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.


In thousands		Texas Industries, Inc.			Guarantor Subsidiaries			Consolidating Adjustments				Consolidated

Condensed consolidating balance sheet at November 30, 2011

Cash and cash equivalents	$		65,744	$		1,718	$		--		$		67,462
Receivables – net			--			82,378			--				82,378
Inventories			--			128,154			--				128,154
Deferred income taxes and prepaid expenses			119			20,645			(235	)			20,529

Total current assets			65,863			232,895			(235	)			298,523
Property, plant and equipment – net			--			1,190,850			--				1,190,850
Goodwill			--			1,715			--				1,715
Real estate and investments			1,463			10,009			--				11,472
Deferred income taxes and other charges			114,445			6,622			(98,586	)			22,481
Investment in subsidiaries			947,264			--			(947,264	)			--
Long-term intercompany receivables			277,334			18,745			(296,079	)			--

Total assets	$		1,406,369	$		1,460,836	$		(1,342,164	)	$		1,525,041


Accounts payable	$		34	$		57,355	$		--		$		57,389
Accrued interest, compensation and other			22,349			41,715			(235	)			63,829
Current portion of long-term debt			19			480			--				499

Total current liabilities			22,402			99,550			(235	)			121,717
Long-term debt			650,249			3,889			--				654,138
Long-term intercompany payables			18,745			277,334			(296,079	)			--
Deferred income taxes			--			98,586			(98,586	)			--
Other credits			46,706			34,213			--				80,919
Shareholders' equity			668,267			947,264			(947,264	)			668,267

Total liabilities and shareholders' equity	$		1,406,369	$		1,460,836	$		(1,342,164	)	$		1,525,041


Condensed consolidating balance sheet at May 31, 2011

Cash and cash equivalents	$		113,898	$		2,534	$		--		$		116,432
Receivables – net			--			85,817			--				85,817
Inventories			--			140,646			--				140,646
Deferred income taxes and prepaid expenses			77			21,963			--				22,040

Total current assets			113,975			250,960			--				364,935
Property, plant and equipment – net			--			1,155,421			--				1,155,421
Goodwill			--			1,715			--				1,715
Real estate and investments			677			6,072			--				6,749
Deferred income taxes and other charges			110,305			6,242			(94,356	)			22,191
Investment in subsidiaries			945,039			--			(945,039	)			--
Long-term intercompany receivables			264,779			18,751			(283,530	)			--

Total assets	$		1,434,775	$		1,439,161	$		(1,322,925	)	$		1,551,011


Accounts payable	$		34	$		56,753	$		--		$		56,787
Accrued interest, compensation and other			22,146			36,702			--				58,848
Current portion of long-term debt			--			73			--				73

Total current liabilities			22,180			93,528			--				115,708
Long-term debt			650,268			2,135			--				652,403
Long-term intercompany payables			18,751			264,779			(283,530	)			--
Deferred income taxes			--			94,356			(94,356	)			--
Other credits			47,994			39,324			--				87,318
Shareholders' equity			695,582			945,039			(945,039	)			695,582

Total liabilities and shareholders' equity	$		1,434,775	$		1,439,161	$		(1,322,925	)	$		1,551,011


In thousands		Texas Industries, Inc.				Guarantor Subsidiaries				Consolidating Adjustments				Consolidated

Condensed consolidating statement of operations for the three months ended November 30, 2011

Net sales	$		--		$		156,071		$		--		$		156,071
Cost of products sold			--				153,325				--				153,325

Gross profit			--				2,746				--				2,746
Selling, general and administrative			228				13,649				--				13,877
Restructuring charges			--				3,216				--				3,216
Interest			17,008				--				(8,170	)			8,838
Loss on debt retirements			--				--				--				--
Other income			(14	)			(1,513	)			--				(1,527	)
Intercompany other income			(873	)			(7,297	)			8,170				--

			16,349				8,055				--				24,404

Income (loss) before the following items			(16,349	)			(5,309	)			--				(21,658	)
Income taxes (benefit)			(1,404	)			783				--				(621	)

			(14,945	)			(6,092	)			--				(21,037	)
Equity in earnings (loss) of subsidiaries			(6,092	)			--				6,092				--

Net income (loss)	$		(21,037	)	$		(6,092	)	$		6,092		$		(21,037	)


Condensed consolidating statement of operations for the three months ended November 30, 2010

Net sales	$		--		$		148,111		$		--		$		148,111
Cost of products sold			--				136,044				--				136,044

Gross profit			--				12,067				--				12,067
Selling, general and administrative			2,107				16,436				--				18,543
Restructuring charges			--				--				--				--
Interest			17,269				--				(3,383	)			13,886
Loss on debt retirements			613				--				--				613
Other income			(83	)			(1,846	)			--				(1,929	)
Intercompany other income			(873	)			(2,510	)			3,383				--

			19,033				12,080				--				31,113

Income (loss) before the following items			(19,033	)			(13	)			--				(19,046	)
Income taxes (benefit)			(6,749	)			(1,096	)			--				(7,845	)

			(12,284	)			1,083				--				(11,201	)
Equity in earnings (loss) of subsidiaries			1,083				--				(1,083	)			--

Net income (loss)	$		(11,201	)	$		1,083		$		(1,083	)	$		(11,201	)


In thousands		Texas Industries, Inc.				Guarantor Subsidiaries				Consolidating Adjustments				Consolidated

Condensed consolidating statement of operations for the six months ended November 30, 2011

Net sales	$		--		$		337,811		$		--		$		337,811
Cost of products sold			--				321,240				--				321,240

Gross profit			--				16,571				--				16,571
Selling, general and administrative			1,253				30,428				--				31,681
Restructuring charges			--				3,216				--				3,216
Interest			34,265				--				(15,967	)			18,298
Loss on debt retirements			--				--				--				--
Other income			(27	)			(7,372	)			--				(7,399	)
Intercompany other income			(1,755	)			(14,212	)			15,967				--

			33,736				12,060				--				45,796

Income (loss) before the following items			(33,736	)			4,511				--				(29,225	)
Income taxes (benefit)			(3,534	)			2,766				--				(768	)

			(30,202	)			1,745				--				(28,457	)
Equity in earnings (loss) of subsidiaries			1,745				--				(1,745	)			--

Net income (loss)	$		(28,457	)	$		1,745		$		(1,745	)	$		(28,457	)


Condensed consolidating statement of operations for the six months ended November 30, 2010

Net sales	$		--		$		320,233		$		--		$		320,233
Cost of products sold			--				292,058				--				292,058

Gross profit			--				28,175				--				28,175
Selling, general and administrative			2,767				31,917				--				34,684
Restructuring charges			--				--				--				--
Interest			31,634				--				(3,337	)			28,297
Loss on debt retirements			29,619				--				--				29,619
Other income			(126	)			(6,693	)			--				(6,819	)
Intercompany other income			(1,755	)			(1,582	)			3,337				--

			62,139				23,642				--				85,781

Income (loss) before the following items			(62,139	)			4,533				--				(57,606	)
Income taxes (benefit)			(22,909	)			196				--				(22,713	)

			(39,230	)			4,337				--				(34,893	)
Equity in earnings (loss) of subsidiaries			4,337				--				(4,337	)			--

Net income (loss)	$		(34,893	)	$		4,337		$		(4,337	)	$		(34,893	)


In thousands		Texas Industries, Inc.				Guarantor Subsidiaries				Consolidating Adjustments			Consolidated

Condensed consolidating statement of cash flows for the six months ended November 30, 2011

Net cash provided (used) by operating activities	$		(34,917	)	$		47,404		$		--	$		12,487

Investing activities
Capital expenditures – expansions			--				(35,966	)			--			(35,966	)
Capital expenditures – other			--				(26,300	)			--			(26,300	)
Proceeds from asset disposals			--				1,649				--			1,649
Investments in life insurance contracts			2,989				--				--			2,989
Other – net			--				(128	)			--			(128	)

Net cash provided (used) by investing activities			2,989				(60,745	)			--			(57,756	)

Financing activities
Long-term borrowings			--				--				--			--
Debt retirements			--				(36	)			--			(36	)
Debt issuance costs			(1,732	)			--				--			(1,732	)
Stock option exercises			158				--				--			158
Common dividends paid			(2,091	)			--				--			(2,091	)
Net intercompany financing activities			(12,561	)			12,561				--			--

Net cash provided (used) by financing activities			(16,226	)			12,525				--			(3,701	)

Increase (decrease) in cash and cash equivalents			(48,154	)			(816	)			--			(48,970	)

Cash and cash equivalents at beginning of period			113,898				2,534				--			116,432

Cash and cash equivalents at end of period	$		65,744		$		1,718		$		--	$		67,462


Condensed consolidating statement of cash flows for the six months ended November 30, 2010

Net cash provided (used) by operating activities	$		(25,335	)	$		35,361		$		--	$		10,026
Investing activities
Capital expenditures – expansions			--				(11,198	)			--			(11,198	)
Capital expenditures – other			--				(12,201	)			--			(12,201	)
Proceeds from asset disposals			--				3,037				--			3,037
Investments in life insurance contracts			3,704				--				--			3,704
Other – net			--				(859	)			--			(859	)

Net cash provided (used) by investing activities			3,704				(21,221	)			--			(17,517	)

Financing activities
Long-term borrowings			650,000				--				--			650,000
Debt retirements			(561,394	)			(174	)			--			(561,568	)
Debt issuance costs			(12,426	)			--				--			(12,426	)
Stock option exercises			464				--				--			464
Common dividends paid			(4,172	)			--				--			(4,172	)
Net intercompany financing activities			15,384				(15,384	)			--			--

Net cash provided (used) by financing activities			87,856				(15,558	)			--			72,298

Increase (decrease) in cash and cash equivalents			66,225				(1,418	)			--			64,807

Cash and cash equivalents at beginning of period			72,492				2,454				--			74,946

Cash and cash equivalents at end of period	$		138,717		$		1,036		$		--	$		139,753