Texas Industries 10-Q 2011 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, 2011

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	(IRS Employer Identification No.)
Incorporation or Organization)

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  [X]    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 27,880,627 shares of the Registrant’s Common Stock, $1.00 par value, outstanding as of March 21, 2011.

INDEX

TEXAS INDUSTRIES, INC. AND SUBSIDIARIES

PART I. FINANCIAL INFORMATION		Page
Item 1.	Financial Statements
	Consolidated Balance Sheets – February 28, 2011 and May 31, 2010	3
	Consolidated Statements of Operations – three and nine months ended February 28, 2011 and February 28, 2010	4
	Consolidated Statements of Cash Flows – nine months ended February 28, 2011 and February 28, 2010	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 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 5.	Other Information	39
Item 6.	Exhibits	40
SIGNATURES		43

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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	2011			2010
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	123,362		$	74,946
Receivables – net		69,999			112,184
Inventories		143,341			142,419
Deferred income taxes and prepaid expenses		22,774			23,426
TOTAL CURRENT ASSETS		359,476			352,975
PROPERTY, PLANT AND EQUIPMENT
Land and land improvements		158,941			158,367
Buildings		58,951			58,351
Machinery and equipment		1,226,451			1,220,021
Construction in progress		343,680			322,039
		1,788,023			1,758,778
Less depreciation and depletion		646,841			604,269
		1,141,182			1,154,509
OTHER ASSETS
Goodwill		1,715			1,715
Real estate and investments		7,007			6,774
Deferred charges and other		20,314			15,774
		29,036			24,263
	$	1,529,694		$	1,531,747
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	43,265		$	56,214
Accrued interest, compensation and other		40,087			51,455
Current portion of long-term debt		72			234
TOTAL CURRENT LIABILITIES		83,424			107,903
LONG-TERM DEBT		652,422			538,620
DEFERRED INCOME TAXES AND OTHER CREDITS		89,177			123,976
SHAREHOLDERS’ EQUITY
Common stock, $1 par value; authorized 100,000 shares; issued and outstanding 27,875 and 27,796 shares, respectively		27,875			27,796
Additional paid-in capital		480,109			475,584
Retained earnings		209,929			272,018
Accumulated other comprehensive loss		(13,242	)		(14,150	)
		704,671			761,248
	$	1,529,694		$	1,531,747

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			2011			2010				2011			2010
NET SALES	$		125,818		$	117,829		$		446,051		$	444,721
Cost of products sold			135,179			131,126				427,237			407,041
GROSS PROFIT (LOSS)			(9,361	)		(13,297	)			18,814			37,680
Selling, general and administrative			17,319			17,568				52,003			53,708
Interest			9,670			13,642				37,967			40,250
Loss on debt retirements			--			--				29,619			--
Other income			(1,115	)		(1,044	)			(7,934	)		(9,424	)
			25,874			30,166				111,655			84,534
LOSS BEFORE INCOME TAXES			(35,235	)		(43,463	)			(92,841	)		(46,854	)
Income tax benefit			(14,301	)		(16,358	)			(37,014	)		(17,762	)
NET LOSS	$		(20,934	)	$	(27,105	)	$		(55,827	)	$	(29,092	)
Net loss per share
Basic	$		(.75	)	$	(.98	)	$		(2.01	)	$	(1.05	)
Diluted	$		(.75	)	$	(.98	)	$		(2.01	)	$	(1.05	)
Average shares outstanding
Basic			27,839			27,749				27,811			27,735
Diluted			27,839			27,749				27,811			27,735
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			2011				2010
OPERATING ACTIVITIES
Net loss	$			(55,827	)	$		(29,092	)
Adjustments to reconcile net loss to cash provided by operating activities
Depreciation, depletion and amortization				48,109				49,263
Gains on asset disposals				(1,456	)			(1,324	)
Deferred income taxes				(37,665	)			(10,988	)
Stock-based compensation expense				4,271				3,732
Excess tax benefits from stock-based compensation				--				(234	)
Loss on debt retirements				29,619				--
Other – net				(2,258	)			3,099
Changes in operating assets and liabilities
Receivables – net				29,814				25,864
Inventories				(922	)			14,102
Prepaid expenses				2,501				1,753
Accounts payable and accrued liabilities				(7,980	)			(9,315	)
Net cash provided by operating activities				8,206				46,860
INVESTING ACTIVITIES
Capital expenditures – expansions				(23,507	)			(5,304	)
Capital expenditures – other				(15,437	)			(6,424	)
Proceeds from asset disposals				3,243				21,568
Investments in life insurance contracts				3,894				6,931
Other – net				1,230				14
Net cash provided (used) by investing activities				(30,577	)			16,785
FINANCING ACTIVITIES
Long-term borrowings				650,000				--
Debt retirements				(561,610	)			(276	)
Debt issuance costs				(12,480	)			(2,039	)
Stock option exercises				1,139				499
Excess tax benefits from stock-based compensation				--				234
Common dividends paid				(6,262	)			(6,244	)
Net cash provided (used) by financing activities				70,787				(7,826	)
Increase in cash and cash equivalents				48,416				55,819
Cash and cash equivalents at beginning of period				74,946				19,796
Cash and cash equivalents at end of period		$		123,362		$		75,615

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, 2011, are not necessarily indicative of the results that may be expected for the year ended May 31, 2011. 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, 2010.

Principles of Consolidation. The consolidated financial statements include the accounts of Texas Industries, Inc. and all subsidiaries. Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation.

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, 2011 and May 31, 2010 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, 2011, the fair value of our long-term debt, including the current portion, was approximately $714.2 million compared to the carrying amount of $652.5 million. As of May 31, 2010, the fair value of our long-term debt, including the current portion, was approximately $534.8 million compared to the carrying amount of $538.9 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. We expect the Texas market to recover to pre-recession levels and to complete the expansion project. 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 and Goodwill Impairment. 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.

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, 2011 and May 31, 2010. Based on an impairment test performed as of March 31, 2010, the fair value of the reporting unit exceeds its carrying value, and therefore, no potential impairment was identified.

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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 both February 28, 2011 and May 31, 2010.

Investments include life insurance contracts purchased in connection with certain of our benefit plans. The contracts, recorded at their net cash surrender value, totaled $1.0 million (net of distributions of $87.3 million plus accrued interest and fees) at February 28, 2011 and $0.8 million (net of distributions of $82.8 million plus accrued interest and fees) at May 31, 2010. 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. Proceeds received from the policies were $7.4 million and $10.6 million in the nine-month periods ended February 28, 2011 and February 28, 2010, respectively.

Deferred Charges and Other.Deferred charges are composed primarily of debt issuance costs that totaled $13.9 million at February 28, 2011 and $8.8 million at May 31, 2010. The costs are amortized over the term of the related debt.

Other Credits.Other credits totaled $84.3 million at February 28, 2011 and $83.9 million at May 31, 2010 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		2011				2010
Balance at beginning of period	$		4,474		$		4,415
Additions			9				--
Accretion expense			140				236
Settlements			(370	)			(189	)
Balance at end of period	$		4,253		$		4,462

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 $13.2 million (net of tax of $7.6 million) at February 28, 2011 and $14.2 million (net of tax of $8.2 million) at May 31, 2010.

Comprehensive loss for the three-month and nine-month periods ending February 28, 2011 and February 28, 2010 consisted of net loss and amounts in accumulated other comprehensive loss recognized in the periods as components of net periodic postretirement benefit cost, net of tax. Comprehensive loss was $20.6 million and $26.8 million in the three-month periods ended February 28, 2011 and February 28, 2010, respectively. Comprehensive loss was $54.9 million and $28.2 million in the nine-month periods ended February 28, 2011 and February 28, 2010, 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 of $1.5 million and $1.3 million in the nine-month periods ended February 28, 2011 and February 28, 2010, respectively. In addition, we have sold emissions credits associated with our Crestmore cement plant in Riverside, California resulting in gains of $1.7 million and $3.4 million in the nine-month periods ended February 28, 2011 and February 28, 2010, 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 and royalties on oil and gas produced resulted in income of $0.5 million and $0.3 million in the three-month periods ended February 28, 2011 and February 28, 2010, respectively, and income of $2.6 million and $0.9 million in the nine-month periods ended February 28, 2011 and February 28, 2010, respectively. We cannot predict what the level of future royalties, if any, will be.

Stock-based Compensation.We have provided stock-based compensation to employees and non-employee directors in the form of non-qualified and incentive stock options, restricted stock, stock appreciation rights, deferred compensation agreements and stock awards. 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	2011			2010			2011			2010
Basic earnings
Net loss	$	(20,934	)	$	(27,105	)	$	(55,827	)	$	(29,092	)
Unvested restricted share participation		9			11			25			11
Basic loss	$	(20,925	)	$	(27,094	)	$	(55,802	)	$	(29,081	)
Diluted earnings
Net loss	$	(20,934	)	$	(27,105	)	$	(55,827	)	$	(29,092	)
Unvested restricted share participation		9			11			25			11
Diluted loss	$	(20,925	)	$	(27,094	)	$	(55,802	)	$	(29,081	)
Shares
Weighted-average shares outstanding		27,849			27,758			27,821			27,742
Contingently issuable shares		2			2			2			7
Unvested restricted shares		(12	)		(11	)		(12	)		(14	)
Basic weighted-average shares		27,839			27,749			27,811			27,735
Stock option, restricted share and award dilution		--			--			--			--
Diluted weighted-average shares*		27,839			27,749			27,811			27,735
Net loss per share
Basic	$	(.75	)	$	(.98	)	$	(2.01	)	$	(1.05	)
Diluted	$	(.75	)	$	(.98	)	$	(2.01	)	$	(1.05	)
* Shares excluded due to antidilutive effect Stock options, restricted shares and awards		865			1,106			1,108			1,022

Recently Issued Accounting Guidance.There is no recently issued accounting guidance that we expect will materially impact our financial statements during the current fiscal year.

2. Working Capital

Working capital totaled $276.1 million at February 28, 2011 compared to $245.1 million at May 31, 2010. Selected components of working capital are summarized below.

Receivables consist of:

		February 28,			May 31,
In thousands		2011			2010
Trade notes and accounts receivable	$		69,500	$		95,120
Income tax receivable			--			13,253
Other			499			3,811
	$		69,999	$		112,184

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Trade notes and accounts receivable are presented net of allowances for doubtful receivables of $4.3 million at February 28, 2011 and $3.5 million at May 31, 2010. Provisions for bad debts charged to expense were $2.4 million and $1.9 million in the nine-month periods ended February 28, 2011 and February 28, 2010, respectively. Uncollectible accounts written off totaled $1.6 million and $0.3 million in the nine-month periods ended February 28, 2011 and February 28, 2010, respectively.

Inventories consist of:

		February 28,			May 31,
In thousands		2011			2010
Finished products	$		9,518	$		9,632
Work in process			48,557			50,798
Raw materials			13,247			13,985
Total inventories at LIFO cost			71,322			74,415
Finished products			23,609			19,955
Raw materials			370			891
Parts and supplies			48,040			47,158
Total inventories at average cost			72,019			68,004
Total inventories	$		143,341	$		142,419

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 $42.3 million at February 28, 2011 and $43.1 million at May 31, 2010.

Accrued interest, compensation and other consist of:

		February 28,			May 31,
In thousands		2011			2010
Interest	$		2,785	$		15,176
Compensation and employee benefits			16,643			13,574
Casualty insurance claims			12,890			12,595
Income taxes			3,011			2,526
Property taxes and other			4,758			7,584
	$		40,087	$		51,455

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3. Long-Term Debt

Long-term debt consists of:

		February 28,				May 31,
In thousands		2011				2010
Senior secured revolving credit facility expiring in 2012	$		--		$		--
9.25% Senior notes due 2020 issued August 10, 2010 at par value			650,000				--
7.25% Senior notes due 2013
Notes issued July 6, 2005 at par value			--				250,000
Additional notes issued August 18, 2008, net of unamortized discount of $13.9 million at May 31, 2010 (effective interest rate 8.98%)			--				286,143
			650,000				536,143
Capital lease obligations			2,226				2,443
Other contract obligations			268				268
			652,494				538,854
Less current portion			(72	)			(234	)
	$		652,422		$		538,620

Senior Secured Revolving Credit Facility. The credit agreement provides 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 rate for one-month LIBOR loans 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 the agreement was $125.7 million as of February 28, 2011. 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, 2011, our fixed charge coverage ratio was .04 to 1.0. Given this ratio, we may use only $85.7 million of the borrowing base as of such date. No borrowings were outstanding at February 28, 2011; however, $31.1 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, 2011 was $54.6 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.

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 (which shall not occur more than four times in any calendar year) or $10 million in the aggregate during any calendar year as long as the credit facility is not in default and borrowing availability is more than the greater of $60 million or 30% of the aggregate commitments of all lenders. 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 our loan covenants as of February 28, 2011.

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9.25% Senior Notes.On August 10, 2010, we sold $650 million aggregate principal amount of our 9.25% senior notes due 2020 at an offering price of 100%. The notes were issued under an indenture dated as of August 10, 2010. The net proceeds were used to purchase or redeem all of our outstanding 7.25% senior notes due 2013, with additional proceeds available for general corporate purposes.

At February 28, 2011, we had $650 million aggregate principal amount of 9.25% senior notes outstanding. Under the indenture, at any time on or prior to August 15, 2015, we may redeem the notes at a redemption price equal to the sum of the principal amount thereof, plus accrued interest and a make-whole premium. On and after August 15, 2015, we may redeem all or a part of the notes at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest if redeemed during the twelve-month period beginning on August 15 of the years indicated below:

Year	Percentage
2015		104.625%
2016		103.083%
2017		101.542%
2018 and thereafter		100.000%

In addition, prior to August 15, 2013, we may redeem up to 35% of the aggregate principal amount of the notes at a redemption price equal to 109.250% of the principal amount thereof, plus accrued interest with the net cash proceeds from certain equity offerings. 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 9.25% senior notes. The indenture governing the notes contains affirmative and negative covenants that, among other things, limit our and our subsidiaries’ ability to pay dividends on or redeem or repurchase stock, make certain investments, incur additional debt or sell preferred stock, create liens, restrict dividend payments or other payments from subsidiaries to the Company, engage in consolidations and mergers or sell or transfer assets, engage in sale and leaseback transactions, engage in transactions with affiliates, and sell stock in our subsidiaries. We are not required to maintain any affirmative financial ratios or covenants. We were in compliance with all of our covenants as of February 28, 2011.

Refinancing. On July 27, 2010, we commenced a cash tender offer for all of the outstanding $550 million aggregate principal amount of our 7.25% senior notes due 2013 and a solicitation of consents to amend the indenture governing the 7.25% notes. Pursuant to the tender offer and consent solicitation, we purchased $536.6 million aggregate principal amount of the 7.25% notes, and paid an aggregate of $547.7 million in purchase price and consent fees. On September 9, 2010, we redeemed the remaining $13.4 million aggregate principal amount of the 7.25% notes at a price of 101.813% of the principal amount thereof, plus accrued and unpaid interest on the 7.25% notes to the redemption date. As of February 28, 2011, we recognized a loss on debt retirement of $29.6 million representing $11.4 million in consent fees, redemption price premium and transaction costs and a write-off of $18.2 million of unamortized debt discount and original issuance costs associated with the 7.25% notes.

Other.There are no required principal payments on long-term debt, excluding the capital lease obligations, during the five years succeeding February 28, 2011. The total amount of interest paid was $59.9 million and $46.4 million during the nine-month periods ended February 28, 2011 and February 28, 2010, respectively. The total amount of interest incurred was $17.3 million and $13.6 million in the three-month periods ended February 28, 2011 and February 28, 2010, respectively, of which $7.6 million was capitalized in the three-month period ended February 28, 2011. The total amount of interest incurred was $49.0 million and $40.3 million in the nine-month periods ended February 28, 2011 and February 28, 2010, respectively, of which $11.0 million was capitalized in the nine-month period ended February 28, 2011.

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 resumed construction in October 2010. The total capital cost of the project is expected to be between $365 million and $375 million, excluding capitalized interest, and commissioning is expected to begin within 24 months of the restart of construction. As of February 28, 2011, we have incurred approximately $303.9 million, excluding capitalized interest of approximately $27.3 million related to the project, of which $301.9 million has been paid.

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5. Shareholders’ Equity

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 $5 Cumulative Preferred Stock or Series B Junior Participating Preferred Stock were outstanding as of February 28, 2011. 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. The Rights Agreement, as amended, expired on December 31, 2010.

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, 2011 and February 28, 2010.

		Nine months ended February 28,
			2011			2010
Weighted average grant date fair value	$		18.45		$	16.83
Weighted average assumptions used:
Expected volatility			.463			.469
Expected lives			6.6			6.5
Risk-free interest rates			2.66	%		3.20	%
Expected dividend yields			.74	%		.83	%

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.

A summary of option transactions for the nine-month period ended February 28, 2011, follows:

	Shares Under Option			Weighted-Average Option Price
Outstanding at May 31, 2010		1,764,516		$	38.54
Granted		351,450			40.19
Exercised		(91,195	)		21.95
Canceled		(33,478	)		38.98
Outstanding at February 28, 2011		1,991,293		$	39.59
Exercisable at February 28, 2011		1,064,973		$	41.33

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The following table summarizes information about stock options outstanding as of February 28, 2011.

	Range of Exercise Prices
	$16.04 - $27.39		$34.00 - $48.60		$50.63 - $70.18
Options outstanding
Shares outstanding		589,146		826,397		575,750
Weighted-average remaining life in years		5.28		8.16		5.46
Weighted-average exercise price	$	22.11		$39.69	$	57.32
Options exercisable
Shares exercisable		372,606		232,217		460,150
Weighted-average remaining life in years		3.92		5.08		5.32
Weighted-average exercise price	$	20.66		$42.56	$	57.44

Outstanding options expire on various dates to January 12, 2021. As of February 28, 2011, we have reserved 612,701 shares for future awards under the 2004 Plan.

As of February 28, 2011, the aggregate intrinsic value (the difference in the closing market price of our common stock of $40.78 and the exercise price to be paid by the optionee) of stock options outstanding was $12.7 million. The aggregate intrinsic value of exercisable stock options at that date was $7.9 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 $1.2 million and $0.4 million for the three-month periods ended February 28, 2011 and February 28, 2010, respectively, and $1.6 million and $0.8 million for the nine-month periods ended February 28, 2011 and February 28, 2010, 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, 2011, outstanding stock appreciation rights totaled 133,315 shares, deferred compensation agreements to be settled in cash totaled 101,397 shares, deferred compensation agreements to be settled in common stock totaled 2,294 shares, unvested restricted stock payments totaled 16,667 shares and stock awards totaled 2,323 shares. Other credits include $6.8 million at February 28, 2011 and $6.0 million at May 31, 2010 representing accrued stock-based compensation which is accounted for as liabilities and expected to be settled in cash. Common stock totaling 2.6 million shares at February 28, 2011 and 2.7 million shares at May 31, 2010 have been reserved for the settlement of stock-based compensation.

Total stock-based compensation included in selling, general and administrative expense was $2.0 million and $1.6 million in the three-month periods ended February 28, 2011 and February 28, 2010, respectively, and $4.3 million and $3.7 million in the nine-month periods ended February 28, 2011 and February 28, 2010, respectively. The impact of changes in our company’s stock price on stock-based awards accounted for as liabilities increased stock-based compensation $0.7 million and $0.4 million in the three-month periods ended February 28, 2011 and February 28, 2010, respectively, and $0.8 million and $0.4 million in the nine-month periods ended February 28, 2011 and February 28, 2010, respectively.

Total tax benefit recognized in our statements of operations for stock-based compensation was $0.5 million and $0.3 million in the three-month periods ended February 28, 2011 and February 28, 2010, respectively, and $0.9 million and $0.7 million in the nine-month periods ended February 28, 2011 and February 28, 2010, respectively. No cash tax benefit was realized for stock-based compensation in the three-month and nine-month periods ended February 28, 2011. Total cash tax benefit realized for stock-based compensation was $0.1 million and $0.7 million in the three-month and nine-month periods ended February 28, 2010, respectively.

As of February 28, 2011, $13.5 million of total unrecognized compensation cost related to stock options, restricted stock payments and stock awards is expected to be recognized in future periods. We currently expect to recognize in the years succeeding February 28, 2011 approximately $4.9 million of this stock-based compensation expense in 2012, $3.5 million in 2013, $2.6 million in 2014, $1.7 million in 2015 and $0.8 million in 2016.

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7. Retirement Plans

Riverside Defined Benefit Plans.Approximately 600 employees and retirees of our 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, 2011 and February 28, 2010, was as follows:

		Pension Benefit								Health Benefit
In thousands		2011				2010				2011				2010
Three months ended February 28
Service cost	$		125		$		114		$		28		$		27
Interest cost			738				791				107				117
Expected return on plan assets			(685	)			(585	)			--				--
Amortization of prior service cost			--				--				(194	)			(194	)
Amortization of net actuarial loss			517				500				153				150
	$		695		$		820		$		94		$		100
Nine months ended February 28
Service cost	$		376		$		343		$		85		$		80
Interest cost			2,213				2,374				319				350
Expected return on plan assets			(2,055	)			(1,756	)			--				--
Amortization of prior service cost			--				--				(581	)			(581	)
Amortization of net actuarial loss			1,551				1,500				460				452
	$		2,085		$		2,461		$		283		$		301

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. Actuarial gains or losses are recognized when incurred. The amount of financial security plan benefit expense charged to costs and expenses for the three-month and nine-month periods ended February 28, 2011 and February 28, 2010, was as follows:

		FSP Benefit
In thousands		2011				2010
Three months ended February 28
Service cost	$		473		$		469
Interest cost			523				561
Recognized actuarial loss adjustment			131				--
Participant contributions			(94	)			(95	)
	$		1,033		$		935
Nine months ended February 28
Service cost	$		1,417		$		1,406
Interest cost			1,573				1,684
Recognized actuarial loss adjustment			393				--
Participant contributions			(294	)			(299	)
	$		3,089		$		2,791

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8. Income Taxes

Income taxes for the interim periods ended February 28, 2011 and February 28, 2010 have been included in the accompanying financial statements on the basis of an estimated annual rate. The estimated annualized rate does not include the tax impact of the loss on debt retirements which has been recognized as a discrete item in the nine-month period ended February 28, 2011. The estimated annualized rate excluding this charge is 40.2% for fiscal year 2011 compared to 38.3% for fiscal year 2010. 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. We made income tax payments of less than $0.1 million and $0.2 million in the nine-month periods ended February 28, 2011 and February 28, 2010, respectively. We received income tax refunds of $13.1 million and $15.8 million in the nine-month periods ended February 28, 2011 and February 28, 2010, respectively.

Management reviews our deferred tax position and in particular our deferred tax assets whenever circumstances indicate that the assets may not be realized in the future and would record a valuation allowance unless such deferred tax assets were deemed more likely than not to be recoverable. The ultimate realization of these deferred tax assets is dependent upon various factors including the generation of taxable income during future periods. The Company’s deferred tax assets exceed deferred tax liabilities as of February 28, 2011. However, we have concluded based on all available evidence that a valuation allowance is not required. Should the Company continue to experience losses a valuation allowance may become necessary.

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 and state tax authorities for years prior to 2007.

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 operations at the Crestmore cement plant in Riverside, California caused the level of hexavalent chromium, or chrome 6, in the air 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 has 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.”

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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.

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, additional lawsuits have been filed in the same court against Texas Industries, Inc. or one or more of our subsidiaries containing allegations of personal injury and wrongful death by over 2,800 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 court has dismissed Texas Industries, Inc. from the suits, but most of our subsidiaries operating in California remain as defendants.

Since January 2009, additional lawsuits have been filed against Texas Industries, Inc. 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 300 individual plaintiffs. The court has also dismissed Texas Industries, Inc. from these suits. 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.

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. At the date of this report, none of the plaintiffs in these cases has alleged in their pleadings any specific amount or range of damages. Some of the suits include additional defendants, such as the owner of another cement plant located approximately four miles from the Crestmore plant or former owners of the Crestmore and Oro Grande plants.

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 that arose in the ordinary course of business. In our judgment the ultimate liability, if any, from such legal proceedings will not have a material effect 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.

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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		2011				2010				2011				2010
Net sales
Cement
Sales to external customers	$		51,235		$		48,742		$		171,608		$		178,373
Intersegment sales			8,927				8,876				33,514				32,624
Aggregates
Sales to external customers			29,760				25,057				107,593				99,777
Intersegment sales			5,144				4,202				18,363				15,870
Consumer products
Sales to external customers			44,823				44,030				166,850				166,571
Intersegment sales			526				497				1,797				1,947
Eliminations			(14,597	)			(13,575	)			(53,674	)			(50,441	)
Total net sales	$		125,818		$		117,829		$		446,051		$		444,721
Segment operating profit
Cement	$		(12,438	)	$		(16,302	)	$		(6,526	)	$		6,239
Aggregates			(82	)			(1,151	)			8,375				9,717
Consumer products			(4,635	)			(1,982	)			(6,267	)			3,050
Total segment operating profit (loss)			(17,155	)			(19,435	)			(4,418	)			19,006
Corporate			(8,410	)			(10,386	)			(20,837	)			(25,610	)
Interest			(9,670	)			(13,642	)			(37,967	)			(40,250	)
Loss on debt retirements			--				--				(29,619	)			--
Loss before income taxes	$		(35,235	)	$		(43,463	)	$		(92,841	)	$		(46,854	)
Depreciation, depletion and amortization
Cement	$		9,124		$		9,250		$		27,454		$		27,877
Aggregates			4,793				5,057				14,521				15,118
Consumer products			1,919				1,695				5,284				5,398
Corporate			282				290				850				870
Total depreciation, depletion and amortization	$		16,118		$		16,292		$		48,109		$		49,263
Capital expenditures
Cement	$		13,767		$		2,111		$		26,346		$		6,902
Aggregates			498				1,896				5,402				4,304
Consumer products			1,038				279				6,505				447
Corporate			242				--				691				75
Total capital expenditures	$		15,545		$		4,286		$		38,944		$		11,728
Net sales by product
Cement	$		45,092		$		43,447		$		149,839		$		159,919
Stone, sand and gravel			14,119				11,568				52,173				49,104
Ready-mix concrete			34,340				33,677				129,771				129,398
Other products			18,920				18,522				66,042				67,080
Delivery fees			13,347				10,615				48,226				39,220
Total net sales	$		125,818		$		117,829		$		446,051		$		444,721

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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Cement segment operating profit includes $1.7 million and $3.4 million in the nine-month periods ended February 28, 2011 and February 28, 2010, respectively, from sales of emission credits associated with our Crestmore cement plant in Riverside, California.

Cement capital expenditures, including capitalized interest, incurred in connection with the expansion of our Hunter, Texas cement plant was $23.5 million and $5.3 million in the nine-month periods ended February 28, 2011 and February 28, 2010, respectively. 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		2011			2010
Identifiable assets
Cement	$		1,073,417	$		1,093,301
Aggregates			211,790			229,084
Consumer products			79,129			85,641
Corporate			165,358			123,721
Total assets	$		1,529,694	$		1,531,747

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

11. Condensed Consolidating Financial Information

On August 10, 2010, Texas Industries, Inc. (the parent company) issued $650 million aggregate principal amount of its 9.25% senior notes due 2020. 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, 2011
Cash and cash equivalents	$		123,035		$		327	$		--		$		123,362
Receivables - net			--				69,999			--				69,999
Inventories			--				143,341			--				143,341
Deferred income taxes and prepaid expenses			202				22,572			--				22,774
Total current assets			123,237				236,239			--				359,476
Property, plant and equipment – net			--				1,141,182			--				1,141,182
Goodwill			--				1,715			--				1,715
Real estate and investments			1,000				6,007			--				7,007
Deferred charges and other			13,920				6,394			--				20,314
Investment in subsidiaries			940,825				--			(940,825	)			--
Long-term intercompany receivables			266,180				18,749			(284,929	)			--
Total assets	$		1,345,162		$		1,410,286	$		(1,225,754	)	$		1,529,694
Accounts payable	$		34		$		43,231	$		--		$		43,265
Accrued interest, compensation and other			8,947				31,140			--				40,087
Current portion of long-term debt			--				72			--				72
Total current liabilities			8,981				74,443			--				83,424
Long-term debt			650,268				2,154			--				652,422
Long-term intercompany payables			18,749				266,180			(284,929	)			--
Deferred income taxes and other credits			(37,507	)			126,684			--				89,177
Shareholders’ equity			704,671				940,825			(940,825	)			704,671
Total liabilities and shareholders’ equity	$		1,345,162		$		1,410,286	$		(1,225,754	)	$		1,529,694
Condensed consolidating balance sheet at May 31, 2010
Cash and cash equivalents	$		72,492		$		2,454	$		--		$		74,946
Receivables – net			13,253				98,931			--				112,184
Inventories			--				142,419			--				142,419
Deferred income taxes and prepaid expenses			152				23,274			--				23,426
Total current assets			85,897				267,078			--				352,975
Property, plant and equipment – net			--				1,154,509			--				1,154,509
Goodwill			--				1,715			--				1,715
Real estate and investments			767				6,007			--				6,774
Deferred charges and other			8,805				6,969			--				15,774
Investment in subsidiaries			945,210				--			(945,210	)			--
Long-term intercompany receivables			288,174				18,755			(306,929	)			--
Total assets	$		1,328,853		$		1,455,033	$		(1,252,139	)	$		1,531,747
Accounts payable	$		84		$		56,130	$		--		$		56,214
Accrued interest, compensation and other			18,725				32,730			--				51,455
Current portion of long-term debt			--				234			--				234
Total current liabilities			18,809				89,094			--				107,903
Long-term debt			536,411				2,209			--				538,620
Long-term intercompany payables			18,755				288,174			(306,929	)			--
Deferred income taxes and other credits			(6,370	)			130,346			--				123,976
Shareholders’ equity			761,248				945,210			(945,210	)			761,248
Total liabilities and shareholders’ equity	$		1,328,853		$		1,455,033	$		(1,252,139	)	$		1,531,747

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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, 2011
Net sales	$		--		$		125,818		$		--		$		125,818
Cost of products sold			--				135,179				--				135,179
Gross profit (loss)			--				(9,361	)			--				(9,361	)
Selling, general and administrative			1,987				15,332				--				17,319
Interest			17,224				--				(7,554	)			9,670
Loss on debt retirements			--				--				--				--
Other income			(44	)			(1,071	)			--				(1,115	)
Intercompany other income			(863	)			(6,691	)			7,554				--
			18,304				7,570				--				25,874
Loss before the following items			(18,304	)			(16,931	)			--				(35,235	)
Income tax benefit			(7,001	)			(7,300	)			--				(14,301	)
			(11,303	)			(9,631	)			--				(20,934	)
Equity in earnings (loss) of subsidiaries			(9,631	)			--				9,631				--
Net loss	$		(20,934	)	$		(9,631	)	$		9,631		$		(20,934	)
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
Loss before the following items			(14,453	)			(29,010	)			--				(43,463	)
Income tax benefit			(5,192	)			(11,166	)			--				(16,358	)
			(9,261	)			(17,844	)			--				(27,105	)
Equity in earnings (loss) of subsidiaries			(17,844	)			--				17,844				--
Net loss	$		(27,105	)	$		(17,844	)	$		17,844		$		(27,105	)

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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, 2011
Net sales	$		--		$		446,051		$		--		$		446,051
Cost of products sold			--				427,237				--				427,237
Gross profit (loss)			--				18,814				--				18,814
Selling, general and administrative			4,754				47,249				--				52,003
Interest			48,858				--				(10,891	)			37,967
Loss on debt retirements			29,619				--				--				29,619
Other income			(170	)			(7,764	)			--				(7,934	)
Intercompany other income			(2,618	)			(8,273	)			10,891				--
			80,443				31,212				--				111,655
Loss before the following items			(80,443	)			(12,398	)			--				(92,841	)
Income tax benefit			(29,910	)			(7,104	)			--				(37,014	)
			(50,533	)			(5,294	)			--				(55,827	)
Equity in earnings (loss) of subsidiaries			(5,294	)			--				5,294				--
Net loss	$		(55,827	)	$		(5,294	)	$		5,294		$		(55,827	)
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
Loss before the following items			(42,272	)			(4,582	)		��	--				(46,854	)
Income tax benefit			(16,116	)			(1,646	)			--				(17,762	)
			(26,156	)			(2,936	)			--				(29,092	)
Equity in earnings (loss) of subsidiaries			(2,936	)			--				2,936				--
Net loss	$		(29,092	)	$		(2,936	)	$		2,936		$		(29,092	)

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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, 2011
Net cash provided by operating activities	$		(46,342	)	$		54,548		$		--	$		8,206
Investing activities
Capital expenditures – expansions			--				(23,507	)			--			(23,507	)
Capital expenditures – other			--				(15,437	)			--			(15,437	)
Proceeds from asset disposals			--				3,243				--			3,243
Investments in life insurance contracts			3,894				--				--			3,894
Other – net			--				1,230				--			1,230
Net cash provided (used) by investing activities			3,894				(34,471	)			--			(30,577	)
Financing activities
Long-term borrowings			650,000				--				--			650,000
Debt retirements			(561,394	)			(216	)			--			(561,610	)
Debt issuance costs			(12,480	)			--				--			(12,480	)
Stock option exercises			1,139				--				--			1,139
Excess tax benefits from stock-based compensation			--				--				--			--
Common dividends paid			(6,262	)			--				--			(6,262	)
Net intercompany financing activities			21,988				(21,988	)			--			--
Net cash provided (used) by financing activities			92,991				(22,204	)			--			70,787
Increase in cash and cash equivalents			50,543				(2,127	)			--			48,416
Cash and cash equivalents at beginning of period			72,492				2,454				--			74,946
Cash and cash equivalents at end of period	$		123,035		$		327		$		--	$		123,362
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	)
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 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

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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, 2011, and the related consolidated statements of operations for the three- and nine-month periods ended February 28, 2011 and 2010 and cash flows for the nine-month periods ended February 28, 2011 and 2010. 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, 2010, 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 21, 2010, 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, 2010, 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 25, 2011

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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.

During the three-month and nine-month periods ended February 28, 2011, construction activity has remained at low levels in both our California and Texas market areas. We have continued to focus on cost reduction, management of our cash position and management of production levels, which we believe has had a significant positive impact on our operating results.

Consolidated sales for the three-month period ended February 28, 2011 were $125.8 million, an increase of $8.0 million from the prior year period primarily due to higher shipments for our major products offset in part by lower sales prices. Consolidated cost of products sold for the three-month period ended February 28, 2011 was $135.2 million, an increase of $4.1 million from the prior year period primarily due to higher shipments. Consolidated gross loss for the three-month periods ended February 28, 2011 and February 28, 2010 was $9.4 million and $13.3 million, respectively.

Consolidated sales for the nine-month period ended February 28, 2011 were $446.1 million, an increase of $1.3 million from the prior year period primarily due to higher shipments for our major products offset in part by lower sales prices. Consolidated cost of products sold for the nine-month period ended February 28, 2011 was $427.3 million, an increase of $20.2 million from the prior year period primarily due to higher shipments. Consolidated gross profit for the nine-month periods ended February 28, 2011 and February 28, 2010 was $18.8 million and $37.7 million, respectively.

Consolidated selling, general and administrative expense for the three-month period ended February 28, 2011 was $17.3 million, a decrease of $0.3 million from the prior year period. Provisions for bad debts increased $0.2 million and stock-based compensation increased $0.4 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 $0.7 million and $0.4 million for the three-month periods ended February 28, 2011 and February 28, 2010, respectively. We hold life insurance policies in connection with certain of our benefit plans. Proceeds received from the policies in the three-month period ended February 28, 2011 decreased expense $0.2 million from the prior year period. Our focus on reducing controllable costs lowered other expenses $0.7 million in the three-month period ended February 28, 2011 from the prior year period.

Consolidated selling, general and administrative expense for the nine-month period ended February 28, 2011 was $52.0 million, a decrease of $1.7 million from the prior year period. Provisions for bad debts increased $0.6 million and stock-based compensation increased $0.5 million from the prior year period. The impact of changes in our stock price on the fair value of awards expected to be settled in cash increased expense $0.8 million and $0.4 million for the nine-month periods ended February 28, 2011 and February 28, 2010, respectively. We hold life insurance policies in connection with certain of our benefit plans. Proceeds received from the policies in the nine-month period ended February 28, 2011 decreased expense $0.8 million from the prior year period. Our focus on reducing controllable costs lowered other expenses $2.0 million in the nine-month period ended February 28, 2011 from the prior year period.

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Consolidated other income for the three-month period ended February 28, 2011 was $1.1 million, an increase of $0.1 million from the prior year period. Higher royalty income was offset in part by lower interest income.

Consolidated other income for the nine-month period ended February 28, 2011 was $7.9 million, a decrease of $1.5 million from the prior year period. Routine sales of surplus operating assets and real estate resulted in gains of $1.5 million and $1.3 million in the nine-month periods ended February 28, 2011 and February 28, 2010, respectively. In addition, we sold emissions credits associated with our Crestmore cement plant in Riverside, California that resulted in gains of $1.7 million and $3.4 million in the nine-month periods ended February 28, 2011 and February 28, 2010, respectively.

Total segment operating profit (loss) for the three-month periods ended February 28, 2011 and February 28, 2010 was $(17.2) million and $(19.4) million, respectively. Total segment operating profit (loss) for the nine-month periods ended February 28, 2011 and February 28, 2010 was $(4.4) million and $19.0 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	2011			2010			2011			2010
Operating Results
Total cement sales	$	54,018		$	52,322		$	183,307		$	192,508
Total other sales and delivery fees		6,144			5,296			21,815			18,489
Total segment sales		60,162			57,618			205,122			210,997
Cost of products sold		70,010			70,616			203,194			198,834
Gross profit (loss)		(9,848	)		(12,998	)		1,928			12,163
Selling, general and administrative		(3,286	)		(3,715	)		(12,097	)		(12,748	)
Other income		696			411			3,643			6,824
Operating Profit (Loss)	$	(12,438	)	$	(16,302	)	$	(6,526	)	$	6,239
Cement
Shipments (tons)		704			639			2,361			2,292
Prices ($/ton)	$	76.75		$	81.82		$	77.64		$	83.96
Cost of sales ($/ton)	$	90.43		$	101.70		$	77.67		$	78.96

Three months ended February 28, 2011

Cement operating loss for the three-month periods ended February 28, 2011 and February 28, 2010 was $12.4 million and $16.3 million, respectively. Higher shipments offset in part by lower sales prices increased total sales $2.5 million from the prior year period.

Total segment sales for the three-month period ended February 28, 2011 were $60.2 million compared to $57.6 million for the prior year period. Cement sales increased $1.7 million from the prior year period as construction activity has remained at low levels in both our Texas and California market areas. Our Texas market area accounted for approximately 72% of cement sales in the current period compared to 73% of cement sales in the prior year period. Average cement prices decreased 7% in our Texas market area and 5% in our California market area. Shipments increased 9% in our Texas market area and 13% in our California market area.

Cost of products sold for the three-month period ended February 28, 2011 decreased $0.6 million from the prior year period. The effect of higher shipments was offset by lower energy and raw material costs and the effect of higher clinker production. Cement unit costs decreased 11% from the prior year period.

Selling, general and administrative expense for the three-month period ended February 28, 2011 decreased $0.4 million from the prior year period. The decrease was primarily due to lower provisions for bad debts and defined benefit plan expense.

Other income for the three-month period ended February 28, 2011 increased $0.3 million from the prior year period. The increase was primarily due to higher gains from routine sales of surplus operating assets.

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Nine months ended February 28, 2011

Cement operating loss for the nine-month period ended February 28, 2011 was $6.5 million. Cement operating profit for the nine-month period ended February 28, 2010 was $6.2 million. Lower sales prices offset in part by higher shipments reduced total sales $5.9 million from the prior year period. In addition, other income decreased $3.2 million from the prior year period.

Total segment sales for the nine-month period ended February 28, 2011 were $205.1 million compared to $211.0 million for the prior year period. Cement sales decreased $9.2 million from the prior year period as construction activity has remained at low levels in both our Texas and California market areas. Our Texas market area accounted for approximately 71% of cement sales in each period. Average cement prices decreased 7% in our Texas market area and 9% in our California market area. Shipments increased 3% in both our Texas and California market areas.

Cost of products sold for the nine-month period ended February 28, 2011 increased $4.4 million from the prior year period. The effect of higher shipments was offset in part by the effect of higher clinker production. Cement unit costs decreased 2% from the prior year period.

Selling, general and administrative expense for the nine-month period ended February 28, 2011 decreased $0.7 million from the prior year period. The decrease was primarily due to lower provisions for bad debts and defined benefit plan expense.

Other income for the nine-month period ended February 28, 2011 decreased $3.2 million from the prior year period. The decrease was primarily due to $0.9 million lower royalty income, $0.3 million lower gains from routine sales of surplus operating assets and $1.7 million lower gains from sales of emissions credits associated with our Crestmore cement plant in Riverside, California.

Aggregate Operations

	Three months ended February 28,						Nine months ended February 28,
In thousands except per unit	2011			2010			2011			2010
Operating Results
Total stone, sand and gravel sales	$	18,212		$	14,849		$	67,449		$	62,860
Total other sales and delivery fees		16,692			14,410			58,507			52,787
Total segment sales		34,904			29,259			125,956			115,647
Cost of products sold		32,323			28,882			110,735			100,038
Gross profit		2,581			377			15,221			15,609
Selling, general and administrative		(2,679	)		(1,937	)		(8,552	)		(7,131	)
Other income		16			409			1,706			1,239
Operating Profit (Loss)	$	(82	)	$	(1,151	)	$	8,375		$	9,717
Stone, sand and gravel
Shipments (tons)		2,470			1,947			9,080			8,012
Prices ($/ton)	$	7.38		$	7.62		$	7.43		$	7.85
Cost of sales ($/ton)	$	7.23		$	8.41		$	6.69		$	7.04

Three months ended February 28, 2011

Aggregate operating loss for the three-month periods ended February 28, 2011 and February 28, 2010 was $0.1 million and $1.2 million, respectively.

Total segment sales for the three-month period ended February 28, 2011 were $34.9 million compared to $29.3 million for the prior year period. Stone, sand and gravel sales increased $3.4 million from the prior year period on 27% higher shipments and 3% lower average prices.

- 28 -

Cost of products sold for the three-month period ended February 28, 2011 increased $3.4 million from the prior year period primarily due to higher shipments. Stone, sand and gravel unit costs decreased 14% from the prior year period primarily due to the effect of higher shipments on unit costs.

Selling, general and administrative expense for the three-month period ended February 28, 2011 increased $0.7 million from the prior year period primarily due to higher provisions for casualty insurance claims.

Other income for the three-month period ended February 28, 2011 decreased $0.4 million from the prior year period primarily due to lower gains from routine sales of surplus operating assets.

Nine months ended February 28, 2011

Aggregate operating profit for the nine-month periods ended February 28, 2011 and February 28, 2010 was $8.4 million and $9.7 million, respectively.

Total segment sales for the nine-month period ended February 28, 2011 were $126.0 million compared to $115.6 million for the prior year period. Stone, sand and gravel sales increased $4.6 million from the prior year period on 13% higher shipments and 5% lower average prices.

Cost of products sold for the nine-month period ended February 28, 2011 increased $10.7 million from the prior year period primarily due to higher shipments. Stone, sand and gravel unit costs decreased 5% from the prior year period primarily due to the effect of higher shipments on unit costs offset in part by higher repair and maintenance costs.

Selling, general and administrative expense for the nine-month period ended February 28, 2011 increased $1.4 million from the prior year period primarily due to higher provisions for bad debts and casualty insurance claims.

Other income for the nine-month period ended February 28, 2011 increased $0.5 million from the prior year period primarily due to higher gains from routine sales of surplus operating assets.

Consumer Products Operations

	Three months ended February 28,						Nine months ended February 28,
In thousands except per unit	2011			2010			2011			2010
Operating Results
Total ready-mix concrete sales	$	34,351		$	33,695		$	129,834		$	129,468
Total other sales and delivery fees		10,998			10,832			38,813			39,050
Total segment sales		45,349			44,527			168,647			168,518
Cost of products sold		47,443			45,203			166,982			158,610
Gross profit (loss)		(2,094	)		(676	)		1,665			9,908
Selling, general and administrative		(2,607	)		(1,421	)		(8,330	)		(7,374	)
Other income		66			115			398			516
Operating Profit (Loss)	$	(4,635	)	$	(1,982	)	$	(6,267	)	$	3,050
Ready-mix concrete
Shipments (cubic yards)		471			427			1,715			1,540
Prices ($/cubic yard)	$	72.83		$	79.17		$	75.66		$	84.12
Cost of sales ($/cubic yard)	$	80.71		$	84.35		$	77.97		$	81.48

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Three months ended February 28, 2011

Consumer products operating loss for the three-month periods ended February 28, 2011 and February 28, 2010 was $4.6 million and $2.0 million, respectively. Reduced margins due to lower sales prices increased operating loss from the prior year period.

Total segment sales for the three-month period ended February 28, 2011 were $45.3 million compared to $44.5 million for the prior year period. Ready-mix concrete sales for the three-month period ended February 28, 2011 increased $0.7 million from the prior year period on 8% lower average prices and 10% higher shipments.

Cost of products sold for the three-month period ended February 28, 2011 increased $2.2 million from the prior year period primarily due to higher shipments. Ready-mix concrete unit costs decreased 4% from the prior year period primarily due to the effect of higher shipments and lower raw material costs offset in part by higher repair and maintenance costs.

Selling, general and administrative expense for the three-month period ended February 28, 2011 increased $1.2 million from the prior year period primarily due to higher provisions for bad debts and casualty insurance claims.

Other income for the three-month period ended February 28, 2011 was comparable to the prior year period.

Nine months ended February 28, 2011

Consumer products operating loss for the nine-month period ended February 28, 2011 was $6.3 million. Consumer products operating profit for the nine-month period ended February 28, 2010 was $3.1 million. Reduced margins due to lower sales prices decreased operating profit from the prior year period.

Total segment sales for the nine-month period ended February 28, 2011 were $168.6 million compared to $168.5 million for the prior year period. Ready-mix concrete sales for the nine-month period ended February 28, 2011 increased $0.4 million from the prior year period on 10% lower average prices and 11% higher shipments.

Cost of products sold for the nine-month period ended February 28, 2011 increased $8.4 million from the prior year period primarily due to higher shipments. Ready-mix concrete unit costs decreased 4% from the prior year period primarily due to the effect of higher shipments and lower raw material costs offset in part by higher repair and maintenance costs.

Selling, general and administrative expense for the nine-month period ended February 28, 2011 increased $1.0 million from the prior year period primarily due to higher provisions for bad debts and casualty insurance claims.

Other income for the nine-month period ended February 28, 2011 decreased $0.1 million from the prior year period primarily due to lower gains from routine sales of surplus operating assets.

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Corporate

	Three months ended February 28,						Nine months ended February 28,
In thousands	2011			2010			2011			2010
Other income	$	337		$	109		$	2,187		$	845
Selling, general and administrative		(8,747	)		(10,495	)		(23,024	)		(26,455	)
	$	(8,410	)	$	(10,386	)	$	(20,837	)	$	(25,610	)

Three months ended February 28, 2011

Other income for the three-month period ended February 28, 2011 increased $0.2 million from the prior year period primarily due to higher oil and gas royalty payments offset in part by lower interest income.

Selling, general and administrative expense for the three-month period ended February 28, 2011 decreased $1.7 million from the prior year period. The decrease was primarily the result of lower provisions for casualty insurance claims and property tax expense.

Nine months ended February 28, 2011

Other income for the nine-month period ended February 28, 2011 increased $1.3 million from the prior year period primarily due to higher oil and gas lease bonus and royalty payments offset in part by lower interest income.

Selling, general and administrative expense for the nine-month period ended February 28, 2011 decreased $3.4 million from the prior year period. The decrease was primarily the result of $1.8 million lower provisions for casualty insurance claims and property tax expense offset in part by $0.5 million higher stock-based compensation and retirement expense. We hold life insurance policies in connection with certain of our benefit plans. Proceeds received from the policies in the nine-month period ended February 28, 2011 decreased expense $0.8 million from the prior year period. Our focus on reducing controllable costs lowered other expenses $1.3 million in the nine-month period ended February 28, 2011 from the prior year period.

Interest

Interest expense incurred for the three-month period ended February 28, 2011 was $17.3 million, of which $7.6 million was capitalized in connection with our Hunter, Texas cement plant expansion project and $9.7 million was expensed. 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 nine-month period ended February 28, 2011 was $49.0 million, of which $11.0 million was capitalized in connection with our Hunter, Texas cement plant expansion project and $38.0 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 three-month and nine-month periods ended February 28, 2011 increased from the prior year periods primarily as a result of higher average outstanding debt at higher interest rates due to the August 2010 refinancing of our 7.25% senior notes. An additional $8 million of interest expense is estimated to be capitalized in connection with our Hunter, Texas cement plant expansion project during the remainder of our current fiscal year.

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Loss on Debt Retirements

On July 27, 2010, we commenced a cash tender offer for all of the outstanding $550 million aggregate principal amount of our 7.25% senior notes due 2013 and a solicitation of consents to amend the indenture governing the 7.25% notes. Pursuant to the tender offer and consent solicitation, we purchased $536.6 million aggregate principal amount of the 7.25% notes, and paid an aggregate of $547.7 million in purchase price and consent fees. On September 9, 2010, we redeemed the remaining $13.4 million aggregate principal amount of the 7.25% notes at a price of 101.813% of the principal amount thereof, plus accrued and unpaid interest on the 7.25% notes to the redemption date. We used the net proceeds from the issuance and sale of $650 million aggregate principal amount of our 9.25% senior notes to pay the purchase or redemption price of the 7.25% notes and the consent fees. As of February 28, 2011, we recognized a loss on debt retirement of $29.6 million representing $11.4 million in consent fees, redemption price premium and transaction costs and a write-off of $18.2 million of unamortized debt discount and original issuance costs associated with the 7.25% notes.

Income Taxes

Income taxes for the interim periods ended February 28, 2011 and February 28, 2010 have been included in the accompanying financial statements on the basis of an estimated annual rate. The estimated annualized rate does not include the tax impact of the loss on debt retirements which has been recognized as a discrete item in the nine-month period ended February 28, 2011. The estimated annualized rate excluding this charge is 40.2% for fiscal year 2011 compared to 38.3% for fiscal year 2010. 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. We made income tax payments of less than $0.1 million and $0.2 million in the nine-month periods ended February 28, 2011 and February 28, 2010, respectively. We received income tax refunds of $13.1 million and $15.8 million in the nine-month periods ended February 28, 2011 and February 28, 2010, respectively.

Management reviews our deferred tax position and in particular our deferred tax assets whenever circumstances indicate that the assets may not be realized in the future and would record a valuation allowance unless such deferred tax assets were deemed more likely than not to be recoverable. The ultimate realization of these deferred tax assets is dependent upon various factors including the generation of taxable income during future periods. The Company’s deferred tax assets exceed deferred tax liabilities as of February 28, 2011. However, we have concluded based on all available evidence that a valuation allowance is not required. Should the Company continue to experience losses a valuation allowance may become necessary.

LIQUIDITY AND CAPITAL RESOURCES

In addition to cash and cash equivalents of $123.4 million at February 28, 2011, our sources of liquidity include cash from operations and borrowings available under our senior secured revolving credit facility.

Senior Secured Revolving Credit Facility. The credit agreement provides 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 rate for one-month LIBOR loans 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 the agreement was $125.7 million as of February 28, 2011. 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, 2011, our fixed charge coverage ratio was .04 to 1.0. Given this ratio, we may use only $85.7 million of the borrowing base as of such date. No borrowings were outstanding at February 28, 2011; however, $31.1 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, 2011 was $54.6 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 (which shall not occur more than four times in any calendar year) or $10 million in the aggregate during any calendar year as long as the credit facility is not in default and borrowing availability is more than the greater of $60 million or 30% of the aggregate commitments of all lenders. 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 our loan covenants as of February 28, 2011.

9.25% Senior Notes.On August 10, 2010, we sold $650 million aggregate principal amount of our 9.25% senior notes due 2020 at an offering price of 100%. The notes were issued under an indenture dated as of August 10, 2010. The net proceeds were used to purchase or redeem all of our outstanding 7.25% senior notes due 2013, with additional proceeds available for general corporate purposes.

At February 28, 2011, we had $650 million aggregate principal amount of 9.25% senior notes outstanding. Under the indenture, at any time on or prior to August 15, 2015, we may redeem the notes at a redemption price equal to the sum of the principal amount thereof, plus accrued interest and a make-whole premium. On and after August 15, 2015, we may redeem all or a part of the notes at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest if redeemed during the twelve-month period beginning on August 15 of the years indicated below:

Year	Percentage
2015		104.625%
2016		103.083%
2017		101.542%
2018 and thereafter		100.000%

In addition, prior to August 15, 2013, we may redeem up to 35% of the aggregate principal amount of the notes at a redemption price equal to 109.250% of the principal amount thereof, plus accrued interest with the net cash proceeds from certain equity offerings. 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 9.25% senior notes. The indenture governing the notes contains affirmative and negative covenants that, among other things, limit our and our subsidiaries’ ability to pay dividends on or redeem or repurchase stock, make certain investments, incur additional debt or sell preferred stock, create liens, restrict dividend payments or other payments from subsidiaries to the Company, engage in consolidations and mergers or sell or transfer assets, engage in sale and leaseback transactions, engage in transactions with affiliates, and sell stock in our subsidiaries. We are not required to maintain any affirmative financial ratios or covenants. We were in compliance with all of our covenants as of February 28, 2011.

Refinancing. On July 27, 2010, we commenced a cash tender offer for all of the outstanding $550 million aggregate principal amount of our 7.25% senior notes due 2013 and a solicitation of consents to amend the indenture governing the 7.25% notes. Pursuant to the tender offer and consent solicitation, we purchased $536.6 million aggregate principal amount of the 7.25% notes, and paid an aggregate of $547.7 million in purchase price and consent fees. On September 9, 2010, we redeemed the remaining $13.4 million aggregate principal amount of the 7.25% notes at a price of 101.813% of the principal amount thereof, plus accrued and unpaid interest on the 7.25% notes to the redemption date. As of February 28, 2011, we recognized a loss on debt retirement of $29.6 million representing $11.4 million in consent fees, redemption price premium and transaction costs and a write-off of $18.2 million of unamortized debt discount and original issuance costs associated with the 7.25% notes.

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Contractual Obligations.On August 10, 2010, we sold $650 million aggregate principal amount of 9.25% senior notes due in 2020. On November 10, 2010, we extended an agreement to purchase coal for use at our Texas cement and expanded shale and clay plants. The agreement requires minimum amounts of material be purchased during the two years beginning January 1, 2012. The following is a summary of our estimated additional future payments as a result of these new commitments, net of obligations prepaid out of the proceeds of the sale of the 9.25% senior notes, for fiscal year periods subsequent to May 31, 2010.

	Future Payments by Period
In thousands	Total			2011			2012			2013			2014-2015			After 2015
Borrowings
New long-term debt	$	650,000		$	--		$	--		$	--		$	--		$	650,000
Interest		602,085			30,898			60,125			60,125			120,250			330,687
Effect of Prepayments
Long-term debt		(550,000	)		--			--			--			(550,000	)		--
Interest		(116,778	)		(17,090	)		(39,875	)		(39,875	)		(19,938	)		--
		585,307			13,808			20,250			20,250			(449,688	)		980,687
Supply and service contracts		20,554			--			4,219			10,252			6,083			--
	$	605,861		$	13,808		$	24,469		$	30,502		$	(443,605	)	$	980,687

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 resumed construction in October 2010. The total capital cost of the project is expected to be between $365 million and $375 million, excluding capitalized interest, and commissioning is expected to begin within 24 months of the restart of construction. As of February 28, 2011, we have incurred approximately $303.9 million, excluding capitalized interest of approximately $27.3 million related to the project, of which $301.9 million has been paid.

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 the Hunter plant expansion and other capital expenditures which are currently estimated at $15 million to $25 million for fiscal year 2011, 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 period ended February 28, 2011 was $8.2 million. Net cash provided by operating activities for the nine-month period ended February 28, 2010 was $46.9 million. The decrease was primarily the result of lower income from operations and changes in working capital items.

Net cash used by investing activities for the nine-month period ended February 28, 2011 was $30.6 million. Net cash provided by investing activities for the nine-month period ended February 28, 2010 was $16.8 million.

Capital expenditures, including capitalized interest, incurred in connection with the expansion of our Hunter, Texas cement plant were $23.5 million and $5.3 million for the nine-month periods ended February 28, 2011 and February 28, 2010, respectively. Capital expenditures for normal replacement and upgrades of existing equipment and acquisitions to sustain our existing operations were $15.4 million and $6.4 million for the nine-month periods ended February 28, 2011 and February 28, 2010, respectively.

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.

We have elected to receive distributions from life insurance contracts purchased in connection with certain of our benefit plans. Proceeds from distributions and policy settlements for the nine-month periods ended February 28, 2011 and February 28, 2010 were $7.4 million and $10.6 million, respectively, which were offset in part by premiums and fees paid to maintain the policies.

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Net cash provided by financing activities for the nine-month period ended February 28, 2011 was $70.8 million. Net cash used by financing activities for the nine-month period ended February 28, 2010 was $7.8 million.

On July 27, 2010, we commenced a cash tender offer for all of the outstanding $550 million aggregate principal amount of our 7.25% senior notes due 2013 and a solicitation of consents to amend the indenture governing the 7.25% notes. Pursuant to the tender offer and consent solicitation, we purchased $536.6 million aggregate principal amount of the 7.25% notes, and paid an aggregate of $547.7 million in purchase price and consent fees. On September 9, 2010, we redeemed the remaining $13.4 million aggregate principal amount of the 7.25% notes at a price of 101.813% of the principal amount thereof, plus accrued and unpaid interest on the 7.25% notes to the redemption date. We used the net proceeds from the issuance and sale of $650 million aggregate principal amount of our 9.25% senior notes to pay the purchase or redemption price of the 7.25% notes and the consent fees. As of February 28, 2011, we recognized a loss on debt retirement of $29.6 million representing $11.4 million in consent fees, redemption price premium and transaction costs and a write-off of $18.2 million of unamortized debt discount and original issuance costs associated with the 7.25% notes.

Dividends paid on our common stock for the nine-month periods ended February 28, 2011 and February 28, 2010 were $6.3 million and $6.2 million, respectively.

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. See Part II, Item 1A, Risk Factors, in this report.

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, 2011 and May 31, 2010 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, 2011, the fair value of our long-term debt, including the current portion, was approximately $714.2 million compared to the carrying amount of $652.5 million. As of May 31, 2010, the fair value of our long-term debt, including the current portion, was approximately $534.8 million compared to the carrying amount of $538.9 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 additional 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.

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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, 2010.

Recently Issued Accounting Guidance

There is no recently issued accounting guidance that we expect will materially impact our financial statements during the current fiscal year.

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,” “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 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, 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

The information regarding the fair value of our fixed rate debt is included under Market Risk in Part I, Item 2 of this report and incorporated herein by reference.

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, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective as of February 28, 2011.

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 1A. Risk Factors

We may incur substantial expenditures to comply with changes in environmental laws and regulations.

California Climate Change Regulations. In 2006, California adopted the “California Global Warming Solutions Act of 2006”, which requires the California Air Resources Board (CARB) to implement rules designed to achieve a statewide reduction in greenhouse gas (GHG) emissions in California to 1990 levels by 2020. In December 2010, CARB adopted new rules that establish a market-based cap-and-trade program beginning on January 1, 2012. The new rules apply to our cement plant in Oro Grande, California and most likely to our lightweight aggregate plant in Frazier Park, California.

The new rules establish a statewide cap on the level of GHG emissions from covered industries for each year from 2012 to 2020. The cap will decline approximately 2% to 3% per year. Individual facilities such as ours will not be assigned a specific limit on GHG emissions. Instead, we will be required to surrender allowances (each covering the equivalent of one ton of carbon dioxide) equal to our total GHG emissions. CARB will allocate allowances equal to the declining cap in a manner prescribed by the rules. To provide a gradual transition, CARB will provide significant free allowances to all industrial sources during the first three years. If our emissions exceed the number of allowances we receive, we may purchase additional allowances in the open market, buy them at a regular quarterly auction conducted by CARB or purchase them from a state price containment reserve. At this time market prices of allowances have not been established, but the rules establish prices for allowances purchased from the state price containment reserve beginning at $40 per metric ton of carbon dioxide emissions in 2012 and increasing annually thereafter.

Our allocation of free allowances will be based on our annual production levels adjusted by a factor that compares the GHG intensity of our plant (i.e., our GHG emissions per unit of production) to the California cement sector average intensity benchmark. This benchmark will be determined by CARB. We believe that the intensity level of our Oro Grande plant will compare favorably to the cement sector average intensity benchmark. CARB further projects that the level of free allowances will be reduced over time with the implementation of a cap adjustment factor intended to gradually reduce the statewide cap over the compliance period. This reduction in the cap will result in a reduction in the level of free allowances allocated to the Oro Grande plant. Neither the cement sector average intensity benchmark nor the cap adjustment factor have been finally determined.

The new rules are likely to be amended before the cap-and-trade program becomes effective and, in any event, the interpretation of many aspects of the rules is still uncertain. The benchmark factor used to calculate the allocation of free allowances has not yet been developed, and it is too early in the process to determine the total number of allowances available for distribution to industrial entities. In addition, the California cement industry is discussing a number of issues with CARB, including a California border adjustment mechanism to help create a level playing field with imported cement.

As a result of these issues, the impact of the new rules is still uncertain and at this time we cannot predict what the cost or effect of the rules will be on our business. In addition, a recent San Francisco Superior Court ruling could delay the effective date of the rules, so the timing of any effect of the rules on us is also uncertain.

Federal Climate Change Regulations. The U.S. Supreme Court decision inMassachusetts v. EPA relating to regulation of GHG emissions from automobiles spurred the Environmental Protection Agency (EPA) to issue in December 2009 a finding that certain GHGs such as carbon dioxide contribute to air pollution that may endanger public health or welfare. Numerous parties, including certain states, industry associations and other private parties, have filed court petitions challenging the validity of the finding.

The endangerment finding does not include any proposed regulations. Although both the Obama Administration and the Administrator of the EPA have indicated their preference for comprehensive federal legislation regulating the emission of GHGs, no such legislation has been adopted and it does not appear that the current session of the U. S. Congress is likely to do so.

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In the absence of federal legislation, the EPA issued a final rule in May 2010 that phases major stationary sources (such as cement plants) into GHG permitting requirements beginning January 2, 2011. This rule, in conjunction with a June 2010 GHG rule referred to as the “Tailoring Rule,” will require us to incorporate best available control technology in any new cement plant that we propose to build and in our existing cement plants when we have to renew their principal operating permits or when we propose to modify them in a manner that would increase GHG emissions (in our case, basically carbon dioxide emissions) by more than 75,000 tons per year. This rule has also been challenged in court by many of the same parties that are challenging the endangerment finding. In addition, legislation has been introduced or is likely to be introduced in the U. S. Congress that would strip the EPA of authority to regulate GHGs under the federal Clean Air Act (CAA) or place a moratorium on such regulation for two years or longer or limit the funding of EPA to enforce these rules. The Obama Administration has signaled its intent to veto such legislation if passed by Congress.

We filed applications with the Texas Commission on Environmental Quality to renew our federal operating permit for our Midlothian, Texas cement plant in April 2010 and our Hunter, Texas cement plant in February 2011. The permit renewals have not yet been issued, and we are uncertain whether the new EPA rules will apply to them. Although many states have the authority and have indicated a willingness to issue permits containing conditions relating to GHGs, the state of Texas has stated that it does not have the authority and has declined to issue such permits. As a result, the EPA adopted a rule in December 2010 under which it would review applications for and issue permits containing GHG conditions for facilities in Texas. The state of Texas subsequently challenged this rule in court, but there has been no decision on the merits of the case.

No technologies or methods of operation for reducing or capturing GHGs such as carbon dioxide have been proven successful in large scale applications other than improvements in fuel efficiency. We do not currently know what the EPA will require as best available control technology for a cement plant or what conditions it will require to be added to operating permits. In addition, we cannot predict the ultimate outcome of the various court challenges to the EPA rules or of the policy debates in the U.S. Congress on the authority and budget of EPA to regulate GHGs under the federal CAA. Therefore, at this time, it is impossible to predict what the cost or effect of EPA’s GHG rules will be on our business.

Federal Air Emission Regulations. In August 2010, the EPA issued a final rule amendment that dramatically reduces the permitted levels of emissions of mercury, total hydrocarbons, particulate matter and hydrochloric acid from cement plants. The amendments are scheduled to take full effect in September 2013. The Portland Cement Association and several cement manufacturers, including us, have petitioned the EPA to reconsider the rule amendments and to delay the effective date of the amendments, and the same parties have also challenged the validity of the amendments in court. We cannot predict whether the EPA petition or court challenge will be successful or whether the effective date of the rule will be delayed.

We are conducting tests to analyze the current level of compliance of our cement plants with the new standards. Based on information currently available to us, we believe that our plant in Oro Grande, California will not meet the mercury emission standard, and the existing kiln at our plant in Hunter, Texas will not meet the particulate matter standard. We expect that the new kiln that is under construction at the Hunter plant, when it is completed, will meet the particulate matter standard. We cannot assure you that these are the only cases in which one of our plants will not meet the new standards.

We have begun the process of identifying and analyzing mercury monitoring and control equipment. We are not aware of any control equipment that has been proven effective in meeting the new standard in cement plant applications. Therefore, we cannot currently predict the total cost or schedule for installing such equipment at the Oro Grande plant. We expect the existing kiln at the Hunter plant will require a new bag house to bring it into compliance with the new particulate matter standard. The cost and schedule for installing such equipment have not yet been determined. At this time, we cannot assure you that new monitoring and control equipment will be available and installed before the new standards take effect, or that such equipment, when installed, will reduce emissions sufficiently to meet the new standards.

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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. The following table presents information with respect to such transactions which occurred during the three-month period ended February 28, 2011.

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, 2010 – December 31, 2010		14,297	$	41.62		--		--
January 1, 2011 - January 31, 2011		--		--		--		--
February 1, 2011 – February 28, 2011		--		--		--		--
Total		14,297	$	41.62		--		--

Item 5. Other Information

The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and proposed Item 106 of Securities and Exchange Commission Regulation S-K is included in exhibit 99.1 to this report.

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Item 6. Exhibits

The following exhibits are included herein:

3.1	Composite Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to Annual Report on Form 10-K filed on July 21, 2010)
3.2	Bylaws (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on January 14, 2010)
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 the Company’s 9 1/4% Senior Note due 2020 and Notation of Guarantee (incorporated by reference to Exhibit 4.4 to Current Report on Form 8-K filed on August 11, 2010)
4.2	Registration Rights Agreement, dated as of August 10, 2010, among the Company and the Initial Purchasers (incorporated by reference to Exhibit 4.2 to Current Report on Form 8-K filed on August 11, 2010)
4.3	Indenture, dated as of August 10, 2010, among the Company, the Guarantors and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K filed on August 11, 2010)
10.1	Purchase Agreement, dated July 27, 2010, among the Company and the Initial Purchasers (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on August 2, 2010)
10.2	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)
10.3	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)
10.4	Second Amendment to Second Amended and Restated Credit Agreement, dated March 24, 2010, 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 10.33 to Quarterly Report on Form 10-Q filed on March 26, 2010)
10.5	Third Amendment to Second Amended and Restated Credit Agreement, dated April 12, 2010, 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 10.1 to Report on Form 8-K filed on April 23, 2010)
10.6	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)
10.7	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 filed on July 8, 2005)
10.8	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 filed on August 1, 2005)

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10.9	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 filed on July 8, 2005)
10.10	Employment Agreement of Mel G. Brekhus dated as of April 14, 2010 (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on April 16, 2010)
10.11	Texas Industries, Inc. 1993 Stock Option Plan (incorporated by reference to Exhibit 4.1 to Registration Statement on Form S-8 filed on May 19, 1994)
10.12	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)
10.13	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)
10.14	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)
10.15	TXI Annual Incentive Plans-Fiscal Year 2011 (incorporated by reference to Exhibit 10.16 to Annual Report on Form 10-K filed on July 21, 2010)
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	TXI Three Year Incentive Plan for the Three Consecutive Fiscal Year Periods Ending May 31, 2013 (incorporated by reference to Exhibit 10.19 to Annual Report on Form 10-K filed on July 21, 2010)
10.19	Master Performance-Based Incentive Plan (incorporated by reference to Appendix A to definitive proxy statement filed on August 25, 2006)
10.20	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)
10.21	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)
10.22	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 filed on April 25, 2006)
10.23	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)
10.24	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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10.25	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 filed on September 30, 2005)
10.26	Deferred Compensation Plan for Directors of Texas Industries, Inc. (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on January 24, 2006)
10.27	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)
10.28	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)
10.29	Form of Change in Control Severance Agreement (incorporated by reference to Exhibit 10.3 to Current Report on Form 8-K filed on April 25, 2006)
10.30	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)
10.31	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)
10.32	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	Standstill Agreement dated July 16, 2010 among the Company, NNS Holding and Mr. Nassef Sawiris (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on July 20, 2010)
12.1	Computation of Ratios of Earnings to Fixed Charges
15.1	Letter re unaudited Interim Financial Information
31.1	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
31.2	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
32.1	Section 1350 Certification of Chief Executive Officer
32.2	Section 1350 Certification of Chief Financial Officer
99.1	Mine Safety Disclosure Exhibit
101	The following financial information from Texas Industries, Inc.’s Quarterly Report on Form 10-Q for the quarter ended February 28, 2011, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of February 28, 2011 and May 31, 2010, (ii) Consolidated Statements of Operations for the three months and nine months ended February 28, 2011 and February 28, 2010, (iii) Consolidated Statements of Cash Flows for the nine months ended February 28, 2011 and February 28, 2010, and (iv) the Notes to Consolidated Financial Statements.

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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 25, 2011	/s/ Kenneth R. Allen
	Kenneth R. Allen
	Vice President – Finance, Chief Financial Officer and Treasurer
	(Principal Financial Officer)
March 25, 2011	/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	Composite Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to Annual Report on Form 10-K filed on July 21, 2010)
	3.2	Bylaws (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on January 14, 2010)
	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 the Company’s 9 1/4% Senior Note due 2020 and Notation of Guarantee (incorporated by reference to Exhibit 4.4 to Current Report on Form 8-K filed on August 11, 2010)
	4.2	Registration Rights Agreement, dated as of August 10, 2010, among the Company and the Initial Purchasers (incorporated by reference to Exhibit 4.2 to Current Report on Form 8-K filed on August 11, 2010)
	4.3	Indenture, dated as of August 10, 2010, among the Company, the Guarantors and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K filed on August 11, 2010)
	10.1	Purchase Agreement, dated July 27, 2010, among the Company and the Initial Purchasers (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on August 2, 2010)
	10.2	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)
	10.3	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)
	10.4	Second Amendment to Second Amended and Restated Credit Agreement, dated March 24, 2010, 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 10.33 to Quarterly Report on Form 10-Q filed on March 26, 2010)
	10.5	Third Amendment to Second Amended and Restated Credit Agreement, dated April 12, 2010, 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 10.1 to Report on Form 8-K filed on April 23, 2010)
	10.6	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)
	10.7	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 filed on July 8, 2005)
	10.8	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 filed on August 1, 2005)

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Index to Exhibits-(Continued)

Exhibit Number
	10.9	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 filed on July 8, 2005)
	10.10	Employment Agreement of Mel G. Brekhus dated as of April 14, 2010 (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on April 16, 2010)
	10.11	Texas Industries, Inc. 1993 Stock Option Plan (incorporated by reference to Exhibit 4.1 to Registration Statement on Form S-8 filed on May 19, 1994)
	10.12	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)
	10.13	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)
	10.14	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)
	10.15	TXI Annual Incentive Plans-Fiscal Year 2011 (incorporated by reference to Exhibit 10.16 to Annual Report on Form 10-K filed on July 21, 2010)
	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	TXI Three Year Incentive Plan for the Three Consecutive Fiscal Year Periods Ending May 31, 2013 (incorporated by reference to Exhibit 10.19 to Annual Report on Form 10-K filed on July 21, 2010)
	10.19	Master Performance-Based Incentive Plan (incorporated by reference to Appendix A to definitive proxy statement filed on August 25, 2006)
	10.20	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)
	10.21	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)
	10.22	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 filed on April 25, 2006)
	10.23	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)
	10.24	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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Index to Exhibits-(Continued)

Exhibit Number
	10.25	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 filed on September 30, 2005)
	10.26	Deferred Compensation Plan for Directors of Texas Industries, Inc. (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on January 24, 2006)
	10.27	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)
	10.28	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)
	10.29	Form of Change in Control Severance Agreement (incorporated by reference to Exhibit 10.3 to Current Report on Form 8-K filed on April 25, 2006)
	10.30	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)
	10.31	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)
	10.32	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	Standstill Agreement dated July 16, 2010 among the Company, NNS Holding and Mr. Nassef Sawiris (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on July 20, 2010)
	12.1	Computation of Ratios of Earnings to Fixed Charges
	15.1	Letter re unaudited Interim Financial Information
	31.1	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
	31.2	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
	32.1	Section 1350 Certification of Chief Executive Officer
	32.2	Section 1350 Certification of Chief Financial Officer
	99.1	Mine Safety Disclosure Exhibit
	101	The following financial information from Texas Industries, Inc.’s Quarterly Report on Form 10-Q for the quarter ended February 28, 2011, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of February 28, 2011 and May 31, 2010, (ii) Consolidated Statements of Operations for the three months and nine months ended February 28, 2011 and February 28, 2010, (iii) Consolidated Statements of Cash Flows for the nine months ended February 28, 2011 and February 28, 2010, and (iv) the Notes to Consolidated Financial Statements.

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