Texas Industries 10-Q 2010 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended February 28, 2010

OR

[    ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                            to                            

Commission File Number 1-4887

TEXAS INDUSTRIES, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	75-0832210
(State or Other Jurisdiction of Incorporation or Organization)	(IRS Employer Identification No.)
1341 West Mockingbird Lane, Suite 700W, Dallas, Texas 75247-6913
(Address of Principal Executive Offices)                              (Zip Code)

Registrant’s Telephone Number, Including Area Code (972) 647-6700

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  [X]    No  [    ]

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).    Yes  [    ]    No  [    ]

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer  [X]	Accelerated Filer  [    ]
Non-accelerated Filer  [    ]	Smaller Reporting Company  [    ]

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  [    ]     No  [X]

There were 27,770,331 shares of the Registrant’s Common Stock, $1.00 par value, outstanding as of March 22, 2010.

INDEX

TEXAS INDUSTRIES, INC. AND SUBSIDIARIES

PART I. FINANCIAL INFORMATION		Page
Item 1.	Financial Statements
	Consolidated Balance Sheets – February 28, 2010 and May 31, 2009	3
	Consolidated Statements of Operations – three and nine months ended February 28, 2010 and February 28, 2009	4
	Consolidated Statements of Cash Flows – nine months ended February 28, 2010 and February 28, 2009	5
	Notes to Consolidated Financial Statements	6
	Report of Independent Registered Public Accounting Firm	25
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4.	Controls and Procedures	36
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 5.	Other Information	37
Item 6.	Exhibits	38
SIGNATURES

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CONSOLIDATED BALANCE SHEETS

TEXAS INDUSTRIES, INC. AND SUBSIDIARIES

		(Unaudited) February 28,			May 31,
In thousands		2010			2009
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	75,615		$	19,796
Receivables – net		74,642			129,432
Inventories		141,304			155,724
Deferred income taxes and prepaid expenses		21,887			22,039
TOTAL CURRENT ASSETS		313,448			326,991
OTHER ASSETS
Goodwill		1,715			1,715
Real estate and investments		7,334			10,001
Deferred charges and other		14,050			14,486
		23,099			26,202
PROPERTY, PLANT AND EQUIPMENT
Land and land improvements		157,613			156,917
Buildings		58,109			58,442
Machinery and equipment		1,246,767			1,247,931
Construction in progress		328,476			328,256
		1,790,965			1,791,546
Less depreciation and depletion		613,930			572,195
		1,177,035			1,219,351
	$	1,513,582		$	1,572,544
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	43,537		$	55,749
Accrued interest, compensation and other		41,515			51,856
Current portion of long-term debt		500			243
TOTAL CURRENT LIABILITIES		85,552			107,848
LONG-TERM DEBT		544,087			541,540
DEFERRED INCOME TAXES AND OTHER CREDITS		111,171			120,011
SHAREHOLDERS’ EQUITY
Common stock, $1 par value		27,770			27,718
Additional paid-in capital		473,949			469,908
Retained earnings		283,863			319,199
Accumulated other comprehensive loss		(12,810	)		(13,680	)
		772,772			803,145
	$	1,513,582		$	1,572,544

See notes to consolidated financial statements.

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(Unaudited)

CONSOLIDATED STATEMENTS OF OPERATIONS

TEXAS INDUSTRIES, INC. AND SUBSIDIARIES

		Three months ended February 28,						Nine months ended February 28,
In thousands except per share		2010			2009			2010			2009
NET SALES	$	117,829		$	178,659		$	444,721		$	656,850
Cost of products sold		131,126			149,015			407,041			567,925
GROSS PROFIT (LOSS)		(13,297	)		29,644			37,680			88,925
Selling, general and administrative		17,568			15,982			53,708			49,184
Interest		13,642			8,344			40,250			24,885
Loss on debt retirements		--			--			--			907
Other income		(1,044	)		(7,944	)		(9,424	)		(18,396	)
		30,166			16,382			84,534			56,580
INCOME (LOSS) BEFORE INCOME TAXES		(43,463	)		13,262			(46,854	)		32,345
Income taxes (benefit)		(16,358	)		2,341			(17,762	)		7,638
NET INCOME (LOSS)	$	(27,105	)	$	10,921		$	(29,092	)	$	24,707
Net income (loss) per share
Basic	$	(.98	)	$	.39		$	(1.05	)	$	.90
Diluted	$	(.98	)	$	.39		$	(1.05	)	$	.89
Average shares outstanding
Basic		27,749			27,680			27,735			27,584
Diluted		27,749			27,757			27,735			27,790
Cash dividends declared per share	$	.075		$	.075		$	.225		$	.225

See notes to consolidated financial statements.

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(Unaudited)

CONSOLIDATED STATEMENTS OF CASH FLOWS

TEXAS INDUSTRIES, INC. AND SUBSIDIARIES

		Nine months ended February 28,
In thousands		2010			2009
OPERATING ACTIVITIES
Net income (loss)	$	(29,092	)	$	24,707
Adjustments to reconcile net income (loss) to cash provided by operating activities
Depreciation, depletion and amortization		49,263			51,199
Gains on asset disposals		(1,324	)		(6,238	)
Deferred income taxes		(10,988	)		1,152
Stock-based compensation expense (credit)		3,732			(9,168	)
Excess tax benefits from stock-based compensation		(234	)		(1,771	)
Loss on debt retirements		--			907
Other – net		3,099			1,384
Changes in operating assets and liabilities
Receivables – net		25,864			46,940
Inventories		14,102			(20,004	)
Prepaid expenses		1,753			518
Accounts payable and accrued liabilities		(9,315	)		(17,089	)
Net cash provided by operating activities		46,860			72,537
INVESTING ACTIVITIES
Capital expenditures – expansions		(5,304	)		(181,657	)
Capital expenditures – other		(6,424	)		(59,214	)
Cash designated for property acquisitions		--			28,733
Proceeds from asset disposals		21,568			7,442
Investments in life insurance contracts		6,931			2,479
Other – net		14			11
Net cash provided (used) by investing activities		16,785			(202,206	)
FINANCING ACTIVITIES
Long-term borrowings		--			327,250
Debt retirements		(276	)		(197,676	)
Debt issuance costs		(2,039	)		(5,470	)
Stock option exercises		499			4,341
Excess tax benefits from stock-based compensation		234			1,771
Common dividends paid		(6,244	)		(6,209	)
Net cash provided (used) by financing activities		(7,826	)		124,007
Increase (decrease) in cash and cash equivalents		55,819			(5,662	)
Cash and cash equivalents at beginning of period		19,796			39,527
Cash and cash equivalents at end of period	$	75,615		$	33,865

See notes to consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Texas Industries, Inc. and subsidiaries is a leading supplier of heavy construction materials in the United States through our three business segments: cement, aggregates and consumer products. Our principal products are gray portland cement, produced and sold through our cement segment; stone, sand and gravel, produced and sold through our aggregates segment; and ready-mix concrete, produced and sold through our consumer products segment. Other products include expanded shale and clay lightweight aggregates, produced and sold through our aggregates segment, and packaged concrete mix, mortar, sand and related products, produced and sold through our consumer products segment. Our facilities are concentrated primarily in Texas, Louisiana and California. When used in these notes the terms “Company”, “we”, “us” or “our” mean Texas Industries, Inc. and subsidiaries unless the context indicates otherwise.

1. Summary of Significant Accounting Policies

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine-month period ended February 28, 2010, are not necessarily indicative of the results that may be expected for the year ended May 31, 2010. For further information, refer to the consolidated financial statements and notes thereto included in the Annual Report on Form 10-K of Texas Industries, Inc. for the year ended May 31, 2009.

Principles of Consolidation. The consolidated financial statements include the accounts of Texas Industries, Inc. and all subsidiaries. The consolidated financial statements also include the accounts of a former qualified intermediary trust, in which we were the primary beneficiary. The trust accounts were established in connection with our tax deferred like-kind-exchange property acquisition transactions under Section 1031 of the Internal Revenue Code. Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation or adjusted to reflect changes we made to prior period interim financial information related to our aggregate inventory in conjunction with our audited financial statements for the year ended May 31, 2009. See Note 1 of Notes to Consolidated Financial Statements in Item 8 of our Annual Report on Form 10-K for the year ended May 31, 2009.

Subsequent Events.We evaluated subsequent events through the time of filing this Quarterly Report on Form 10-Q. We are not aware of any significant events that occurred subsequent to the balance sheet date but prior to the filing of this report that would have a material impact on our consolidated financial statements.

Estimates. The preparation of financial statements and accompanying notes in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ from those estimates.

Fair Value of Financial Instruments. The estimated fair value of each class of financial instrument as of February 28, 2010 and May 31, 2009 approximates its carrying value except for long-term debt having fixed interest rates. The fair value of our long-term debt is estimated based on broker/dealer quoted market prices. As of February 28, 2010, the fair value of our long-term debt, including the current portion, was approximately $553.9 million compared to the carrying amount of $544.6 million. As of May 31, 2009, the fair value of our long-term debt, including the current portion, was approximately $476.8 million compared to the carrying amount of $541.8 million.

Cash and Cash Equivalents. Investments with maturities of less than 90 days when purchased are classified as cash equivalents and consist primarily of money market funds and investment grade commercial paper issued by major corporations and financial institutions.

Receivables.Management evaluates the ability to collect accounts receivable based on a combination of factors. A reserve for doubtful accounts is maintained based on the length of time receivables are past due or the status of a customer’s financial condition. If we are aware of a specific customer’s inability to make required payments, specific amounts are added to the reserve.

Environmental Liabilities.We are subject to environmental laws and regulations established by federal, state and local authorities, and make provision for the estimated costs related to compliance when it is probable that a reasonably estimable liability has been incurred.

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Legal Contingencies.We are a defendant in lawsuits which arose in the normal course of business, and make provision for the estimated loss from any claim or legal proceeding when it is probable that a reasonably estimable liability has been incurred.

Inventories.Inventories are stated at the lower of cost or market. We used the last-in, first out (“LIFO”) method to value finished products, work in process and raw material inventories excluding natural aggregate inventories. Natural aggregate inventories and parts and supplies inventories are valued using the average cost method. Our natural aggregate inventory excludes volumes in excess of an average twelve-month period of actual sales.

Long-lived Assets.Management reviews long-lived assets on a facility by facility basis for impairment whenever changes in circumstances indicate that the carrying amount of the assets may not be recoverable and would record an impairment charge if necessary. Such evaluations compare the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset and are significantly impacted by estimates of future prices for our products, capital needs, economic trends and other factors.

In the fourth quarter of our prior fiscal year, management evaluated the Hunter, Texas cement plant, including the capitalized construction and interest costs associated with the expansion that is currently suspended. We expect the Texas market to recover to pre-recession levels and to complete the expansion project. While the specific timing of the completion has not been determined, we anticipate completing the project within 2-4 years. Based on historical margins, we believe the undiscounted cash flows over the remaining life of the Hunter plant after completion of the expansion will significantly exceed the current investment in the plant as well as the remaining costs of the expansion and future capital expenditures necessary to achieve these cash flows.

Property, plant and equipment is recorded at cost. Costs incurred to construct certain long-lived assets include capitalized interest which is amortized over the estimated useful life of the related asset. Interest is capitalized during the construction period of qualified assets based on the average amount of accumulated expenditures and the weighted average interest rate applicable to borrowings outstanding during the period. If accumulated expenditures exceed applicable borrowings outstanding during the period, capitalized interest is allocated to projects under construction on a pro rata basis. Provisions for depreciation are computed generally using the straight-line method. Useful lives for our primary operating facilities range from 10 to 25 years with certain cement facility structures having useful lives of 40 years. Provisions for depletion of mineral deposits are computed on the basis of the estimated quantity of recoverable raw materials. The cost of all post-production stripping costs, which represents costs of removing overburden and waste materials to access mineral deposits, is recognized as a cost of the inventory produced during the period the stripping costs are incurred. Maintenance and repairs are charged to expense as incurred.

Goodwill. Management tests goodwill for impairment annually by reporting unit in the fourth quarter of our fiscal year using a two-step process. The first step of the impairment test identifies potential impairment by comparing the fair value of a reporting unit to its carrying value including goodwill. In applying a fair-value-based test, estimates are made of the expected future cash flows to be derived from the reporting unit. Similar to the review for impairment of other long-lived assets, the resulting fair value determination is significantly impacted by estimates of future prices for our products, capital needs, economic trends and other factors. If the carrying value of the reporting unit exceeds its fair value, the second step of the impairment test is performed to measure the amount of impairment loss, if any. The second step of the impairment test compares the implied fair value of the reporting unit goodwill with the carrying amount of that goodwill. If the carrying value of the reporting unit goodwill exceeds the implied fair value of the goodwill, an impairment loss is recognized in an amount equal to that excess. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination.

Based on an impairment test performed as of May 31, 2009, an impairment charge of $58.4 million was recognized with respect to goodwill resulting from the acquisition of Riverside Cement Company and identified with our California cement operations. The fair value of the reporting unit declined compared to prior evaluations, the most recent of which was as of November 30, 2008, due to a change in assumptions regarding the timing of cash flows expected to be derived from the reporting unit. The extreme depth of the recession in California was better understood at this time and resulted in the expected timing of a full recovery in the California cement market to be later than previously anticipated. The resulting present value of the projected cash flows did not support the carrying value of the goodwill and a full impairment charge was recognized.

Goodwill resulting from the acquisition of ready-mix operations in Texas and Louisiana and identified with our consumer products operations has a carrying value of $1.7 million at both February 28, 2010 and May 31, 2009. Based on an impairment test performed as of March 31, 2009, the fair value of the reporting unit exceeds its carrying value.

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Real Estate and Investments.Surplus real estate and real estate acquired for development of high quality industrial, office or multi-use parks totaled $5.9 million at February 28, 2010 and $6.0 million at May 31, 2009.

Investments include life insurance contracts purchased in connection with certain of our benefit plans. The contracts, recorded at their net cash surrender value, totaled $1.3 million (net of distributions of $83.0 million plus accrued interest and fees) at February 28, 2010 and $4.0 million (net of distributions of $89.5 million plus accrued interest and fees) at May 31, 2009. We can elect to receive distributions chargeable against the cash surrender value of the policies in the form of borrowings or withdrawals or we can elect to surrender the policies and receive their net cash surrender value. Distributions and policy surrenders totaling $10.6 million and $5.7 million were received in the nine-month periods ended February 28, 2010 and February 28, 2009, respectively.

Deferred Charges and Other.Deferred charges are composed primarily of debt issuance costs that totaled $8.8 million at February 28, 2010 and $9.0 million at May 31, 2009. The costs are amortized over the term of the related debt.

Other Credits.Other credits totaled $72.5 million at February 28, 2010 and $72.3 million at May 31, 2009 and are composed primarily of liabilities related to our retirement plans, deferred compensation agreements and asset retirement obligations.

Asset Retirement Obligations.We record a liability for legal obligations associated with the retirement of our long-lived assets in the period in which it is incurred if a reasonable estimate of fair value of the obligation can be made. The discounted fair value of the obligation incurred in each period is added to the carrying amount of the associated assets and depreciated over the lives of the assets. The liability is accreted at the end of each period through a charge to operating expense. A gain or loss on settlement is recognized if the obligation is settled for other than the carrying amount of the liability.

We incur legal obligations for asset retirement as part of our normal operations related to land reclamation, plant removal and Resource Conservation and Recovery Act closures. Determining the amount of an asset retirement liability requires estimating the future cost of contracting with third parties to perform the obligation. The estimate is significantly impacted by, among other considerations, management’s assumptions regarding the scope of the work required, labor costs, inflation rates, market-risk premiums and closure dates.

Changes in asset retirement obligations are as follows:

		Nine months ended February 28,
In thousands		2010			2009
Balance at beginning of period	$	4,415		$	3,961
Additions		--			171
Accretion expense		236			198
Settlements		(189	)		--
Balance at end of period	$	4,462		$	4,330

Accumulated Other Comprehensive Loss.Amounts recognized in accumulated other comprehensive loss represent adjustments related to a defined benefit retirement plan and a postretirement health benefit plan covering approximately 600 employees and retirees of our California cement subsidiary. The amounts totaled $12.8 million (net of tax of $7.4 million) at February 28, 2010 and $13.7 million (net of tax of $7.9 million) at May 31, 2009.

Comprehensive income (loss) for the three-month and nine-month periods ending February 28, 2010 and February 28, 2009 consisted of net income (loss) and amounts in accumulated other comprehensive loss recognized in the periods as components of net periodic postretirement benefit cost, net of tax. Comprehensive income (loss) was $(26.8) million and $11.0 million in the three-month periods ended February 28, 2010 and February 28, 2009, respectively, and $(28.2) million and $25.0 million in the nine-month periods ended February 28, 2010 and February 28, 2009, respectively.

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Net Sales. Sales are recognized when title has transferred and products are delivered. We include delivery fees in the amount we bill customers to the extent needed to recover our cost of freight and delivery. Net sales are presented as revenues and include these delivery fees.

Other Income.Routine sales of surplus operating assets and real estate resulted in gains (losses) of ($0.1) million and $5.8 million in the three-month periods ended February 28, 2010 and February 28, 2009, respectively, and gains of $1.3 million and $6.2 million in the nine-month periods ended February 28, 2010 and February 28, 2009, respectively. In addition, sales of emission credits associated with our Crestmore cement plant in Riverside, California resulted in gains of $3.4 million and $1.7 million in the nine-month periods ended February 28, 2010 and February 28, 2009, respectively. We have entered into various oil and gas lease agreements on property we own in north Texas. The terms of the agreements include the payment of a lease bonus and royalties on any oil and gas produced. However, we cannot guaranty what the level of royalties, if any, will be. Lease bonus payments received resulted in income of $4.7 million in the nine-month period ended February 28, 2009.

Stock-based Compensation.We use the Black-Scholes option-pricing model to determine the fair value of stock options granted as of the date of grant. Options with graded vesting are valued as single awards and the related compensation cost is recognized using a straight-line attribution method over the shorter of the vesting period or required service period adjusted for estimated forfeitures. We use the average stock price on the date of grant to determine the fair value of restricted stock awards paid. A liability, which is included in other credits, is recorded for stock appreciation rights, deferred compensation agreements and stock awards expected to be settled in cash, based on their fair value at the end of each period until such awards are paid.

Income Taxes. Accounting for income taxes uses the liability method of recognizing and classifying deferred income taxes. Texas Industries, Inc. (the parent company) joins in filing a consolidated return with its subsidiaries. Current and deferred tax expense is allocated among the members of the group based on a stand-alone calculation of the tax of the individual member. Accrued interest and penalties related to unrecognized tax benefits are recognized in income tax expense.

Earnings Per Share(“EPS”). Basic EPS is computed by adjusting net income for the participation in earnings of unvested restricted shares outstanding, then dividing by the weighted-average number of common shares outstanding during the period including contingently issuable shares and excluding outstanding unvested restricted shares.

Contingently issuable shares relate to vested shares under our former stock awards program and to deferred compensation agreements in which directors elected to defer their fees. Vested stock award shares are issued in the year in which the employee reaches age 60. The deferred compensation is denominated in shares of our common stock and issued in accordance with the terms of the agreement subsequent to retirement or separation from us. The shares are considered contingently issuable because the director has an unconditional right to the shares to be issued.

Diluted EPS adjusts net income and the outstanding shares for the dilutive effect of stock options, restricted shares and awards.

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Basic and Diluted EPS are calculated as follows:

		Three months ended February 28,						Nine months ended February 28,
In thousands except per share		2010			2009			2010			2009
Basic earnings
Net income (loss)	$	(27,105	)	$	10,921		$	(29,092	)	$	24,707
Unvested restricted share participation		11			(5	)		11			(14	)
Basic income (loss)	$	(27,094	)	$	10,916		$	(29,081	)	$	24,693
Diluted earnings
Net income (loss)	$	(27,105	)	$	10,921		$	(29,092	)	$	24,707
Unvested restricted share participation		11			(5	)		11			(14	)
Diluted income (loss)	$	(27,094	)	$	10,916		$	(29,081	)	$	24,693
Shares
Weighted-average shares outstanding		27,758			27,683			27,742			27,590
Contingently issuable shares		2			10			7			9
Unvested restricted shares		(11	)		(13	)		(14	)		(15	)
Basic weighted-average shares		27,749			27,680			27,735			27,584
Stock option, restricted share and award dilution		--			77			--			206
Diluted weighted-average shares*		27,749			27,757			27,735			27,790
Net income (loss) per share
Basic	$	(.98	)	$	.39		$	(1.05	)	$	.90
Diluted	$	(.98	)	$	.39		$	(1.05	)	$	.89
* Shares excluded due to antidilutive effect Stock options, restricted shares and awards		1,106			895			1,022			623

Recently Issued Accounting Guidance.In May 2009, the Financial Accounting Standards Board issued new accounting and disclosure guidance for recognized and non-recognized subsequent events that occur after the balance sheet date but before financial statements are issued. The new guidance also requires disclosure of the date through which an entity has evaluated subsequent events and the basis for that date. This new accounting guidance was effective for our Company beginning with our Quarterly Report on Form 10-Q for the three-month period ended August 31, 2009, and is being applied prospectively. This change in accounting policy had no impact on our consolidated financial statements.

In September 2006, the Financial Accounting Standards Board issued new accounting guidance that defines fair value, establishes a framework for measuring fair value and expands disclosure requirements about fair value measurements. This accounting guidance was effective for our Company on June 1, 2008. However, in February 2008, the FASB delayed the effective date of the new guidance for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). The new guidance became effective for all nonfinancial assets and nonfinancial liabilities on June 1, 2009. The adoption of this new accounting policy for our nonfinancial assets and nonfinancial liabilities has not had a current material impact on our consolidated financial statements.

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2. Working Capital

Working capital totaled $227.9 million at February 28, 2010 compared to $219.1 million at May 31, 2009. Selected components of working capital are summarized below.

Receivables consist of:

		February 28,		May 31,
In thousands		2010		2009
Trade notes and accounts receivable	$	68,256	$	92,622
Other notes receivable including accrued interest		--		19,197
Income tax receivable		4,939		13,579
Refund claims and other		1,447		4,034
	$	74,642	$	129,432

Trade notes and accounts receivable are presented net of allowances for doubtful receivables of $3.7 million at February 28, 2010 and $2.1 million at May 31, 2009. Provisions for bad debts charged to expense were $1.9 million and $1.4 million in the nine-month periods ended February 28, 2010 and February 28, 2009, respectively. Uncollectible accounts written off totaled $0.3 million and $0.7 million in the nine-month periods ended February 28, 2010 and February 28, 2009, respectively.

Other notes receivable at May 31, 2009 includes a note received in connection with the sale of land associated with our expanded shale and clay operations in south Texas in 2006. The note, scheduled to mature May 31, 2010, was sold on December 18, 2009 for $19.9 million representing the outstanding principal amount plus accrued interest.

Inventories consist of:

		February 28,		May 31,
In thousands		2010		2009
Finished products	$	9,649	$	10,873
Work in process		52,690		61,608
Raw materials		13,280		17,513
Total inventories at LIFO cost		75,619		89,994
Finished products		18,712		16,575
Raw materials		1,119		2,079
Parts and supplies		45,854		47,076
Total inventories at average cost		65,685		65,730
Total inventories	$	141,304	$	155,724

All inventories are stated at the lower of cost or market. Finished products, work in process and raw material inventories excluding natural aggregate inventories are valued using the last-in, first-out (“LIFO”) method. Natural aggregate finished product and raw material inventories and parts and supplies inventories are valued using the average cost method. An actual valuation of inventory under the LIFO method can be made only at the end of each year based on the inventory levels and costs at that time. Accordingly, interim LIFO calculations are based on management’s estimates of expected year-end inventory levels and costs and are subject to the final year-end LIFO inventory valuation. If the average cost method (which approximates current replacement cost) had been used for all of these inventories, inventory values would have been higher by $49.1 million at February 28, 2010 and $47.0 million at May 31, 2009.

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Accrued interest, compensation and other consist of:

		February 28,		May 31,
In thousands		2010		2009
Interest	$	5,253	$	15,271
Compensation and employee benefits		17,566		14,316
Casualty insurance		12,412		14,332
Income taxes		851		613
Property taxes and other		5,433		7,324
	$	41,515	$	51,856

3. Long-Term Debt

Long-term debt consists of:

		February 28,			May 31,
In thousands		2010			2009
Senior secured revolving credit facility expiring in 2012	$	--		$	--
7.25% Senior notes due 2013
Notes issued July 6, 2005 at par value		250,000			250,000
Additional notes issued August 18, 2008, net of unamortized discount of $14.8 million at February 28, 2010 and $17.6 million at May 31, 2009 (effective interest rate 8.98%)		285,189			282,448
		535,189			532,448
Capital lease obligations		9,121			9,058
Other contract obligations		277			277
		544,587			541,783
Less current portion		(500	)		(243	)
	$	544,087		$	541,540

Senior Secured Revolving Credit Facility.On June 19, 2009, we amended and restated our credit agreement and the associated security agreement. On March 24, 2010, we further amended our credit agreement to permit us to declare dividends not subject to the restricted payment requirements. The credit agreement continues to provide for a $200 million senior secured revolving credit facility with a $50 million sub-limit for letters of credit and a $15 million sub-limit for swing line loans. The credit facility matures on August 15, 2012. Amounts drawn under the credit facility bear annual interest either at the LIBOR rate plus a margin of 3.5% to 4.0% or at a base rate plus a margin of 2.5% to 3.0%. The base rate is the higher of the federal funds rate plus 0.5%, the prime rate established by Bank of America, N.A. or the one-month LIBOR rate plus 1.0%. The interest rate margins are determined based on our leverage ratio. The commitment fee calculated on the unused portion of the credit facility ranges from 0.50% to 0.75% per year based on our leverage ratio. We may terminate the credit facility at any time.

The amount that can be borrowed under the credit facility is limited to an amount based on the value of our consolidated accounts receivable, inventory and mobile equipment. This amount, called the borrowing base, may be less than the $200 million stated principal amount of the credit facility. The borrowing base under our amended agreement was $138.5 million as of February 28, 2010. We are not required to maintain any financial ratios or covenants unless an event of default occurs or the unused portion of the borrowing base is less than $40 million, in which case we must maintain a fixed charge coverage ratio of at least 1.1 to 1.0. At February 28, 2010, our fixed charge coverage ratio was 0.82 to 1.0. Given this ratio, we may use only $98.5 million of the borrowing base. No borrowings were outstanding at February 28, 2010; however, $27.5 million of the borrowing base was used to support letters of credit. As a result, the maximum amount we could borrow as of February 28, 2010 was $71.0 million.

All of our consolidated subsidiaries have guaranteed our obligations under the credit facility. The credit facility is secured by first priority security interests in all or most of our existing and future consolidated accounts, inventory, equipment, intellectual property and other personal property, and in all of our equity interests in present and future domestic subsidiaries and 66% of the equity interest in any future foreign subsidiaries, if any.

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The credit agreement contains a number of covenants restricting, among other things, prepayment or redemption of our senior notes, distributions and dividends on and repurchases of our capital stock, acquisitions and investments, indebtedness, liens and affiliate transactions. We are permitted to pay cash dividends on our common stock as long as the credit facility is not in default, the fixed charge coverage ratio is greater than 1.1 to 1.0 and borrowing availability under the borrowing base is more than $50 million. When our fixed charge coverage ratio is less than 1.1 to 1.0 we are permitted to pay cash dividends on our common stock not to exceed $2.5 million in any single instance or $10 million in any calendar year as long as the credit facility is not in default and borrowing availability is more than $60 million. For this purpose, borrowing availability is equal to the borrowing base less the amount of outstanding borrowings less the amount used to support letters of credit. We were in compliance with all of these loan covenants as of February 28, 2010.

7.25% Senior Notes.On August 18, 2008, we sold $300 million aggregate principal amount of additional 7.25% senior notes at an offering price of 93.25%. The additional notes were issued under our existing indenture dated July 6, 2005. The net proceeds were used to repay our $150 million senior term loan and borrowings outstanding under our senior secured revolving credit facility in the amount of $29.5 million, with additional proceeds available for general corporate purposes. We recognized a loss on debt retirement of $0.9 million representing a write-off of debt issuance costs associated with the mandatory prepayment of the term loan.

At February 28, 2010, we had $550 million aggregate principal amount of 7.25% senior notes outstanding. Under the indenture, we may redeem the notes at premiums of 103.625% beginning July 15, 2009, 101.813% beginning July 15, 2010 and 100% beginning July 15, 2011 and thereafter. If we experience a change of control, we may be required to offer to purchase the notes at a purchase price equal to 101% of the principal amount, plus accrued interest.

All of our consolidated subsidiaries have unconditionally guaranteed the 7.25% senior notes. The indenture governing the notes contains covenants that limit our ability and the ability of our subsidiaries to, among other things, incur additional indebtedness, pay dividends or make other distributions or repurchase or redeem our stock, make investments, sell assets, incur liens, enter into agreements restricting our subsidiaries’ ability to pay dividends, enter into transactions with affiliates and consolidate, merge or sell all or substantially all of our assets. We are not required to maintain any affirmative financial ratios or covenants. We were in compliance with all of these loan covenants as of February 28, 2010.

Other.Required principal payments on long-term debt, excluding the capital lease obligations, for each of the five years succeeding February 28, 2010 are none for 2011 through 2013 and $550.0 million for 2014 and none for 2015. The total amount of interest paid was $46.4 million and $33.8 million during the nine-month periods ended February 28, 2010 and February 28, 2009, respectively. The total amount of interest incurred was $13.6 million and $13.0 million in the three-month periods ended February 28, 2010 and February 28, 2009, respectively, of which $4.7 million was capitalized in the three-month period ended February 28, 2009. The total amount of interest incurred was $40.3 million and $34.6 million in the nine-month periods ended February 28, 2010 and February 28, 2009, respectively, of which $9.7 million was capitalized in the nine-month period ended February 28, 2009.

4. Commitments

During October 2007, we commenced construction on a project to expand our Hunter, Texas cement plant. In May 2009 we temporarily halted construction on the project because we believed that economic and market conditions made it unlikely that current cement demand levels in Texas would permit the new kiln to operate profitably if the project was completed as originally scheduled. We expect to resume construction by November 2010 in order to maintain our construction permit in effect. We have not entered into a new construction contract to complete the construction, so no schedule for completion has yet been determined. To the extent practical, we expect to match the construction schedule to the speed with which market conditions rebound in Texas. As of February 28, 2010, we have incurred approximately $294.6 million, excluding capitalized interest of approximately $16.3 million related to the project, of which $289.4 million has been expended. We estimate that the project is 85-90% complete. Until we determine the date that we will resume construction and the period over which the construction will occur, we cannot accurately estimate the cost of completing the project.

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5. Shareholders’ Equity

Common stock consists of:

	February 28,	May 31,
In thousands	2010	2009
Shares authorized	100,000	100,000
Shares outstanding	27,770	27,718
Shares reserved for stock options and other	2,740	2,850

There are authorized 100,000 shares of Cumulative Preferred Stock, no par value, of which 20,000 shares are designated $5 Cumulative Preferred Stock (Voting), redeemable at $105 per share and entitled to $100 per share upon dissolution. An additional 40,000 shares are designated Series B Junior Participating Preferred Stock. The Series B Preferred Stock is not redeemable and ranks, with respect to the payment of dividends and the distribution of assets, junior to (i) all other series of the Preferred Stock unless the terms of any other series shall provide otherwise and (ii) the $5 Cumulative Preferred Stock. No shares of Cumulative Preferred Stock or Series B Junior Participating Preferred Stock were outstanding as of February 28, 2010. Pursuant to a Rights Agreement, in November 2006, we distributed a dividend of one preferred share purchase right for each outstanding share of our Common Stock. Each right entitles the holder to purchase from us one one-thousandth of a share of the Series B Junior Participating Preferred Stock at a price of $300, subject to adjustment. The Rights Agreement was amended effective January 13, 2010 to change the final expiration date of the rights from November 1, 2016 to November 1, 2012, unless the rights are earlier redeemed or exchanged by us pursuant to the Rights Agreement.

6. Stock-Based Compensation Plans

The Texas Industries, Inc. 2004 Omnibus Equity Compensation Plan (the “2004 Plan”) provides that, in addition to other types of awards, non-qualified and incentive stock options to purchase Common Stock may be granted to employees and non-employee directors at market prices at date of grant. In addition, non-qualified and incentive stock options remain outstanding under our 1993 Stock Option Plan.

Options become exercisable in installments beginning one year after the date of grant and expire ten years after the date of grant. The fair value of each option grant was estimated on the date of grant using the Black-Scholes option pricing model. Options with graded vesting are valued as single awards and the compensation cost recognized using a straight-line attribution method over the shorter of the vesting period or required service period adjusted for estimated forfeitures. The following table sets forth the information about the weighted-average grant date fair value of options granted during the nine-month periods ended February 28, 2010 and February 28, 2009.

	Nine months ended February 28,
		2010			2009
Weighted average grant date fair value	$	16.83		$	9.26
Weighted average assumptions used:
Expected volatility		.469			.398
Expected lives		6.5			6.5
Risk-free interest rates		3.20	%		1.60	%
Expected dividend yields		.83	%		1.21	%

Expected volatility is based on an analysis of historical volatility of our common stock. Expected lives of options are determined based on the historical share option exercise experience of our optionees. Risk-free interest rates are determined using the implied yield currently available for zero coupon U.S. treasury issues with a remaining term equal to the expected life of the options. Expected dividend yields are based on the approved annual dividend rate in effect and the market price of our common stock at the time of grant.

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A summary of option transactions for the nine-month period ended February 28, 2010, follows:

	Shares Under Option			Weighted-Average Option Price
Outstanding at May 31, 2009	1,594,757		$	38.03
Granted	320,450			36.15
Exercised	(92,915	)		28.17
Canceled	(18,416	)		40.91
Outstanding at February 28, 2010	1,803,876		$	38.18
Exercisable at February 28, 2010	936,236		$	38.42

The following table summarizes information about stock options outstanding as of February 28, 2010.

	Range of Exercise Prices
	$16.04 - $27.39	$36.15 - $48.60	$50.63 - $70.18
Options outstanding
Shares outstanding	722,578	494,748	586,550
Weighted-average remaining life in years	5.84	8.09	6.54
Weighted-average exercise price	$21.93	$39.27	$57.26
Options exercisable
Shares exercisable	419,218	169,498	347,520
Weighted-average remaining life in years	3.70	4.72	6.34
Weighted-average exercise price	$19.99	$44.92	$57.48

Outstanding options expire on various dates to January 13, 2020. As of February 28, 2010, we have reserved 930,425 shares for future awards under the 2004 Plan.

As of February 28, 2010, the aggregate intrinsic value (the difference in the closing market price of our common stock of $35.53 and the exercise price to be paid by the optionee) of stock options outstanding was $9.8 million. The aggregate intrinsic value of exercisable stock options at that date was $6.5 million. The total intrinsic value for options exercised (the difference in the market price of our common stock on the exercise date and the price paid by the optionee to exercise the option) was $0.4 million and $0.8 million for the three-month periods ended February 28, 2010 and February 28, 2009, respectively, and $0.8 million and $2.8 million for the nine-month periods ended February 28, 2010 and February 28, 2009, respectively.

We have provided additional stock-based compensation to employees and directors under stock appreciation rights contracts, deferred compensation agreements, restricted stock payments and a former stock awards program. At February 28, 2010, outstanding stock appreciation rights totaled 133,315 shares, deferred compensation agreements to be settled in cash totaled 100,550 shares, deferred compensation agreements to be settled in common stock totaled 2,065 shares, unvested restricted stock payments totaled 15,667 shares and stock awards totaled 3,499 shares. Deferred income taxes and other credits on the consolidated balance sheets include $5.9 million at February 28, 2010 and $6.0 million at May 31, 2009 representing accrued stock-based compensation which is expected to be settled in cash.

Total stock-based compensation included in selling, general and administrative expense (credit) was $1.6 million and $(1.3) million in the three-month periods ended February 28, 2010 and February 28, 2009, respectively, and $3.7 million and $(9.2) million in the nine-month periods ended February 28, 2010 and February 28, 2009, respectively. The impact of changes in our company’s stock price on stock-based awards accounted for as liabilities increased stock-based compensation $0.4 million in the three-month period ended February 28, 2010 and reduced stock-based compensation $2.4 million in the three-month period ended February 28, 2009. The impact of changes in our company’s stock price on stock-based awards accounted for as liabilities increased stock-based compensation $0.4 million in the nine-month period ended February 28, 2010 and reduced stock-based compensation $12.1 million in the nine-month period ended February 28, 2009.

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Total tax expense (benefit) recognized in our statements of operations for stock-based compensation was $(0.3) million and $0.7 million in the three-month periods ended February 28, 2010 and February 28, 2009, respectively, and $(0.7) million and $4.0 million in the nine-month periods ended February 28, 2010 and February 28, 2009, respectively. Total tax benefit realized for stock-based compensation was less than $0.1 million in each of the three-month periods ended February 28, 2010 and February 28, 2009, and $0.2 million and $1.8 million in the nine-month periods ended February 28, 2010 and February 28, 2009, respectively.

As of February 28, 2010, $11.9 million of total unrecognized compensation cost related to stock options, restricted stock payments and stock awards is expected to be recognized. We currently expect to recognize in the years succeeding February 28, 2010 approximately $4.4 million of this stock-based compensation expense in 2011, $3.2 million in 2012, $2.1 million in 2013, $1.5 million in 2014 and $0.7 million in 2015.

7. Retirement Plans

Riverside Defined Benefit Plans.Approximately 600 employees and retirees of our California cement subsidiary, Riverside Cement Company, are covered by a defined benefit pension plan and a postretirement health benefit plan. Unrecognized prior service costs and actuarial gains or losses for these plans are recognized in a systematic manner over the remaining service periods of active employees expected to receive benefits under these plans. The amount of the defined benefit pension plan and postretirement health benefit plan expense charged to costs and expenses for the three-month and nine-month periods ended February 28, 2010 and February 28, 2009, was as follows:

		Pension Benefit						Health Benefit
In thousands		2010			2009			2010			2009
Three months ended February 28
Service cost	$	114		$	179		$	27		$	21
Interest cost		791			791			117			110
Expected return on plan assets		(585	)		(812	)		--			--
Amortization of prior service cost		--			--			(194	)		(196	)
Amortization of net actuarial loss		500			175			150			168
	$	820		$	333		$	100		$	103
Nine months ended February 28
Service cost	$	343		$	538		$	80		$	65
Interest cost		2,374			2,374			350			329
Expected return on plan assets		(1,756	)		(2,438	)		--			--
Amortization of prior service cost		--			--			(581	)		(589	)
Amortization of net actuarial loss		1,500			524			452			504
	$	2,461		$	998		$	301		$	309

Financial Security Defined Benefit Plans.We have a series of financial security plans that are non-qualified defined benefit plans providing retirement and death benefits to substantially all of our executive and key managerial employees. The plans are contributory but not funded. The amount of financial security plan benefit expense charged to costs and expenses for the three-month and nine-month periods ended February 28, 2010 and February 28, 2009, was as follows:

		FSP Benefit
In thousands		2010			2009
Three months ended February 28
Service cost	$	469		$	400
Interest cost		561			545
Participant contributions		(95	)		(90	)
	$	935		$	855
Nine months ended February 28
Service cost	$	1,406		$	1,198
Interest cost		1,684			1,636
Participant contributions		(299	)		(268	)
	$	2,791		$	2,566

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8. Income Taxes

Income taxes for the interim periods ended February 28, 2010 and February 28, 2009 have been included in the accompanying financial statements on the basis of an estimated annual rate. The primary reason that the tax rate differs from the 35% federal statutory corporate rate is due to percentage depletion that is tax deductible, state income taxes and deductions for income from qualified domestic production activities. Our estimated effective tax rate for fiscal year 2010 is 38.3% compared to 25.5% for fiscal year 2009. We made income tax payments of $0.2 million and $2.1 million during the nine-month periods ended February 28, 2010 and February 28, 2009, respectively, and received income tax refunds of $15.8 million and $13.4 million during the nine-month periods ended February 28, 2010 and February 28, 2009, respectively.

In addition to our federal income tax return, we file income tax returns in various state jurisdictions. We are no longer subject to income tax examinations by federal tax authorities for years prior to 2007 and state tax authorities for years prior to 2006.

9. Legal Proceedings and Contingent Liabilities

We are subject to federal, state and local environmental laws, regulations and permits concerning, among other matters, air emissions and wastewater discharge. We intend to comply with these laws, regulations and permits. However, from time to time we receive claims from federal and state environmental regulatory agencies and entities asserting that we are or may be in violation of certain of these laws, regulations and permits, or from private parties alleging that our operations have injured them or their property. It is possible that we could be held liable for future charges which might be material but are not currently known or estimable. In addition, changes in federal or state laws, regulations or requirements or discovery of currently unknown conditions could require additional expenditures by us.

In March 2008, the South Coast Air Quality Management District, or SCAQMD, informed one of our subsidiaries, Riverside Cement Company (Riverside), that it believed that dust blowing from open stockpiles of gray clinker or other operations at our Crestmore cement plant in Riverside, California caused the level of hexavalent chromium, or chrome 6, in the vicinity of the plant to be elevated above ambient air levels. Chrome 6 has been identified by the State of California as a carcinogen. Riverside immediately began taking steps, in addition to its normal dust control procedures, to reduce dust from plant operations and eliminate the use of open clinker stockpiles. In February 2008, the SCAQMD placed an air monitoring station at the downwind property line closest to the open clinker stockpiles. In the SCAQMD’s first public report of the results of its monitoring, over the period of February 12 to April 9, 2008, the average level of chrome 6 was 2.43 nanograms per cubic meter, or ng/m³. Since that time, the average level has decreased. The average levels of chrome 6 reported by the SCAQMD at all of the air monitoring stations in areas around the plant, including the station at the property line, are below 1.0 ng/m³ over the entire period of time it operated the stations. The SCAQMD compared the level of exposure at the air monitor on our property line with the following employee exposure standards established by regulatory agencies:

Occupational Safety and Health Administration	5,000 ng/m³
National Institute for Occupational Safety and Health	1,000 ng/m³
California Environmental Protection Agency	200 ng/m³

In public meetings conducted by the SCAQMD, it stated that the risk of long term exposure immediately adjacent to the plant is similar to living close to a busy freeway or rail yard, and it estimated an increased risk of 250 to 500 cancers per one million people, assuming continuous exposure for 70 years. Riverside has not determined how this particular risk number was calculated by SCAQMD. However, theRiverside Press Enterprisereported in a May 30, 2008 story that “John Morgan, a public health and epidemiology professor at Loma Linda University, said he looked at cancer cases reported from 1996 to 2005 in the … census [tract] nearest the [plant] and found no excess cases. That includes lung cancer, which is associated with exposure to hexavalent chromium.”

In late April 2008, a lawsuit was filed in Riverside County Superior Court of the State of California styledVirginia Shellman, et al. v. Riverside Cement Holdings Company, et al. The lawsuit against three of our subsidiaries purports to be a class action complaint for medical monitoring for a putative class defined as individuals who were allegedly exposed to chrome 6 emissions from our Crestmore cement plant. The complaint alleges an increased risk of future illness due to the exposure to chrome 6 and other toxic chemicals. The suit requests, among other things, establishment and funding of a medical testing and monitoring program for the class until their exposure to chrome 6 is no longer a threat to their health, as well as punitive and exemplary damages.

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Since theShellmanlawsuit was filed, five additional putative class action lawsuits have been filed in the same court. The putative class in each of these cases is the same as or a subset of the putative class in theShellmancase, and the allegations and requests for relief are similar to those in theShellmancase. As a consequence, the court has stayed four of these lawsuits until theShellmanlawsuit is finally determined.

Since August 2008, twenty-two additional lawsuits have been filed in the same court against us or one or more of our subsidiaries containing allegations of personal injury and wrongful death by approximately 2,900 individual plaintiffs who were allegedly exposed to chrome 6 and other toxic or harmful substances in the air, water and soil caused by emissions from the Crestmore plant. The plaintiffs allege causes of action that vary somewhat from suit to suit, but typically include, among other things, negligence, intentional and negligent infliction of emotional distress, trespass, public and private nuisance, strict liability, willful misconduct, fraudulent concealment, wrongful death and loss of consortium. The plaintiffs generally request, among other things, general and punitive damages, medical expenses, loss of earnings, property damages and medical monitoring costs. Some of the suits include additional defendants, such as predecessor owners of Riverside and the owner of another cement plant located approximately four miles from the Crestmore plant.

Since January 2009, six lawsuits have been filed against us or one or more of our subsidiaries in the same court involving similar allegations, causes of action and requests for relief, but with respect to our Oro Grande, California cement plant instead of the Crestmore plant. The suits involve approximately 280 individual plaintiffs. Prior to the filing of the lawsuits, the air quality management district in whose jurisdiction the plant lies conducted air sampling from locations around the plant. None of the samples contained chrome 6 levels above 1.0 ng/m³.

At this time, none of the plaintiffs in these cases has alleged any specific amount or range of damages. We will vigorously defend all of these suits but we cannot predict what liability, if any, could arise from them. We also cannot predict whether any other suits may be filed against us alleging damages due to injuries to persons or property caused by claimed exposure to chrome 6.

We are defendants in other lawsuits which arose in the normal course of business. In management’s judgment the ultimate liability, if any, from such other legal proceedings will not have a material affect on our consolidated financial position or results of operations.

10. Business Segments

We have three business segments: cement, aggregates and consumer products. Our business segments are managed separately along product lines. Through the cement segment we produce and sell gray portland cement as our principal product, as well as specialty cements. Through the aggregates segment we produce and sell stone, sand and gravel as our principal products, as well as expanded shale and clay lightweight aggregates. Through the consumer products segment we produce and sell ready-mix concrete as our principal product, as well as packaged concrete mix, mortar, sand and related products. We account for intersegment sales at market prices. Segment operating profit consists of net sales less operating costs and expenses. Corporate includes those administrative, financial, legal, human resources, environmental and real estate activities which are not allocated to operations and are excluded from segment operating profit. Identifiable assets by segment are those assets that are used in each segment’s operation. Corporate assets consist primarily of cash and cash equivalents, real estate and other financial assets not identified with a business segment. We no longer report “Unallocated overhead and other income–net” as a separate part of total segment operating profit. Engineering and other income items previously reported in “Unallocated overhead and other income–net” are reported in our cement segment. Environmental and other remaining overhead items previously reported in “Unallocated overhead and other income–net” are reported in corporate. Prior period information has been reclassified to conform to the current period presentation.

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The following is a summary of operating results and certain other financial data for our business segments.

		Three months ended February 28,						Nine months ended February 28,
In thousands		2010			2009			2010			2009
Net sales
Cement
Sales to external customers	$	48,742		$	68,023		$	178,373		$	261,421
Intersegment sales		8,876			13,416			32,624			49,429
Aggregates
Sales to external customers		25,057			44,790			99,777			155,713
Intersegment sales		4,202			7,981			15,870			29,360
Consumer products
Sales to external customers		44,030			65,846			166,571			239,716
Intersegment sales		497			754			1,947			2,752
Eliminations		(13,575	)		(22,151	)		(50,441	)		(81,541	)
Total net sales	$	117,829		$	178,659		$	444,721		$	656,850
Segment operating profit
Cement	$	(16,302	)	$	11,366		$	6,239		$	36,799
Aggregates		(1,151	)		13,180			9,717			27,659
Consumer products		(1,982	)		4,540			3,050			4,769
Total segment operating profit (loss)		(19,435	)		29,086			19,006			69,227
Corporate		(10,386	)		(7,480	)		(25,610	)		(11,090	)
Interest		(13,642	)		(8,344	)		(40,250	)		(24,885	)
Loss on debt retirements		--			--			--			(907	)
Income (loss) before income taxes	$	(43,463	)	$	13,262		$	(46,854	)	$	32,345
Depreciation, depletion and amortization
Cement	$	9,250		$	9,525		$	27,877		$	28,251
Aggregates		5,057			5,576			15,118			16,648
Consumer products		1,695			1,817			5,398			5,546
Corporate		290			265			870			754
Total depreciation, depletion and amortization	$	16,292		$	17,183		$	49,263		$	51,199
Capital expenditures
Cement	$	2,111		$	61,004		$	6,902		$	197,014
Aggregates		1,896			3,704			4,304			39,066
Consumer products		279			787			447			4,260
Corporate		--			45			75			531
Total capital expenditures	$	4,286		$	65,540		$	11,728		$	240,871
Net sales by product
Cement	$	43,447		$	62,151		$	159,919		$	235,963
Stone, sand and gravel		11,568			20,190			49,104			77,816
Ready-mix concrete		33,677			53,292			129,398			196,878
Other products		18,522			27,168			67,080			83,410
Delivery fees		10,615			15,858			39,220			62,783
Total net sales	$	117,829		$	178,659		$	444,721		$	656,850

All sales were made in the United States during the periods presented with no single customer representing more than 10 percent of sales.

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Other income includes gains from sales of emission credits associated with our Crestmore cement plant in Riverside, California of $3.4 million and $1.7 million in the nine-month periods ended February 28, 2010 and February 28, 2009, respectively. In addition, other income in the three-month and nine-month periods ended February 28, 2009 includes a gain of $5.0 million from the sale of real estate associated with our aggregate operations in north Texas. Other income in the nine-month period ended February 28, 2009 includes $4.7 million in lease bonus payments received upon the execution of oil and gas lease agreements on property we own in north Texas, including $2.8 million associated with our cement operations and $1.6 million associated with our corporate real estate activities.

Cement capital expenditures, including capitalized interest, incurred in connection with the expansion of our Hunter, Texas cement plant was $5.3 million and $180.4 million in the nine-month periods ended February 28, 2010 and February 28, 2009, respectively. In addition, cement capital expenditures, including capitalized interest, incurred in connection with the expansion and modernization of our Oro Grande, California cement plant were $1.3 million in the nine-month period ended February 28, 2009. Aggregate capital expenditures include $25.3 million in the nine-month period ended February 28, 2009 incurred to acquire aggregate operations in central Texas through a tax deferred like-kind-exchange transaction. Other capital expenditures incurred represent normal replacement and upgrades of existing equipment and acquisitions to sustain existing operations in each segment.

The following is a summary of assets used in each of our business segments.

		February 28,		May 31,
In thousands		2010		2009
Identifiable assets
Cement	$	1,095,921	$	1,149,320
Aggregates		222,168		236,727
Consumer products		79,821		95,310
Corporate		115,672		91,187
Total assets	$	1,513,582	$	1,572,544

All of our identifiable assets are located in the United States.

11. Condensed Consolidating Financial Information

On July 6, 2005 and August 18, 2008, Texas Industries, Inc. (the parent company) issued $250 million and $300 million aggregate principal amounts of its 7.25% Senior Notes, respectively. All existing consolidated subsidiaries of the parent company are 100% owned and provide a joint and several, full and unconditional guarantee of the securities. There are no significant restrictions on the parent company’s ability to obtain funds from any of the guarantor subsidiaries in the form of a dividend or loan. Additionally, there are no significant restrictions on a guarantor subsidiary’s ability to obtain funds from the parent company or its direct or indirect subsidiaries.

The following condensed consolidating balance sheets, statements of operations and statements of cash flows are provided for the parent company and guarantor subsidiaries. The information has been presented as if the parent company accounted for its ownership of the guarantor subsidiaries using the equity method of accounting. Prior period information has been reclassified to conform to the current period presentation.

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In thousands		Texas Industries, Inc.			Guarantor Subsidiaries		Eliminating Entries			Consolidated
Condensed consolidating balance sheet at February 28, 2010
Cash and cash equivalents	$	74,078		$	1,537	$	--		$	75,615
Receivables - net		4,939			69,703		--			74,642
Inventories		--			141,304		--			141,304
Deferred income taxes and prepaid expenses		440			21,447		--			21,887
Total current assets		79,457			233,991		--			313,448
Goodwill		--			1,715		--			1,715
Real estate and investments		1,327			6,007		--			7,334
Deferred charges and other		8,850			5,200		--			14,050
Investment in subsidiaries		938,916			--		(938,916	)		--
Long-term intercompany receivables		292,836			18,753		(311,589	)		--
Property, plant and equipment - net		--			1,177,035		--			1,177,035
Total assets	$	1,321,386		$	1,442,701	$	(1,250,505	)	$	1,513,582
Accounts payable	$	86		$	43,451	$	--		$	43,537
Accrued interest, compensation and other		9,731			31,784		--			41,515
Current portion of long-term debt		--			500		--			500
Total current liabilities		9,817			75,735		--			85,552
Long-term debt		535,466			8,621		--			544,087
Long-term intercompany payables		18,753			292,836		(311,589	)		--
Deferred income taxes and other credits		(15,422	)		126,593		--			111,171
Shareholders’ equity		772,772			938,916		(938,916	)		772,772
Total liabilities and shareholders’ equity	$	1,321,386		$	1,442,701	$	(1,250,505	)	$	1,513,582
Condensed consolidating balance sheet at May 31, 2009
Cash and cash equivalents	$	17,226		$	2,570	$	--		$	19,796
Receivables - net		14,707			114,725		--			129,432
Inventories		--			155,724		--			155,724
Deferred income taxes and prepaid expenses		426			21,613		--			22,039
Total current assets		32,359			294,632		--			326,991
Goodwill		--			1,715		--			1,715
Real estate and investments		3,965			6,036		--			10,001
Deferred charges and other		8,997			5,489		--			14,486
Investment in subsidiaries		940,982			--		(940,982	)		--
Long-term intercompany receivables		383,886			18,759		(402,645	)		--
Property, plant and equipment - net		--			1,219,351		--			1,219,351
Total assets	$	1,370,189		$	1,545,982	$	(1,343,627	)	$	1,572,544
Accounts payable	$	74		$	55,675	$	--		$	55,749
Accrued interest, compensation and other		19,773			32,083		--			51,856
Current portion of long-term debt		--			243		--			243
Total current liabilities		19,847			88,001		--			107,848
Long-term debt		532,725			8,815		--			541,540
Long-term intercompany payables		18,759			383,886		(402,645	)		--
Deferred income taxes and other credits		(4,287	)		124,298		--			120,011
Shareholders’ equity		803,145			940,982		(940,982	)		803,145
Total liabilities and shareholders’ equity	$	1,370,189		$	1,545,982	$	(1,343,627	)	$	1,572,544

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In thousands		Texas Industries, Inc.			Guarantor Subsidiaries			Eliminating Entries			Consolidated
Condensed consolidating statement of operations for the three months ended February 28, 2010
Net sales	$	--		$	117,829		$	--		$	117,829
Cost of products sold		--			131,126			--			131,126
Gross profit (loss)		--			(13,297	)		--			(13,297	)
Selling, general and administrative		1,854			15,714			--			17,568
Interest		13,469			1,036			(863	)		13,642
Loss on debt retirements		--			--			--			--
Other income		(7	)		(1,037	)		--			(1,044	)
Intercompany other income		(863	)		--			863			--
		14,453			15,713			--			30,166
Income (loss) before the following items		(14,453	)		(29,010	)		--			(43,463	)
Income taxes (benefit)		(5,192	)		(11,166	)		--			(16,358	)
		(9,261	)		(17,844	)		--			(27,105	)
Equity in earnings (loss) of subsidiaries		(17,844	)		--			17,844			--
Net income (loss)	$	(27,105	)	$	(17,844	)	$	17,844		$	(27,105	)
Condensed consolidating statement of operations for the three months ended February 28, 2009
Net sales	$	--		$	178,659		$	--		$	178,659
Cost of products sold		--			149,015			--			149,015
Gross profit (loss)		--			29,644			--			29,644
Selling, general and administrative		666			15,316			--			15,982
Interest		12,889			--			(4,545	)		8,344
Loss on debt retirements		--			--			--			--
Other income		(49	)		(7,895	)		--			(7,944	)
Intercompany other income		(863	)		(3,682	)		4,545			--
		12,643			3,739			--			16,382
Income (loss) before the following items		(12,643	)		25,905			--			13,262
Income taxes (benefit)		(8,875	)		11,216			--			2,341
		(3,768	)		14,689			--			10,921
Equity in earnings (loss) of subsidiaries		14,689			--			(14,689	)		--
Net income (loss)	$	10,921		$	14,689		$	(14,689	)	$	10,921

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In thousands		Texas Industries, Inc.			Guarantor Subsidiaries			Eliminating Entries			Consolidated
Condensed consolidating statement of operations for the nine months ended February 28, 2010
Net sales	$	--		$	444,721		$	--		$	444,721
Cost of products sold		--			407,041			--			407,041
Gross profit (loss)		--			37,680			--			37,680
Selling, general and administrative		5,192			48,516			--			53,708
Interest		39,731			3,137			(2,618	)		40,250
Loss on debt retirements		--			--			--			--
Other income		(33	)		(9,391	)		--			(9,424	)
Intercompany other income		(2,618	)		--			2,618			--
		42,272			42,262			--			84,534
Income (loss) before the following items		(42,272	)		(4,582	)		--			(46,854	)
Income taxes (benefit)		(16,116	)		(1,646	)		--			(17,762	)
		(26,156	)		(2,936	)		--			(29,092	)
Equity in earnings (loss) of subsidiaries		(2,936	)		--			2,936			--
Net income (loss)	$	(29,092	)	$	(2,936	)	$	2,936		$	(29,092	)
Condensed consolidating statement of operations for the nine months ended February 28, 2009
Net sales	$	--		$	656,850		$	--		$	656,850
Cost of products sold		--			567,925			--			567,925
Gross profit (loss)		--			88,925			--			88,925
Selling, general and administrative		(1,853	)		51,037			--			49,184
Interest		34,040			--			(9,155	)		24,885
Loss on debt retirements		907			--			--			907
Other income		(383	)		(18,013	)		--			(18,396	)
Intercompany other income		(2,618	)		(6,537	)		9,155			--
		30,093			26,487			--			56,580
Income (loss) before the following items		(30,093	)		62,438			--			32,345
Income taxes (benefit)		(14,560	)		22,198			--			7,638
		(15,533	)		40,240			--			24,707
Equity in earnings (loss) of subsidiaries		40,240			--			(40,240	)		--
Net income (loss)	$	24,707		$	40,240		$	(40,240	)	$	24,707

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In thousands		Texas Industries, Inc.			Guarantor Subsidiaries			Eliminating Entries		Consolidated
Condensed consolidating statement of cash flows for the nine months ended February 28, 2010
Net cash provided by operating activities	$	(33,573	)	$	80,433		$	--	$	46,860
Investing activities
Capital expenditures - expansions		--			(5,304	)		--		(5,304	)
Capital expenditures - other		--			(6,424	)		--		(6,424	)
Cash designated for property acquisitions		--			--			--		--
Proceeds from asset disposals		--			21,568			--		21,568
Investments in life insurance contracts		6,931			--			--		6,931
Other - net		--			14			--		14
Net cash provided (used) by investing activities		6,931			9,854			--		16,785
Financing activities
Long-term borrowings		--			--			--		--
Debt retirements		--			(276	)		--		(276	)
Debt issuance costs		(2,039	)		--			--		(2,039	)
Stock option exercises		499			--			--		499
Excess tax benefits from stock-based compensation		234			--			--		234
Common dividends paid		(6,244	)		--			--		(6,244	)
Net intercompany financing activities		91,044			(91,044	)		--		--
Net cash provided (used) by financing activities		83,494			(91,320	)		--		(7,826	)
Increase (decrease) in cash and cash equivalents		56,852			(1,033	)		--		55,819
Cash and cash equivalents at beginning of period		17,226			2,570			--		19,796
Cash and cash equivalents at end of period	$	74,078		$	1,537		$	--	$	75,615
Condensed consolidating statement of cash flows for the nine months ended February 28, 2009
Net cash provided by operating activities	$	(13,483	)	$	86,020		$	--	$	72,537
Investing activities
Capital expenditures - expansions		--			(181,657	)		--		(181,657	)
Capital expenditures - other		--			(59,214	)		--		(59,214	)
Cash designated for property acquisitions		--			28,733			--		28,733
Proceeds from asset disposals		--			7,442			--		7,442
Investments in life insurance contracts		2,479			--			--		2,479
Other - net		--			11			--		11
Net cash provided (used) by investing activities		2,479			(204,685	)		--		(202,206	)
Financing activities
Long-term borrowings		327,250			--			--		327,250
Debt retirements		(197,509	)		(167	)		--		(197,676	)
Debt issuance costs		(5,470	)		--			--		(5,470	)
Stock option exercises		4,341			--			--		4,341
Excess tax benefits from stock-based compensation		1,771			--			--		1,771
Common dividends paid		(6,209	)		--			--		(6,209	)
Net intercompany financing activities		(116,058	)		116,058			--		--
Net cash provided (used) by financing activities		8,116			115,891			--		124,007
Increase (decrease) in cash and cash equivalents		(2,888	)		(2,774	)		--		(5,662	)
Cash and cash equivalents at beginning of period		34,675			4,852			--		39,527
Cash and cash equivalents at end of period	$	31,787		$	2,078		$	--	$	33,865

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors

Texas Industries, Inc.

We have reviewed the accompanying consolidated balance sheet of Texas Industries, Inc. and subsidiaries (the Company) as of February 28, 2010, and the related consolidated statements of operations for the three- and nine-month periods ended February 28, 2010 and 2009 and cash flows for the nine-month periods ended February 28, 2010 and 2009. These financial statements are the responsibility of the Company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the consolidated interim financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of Texas Industries, Inc. and subsidiaries as of May 31, 2009, and the related consolidated statements of operations, shareholders’ equity, and cash flows for the year then ended [not presented herein], and in our report dated July 15, 2009, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of May 31, 2009, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ Ernst & Young LLP

Fort Worth, Texas

March 26, 2010

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

When used in this report the terms “Company”, “we”, “us” or “our” mean Texas Industries, Inc. and subsidiaries unless the context indicates otherwise.

RESULTS OF OPERATIONS

We are a leading supplier of heavy construction materials in the United States through our three business segments: cement, aggregates and consumer products. Our principal products are gray portland cement, produced and sold through our cement segment; stone, sand and gravel, produced and sold through our aggregates segment; and ready-mix concrete, produced and sold through our consumer products segment. Other products include expanded shale and clay lightweight aggregates, produced and sold through our aggregates segment, and packaged concrete mix, mortar, sand and related products, produced and sold through our consumer products segment. Our facilities are concentrated primarily in Texas, Louisiana and California.

Management uses segment operating profit as its principal measure to assess performance and to allocate resources. Business segment operating profit consists of net sales less operating costs and expenses that are directly attributable to the segment. Corporate includes non-operating income and expenses related to administrative, financial, legal, human resources environmental and real estate activities. Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation or adjusted to reflect changes we made to prior period interim financial information related to our aggregate inventory in conjunction with our audited financial statements for the year ended May 31, 2009. See Note 1 of Notes to Consolidated Financial Statements in Item 8 of our Annual Report on Form 10-K for the year ended May 31, 2009.

During the three-month and nine-month periods ended February 28, 2010, the economy in both our California and Texas market areas continued to be challenging. In addition, during the three-month period ended February 28, 2010, abnormally inclement weather in our Texas and California market areas further impacted already depressed construction activity. We have continued to manage our production to more closely match market demand, reduce costs and manage our cash position. We believe these steps have had a significant positive impact on our cash flows in the current periods.

Consolidated sales for the three-month period ended February 28, 2010 were $117.8 million, a decrease of $60.8 million from the prior year period. Consolidated cost of products sold for the three-month period ended February 28, 2010 was $131.1 million, a decrease of $17.9 million from the prior year period. Consolidated gross loss for the three-month period ended February 28, 2010 was $13.3 million, a decrease in profit of $42.9 million from the prior year period. Lower shipments and sales prices reduced consolidated gross profit approximately $27 million. In addition, extended plant shutdowns for maintenance and inventory reductions at each of our three cement plants lowered production levels and increased costs in the current period.

Consolidated sales for the nine-month period ended February 28, 2010 were $444.7 million, a decrease of $212.1 million from the prior year period. Consolidated cost of products sold for the nine-month period ended February 28, 2010 was $407.0 million, a decrease of $160.9 million from the prior year period. Consolidated gross profit for the nine-month period ended February 28, 2010 was $37.7 million, a decrease of $51.2 million from the prior year period. Lower shipments and sales prices reduced consolidated gross profit approximately $64 million. The effect of lower sales was offset in part by lower costs including approximately $12 million lower supplies and maintenance costs related to plant shutdowns for maintenance at our three cement plants.

Consolidated selling, general and administrative expense for the three-month period ended February 28, 2010 was $17.6 million, an increase of $1.6 million from the prior year period. Consolidated selling, general and administrative expense for the nine-month period ended February 28, 2010 was $53.7 million, an increase of $4.5 million from the prior year period. Our stock-based compensation includes awards expected to be settled in cash, the expense for which is based on their fair value at the end of each period until the awards are paid. The impact of changes in our stock price on the fair value of these awards increased expense $2.7 million for the three-month period ended February 28, 2010 and $12.5 million for the nine-month period ended February 28, 2010 from the prior year periods. Our focus on reducing controllable costs lowered overall other expenses $1.1 million in the three-month period ended February 28, 2010 and $8.0 million in the nine-month period ended February 28, 2010 from the prior year periods.

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Consolidated other income for the three-month period ended February 28, 2010 was $1.0 million, a decrease of $6.9 million from the prior year period. Consolidated other income for the nine-month period ended February 28, 2010 was $9.4 million, a decrease of $9.0 million from the prior year period. The sale of real estate associated with our aggregate operations in north Texas resulted in a gain of $5.0 million in the three-month and nine-month periods ended February 28, 2009. In addition, sales of emission credits associated with our Crestmore cement plant in Riverside, California resulted in gains of $3.4 million and $1.7 million in the nine-month periods ended February 28, 2010 and February 28, 2009, respectively. We have entered into various oil and gas lease agreements on property we own in north Texas. The terms of the agreements include the payment of a lease bonus and royalties on any oil and gas produced. Lease bonus payments received resulted in income of $4.7 million in the nine-month period ended February 28, 2009.

Consolidated operating loss for the three-month period ended February 28, 2010 was $19.4 million. Consolidated operating profit for the three-month period ended February 28, 2009 was $29.1 million. Consolidated operating profit for the nine-month periods ended February 28, 2010 and February 28, 2009 was $19.0 million and $69.2 million, respectively. The following is a summary of operating results for our business segments and certain other information related to our principal products and non-operating income and expenses.

Cement Operations

	Three months ended February 28,						Nine months ended February 28,
In thousands except per unit		2010			2009			2010			2009
Operating Results
Total cement sales	$	52,322		$	75,557		$	192,508		$	285,368
Total other sales and delivery fees		5,296			5,882			18,489			25,482
Total segment sales		57,618			81,439			210,997			310,850
Cost of products sold		70,616			67,919			198,834			266,682
Gross profit (loss)		(12,998	)		13,520			12,163			44,168
Selling, general and administrative		(3,715	)		(3,577	)		(12,748	)		(15,064	)
Other income		411			1,423			6,824			7,695
Operating Profit (Loss)	$	(16,302	)	$	11,366		$	6,239		$	36,799
Cement
Shipments (tons)		639			837			2,292			3,138
Prices ($/ton)	$	81.82		$	90.17		$	83.96		$	90.90
Cost of sales ($/ton)	$	101.70		$	73.92		$	78.96		$	77.76

Three months ended February 28, 2010

Cement operating loss for the three-month period ended February 28, 2010 was $16.3 million, a decrease in operating profit of $27.7 million from the prior year period. Lower shipments and sales prices reduced operating profit approximately $11 million.

Total segment sales for the three-month period ended February 28, 2010 were $57.6 million compared to $81.4 million for the prior year period. Cement sales decreased $23.2 million as construction activity continued to decline in both our Texas and California market areas. Abnormally inclement weather in our Texas and California market areas contributed to the decline in construction activity during the current period. Our Texas market area accounted for approximately 73% of cement sales in the current period compared to 74% of cement sales in the prior year period. Shipments decreased 25% in our Texas market area and 20% in our California market area. Average cement prices decreased 8% in our Texas market area and 13% in our California market area.

Cost of products sold for the three-month period ended February 28, 2010 increased $2.7 million from the prior year period. The effect of lower shipments was offset by the effect of lower clinker production which reduced inventories and increased costs recognized. Cement unit costs increased 38% from the prior year period. Extended plant shutdowns for maintenance and inventory reductions at each of our three cement plants during the current period further lowered production levels and increased supplies and maintenance costs by approximately $5 million.

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Selling, general and administrative expense for the three-month period ended February 28, 2010 increased $0.1 million from the prior year period. The increase was primarily due to $0.4 million higher provisions for bad debts, $0.5 million higher defined benefit plan expense and $0.4 million higher insurance expense which offset $1.1 million lower legal and professional expense.

Other income for the three-month period ended February 28, 2010 decreased $1.0 million from the prior year period due in part to lower gains from routine sales of surplus operating assets.

Nine months ended February 28, 2010

Cement operating profit for the nine-month period ended February 28, 2010 was $6.2 million, a decrease of $30.6 million from the prior year period. Lower shipments and sales prices reduced operating profit approximately $41 million.

Total segment sales for the nine-month period ended February 28, 2010 were $211.0 million compared to $310.9 million for the prior year period. Cement sales decreased $92.9 million as construction activity continued to decline in both our Texas and California market areas. Abnormally inclement weather contributed to the decline in construction activity in our Texas market area during the last six months and in our California market area during the last three months of the current period. Our Texas market area accounted for approximately 71% of cement sales in both the current and prior periods. Shipments decreased 28% in our Texas market area and 24% in our California market area. Average cement prices decreased 6% in our Texas market area and 13% in our California market area.

Cost of products sold for the nine-month period ended February 28, 2010 decreased $67.8 million from the prior year period primarily due to lower shipments and our efforts to manage costs. Cement unit costs increased 2% from the prior year period as the effect of lower shipments was offset in part by lower raw materials, energy and supplies and maintenance costs. Supplies and maintenance costs related to scheduled maintenance at our three cement plants decreased approximately $12 million from the prior year period.

Selling, general and administrative expense for the nine-month period ended February 28, 2010 decreased $2.3 million from the prior year period. Lower overall expenses, including wages and benefits, marketing, travel, and legal, professional and other outside service expenses, as a result of our focus on reducing costs were offset in part by $0.7 million higher provisions for bad debts, $0.4 million higher insurance expense and $1.5 million higher defined benefit plan expense.

Other income for the nine-month period ended February 28, 2010 decreased $0.9 million from the prior year period. Other income in the current period includes gains of $3.4 million from sales of emission credits associated with our Crestmore cement plant in Riverside, California. Other income in the prior period included a lease bonus payment of $2.8 million received upon the execution of an oil and gas lease agreement on property we own in north Texas and a gain of $1.7 million from the sale of emission credits associated with our Crestmore cement plant in Riverside, California.

- 28 -

Aggregate Operations

	Three months ended February 28,						Nine months ended February 28,
In thousands except per unit		2010			2009			2010			2009
Operating Results
Total stone, sand and gravel sales	$	14,849		$	26,889		$	62,860		$	103,235
Total other sales and delivery fees		14,410			25,882			52,787			81,838
Total segment sales		29,259			52,771			115,647			185,073
Cost of products sold		28,882			42,678			100,038			154,042
Gross profit		377			10,093			15,609			31,031
Selling, general and administrative		(1,937	)		(2,379	)		(7,131	)		(9,708	)
Other income		409			5,466			1,239			6,336
Operating Profit (Loss)	$	(1,151	)	$	13,180		$	9,717		$	27,659
Stone, sand and gravel
Shipments (tons)		1,947			3,267			8,012			13,073
Prices ($/ton)	$	7.62		$	8.23		$	7.85		$	7.90
Cost of sales ($/ton)	$	8.41		$	6.92		$	7.04		$	6.56

Three months ended February 28, 2010

Aggregate operating loss for the three-month period ended February 28, 2010 was $1.2 million, a decrease in operating profit of $14.3 million from the prior year period. Lower shipments and sales prices reduced operating profit approximately $10 million.

Total segment sales for the three-month period ended February 28, 2010 were $29.3 million compared to $52.8 million for the prior year period. Stone, sand and gravel sales decreased $12.0 million on 7% lower average prices and 40% lower shipments as construction activity continued to decline in our Texas market area. Abnormally inclement weather contributed to the decline in construction activity during the current period.

Cost of products sold for the three-month period ended February 28, 2010 decreased $13.8 million from the prior year period. Overall stone, sand and gravel unit costs increased 22% from the prior year period primarily due to the effect of lower shipments.

Selling, general and administrative expense for the three-month period ended February 28, 2010 decreased $0.4 million from the prior year period primarily due to lower overall expenses, including wages and benefits, marketing, travel and outside service expenses, as a result of our focus on reducing costs.

Other income for the three-month period ended February 28, 2010 decreased $5.1 million from the prior year period. Other income in the prior year period included a gain of $5.0 million from the sale of real estate associated with our north Texas aggregate operations.

Nine months ended February 28, 2010

Aggregate operating profit for the nine-month period ended February 28, 2010 was $9.7 million, a decrease of $17.9 million from the prior year period. Lower shipments and sales prices reduced operating profit approximately $19 million.

Total segment sales for the nine-month period ended February 28, 2010 were $115.6 million compared to $185.1 million for the prior year period. Stone, sand and gravel sales decreased $40.4 million on 1% lower average prices and 39% lower shipments as construction activity continued to decline in our Texas market area. Abnormally inclement weather contributed to the decline in construction activity during the last six months of the current period.

Cost of products sold for the nine-month period ended February 28, 2010 decreased $54.0 million from the prior year period. Overall stone, sand and gravel unit costs increased 7% from the prior year period primarily due to the effect of lower shipments.

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Selling, general and administrative expense for the nine-month period ended February 28, 2010 decreased $2.6 million from the prior year period primarily due to lower overall expenses, including wages and benefits, marketing, travel and outside service expenses, as a result of our focus on reducing costs.

Other income for the nine-month period ended February 28, 2010 decreased $5.1 million from the prior year period. Other income in the prior year period included a gain of $5.0 million from the sale of real estate associated with our north Texas aggregate operations.

Consumer Products Operations

	Three months ended February 28,						Nine months ended February 28,
In thousands except per unit		2010			2009			2010			2009
Operating Results
Total ready-mix concrete sales	$	33,695		$	53,306		$	129,468		$	197,032
Total other sales and delivery fees		10,832			13,294			39,050			45,436
Total segment sales		44,527			66,600			168,518			242,468
Cost of products sold		45,203			60,569			158,610			228,742
Gross profit (loss)		(676	)		6,031			9,908			13,726
Selling, general and administrative		(1,421	)		(2,142	)		(7,374	)		(10,173	)
Other income		115			651			516			1,216
Operating Profit (Loss)	$	(1,982	)	$	4,540		$	3,050		$	4,769
Ready-mix concrete
Shipments (cubic yards)		427			614			1,540			2,330
Prices ($/cubic yard)	$	79.17		$	86.87		$	84.12		$	84.59
Cost of sales ($/cubic yard)	$	84.35		$	80.45		$	81.48		$	81.24

Three months ended February 28, 2010

Consumer products operating loss for the three-month period ended February 28, 2010 was $2.0 million, a decrease in operating profit of $6.5 million from the prior year period. Lower shipments and sales prices reduced operating profit approximately $6 million.

Total segment sales for the three-month period ended February 28, 2010 were $44.5 million compared to $66.6 million for the prior year period. Ready-mix concrete sales for the three-month period ended February 28, 2010 decreased $19.6 million on 9% lower average prices and 30% lower shipments as construction activity continued to decline in our Texas market area. Abnormally inclement weather contributed to the decline in construction activity during the current period.

Cost of products sold for the three-month period ended February 28, 2010 decreased $15.4 million from the prior year period. Overall ready-mix concrete unit costs increased 5% from the prior year period primarily due to the effect of lower shipments.

Selling, general and administrative expense for the three-month period ended February 28, 2010 decreased $0.7 million from the prior year period primarily due to lower overall expenses, including wages and benefits, marketing, travel and outside service expenses, as a result of our focus on reducing costs.

Other income for the three-month period ended February 28, 2010 decreased $0.5 million from the prior year period. Other income in the prior year period included $0.5 million higher gains from routine sales of surplus operating assets.

Nine months ended February 28, 2010

Consumer products operating profit for the nine-month period ended February 28, 2010 was $3.1 million, a decrease of $1.7 million from the prior year period. Lower shipments and sales prices reduced operating profit approximately $4 million.

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Total segment sales for the nine-month period ended February 28, 2010 were $168.5 million compared to $242.5 million for the prior year period. Ready-mix concrete sales for the nine-month period ended February 28, 2010 decreased $67.6 million on 1% lower average prices and 34% lower shipments as construction activity continued to decline in our Texas market area. Abnormally inclement weather contributed to the decline in construction activity during the last six months of the current period.

Cost of products sold for the nine-month period ended February 28, 2010 decreased $70.1 million from the prior year period. Overall ready-mix concrete unit costs were comparable to the prior year period.

Selling, general and administrative expense for the nine-month period ended February 28, 2010 decreased $2.8 million from the prior year period primarily due to lower overall expenses, including wages and benefits, marketing, travel and outside service expenses, as a result of our focus on reducing costs.

Other income for the nine-month period ended February 28, 2010 decreased $0.7 million from the prior year period. Other income in the prior year period included $0.4 million higher gains from routine sales of surplus operating assets and lease bonus payments of $0.2 million received upon the execution of oil and gas lease agreements on property we own in north Texas.

Corporate

	Three months ended February 28,						Nine months ended February 28,
In thousands		2010			2009			2010			2009
Other income	$	109		$	404		$	845		$	3,149
Selling, general and administrative		(10,495	)		(7,884	)		(26,455	)		(14,239	)
	$	(10,386	)	$	(7,480	)	$	(25,610	)	$	(11,090	)

Three months ended February 28, 2010

Other income for the three-month period ended February 28, 2010 decreased $0.3 million from the prior year period on lower interest income.

Selling, general and administrative expense for the three-month period ended February 28, 2010 increased $2.6 million from the prior year period. The increase was primarily the result of $2.8 million higher stock-based compensation. Our stock-based compensation includes awards expected to be settled in cash, the expense for which is based on their fair value at the end of each period until the awards are paid. The impact of changes in our stock price on their fair value increased stock-based compensation $0.4 million in the three-month period ended February 28, 2010 and reduced stock-based compensation $2.4 million in the three-month period ended February 28, 2009.

Nine months ended February 28, 2010

Other income for the nine-month period ended February 28, 2010 decreased $2.3 million from the prior year period. In addition to lower interest income of $0.7 million, other income in the prior year period included a lease bonus payment of $1.6 million received upon the execution of an oil and gas lease agreement on property we own in north Texas that is not associated with any business segment.

Selling, general and administrative expense for the nine-month period ended February 28, 2010 increased $12.2 million from the prior year period. The increase was primarily the result of $12.6 million higher stock-based compensation. Our stock-based compensation includes awards expected to be settled in cash, the expense for which is based on their fair value at the end of each period until the awards are paid. The impact of changes in our stock price on their fair value increased stock-based compensation $0.4 million in the nine-month period ended February 28, 2010 and reduced stock-based compensation $12.1 million in the nine-month period ended February 28, 2009.

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Interest

Interest expense incurred for the three-month period ended February 28, 2010 was $13.6 million, all of which was expensed. Interest expense incurred for the three-month period ended February 28, 2009 was $13.0 million, of which $4.7 million was capitalized in connection with our Hunter, Texas cement plant expansion project and $8.3 million was expensed.

Interest expense incurred for the nine-month period ended February 28, 2010 was $40.3 million, all of which was expensed. Interest expense incurred for the nine-month period ended February 28, 2009 was $34.6 million, of which $9.7 million was capitalized in connection with our Hunter, Texas cement plant expansion project and $24.9 million was expensed.

Interest expense incurred for the three-month period ended February 28, 2010 increased $0.6 million primarily as a result of higher credit facility commitment fees and debt amortization expense. Interest expense incurred for the nine-month period ended February 28, 2010 increased $5.7 million from the prior year period primarily as a result of higher average outstanding debt due to the sale of $300 million aggregate principal amount of additional 7.25% senior notes on August 18, 2008. We have delayed completion of the Hunter, Texas cement plant expansion and do not expect to capitalize any interest in connection with the project during the remainder of fiscal year 2010.

Loss on Debt Retirements

On August 18, 2008, we sold $300 million aggregate principal amount of additional 7.25% senior notes due in 2013 at an offering price of $93.25. The net proceeds were used in part to repay our $150 million senior term loan and borrowings outstanding under our senior revolving credit facility in the amount of $29.5 million. We recognized a loss on debt retirement of $0.9 million representing a write-off of debt issuance costs associated with the mandatory prepayment of the term loan.

Income Taxes

Income taxes for the interim periods ended February 28, 2010 and February 28, 2009 have been included in the accompanying financial statements on the basis of an estimated annual rate. The primary reason that the tax rate differs from the 35% federal statutory corporate rate is due to percentage depletion that is tax deductible, state income taxes and deductions for income from qualified domestic production activities. Our estimated effective tax rate for fiscal year 2010 is 38.3% compared to 25.5% for fiscal year 2009.

LIQUIDITY AND CAPITAL RESOURCES

In addition to cash and cash equivalents of $75.6 million at February 28, 2010, our sources of liquidity include cash from operations and borrowings available under our senior secured revolving credit facility.

Senior Secured Revolving Credit Facility.On June 19, 2009, we amended and restated our credit agreement and the associated security agreement. On March 24, 2010, we further amended our credit agreement to permit us to declare dividends not subject to the restricted payment requirements. The credit agreement continues to provide for a $200 million senior secured revolving credit facility with a $50 million sub-limit for letters of credit and a $15 million sub-limit for swing line loans. The credit facility matures on August 15, 2012. Amounts drawn under the credit facility bear annual interest either at the LIBOR rate plus a margin of 3.5% to 4.0% or at a base rate plus a margin of 2.5% to 3.0%. The base rate is the higher of the federal funds rate plus 0.5%, the prime rate established by Bank of America, N.A. or the one-month LIBOR rate plus 1.0%. The interest rate margins are determined based on our leverage ratio. The commitment fee calculated on the unused portion of the credit facility ranges from 0.50% to 0.75% per year based on our leverage ratio. We may terminate the credit facility at any time.

The amount that can be borrowed under the credit facility is limited to an amount based on the value of our consolidated accounts receivable, inventory and mobile equipment. This amount, called the borrowing base, may be less than the $200 million stated principal amount of the credit facility. The borrowing base under our amended agreement was $138.5 million as of February 28, 2010. We are not required to maintain any financial ratios or covenants unless an event of default occurs or the unused portion of the borrowing base is less than $40 million, in which case we must maintain a fixed charge coverage ratio of at least 1.1 to 1.0. At February 28, 2010, our fixed charge coverage ratio was 0.82 to 1.0. Given this ratio, we may use only $98.5 million of the borrowing base. No borrowings were outstanding at February 28, 2010; however, $27.5 million of the borrowing base was used to support letters of credit. As a result, the maximum amount we could borrow as of February 28, 2010 was $71.0 million.

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All of our consolidated subsidiaries have guaranteed our obligations under the credit facility. The credit facility is secured by first priority security interests in all or most of our existing and future consolidated accounts, inventory, equipment, intellectual property and other personal property, and in all of our equity interests in present and future domestic subsidiaries and 66% of the equity interest in any future foreign subsidiaries, if any.

The credit agreement contains a number of covenants restricting, among other things, prepayment or redemption of our senior notes, distributions and dividends on and repurchases of our capital stock, acquisitions and investments, indebtedness, liens and affiliate transactions. We are permitted to pay cash dividends on our common stock as long as the credit facility is not in default, the fixed charge coverage ratio is greater than 1.1 to 1.0 and borrowing availability under the borrowing base is more than $50 million. When our fixed charge coverage ratio is less than 1.1 to 1.0 we are permitted to pay cash dividends on our common stock not to exceed $2.5 million in any single instance or $10 million in any calendar year as long as the credit facility is not in default and borrowing availability is more than $60 million. For this purpose, borrowing availability is equal to the borrowing base less the amount of outstanding borrowings less the amount used to support letters of credit. We were in compliance with all of these loan covenants as of February 28, 2010.

As February 28, 2010, there have been no material changes to our material contractual obligations described in our Annual Report on Form 10-K for the year ended May 31, 2009.

During October 2007, we commenced construction on a project to expand our Hunter, Texas cement plant. In May 2009 we temporarily halted construction on the project because we believed that economic and market conditions made it unlikely that current cement demand levels in Texas would permit the new kiln to operate profitably if the project was completed as originally scheduled. We expect to resume construction by November 2010 in order to maintain our construction permit in effect. We have not entered into a new construction contract to complete the construction, so no schedule for completion has yet been determined. To the extent practical, we expect to match the construction schedule to the speed with which market conditions rebound in Texas. As of February 28, 2010, we have incurred approximately $294.6 million, excluding capitalized interest of approximately $16.3 million related to the project, of which $289.4 million has been expended. We estimate that the project is 85-90% complete. Until we determine the date that we will resume construction and the period over which the construction will occur, we cannot accurately estimate the cost of completing the project.

We expect cash and cash equivalents, cash from operations and available borrowings under our senior secured revolving credit facility to be sufficient to provide funds for capital expenditure commitments currently estimated at $15 million to $25 million for fiscal year 2010, scheduled debt payments, working capital needs and other general corporate purposes for at least the next year.

Cash Flows

Net cash provided by operating activities for the nine-month periods ended February 28, 2010 and February 28, 2009 was $46.9 million and $72.5 million, respectively. The decrease was primarily the result of lower income from operations which was partially offset by changes in working capital items.

Net cash provided by investing activities for the nine-month period ended February 28, 2010 was $16.8 million. Net cash used by investing activities for the nine-month period ended February 28, 2009 was $202.2 million.

Capital expenditures, including capitalized interest, incurred in connection with the expansion of our Hunter, Texas cement plant were $5.3 million and $180.4 million for the nine-month periods ended February 28, 2010 and February 28, 2009, respectively. Capital expenditures, including capitalized interest, incurred in connection with the expansion and modernization of our Oro Grande, California cement plant were $1.3 million for the nine-month period ended February 28, 2009. Capital expenditures for normal replacement and upgrades of existing equipment and acquisitions to sustain our existing operations were $6.4 million and $59.2 million for the nine-month periods ended February 28, 2010 and February 28, 2009, respectively. Capital expenditures in the prior year period include $25.3 million incurred to acquire aggregate operations in central Texas through a tax deferred like-kind-exchange transaction. Completion of our tax deferred like-kind-exchange transactions reduced the cash designated for property acquisitions held by a qualified intermediary trust by $28.7 million.

Proceeds from asset disposals for the nine-month period ended February 28, 2010 includes proceeds of $19.2 million representing the outstanding principal amount of a note receivable we sold December 18, 2009. The note was received in connection with the sale of land associated with our expanded shale and clay operations in south Texas in 2006 and had been scheduled to mature May 31, 2010.

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We elected to receive distributions and policy surrenders from life insurance contracts purchased in connection with certain of our benefit plans totaling $10.6 million and $5.7 million in the nine-month periods ended February 28, 2010 and February 28, 2009, respectively. These distributions were offset in part by premiums and fees paid to maintain the policies.

Net cash used by financing activities for the nine-month period ended February 28, 2010 was $7.8 million. Net cash provided by financing activities for the nine-month period ended February 28, 2009 was $124.0 million.

We sold $300 million aggregate principal amount of additional 7.25% senior notes due in 2013 at an offering price of 93.25% in the nine-month period ended February 28, 2009. The net proceeds were used in part to repay our $150 million senior term loan and borrowings outstanding under our senior revolving credit facility in the amount of $29.5 million.

OTHER ITEMS

Environmental Matters

We are subject to federal, state and local environmental laws, regulations and permits concerning, among other matters, air emissions and wastewater discharge. We intend to comply with these laws, regulations and permits. However, from time to time we receive claims from federal and state environmental regulatory agencies and entities asserting that we are or may be in violation of certain of these laws, regulations and permits, or from private parties alleging that our operations have injured them or their property. See Note 9 of Notes to Consolidated Financial Statements presented in Part I, Item 1 of this report for a description of certain claims. It is possible that we could be held liable for future charges which might be material but are not currently known or estimable. In addition, changes in federal or state laws, regulations or requirements or discovery of currently unknown conditions could require additional expenditures by us.

Market Risk

Historically, we have not entered into derivatives or other financial instruments for trading or speculative purposes. Because of the short duration of our investments, changes in market interest rates would not have a significant impact on their fair value. The fair value of fixed rate debt will vary as interest rates change.

The estimated fair value of each class of financial instrument as of February 28, 2010 and May 31, 2009 approximates its carrying value except for long-term debt having fixed interest rates. The fair value of our long-term debt is estimated based on broker/dealer quoted market prices. As of February 28, 2010, the fair value of our long-term debt, including the current portion, was approximately $553.9 million compared to the carrying amount of $544.6 million. As of May 31, 2009, the fair value of our long-term debt, including the current portion, was approximately $476.8 million compared to the carrying amount of $541.8 million.

Our operations require large amounts of energy and are dependent upon energy sources, including electricity and fossil fuels. Prices for energy are subject to market forces largely beyond our control. We have generally not entered into any long-term contracts to satisfy our fuel and electricity needs, with the exception of coal which we purchase from specific mines pursuant to long-term contracts. However, we continually monitor these markets and we may decide in the future to enter into long-term contracts. If we are unable to meet our requirements for fuel and electricity, we may experience interruptions in our production. Price increases or disruption of the uninterrupted supply of these products could adversely affect our results of operations.

Critical Accounting Policies

The preparation of financial statements and accompanying notes in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported. Changes in the facts and circumstances could have a significant impact on the resulting financial statements. The critical accounting policies that affect the more complex judgments and estimates are described in our Annual Report on Form 10-K for the year ended May 31, 2009.

Management reviews long-lived assets on a facility by facility basis for impairment whenever changes in circumstances indicate that the carrying amount of the assets may not be recoverable and would record an impairment charge if necessary. Such evaluations compare the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset and are significantly impacted by estimates of future prices for our products, capital needs, economic trends and other factors.

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In the fourth quarter of our prior fiscal year, management evaluated the Hunter, Texas cement plant, including the capitalized construction and interest costs associated with the expansion that is currently suspended. We expect the Texas market to recover to pre-recession levels and to complete the expansion project. While the specific timing of the completion has not been determined, we anticipate completing the project within 2-4 years. Based on historical margins, we believe the undiscounted cash flows over the remaining life of the Hunter plant after completion of the expansion will significantly exceed the current investment in the plant as well as the remaining costs of the expansion and future capital expenditures necessary to achieve these cash flows.

Management tests goodwill for impairment annually by reporting unit in the fourth quarter of our fiscal year using a two-step process. The first step of the impairment test identifies potential impairment by comparing the fair value of a reporting unit to its carrying value including goodwill. In applying a fair-value-based test, estimates are made of the expected future cash flows to be derived from the reporting unit. Similar to the review for impairment of other long-lived assets, the resulting fair value determination is significantly impacted by estimates of future prices for our products, capital needs, economic trends and other factors. If the carrying value of the reporting unit exceeds its fair value, the second step of the impairment test is performed to measure the amount of impairment loss, if any. The second step of the impairment test compares the implied fair value of the reporting unit goodwill with the carrying amount of that goodwill. If the carrying value of the reporting unit goodwill exceeds the implied fair value of the goodwill, an impairment loss is recognized in an amount equal to that excess. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination.

Based on an impairment test performed as of May 31, 2009, an impairment charge of $58.4 million was recognized with respect to goodwill resulting from the acquisition of Riverside Cement Company and identified with our California cement operations. The fair value of the reporting unit declined compared to prior evaluations, the most recent of which was as of November 30, 2008, due to a change in assumptions regarding the timing of cash flows expected to be derived from the reporting unit. The extreme depth of the recession in California was better understood at this time and resulted in the expected timing of a full recovery in the California cement market to be later than previously anticipated. The resulting present value of the projected cash flows did not support the carrying value of the goodwill and a full impairment charge was recognized.

Goodwill resulting from the acquisition of ready-mix operations in Texas and Louisiana and identified with our consumer products operations has a carrying value of $1.7 million at both February 28, 2010 and May 31, 2009. Based on an impairment test performed as of March 31, 2009, the fair value of the reporting unit exceeds its carrying value.

Recently Issued Accounting Guidance

In May 2009, the Financial Accounting Standards Board issued new accounting and disclosure guidance for recognized and non-recognized subsequent events that occur after the balance sheet date but before financial statements are issued. The new guidance also requires disclosure of the date through which an entity has evaluated subsequent events and the basis for that date. This new accounting guidance was effective for our Company beginning with our Quarterly Report on Form 10-Q for the three-month period ended August 31, 2009, and is being applied prospectively. This change in accounting policy had no impact on our consolidated financial statements.

In September 2006, the Financial Accounting Standards Board issued new accounting guidance that defines fair value, establishes a framework for measuring fair value and expands disclosure requirements about fair value measurements. This accounting guidance was effective for our Company on June 1, 2008. However, in February 2008, the FASB delayed the effective date of the new guidance for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). The new guidance became effective for all nonfinancial assets and nonfinancial liabilities on June 1, 2009. The adoption of this new accounting policy for our nonfinancial assets and nonfinancial liabilities has not had a current material impact on our consolidated financial statements.

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Cautionary Statement for Purposes of the “Safe Harbor” Provisions of the

Private Securities Litigation Reform Act of 1995

Certain statements contained in this quarterly report are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements may include the words “may”, “will”, “estimate”, “intend”, “continue”, “believe”, “expect”, “plan” or “anticipate” and other similar words. 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 our business, the cyclical and seasonal nature of our business, the level of construction activity in our markets, abnormal periods of inclement weather, unexpected periods of equipment downtime, unexpected operational difficulties, changes in the cost of raw materials, fuel and energy, changes in the cost or availability of transportation, changes in interest rates, the timing and amount of federal, state and local funding for infrastructure, delays in announced capacity expansions, ongoing volatility and uncertainty in the capital or credit markets, the impact of environmental laws, regulations and claims and changes in governmental and public policy, and the risks and uncertainties described in our reports on Forms 10-K, 10-Q and 8-K. Forward-looking statements speak only as of the date hereof, and we assume no obligation to publicly update such statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As of February 28, 2010, there were no material changes to the information about market risk contained in our Annual Report on Form 10-K for the year ended May 31, 2009.

Item 4. Controls and Procedures

We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the specified time periods. As of the end of the period covered by this Quarterly Report on Form 10-Q, our Chief Executive Officer and Chief Financial Officer evaluated, with the participation of our management, the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based on the evaluation, Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective as of February 28, 2010.

There were no changes in our internal controls over financial reporting that occurred during our most recent fiscal quarter that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The information required by this item is included in Note 9 of Notes to Consolidated Financial Statements presented in Part I, Item 1 of this report and incorporated herein by reference.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Market and Shareholders Information.Shares of our common stock, $1 par value, are traded on the New York Stock Exchange (ticker symbol TXI). The restriction on the payment of dividends is included in Note 3 of Notes to Consolidated Financial Statements presented in Part I, Item 1 of this report and incorporated herein by reference.

Issuer Purchases of Equity Securities. We are restricted by our loan covenants from purchasing our Common Stock on the open market. However, in connection with so-called “stock swap exercises” of employee stock options, shares are surrendered or deemed surrendered to the Company to pay the exercise price or to satisfy tax withholding obligations. The following table presents information with respect to such transactions which occurred during the three-month period ended February 28, 2010.

Period	(a) Total Number of Shares Purchased	(b) Average Price Paid per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
December 1, 2009 – December 31, 2009	--	$	--	--	--
January 1, 2010 – January 31, 2010	57,351		35.63	--	--
February 1, 2010 – February 28, 2010	--		--	--	--
Total	57,351	$	35.63	--	--

Item 5. Other Information

On March 24, 2010, we entered into the Second Amendment to Second Amended and Restated Credit Agreement with Bank of America, N.A., as Administrative Agent and lender, L/C issuer and swing line lender, and the other lenders that are party thereto (the “Second Amendment”). The Second Amendment amends the covenant in our senior secured credit facility that limits dividend payments. We are currently permitted to pay cash dividends on our common stock as long as the credit facility is not in default, the fixed charge coverage ratio is greater than 1.1 to 1.0 and borrowing availability under the borrowing base is more than $50 million. In order to permit us to pay dividends when our fixed charge coverage ratio is less than 1.1 to 1.0, the Second Amendment adds a provision that permits us to declare and pay dividends on our common stock in an amount not exceeding (i) $2,500,000 in any single instance (which shall not occur more than four times in any calendar year) or (ii) $10,000,000 in the aggregate during any calendar year, provided that immediately before and after giving effect to any such dividend there shall exist no default and, for the 30 consecutive calendar days immediately preceding the declaration of such dividend and on the date of such declaration after giving pro forma effect to such dividend, borrowing availability shall exceed the greater of $60,000,000 or 30% of the aggregate commitments of all lenders. For this purpose, borrowing availability is equal to the borrowing lease less the amount of outstanding borrowings less the amount used to support letters of credit.

A copy of the Second Amendment to Second Amended and Restated Credit Agreement is attached as Exhibit 10.33 hereto and incorporated herein by reference.

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Item 6. Exhibits

The following exhibits are included herein:

3.1	Articles of Incorporation (incorporated by reference to Exhibit 3.1 to Annual Report on Form 10-K dated August 28, 1996)
3.2	By-laws (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed January 16, 2009)
3.3	Amended and Restated Certificate of Designations of Series B Junior Participating Preferred Stock (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on November 1, 2006)
4.1	Form of Rights Agreement dated as of November 1, 2006, between Texas Industries, Inc. and Mellon Investor Services, LLC (incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K filed on October 20, 2006)
4.2	Amendment No. 1 to Rights Agreement executed on February 2, 2010 (incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K filed on February 8, 2010)
4.3	Form of the Company’s 7 1/4% Senior Note due 2013 (CUSIP 882491 AK9) (incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K dated June 29, 2005)
4.4	Form of the Company’s Notation of Guarantee (incorporated by reference to Exhibit 4.2 to Current Report on Form 8-K dated June 29, 2005)
4.5	Form of the Company’s 7 1/4% Senior Note due 2013 (CUSIP 882491 AM5) and Notation of Guarantee (incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K filed August 19, 2008)
4.6	Form of the Company’s 7 1/4% Senior Note due 2013 (CUSIP U88244 AC9) and Notation of Guarantee (incorporated by reference to Exhibit 4.2 to Current Report on Form 8-K filed August 19, 2008)
4.7	Registration Rights Agreement, dated July 6, 2005, among the Company and the Initial Purchasers (incorporated by reference to Exhibit 4.3 to Current Report on Form 8-K dated June 29, 2005)
4.8	Registration Rights Agreement, dated August 18, 2008, among the Company, the Guarantors and the Initial Purchasers (incorporated by reference to Exhibit 4.3 to Current Report on Form 8-K filed August 19, 2008)
4.9	Indenture, dated July 6, 2005, among the Company, the Guarantors and Wells Fargo, National Association, as Trustee (incorporated by reference to Exhibit 4.4 to Current Report on Form 8-K dated June 29, 2005)
4.10	First Supplemental Indenture dated August 18, 2008 among the Company, the Guarantors and the Trustee (incorporated by reference to Exhibit 4.4 to Current Report on Form 8-K filed August 19, 2008)
4.11	Second Supplemental Indenture dated August 18, 2008 among the Company, the Guarantors and the Trustee (incorporated by reference to Exhibit 4.5 to Current Report on Form 8-K filed August 19, 2008)
10.1	Purchase Agreement, dated June 29, 2005, among the Company and the Initial Purchasers (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K dated June 29, 2005)
10.2	Purchase Agreement, dated August 7, 2008, among the Company, the Guarantors and the Initial Purchasers (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed August 13, 2008)
10.3	Second Amended and Restated Credit Agreement, dated June 19, 2009, among the Company, Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer and the lenders that are parties thereto (incorporated by reference to Exhibit 10.3 to Quarterly Report on Form 10-Q filed on January 7, 2010)
10.4	First Amendment to Second Amended and Restated Credit Agreement, dated June 19, 2009, among the Company, Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, and the lenders that are parties thereto (incorporated by reference to Exhibit 10.2 to Report on Form 8-K filed on June 25, 2009)

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10.5	Amended and Restated Security Agreement, dated June 19, 2009, among the Company, the Guarantors and Bank of America, N. A., as Administrative Agent (incorporated by reference to Exhibit 10.5 to Quarterly Report on Form 10-Q filed on January 7, 2010)
10.6	Separation and Distribution Agreement, dated July 6, 2005, between the Company and Chaparral Steel Company (incorporated by reference to Exhibit 10.3 to Current Report on Form 8-K dated June 29, 2005)
10.7	Amendment No. 1 to Separation and Distribution Agreement dated as of July 27, 2005 (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K dated July 27, 2005)
10.8	Tax Sharing and Indemnification Agreement, dated July 6, 2005, between the Company and Chaparral Steel Company (incorporated by reference to Exhibit 10.4 to Current Report on Form 8-K dated June 29, 2005)
10.9	Employment Agreement of Mel G. Brekhus (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on January 22, 2007)
10.10	Texas Industries, Inc. 1993 Stock Option Plan (incorporated by reference to Exhibit 4.1 to Registration Statement on Form S-8 as filed May 19, 1994, File No. 033-53715)
10.11	Texas Industries, Inc. 2004 Omnibus Equity Compensation Plan, as amended (incorporated by reference to Exhibit 10.9 to Quarterly Report on Form 10-Q filed on January 5, 2007)
10.12	Form of Stock Option Agreement under Texas Industries, Inc. 2004 Omnibus Equity Compensation Plan (incorporated by reference to Exhibit 10.10 to Annual Report on Form 10-K filed on July 25, 2006)
10.13	Form of Non-Employee Directors Restricted Stock Agreement (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on January 16, 2009)
10.14	TXI Annual Incentive Plans-Fiscal Year 2010 (incorporated by reference to Exhibit 10.14 to Annual Report on Form 10-K filed on July 17, 2009)
10.15	TXI Three Year Incentive Plan for the Three Consecutive Fiscal Year Periods Ending May 31, 2010 (incorporated by reference to Exhibit 10.15 to Annual Report on Form 10-K filed on July 13, 2007)
10.16	TXI Three Year Incentive Plan for the Three Consecutive Fiscal Year Periods Ending May 31, 2011 (incorporated by reference to Exhibit 10.14 to Annual Report on Form 10-K filed on July 11, 2008)
10.17	TXI Three Year Incentive Plan for the Three Consecutive Fiscal Year Periods Ending May 31, 2012 (incorporated by reference to Exhibit 10.17 to Annual Report on Form 10-K filed on July 17, 2009)
10.18	Master Performance-Based Incentive Plan (incorporated by reference to Appendix A to definitive proxy statement filed on August 25, 2006)
10.19	Texas Industries, Inc. 2003 Share Appreciation Rights Plan (incorporated by reference to Exhibit 10.15 to Annual Report on Form 10-K filed on August 12, 2005)
10.20	Form of SAR Agreement for Non-Employee Directors under Texas Industries, Inc. 2003 Share Appreciation Rights Plan (incorporated by reference to Exhibit 10.16 to Annual Report on Form 10-K filed on August 12, 2005)
10.21	Form of Amendment No. 1 to SAR Agreement for Non-Employee Directors Under Texas Industries, Inc. 2003 Stock Appreciation Rights Plan (incorporated by reference to Exhibit 10.6 to Current Report on Form 8-K dated April 19, 2006)
10.22	SAR Agreement for Employee Directors Under Texas Industries, Inc. 2003 Stock Appreciation Rights Plan between Texas Industries, Inc. and Mel G. Brekhus, dated June 1, 2004 (incorporated by reference to Exhibit 10.22 to Annual Report on Form 10-K filed on July 25, 2006)
10.23	Amendment No. 1 to SAR Agreement for Employee Directors Under Texas Industries, Inc. 2003 Stock Appreciation Rights Plan, by and between Texas Industries, Inc. and Mel G. Brekhus dated April 24, 2006 (incorporated by reference to Exhibit 10.23 to Annual Report on Form 10-K filed on July 25, 2006)

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10.24	Contract, dated September 27, 2005, between Riverside Cement Company and Oro Grande Contractors (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K dated September 27, 2005, noting that portions of the exhibit were omitted pursuant to a request for confidential treatment)
10.25	Deferred Compensation Plan for Directors of Texas Industries, Inc. (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K dated January 18, 2006)
10.26	Form of 2005 Executive Financial Security Plan (Annuity Formula), as amended (incorporated by reference to Exhibit 10.26 to Quarterly Report on Form 10-Q filed on January 7, 2010)
10.27	Form of 2005 Executive Financial Security Plan (Lump Sum Formula), as amended (incorporated by reference to Exhibit 10.27 to Quarterly Report Form 10-Q filed on January 7, 2010)
10.28	Form of Change in Control Severance Agreement (incorporated by reference to Exhibit 10.3 to Current Report on Form 8-K dated April 19, 2006)
10.29	Amendment No. 2 to SAR Agreement for Employee Directors Under Texas Industries, Inc. 2003 Stock Appreciation Rights Plan, between Texas Industries, Inc. and Mel G. Brekhus dated July 11, 2007 (incorporated by reference to Exhibit 10.27 to Annual Report on Form 10-K filed on July 13, 2007)
10.30	Contract, signed September 21, 2007, between TXI Operations, LP and Amec-Zachry Contractors (incorporated by reference to Exhibit 10.28 to Quarterly Report on Form 10-Q filed on September 27, 2007, noting that portions of the exhibit have been omitted pursuant to a request for confidential treatment)
10.31	Amendment No. 1 to Employment Agreement of Mel G. Brekhus dated March 26, 2009 (incorporated by reference to Exhibit 10.33 in Quarterly Report on Form 10-Q filed on March 27, 2009)
10.32	Contract Amendment No. 1, executed August 17, 2009, between TXI Operations, LP and Amec-Zachry Contractors (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed August 21, 2009)
10.33	Second Amendment to Second Amended and Restated Credit Agreement, among the Company, Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer and the lenders that are parties thereto
12.1	Computation of Ratios of Earnings to Fixed Charges
15.1	Letter re: Unaudited Interim Financial Information
31.1	Certification of Chief Executive Officer
31.2	Certification of Chief Financial Officer
32.1	Section 1350 Certification of Chief Executive Officer
32.2	Section 1350 Certification of Chief Financial Officer

The remaining exhibits have been omitted because they are not applicable or the information required therein is included elsewhere in the financial statements or notes thereto.

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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.

	TEXAS INDUSTRIES, INC.
March 26, 2010	/s/ Kenneth R. Allen
	Kenneth R. Allen
	Vice President – Finance, Chief Financial Officer and Treasurer
	(Principal Financial Officer)
March 26, 2010	/s/ T. Lesley Vines
	T. Lesley Vines
	Vice President – Corporate Controller and Assistant Treasurer
	(Principal Accounting Officer)

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INDEX TO EXHIBITS

Exhibit Number
3.1	Articles of Incorporation (incorporated by reference to Exhibit 3.1 to Annual Report on Form 10-K dated August 28, 1996)
3.2	By-laws (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed January 16, 2009)
3.3	Amended and Restated Certificate of Designations of Series B Junior Participating Preferred Stock (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on November 1, 2006)
4.1	Form of Rights Agreement dated as of November 1, 2006, between Texas Industries, Inc. and Mellon Investor Services, LLC (incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K filed on October 20, 2006)
4.2	Amendment No. 1 to Rights Agreement executed on February 2, 2010 (incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K filed on February 8, 2010)
4.3	Form of the Company’s 7 1/4% Senior Note due 2013 (CUSIP 882491 AK9) (incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K dated June 29, 2005)
4.4	Form of the Company’s Notation of Guarantee (incorporated by reference to Exhibit 4.2 to Current Report on Form 8-K dated June 29, 2005)
4.5	Form of the Company’s 7 1/4% Senior Note due 2013 (CUSIP 882491 AM5) and Notation of Guarantee (incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K filed August 19, 2008)
4.6	Form of the Company’s 7 1/4% Senior Note due 2013 (CUSIP U88244 AC9) and Notation of Guarantee (incorporated by reference to Exhibit 4.2 to Current Report on Form 8-K filed August 19, 2008)
4.7	Registration Rights Agreement, dated July 6, 2005, among the Company and the Initial Purchasers (incorporated by reference to Exhibit 4.3 to Current Report on Form 8-K dated June 29, 2005)
4.8	Registration Rights Agreement, dated August 18, 2008, among the Company, the Guarantors and the Initial Purchasers (incorporated by reference to Exhibit 4.3 to Current Report on Form 8-K filed August 19, 2008)
4.9	Indenture, dated July 6, 2005, among the Company, the Guarantors and Wells Fargo, National Association, as Trustee (incorporated by reference to Exhibit 4.4 to Current Report on Form 8-K dated June 29, 2005)
4.10	First Supplemental Indenture dated August 18, 2008 among the Company, the Guarantors and the Trustee (incorporated by reference to Exhibit 4.4 to Current Report on Form 8-K filed August 19, 2008)
4.11	Second Supplemental Indenture dated August 18, 2008 among the Company, the Guarantors and the Trustee (incorporated by reference to Exhibit 4.5 to Current Report on Form 8-K filed August 19, 2008)
10.1	Purchase Agreement, dated June 29, 2005, among the Company and the Initial Purchasers (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K dated June 29, 2005)
10.2	Purchase Agreement, dated August 7, 2008, among the Company, the Guarantors and the Initial Purchasers (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed August 13, 2008)
10.3	Second Amended and Restated Credit Agreement, dated June 19, 2009, among the Company, Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer and the lenders that are parties thereto (incorporated by reference to Exhibit 10.3 to Quarterly Report on Form 10-Q filed on January 7, 2010)
10.4	First Amendment to Second Amended and Restated Credit Agreement, dated June 19, 2009, among the Company, Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, and the lenders that are parties thereto (incorporated by reference to Exhibit 10.2 to Report on Form 8-K filed on June 25, 2009)

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Index to Exhibits-(Continued)

Exhibit Number
10.5	Amended and Restated Security Agreement, dated June 19, 2009, among the Company, the Guarantors and Bank of America, N. A., as Administrative Agent (incorporated by reference to Exhibit 10.5 to Quarterly Report on Form 10-Q filed on January 7, 2010)
10.6	Separation and Distribution Agreement, dated July 6, 2005, between the Company and Chaparral Steel Company (incorporated by reference to Exhibit 10.3 to Current Report on Form 8-K dated June 29, 2005)
10.7	Amendment No. 1 to Separation and Distribution Agreement dated as of July 27, 2005 (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K dated July 27, 2005)
10.8	Tax Sharing and Indemnification Agreement, dated July 6, 2005, between the Company and Chaparral Steel Company (incorporated by reference to Exhibit 10.4 to Current Report on Form 8-K dated June 29, 2005)
10.9	Employment Agreement of Mel G. Brekhus (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on January 22, 2007)
10.10	Texas Industries, Inc. 1993 Stock Option Plan (incorporated by reference to Exhibit 4.1 to Registration Statement on Form S-8 as filed May 19, 1994, File No. 033-53715)
10.11	Texas Industries, Inc. 2004 Omnibus Equity Compensation Plan, as amended (incorporated by reference to Exhibit 10.9 to Quarterly Report on Form 10-Q filed on January 5, 2007)
10.12	Form of Stock Option Agreement under Texas Industries, Inc. 2004 Omnibus Equity Compensation Plan (incorporated by reference to Exhibit 10.10 to Annual Report on Form 10-K filed on July 25, 2006)
10.13	Form of Non-Employee Directors Restricted Stock Agreement (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on January 16, 2009)
10.14	TXI Annual Incentive Plans-Fiscal Year 2010 (incorporated by reference to Exhibit 10.14 to Annual Report on Form 10-K filed on July 17, 2009)
10.15	TXI Three Year Incentive Plan for the Three Consecutive Fiscal Year Periods Ending May 31, 2010 (incorporated by reference to Exhibit 10.15 to Annual Report on Form 10-K filed on July 13, 2007)
10.16	TXI Three Year Incentive Plan for the Three Consecutive Fiscal Year Periods Ending May 31, 2011 (incorporated by reference to Exhibit 10.14 to Annual Report on Form 10-K filed on July 11, 2008)
10.17	TXI Three Year Incentive Plan for the Three Consecutive Fiscal Year Periods Ending May 31, 2012 (incorporated by reference to Exhibit 10.17 to Annual Report on Form 10-K filed on July 17, 2009)
10.18	Master Performance-Based Incentive Plan (incorporated by reference to Appendix A to definitive proxy statement filed on August 25, 2006)
10.19	Texas Industries, Inc. 2003 Share Appreciation Rights Plan (incorporated by reference to Exhibit 10.15 to Annual Report on Form 10-K filed on August 12, 2005)
10.20	Form of SAR Agreement for Non-Employee Directors under Texas Industries, Inc. 2003 Share Appreciation Rights Plan (incorporated by reference to Exhibit 10.16 to Annual Report on Form 10-K filed on August 12, 2005)
10.21	Form of Amendment No. 1 to SAR Agreement for Non-Employee Directors Under Texas Industries, Inc. 2003 Stock Appreciation Rights Plan (incorporated by reference to Exhibit 10.6 to Current Report on Form 8-K dated April 19, 2006)

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Index to Exhibits-(Continued)

Exhibit Number
10.22	SAR Agreement for Employee Directors Under Texas Industries, Inc. 2003 Stock Appreciation Rights Plan between Texas Industries, Inc. and Mel G. Brekhus, dated June 1, 2004 (incorporated by reference to Exhibit 10.22 to Annual Report on Form 10-K filed on July 25, 2006)
10.23	Amendment No. 1 to SAR Agreement for Employee Directors Under Texas Industries, Inc. 2003 Stock Appreciation Rights Plan, by and between Texas Industries, Inc. and Mel G. Brekhus dated April 24, 2006 (incorporated by reference to Exhibit 10.23 to Annual Report on Form 10-K filed on July 25, 2006)
10.24	Contract, dated September 27, 2005, between Riverside Cement Company and Oro Grande Contractors (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K dated September 27, 2005, noting that portions of the exhibit were omitted pursuant to a request for confidential treatment)
10.25	Deferred Compensation Plan for Directors of Texas Industries, Inc. (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K dated January 18, 2006)
10.26	Form of 2005 Executive Financial Security Plan (Annuity Formula), as amended (incorporated by reference to Exhibit 10.26 to Quarterly Report on Form 10-Q filed on January 7, 2010)
10.27	Form of 2005 Executive Financial Security Plan (Lump Sum Formula), as amended (incorporated by reference to Exhibit 10.27 to Quarterly Report on Form 10-Q filed on January 7, 2010)
10.28	Form of Change in Control Severance Agreement (incorporated by reference to Exhibit 10.3 to Current Report on Form 8-K dated April 19, 2006)
10.29	Amendment No. 2 to SAR Agreement for Employee Directors Under Texas Industries, Inc. 2003 Stock Appreciation Rights Plan, between Texas Industries, Inc. and Mel G. Brekhus dated July 11, 2007 (incorporated by reference to Exhibit 10.27 to Annual Report on Form 10-K filed on July 13, 2007)
10.30	Contract, signed September 21, 2007, between TXI Operations, LP and Amec-Zachry Contractors (incorporated by reference to Exhibit 10.28 to Quarterly Report on Form 10-Q filed on September 27, 2007, noting that portions of the exhibit have been omitted pursuant to a request for confidential treatment)
10.31	Amendment No. 1 to Employment Agreement of Mel G. Brekhus dated March 26, 2009 (incorporated by reference to Exhibit 10.33 in Quarterly Report on Form 10-Q filed on March 27, 2009)
10.32	Contract Amendment No. 1, executed August 17, 2009, between TXI Operations, LP and Amec-Zachry Contractors (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed August 21, 2009)
10.33	Second Amendment to Second Amended and Restated Credit Agreement, among the Company, Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer and the lenders that are parties thereto
12.1	Computation of Ratios of Earnings to Fixed Charges
15.1	Letter re: Unaudited Interim Financial Information
31.1	Certification of Chief Executive Officer
31.2	Certification of Chief Financial Officer
32.1	Section 1350 Certification of Chief Executive Officer
32.2	Section 1350 Certification of Chief Financial Officer

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