In $ Thousands

	FY2003			FY2004			FY2005			FY2006			FY2007															FY2008
										Total			Q1			Q2			Q3			Q4			Total			Q1			Q2			Q3			Q4			Total
CONTINUING OPERATIONS
Operating Activities
Income from Continuing Operations		27,165			42,277			45,444			(589	)		29,431			28,652			12,713			30,111			100,907			17,914			29,315			14,624			25,561			87,414
Adjustments to Reconcile Income from Continuing
Operations to Cash Provided (Used) by
Continuing Operating Activities
Loss on Debt Retirements		-			12,302			-			107,006			-			-			26			22			48			-												-
Loss (Gain) on Asset Disposals		687			(37,997	)		(6,582	)		(34,768	)		(490	)		(49	)		(31	)		(2,347	)		(2,917	)		(455	)		(462	)		(279	)		(18,214	)		(19,410	)
Depreciation, Depletion and Amortization		49,196			47,409			46,474			44,955			11,172			11,112			11,572			12,500			46,356			13,318			13,846			13,816			14,597			55,577
Deferred Income Taxes (Benefit)		(27,726	)		319			33,811			6,581			3,777			4,734			8,319			(5,476	)		11,354			513			614			3,527			14,913			19,567
Other - Net		6,000			5,391			8,889			7,570			(502	)		2,482			8,174			5,252			15,406			(5,146	)		(507	)		753			6,471			1,571
Changes in Operating Assets and Liabilities											-															-															-
Receivables Sold		(7,321	)		(72,032	)		-			-			-												-			-												-
Accounts Receivable - Net		(1,258	)		1,052			(8,873	)		(5,060	)		(6,218	)		9,034			1,724			(3,694	)		846			(17,458	)		(3,899	)		12,312			(20,462	)		(29,507	)
Inventories		(1,635	)		1,664			6,082			(18,761	)		722			840			(13,821	)		(6,716	)		(18,975	)		8,950			(307	)		(10,911	)		(6,446	)		(8,714	)
Prepaid Expenses		2,099			(5,744	)		(1,680	)		63			953			1,412			1,545			(2,518	)		1,392			1,735			185			286			(4,239	)		(2,033	)
Accounts Payable and Accrued Liabilities		3,889			(3,011	)		17,017			(12,155	)		(2,782	)		16,338			(15,088	)		33,073			31,541			(5,319	)		7,639			(18,287	)		13,057			(2,910	)
Other Credits		2,819			7,375			3,838			2,527			-			-			-			-			-			-												-
Cash Provided (Used) by Continuing Operations		53,915			(995	)		144,420			97,369			36,063			74,555			15,133			60,207			185,958			14,052			46,424			15,841			25,238			101,555
Investing Activities
Capital Expenditures		(32,327	)		(15,887	)		(46,178	)		(110,245	)		(64,118	)		(83,338	)		(88,983	)		(81,219	)		(317,658	)		(103,592	)		(71,496	)		(66,592	)		(70,845	)		(312,525	)
Proceeds from Asset Disposals		11,258			47,243			7,136			23,107			987			(212	)		186			4,591			5,552			1,288			1,078			1,562			30,994			34,922
Purchases of Short-term Investments - net											(50,500	)		11,500			29,000			10,000			-			50,500			-						-						-
Investments in Insurance Contracts		(713	)		(1,162	)		(58,798	)		(4,366	)		(2,402	)		(1,872	)		(1,014	)		(773	)		(6,061	)		(415	)		65,944			22,611			11,063			99,203
Other - Net		2,961			(2,875	)		(677	)		612			297			(402	)		(20	)		(211	)		(336	)		(24	)		79			163			(28,850	)		(28,632	)
Cash Provided (Used) by Investing Activities		(18,821	)		27,319			(98,517	)		(141,392	)		(53,736	)		(56,824	)		(79,831	)		(77,612	)		(268,003	)		(102,743	)		(4,395	)		(42,256	)		(57,638	)		(207,032	)
Financing Activities
Long Term Borrowings		366,640			718,097			-			250,000			-			-			-			38,000			38,000			124,000			65,000			24,000			153,000			366,000
Debt Retirements		(371,344	)		(592,398	)		(699	)		(600,700	)		(1	)		(354	)		(930	)		(24,236	)		(25,521	)		(46,173	)		(84,064	)		(14,076	)		(88,053	)		(232,366	)
Debt Issuance Costs		(1,458	)		(16,378	)		(39	)		(7,363	)		-			-			-			-			-			(944	)		(89	)		(119	)		(1,008	)		(2,160	)
Debt Retirement Costs					(8,605	)		-			(96,029	)		-			-			(4	)		(2	)		(6	)		-												-
Interest Rate Swap Terminations					8,358			(6,315	)		-			-			-			-			-			-			-												-
Stock Option Exercises		512			2,541			41,399			7,510			752			1,091			4,133			418			6,394			599			131			1,948			637			3,315
Common Dividends Paid		(6,315	)		(6,336	)		(6,643	)		(6,908	)		(1,798	)		(1,802	)		(1,868	)		(2,049	)		(7,517	)		(2,051	)		(2,052	)		(2,058	)		(2,061	)		(8,222	)
Other - Net		(1,961	)		(26	)		-			-			881			682			84			47			1,694			3,287			96			136			(220	)		3,299
Cash Provided (Used) by Financing Activities		(13,926	)		105,253			27,703			(453,490	)		(166	)		(383	)		1,415			12,178			13,044			78,718			(20,978	)		9,831			62,295			129,866
Net Cash Provided (Used) by Continuing Operations		21,168			131,577			73,606			(497,513	)		(17,839	)		17,348			(63,283	)		(5,227	)		(69,001	)		(9,973	)		21,051			(16,584	)		29,895			24,389
DISCONTINUED OPERATIONS
Cash Provided (Used) by Discontinued Operating Activities		(5,797	)		12,668			73,104			(7,778	)														-															-
Cash Used by Discontinued Investing Activities		(23,265	)		(14,068	)		(28,163	)		(2,757	)														-															-
Cash Used by Discontinued Financing Activities		(2,117	)		-			-			340,587															-															-
Net Cash Provided (Used) by Discontinued Operations		(31,179	)		(1,400	)		44,941			330,052			-			-			-			-			-			-			-			-			-			-
Increase (Decrease) in Cash and Cash Equivalents		(10,011	)		130,177			118,547			(167,461	)		(17,839	)		17,348			(63,283	)		(5,227	)		(69,001	)		(9,973	)		21,051			(16,584	)		29,895			24,389
Beginning Cash and Cash Equivalents		12,887			2,876			133,053			251,600			84,139			66,300			83,648			20,365			84,139			15,138			5,165			26,216			9,632			15,138
Ending Cash and Cash Equivalents		2,876			133,053			251,600			84,139			66,300			83,648			20,365			15,138			15,138			5,165			26,216			9,632			39,527			39,527

9

Texas Industries, Inc.

Reconciliation of EBITDA to Net Income and Cash Provided (Used) by Continuing Operations

In $ Thousands

	FY2003		FY2004		FY2005		FY2006			FY2007										FY2008
							Total			Q1		Q2		Q3		Q4		Total		Q1		Q2		Q3		Q4		Total
EBITDA Defined
Net Income (Loss) from Continuing Operations		27,165		42,277		45,444		(589	)		29,431		28,652		12,713		30,111		100,907		17,914		29,315		14,624		25,561		87,414
Plus (minus):
Interest		14,827		24,102		23,533		31,155			5,542		4,643		3,289		600		14,074		-		-		-		2,505		2,505
Income Taxes (Benefit)		13,485		16,819		16,811		(8,225	)		13,834		13,133		6,838		15,779		49,584		8,173		13,265		6,300		11,521		39,259
Depreciation, Depletion & Amortization		49,196		47,409		46,474		44,955			11,172		11,112		11,572		12,500		46,356		13,318		13,846		13,816		14,597		55,577
Loss on Early Retirement of Debt and Spin-off Charges		-		12,302		894		113,247			-		-		26		22		48		-		-		-		-		-
EBITDA		104,673		142,909		133,156		180,543			59,979		57,540		34,438		59,012		210,969		39,405		56,426		34,740		54,184		184,755

EBITDA represents income from continuing operations before interest, income taxes, depreciation and amortization, and loss on early retirement of debt

EBITDA is presented because we believe it is a useful indicator of our performance and our ability to meet debt service and capital expenditure requirements.

It is not, however, intended as an alternative measure of operating results or cash flow from operations as determined in accordance with generally accepted accounting principles.

EBITDA is not necessarily comparable to similarly titled measures used by other companies.

EBITDA Reconciliation
Cash from Continuing Operating Activities	53,915		(995	)	144,420		97,369		36,063		74,555		15,133		60,207		185,958		14,052		46,424		15,841		25,238		101,555
Plus (minus):
Changes in Operating Assets and Liabilities	1,407		70,696		(16,384	)	33,386		7,325		(27,624	)	25,640		(20,145	)	(14,804	)	12,092		(3,618	)	16,600		18,090		43,164
Deferred Taxes (Benefit)	27,726		(319	)	(33,811	)	(6,581	)	(3,777	)	(4,734	)	(8,319	)	5,476		(11,354	)	(513	)	(614	)	(3,527	)	(14,913	)	(19,567	)
Income Taxes (Benefit)	13,485		16,819		16,811		(8,225	)	13,834		13,133		6,838		15,779		49,584		8,173		13,265		6,300		11,521		39,259
Loss (Gain) on Disposal of Assets	(687	)	37,997		6,582		34,768		490		49		31		2,347		2,917		455		462		279		18,214		19,410
Interest	14,827		24,102		23,533		31,155		5,542		4,643		3,289		600		14,074		-		-		-		2,505		2,505
Spin-off Charges	-		-		894		6,241		-		-		-		-		-		-		-		-		-		-
Other - net	(6,000	)	(5,391	)	(8,889	)	(7,570	)	502		(2,482	)	(8,174	)	(5,252	)	(15,406	)	5,146		507		(753	)	(6,471	)	(1,571	)
EBITDA	104,673		142,909		133,156		180,543		59,979		57,540		34,438		59,012		210,969		39,405		56,426		34,740		54,184		184,755

10

Texas Industries, Inc.

Business Segment Summary

$Thousands

	FY2004		FY2005		FY2006		FY2007										FY2008
			Total		Total		Q1		Q2		Q3		Q4		Total		Q1		Q2		Q3		Q4		Total
Segment Net Sales (Including Delivery Fees)
Cement	383,623		431,895		471,482		137,690		122,770		111,885		132,578		504,923		129,497		129,234		110,797		126,457		495,985
Aggregates	206,970		225,972		256,109		75,895		65,879		60,573		71,611		273,958		71,863		75,958		68,166		78,110		294,097
Consumer Products	274,939		282,512		337,458		89,545		87,229		68,203		90,798		335,775		94,526		98,031		82,060		94,616		369,233
Eliminations	(98,353	)	(105,576	)	(121,127	)	(31,478	)	(30,046	)	(23,890	)	(32,992	)	(118,406	)	(32,432	)	(34,750	)	(30,488	)	(32,791	)	(130,461	)
Total Net Sales	767,179		834,803		943,922		271,652		245,832		216,771		261,995		996,250		263,454		268,473		230,535		266,392		1,028,854
Operating Profit
Cement	66,069		82,719		110,953		40,134		50,346		36,470		45,381		172,331		17,218		33,950		24,299		26,031		101,498
Aggregtates	19,047		29,902		48,339		12,582		6,832		1,320		10,517		31,251		11,660		11,085		5,304		28,043		56,092
Consumer Products	11,013		5,259		10,349		3,641		2,623		(1,742	)	5,324		9,846		4,077		4,607		(481	)	3,380		11,583
Unallocated Overhead and Other Income	26,680		(4,307	)	(10,181	)	(1,911	)	(2,877	)	(3,257	)	(3,683	)	(11,728	)	(1,734	)	(1,746	)	(2,624	)	(3,863	)	(9,967	)
Total Operating Profit	122,809		113,573		159,460		54,446		56,924		32,791		57,539		201,700		31,221		47,896		26,498		53,591		159,206
Corporate
Selling, General and Administrative	(28,658	)	(33,272	)	(39,110	)	(7,747	)	(14,522	)	(11,359	)	(11,566	)	(45,194	)	(5,809	)	(7,379	)	(6,119	)	(14,585	)	(33,892	)
Interest	(24,102	)	(23,533	)	(31,155	)	(5,542	)	(4,643	)	(3,289	)	(600	)	(14,074	)	-						(2,505	)	(2,505	)
Loss on Debt Retirements and Spin-off Charges	(12,302	)	(894	)	(113,247	)	-		-		(26	)	(22	)	(48	)	-								-
Other Income	1,349		6,381		15,238		2,108		4,026		1,434		539		8,107		675		2,063		545		581		3,864
Income (loss) from Continuing Operations	59,096		62,255		(8,814	)	43,265		41,785		19,551		45,890		150,491		26,087		42,580		20,924		37,082		126,673
before Income Taxes
Major Gains (Losses) in Other Income
Unallocated Overhead - Sale of Brick Assets	34,710		-		-		-		-		-		-		-		-		-		-		-		-
Aggregates - Sale of Emissions Credits	-		6,225		-		-		-		-		-		-		-		-		-		-		-
Aggregates - Sale of Real Estate	-		-		23,987		-		-		-		-		-		-		-		-		5,146		5,146
Cement - Cement Antidumping Settlement	-		-		-		-		19,803		-		-		19,803		-		-		-		-		-
Sale of Southern Louisiana Aggregates Operation																							10,093		10,093
Cement - Sale of Emissions Credits																							3,879		3,879

11