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 all 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 May 31, 2012

Cash and cash equivalents	$	84,713	$	3,314	$	—		$	88,027
Receivables—net		—		98,836		—			98,836
Inventories		—		129,514		—			129,514
Deferred income taxes and prepaid expenses		99		18,908		—			19,007

Total current assets		84,812		250,572		—			335,384

Property, plant and equipment—net		—		1,195,596		—			1,195,596
Goodwill		—		1,715		—			1,715
Real estate and investments		664		20,201		—			20,865
Deferred income taxes and other charges		123,734		7,356		(107,722	)		23,368
Investment in subsidiaries		987,519		—		(987,519	)		—
Long-term intercompany receivables		246,298		18,747		(265,045	)		—

Total assets	$	1,443,027	$	1,494,187	$	(1,360,286	)	$	1,576,928


Accounts payable	$	108	$	64,717	$	—		$	64,825
Accrued interest, compensation and other		25,829		35,488		—			61,317
Current portion of long-term debt		4		1,210		—			1,214

Total current liabilities		25,941		101,415		—			127,356

Long-term debt		650,245		6,704		—			656,949
Long-term intercompany payables		18,747		246,298		(265,045	)		—
Deferred income taxes		—		107,722		(107,722	)		—
Other credits		51,823		44,529		—			96,352
Shareholders’ equity		696,271		987,519		(987,519	)		696,271

Total liabilities and shareholders’ equity	$	1,443,027	$	1,494,187	$	(1,360,286	)	$	1,576,928


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


Condensed consolidating statement of operations for the year ended May 31, 2012

Net sales	$	—		$	647,003		$	—		$	647,003
Cost of products sold		—			601,256			—			601,256

Gross profit		—			45,747			—			45,747

Selling, general and administrative		9,349			63,708			—			73,057
Restructuring charges		—			3,216			—			3,216
Interest		68,291			—			(33,456	)		34,835
Loss on debt retirements		—			—			—			—
Other income		(56	)		(73,777	)		—			(73,833	)
Intercompany other income		(3,500	)		(29,956	)		33,456			—

		74,084			(36,809	)		—			37,275

Income (loss) before the following items		(74,084	)		82,556			—			8,472
Income taxes (benefit)		(27,345	)		28,341			—			996

		(46,739	)		54,215			—			7,476
Equity in earnings (loss) of subsidiaries		54,215			—			(54,215	)		—

Net income (loss)	$	7,476		$	54,215		$	(54,215	)	$	7,476


In thousands	Texas Industries, Inc.			Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Condensed consolidating statement of operations for the year ended May 31, 2011

Net sales	$	—		$	621,813		$	—		$	621,813
Cost of products sold		—			596,510			—			596,510

Gross profit		—			25,303			—			25,303

Selling, general and administrative		8,810			67,610			—			76,420
Restructuring charges		—			—			—			—
Interest		66,101			—			(18,518	)		47,583
Loss on debt retirements		29,619			—			—			29,619
Other income		(200	)		(21,312	)		—			(21,512	)
Intercompany other income		(3,500	)		(15,018	)		18,518			—

		100,830			31,280			—			132,110

Income (loss) before the following items		(100,830	)		(5,977	)		—			(106,807	)
Income taxes (benefit)		(37,475	)		(4,419	)		—			(41,894	)

		(63,355	)		(1,558	)		—			(64,913	)
Equity in earnings (loss) of subsidiaries		(1,558	)		—			1,558			—

Net income (loss)	$	(64,913	)	$	(1,558	)	$	1,558		$	(64,913	)


Condensed consolidating statement of operations for the year ended May 31, 2010

Net sales	$	—		$	621,064		$	—		$	621,064
Cost of products sold		—			562,066			—			562,066

Gross profit		—			58,998			—			58,998

Selling, general and administrative		14,973			64,442			—			79,415
Restructuring charges		—			—			—			—
Interest		53,114			2,626			(3,500	)		52,240
Loss on debt retirements		—			—			—			—
Other income		(39	)		(10,627	)		—			(10,666	)
Intercompany other income		(3,500	)		—			3,500			—

		64,548			56,441			—			120,989

Income (loss) before the following items		(64,548	)		2,557			—			(61,991	)
Income taxes (benefit)		(21,247	)		(1,891	)		—			(23,138	)

		(43,301	)		4,448			—			(38,853	)
Equity in earnings (loss) of subsidiaries		4,448			—			(4,448	)		—

Net income (loss)	$	(38,853	)	$	4,448		$	(4,448	)	$	(38,853	)


In thousands	Texas Industries, Inc.			Guarantor Subsidiaries			Consolidating Adjustments		Consolidated
Condensed consolidating statement of cash flows for the year ended May 31, 2012

Net cash provided (used) by operating activities	$	(49,100	)	$	59,274		$	—	$	10,174

Investing activities
Capital expenditures—expansions		—			(72,906	)		—		(72,906	)
Capital expenditures—other		—			(33,430	)		—		(33,430	)
Proceeds from asset disposals		—			66,845			—		66,845
Investments in life insurance contracts		3,354			—			—		3,354
Other—net		—			(245	)		—		(245	)

Net cash provided (used) by investing activities		3,354			(39,736	)		—		(36,382	)

Financing activities
Long-term borrowings		—			—			—		—
Debt retirements		(19	)		(281	)		—		(300	)
Debt issuance costs		(1,829	)		—			—		(1,829	)
Stock option exercises		2,023			—			—		2,023
Excess tax benefits from stock-based compensation		—			—			—		—
Common dividends paid		(2,091	)		—			—		(2,091	)
Net intercompany financing activities		18,477			(18,477	)		—		—

Net cash provided (used) by financing activities		16,561			(18,758	)		—		(2,197	)

Increase (decrease) in cash and cash equivalents		(29,185	)		780			—		(28,405	)

Cash and cash equivalents at beginning of year		113,898			2,534			—		116,432

Cash and cash equivalents at end of year	$	84,713		$	3,314		$	—	$	88,027


Condensed consolidating statement of cash flows for the year ended May 31, 2011

Net cash provided (used) by operating activities	$	(55,280	)	$	64,525		$	—	$	9,245

Investing activities
Capital expenditures—expansions		—			(25,430	)		—		(25,430	)
Capital expenditures—other		—			(20,253	)		—		(20,253	)
Proceeds from asset disposals		—			3,596			—		3,596
Investments in life insurance contracts		4,073			—			—		4,073
Other—net		—			1,266			—		1,266

Net cash provided (used) by investing activities		4,073			(40,821	)		—		(36,748	)

Financing activities
Long-term borrowings		650,000			—			—		650,000
Debt retirements		(561,394	)		(233	)		—		(561,627	)
Debt issuance costs		(12,492	)		—			—		(12,492	)
Stock option exercises		1,462			—			—		1,462
Excess tax benefits from stock-based compensation		—			—			—		—
Common dividends paid		(8,354	)		—			—		(8,354	)
Net intercompany financing activities		23,391			(23,391	)		—		—

Net cash provided (used) by financing activities		92,613			(23,624	)		—		68,989

Increase (decrease) in cash and cash equivalents		41,406			80			—		41,486

Cash and cash equivalents at beginning of year		72,492			2,454			—		74,946

Cash and cash equivalents at end of year	$	113,898		$	2,534		$	—	$	116,432


In thousands	Texas Industries, Inc.			Guarantor Subsidiaries			Consolidating Adjustments		Consolidated
Condensed consolidating statement of cash flows for the year ended May 31, 2010

Net cash provided (used) by operating activities	$	(37,662	)	$	85,815		$	—	$	48,153

Investing activities
Capital expenditures—expansions		—			(5,337	)		—		(5,337	)
Capital expenditures—other		—			(8,322	)		—		(8,322	)
Proceeds from asset disposals		—			21,592			—		21,592
Investments in life insurance contracts		6,967			—			—		6,967
Other—net		—			2,079			—		2,079

Net cash provided (used) by investing activities		6,967			10,012			—		16,979

Financing activities
Long-term borrowings		—			—			—		—
Debt retirements		(10	)		(235	)		—		(245	)
Debt issuance costs		(2,552	)		—			—		(2,552	)
Stock option exercises		893			—			—		893
Excess tax benefits from stock-based compensation		250			—			—		250
Common dividends paid		(8,328	)		—			—		(8,328	)
Net intercompany financing activities		95,708			(95,708	)		—		—

Net cash provided (used) by financing activities		85,961			(95,943	)		—		(9,982	)

Increase (decrease) in cash and cash equivalents		55,266			(116	)		—		55,150

Cash and cash equivalents at beginning of year		17,226			2,570			—		19,796

Cash and cash equivalents at end of year	$	72,492		$	2,454		$	—	$	74,946