Profile: Texas Industries, Inc. (TXI)

Texas Industries, Inc., incorporated in 1951, is a supplier of heavy construction materials in the United States through its three business segments: cement, aggregates and consumer products. The Company’s cement segment produces gray portland cement and specialty cements. Its cement production and distribution facilities are concentrated primarily in Texas and California. The Company’s aggregates segment produces natural aggregates, including sand, gravel and crushed limestone, and specialty lightweight aggregates. Its consumer products segment produces primarily ready-mix concrete and, to a lesser extent, packaged products. The Company is a supplier of natural aggregates and ready-mix concrete in Texas and northern Louisiana, and to a lesser extent, in Oklahoma and Arkansas. As of May 31, 2009, Texas Industries, Inc. operated 88 manufacturing facilities in six states. During the fiscal year ended May 31, 2009 (fiscal 2009), it shipped four million tons of finished cement, 16.5 million tons of natural aggregates, 1.4 million cubic yards of lightweight aggregates and 2.9 million cubic yards of ready-mix concrete.

The Company’s revenue is derived from multiple end-use markets, including the public works, residential, commercial, retail, industrial and institutional construction sectors, as well as the energy industry. No one customer accounted for more than 10% of the Company’s total net sales in fiscal 2009. In May 2008, the Company completed its Oro Grande, California cement plant. It constructed approximately 2.3 million tons of advanced dry process annual cement production capacity, and retired the 1.3 million tons of existing, but less efficient, production.

Cement Segment

The Company’s cement segment produces gray portland cement as its principal product. It also produces specialty cements, such as masonry and oil well cements. Texas Industries, Inc.’s cement production facilities are located at three sites in Texas and California: Midlothian, Texas, south of Dallas/ Fort Worth; Hunter, Texas, south of Austin, and Oro Grande, California, near Los Angeles. The limestone reserves used as the primary raw material are located on property the Company owns adjacent to each of the plants. In October 2008, the Company idled the four wet kilns at its Midlothian plant, only two of which were permitted to operate while the large dry kiln was operating. In addition, it has temporarily idled its Oro Grande plant from time to time. The Company continues to operate a cement terminal and packaging facility at the Crestmore plant.

Texas Industries, Inc. produced approximately four million tons of finished cement in fiscal 2009. Total shipments of finished cement were approximately four million tons in fiscal 2009, of which 3.3 million tons were shipped to outside trade customers. The Company markets its cement products in the southwestern United States. Its principal marketing area includes the states of Texas, Louisiana, Oklahoma, California, Nevada and Arizona.

Aggregates Segment

The Company’s natural aggregate operations, which produce sand, gravel and crushed limestone, are conducted from facilities primarily serving the Dallas/Fort Worth, Austin and Houston areas in Texas; the southern Oklahoma area, and the Alexandria and Monroe areas in Louisiana. Natural aggregate sales, for fiscal 2009, totaled 16.5 million tons, of which approximately 12.5 million tons were shipped to outside trade customers. Expanded shale and clay, a specialty lightweight aggregate product, is manufactured from facilities serving the Dallas/Fort Worth, Austin and Houston areas in Texas; the Oakland/San Francisco and Los Angeles areas in California, and the Denver area in Colorado. Products are distributed to trade customers principally by contract or customer-owned haulers and, to a lesser extent, by rail. Certain specialty products it has developed from its expanded shale and clay, such as DiamondPro baseball infield conditioner, have developed a geographically dispersed customer base and are shipped to a significant portion of the continental United States.

Consumer Products Segment

Texas Industries, Inc.’s ready-mix concrete operations are situated in three areas in Texas (Dallas/Fort Worth/Denton, Houston and east Texas), in north and central Louisiana, and at one location in southern Arkansas. The Company manufactures and supplies a substantial amount of the cement and aggregates used by the ready-mix plants. The remainder is purchased from outside suppliers. It manufactures and markets packaged concrete mix, mortar, sand and related products from plant or distribution sites it owns in the Dallas/Fort Worth, Austin and Houston areas in Texas. The Company also markets its Maximizer packaged concrete mix in southern California. These products are sold by the retailers to contractors, distributors and property owners.

The Company competes with Holcim Ltd., Cemex S.A. de C. V., US Concrete, Southern Star, Campbell Ready Mix, Lattimore Materials, Lehigh/Hanson Aggregates, Vulcan Materials and Martin Marietta Materials.