<PAGE>

                                  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 August 31, 2001


[ ]  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 the 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___
                                              --

     As of October 8, 2001, 20,924,628 shares of Registrant's Common Stock,
$1.00 par value, were outstanding.

                                  Page 1 of 22

<PAGE>

                                      INDEX

                     TEXAS INDUSTRIES, INC. AND SUBSIDIARIES

<TABLE>
<CAPTION>

PART I. FINANCIAL INFORMATION                                                                         Page
-----------------------------
<S>                                                                                                   <C>
Item 1.   Financial Statements

          Consolidated Balance Sheets -- August 31, 2001 and May 31, 2001 ..........................     3

          Consolidated Statements of Income -- three months ended August 31, 2001
              and August 31, 2000 ..................................................................     4

          Consolidated Statements of Cash Flows -- three months ended August 31, 2001
              and August 31, 2000 ..................................................................     5

          Notes to Consolidated Financial Statements ...............................................     6

          Independent Accountants' Review Report ...................................................    13

Item 2.   Management's Discussion and Analysis of Operating Results
              and Financial Condition ..............................................................    14

Item 3.   Quantitative and Qualitative Disclosures About Market Risk -- the information required
              by this item is included in Item 2 ...................................................    --

PART II.  OTHER INFORMATION
---------------------------

Item 6.   Exhibits and Reports on Form 8-K .........................................................    19

</TABLE>

SIGNATURES
----------

                                       -2-

<PAGE>

                           CONSOLIDATED BALANCE SHEETS
                     TEXAS INDUSTRIES, INC. AND SUBSIDIARIES



<TABLE>
<CAPTION>
                                                                                             (Unaudited)
                                                                                              August 31,        May 31,
-----------------------------------------------------------------------------------------------------------------------
In thousands                                                                                     2001           2001
-----------------------------------------------------------------------------------------------------------------------
<S>                                                                                          <C>            <C>
ASSETS
CURRENT ASSETS
  Cash                                                                                       $   13,837     $    8,734
  Receivables                                                                                    73,993         77,297
  Inventories                                                                                   245,209        262,411
  Deferred taxes and prepaid expenses                                                            35,536         36,510
                                                                                             ----------     ----------
            TOTAL CURRENT ASSETS                                                                368,575        384,952

OTHER ASSETS
  Goodwill                                                                                      143,193        143,085
  Real estate and investments                                                                    39,831         39,666
  Deferred charges and intangibles                                                               32,533         29,678
                                                                                             ----------     ----------
                                                                                                215,557        212,429

PROPERTY, PLANT AND EQUIPMENT
  Land and land improvements                                                                    206,930        194,348
  Buildings                                                                                     100,457         99,981
  Machinery and equipment                                                                     1,756,082      1,740,178
  Construction in progress                                                                       55,916         84,650
                                                                                             ----------     ----------
                                                                                              2,119,385      2,119,157
  Less allowances for depreciation                                                              885,433        859,177
                                                                                             ----------     ----------
                                                                                              1,233,952      1,259,980
                                                                                             ----------     ----------
                                                                                             $1,818,084     $1,857,361
                                                                                             ==========     ==========

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
  Trade accounts payable                                                                     $  148,753     $  129,375
  Accrued interest, wages and other items                                                        57,152         53,348
  Current portion of long-term debt                                                               9,225          9,237
                                                                                             ----------     ----------
            TOTAL CURRENT LIABILITIES                                                           215,130        191,960

LONG-TERM DEBT                                                                                  544,222        614,250

DEFERRED FEDERAL INCOME TAXES AND OTHER CREDITS                                                 141,085        138,906

COMPANY-OBLIGATED MANDATORILY REDEEMABLE
  PREFERRED SECURITIES  OF SUBSIDIARY HOLDING
  SOLELY COMPANY CONVERTIBLE DEBENTURES                                                         200,000        200,000

SHAREHOLDERS' EQUITY
  Common stock, $1 par value                                                                     25,067         25,067
  Additional paid-in capital                                                                    258,911        258,531
  Retained earnings                                                                             527,549        524,104
  Cost of common stock in treasury                                                              (93,880)       (95,457)
                                                                                             ----------     ----------
                                                                                                717,647        712,245
                                                                                             ----------     ----------
                                                                                             $1,818,084     $1,857,361
                                                                                             ==========     ==========
</TABLE>

See notes to consolidated financial statements.

                                       -3-

<PAGE>

                                   (Unaudited)
                        CONSOLIDATED STATEMENTS OF INCOME
                     TEXAS INDUSTRIES, INC. AND SUBSIDIARIES


<TABLE>
<CAPTION>
                                                                                                 Three months ended
                                                                                                     August 31,
----------------------------------------------------------------------------------------------------------------------
In thousands except per share                                                                   2001            2000
----------------------------------------------------------------------------------------------------------------------
<S>                                                                                            <C>           <C>

NET SALES                                                                                      $ 361,562     $ 365,172

COSTS AND EXPENSES (INCOME)
  Cost of products sold                                                                          314,641       291,684
  Selling, general and administrative                                                             28,212        27,362
  Interest                                                                                        12,364         9,307
  Other income                                                                                    (3,738)       (4,400)
                                                                                               ---------     ---------
                                                                                                 351,479       323,953
                                                                                               ---------     ---------
             INCOME BEFORE THE FOLLOWING ITEMS                                                    10,083        41,219


Income taxes                                                                                       3,284        13,767
                                                                                               ---------     ---------
                                                                                                   6,799        27,452

Dividends on preferred securities - net of tax                                                    (1,788)       (1,788)
                                                                                               ---------     ---------
             NET INCOME                                                                        $   5,011     $  25,664
                                                                                               =========     =========


BASIC

  Average shares                                                                                  21,014        21,211

  Earnings per share                                                                           $     .24     $    1.21
                                                                                               =========     =========

DILUTED

  Average shares                                                                                  21,485        24,425

  Earnings per share                                                                           $     .23     $    1.13
                                                                                               =========     =========


Cash dividends per share                                                                       $    .075     $    .075
                                                                                               =========     =========
</TABLE>


See notes to consolidated financial statements.

                                       -4-

<PAGE>

                                   (Unaudited)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     TEXAS INDUSTRIES, INC. AND SUBSIDIARIES


<TABLE>
<CAPTION>
                                                                           Three months ended
                                                                                August 31,
-----------------------------------------------------------------------------------------------
In thousands                                                             2001          2000
-----------------------------------------------------------------------------------------------
<S>                                                                   <C>            <C>


OPERATING ACTIVITIES
  Net income                                                          $   5,011      $  25,664
  Gain on disposal of assets                                               (123)          (392)
  Non-cash items
     Depreciation, depletion and amortization                            27,183         25,186
     Deferred taxes                                                       1,494          7,057
     Other - net                                                          2,583          2,633
  Changes in operating assets and liabilities
     Receivables sold                                                        --         40,000
     Receivables                                                          3,304        (21,882)
     Inventories and prepaid expenses                                    18,123         (3,104)
     Accounts payable and accrued liabilities                            23,365         (1,185)
     Real estate and investments                                           (329)           239
                                                                      ---------      ---------
         Net cash provided by operations                                 80,611         74,216

INVESTING ACTIVITIES
  Capital expenditures - expansions                                          --        (22,224)
  Capital expenditures - other                                           (6,759)       (32,583)
  Proceeds from disposal of assets                                        3,064            917
  Other - net                                                            (1,757)        (1,275)
                                                                      ---------      ---------
         Net cash used by investing                                      (5,452)       (55,165)

FINANCING ACTIVITIES
  Proceeds of long-term borrowing                                       100,950         86,600
  Debt retirements                                                     (170,991)      (102,648)
  Purchase of treasury shares                                              (206)            --
  Common dividends paid                                                  (1,567)        (1,580)
  Other - net                                                             1,758           (460)
                                                                      ---------      ---------
         Net cash used by financing                                     (70,056)       (18,088)
                                                                      ---------      ---------
Increase in cash                                                          5,103            963

Cash at beginning of period                                               8,734          6,988
                                                                      ---------      ---------
Cash at end of period                                                 $  13,837      $   7,951
                                                                      =========      =========
</TABLE>


See notes to consolidated financial statements.

                                       -5-

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

     Texas Industries, Inc. ("TXI" or the "Company"), is a leading supplier of
construction materials through two business segments: cement, aggregate and
concrete products (the "CAC" segment) and structural steel and specialty bar
products (the "Steel" segment). Through the CAC segment, the Company produces
and sells cement, stone, sand and gravel, expanded shale and clay aggregate and
concrete products from facilities concentrated in Texas, Louisiana, and
California, with several products marketed throughout the United States. Through
its Steel segment, the Company produces and sells structural steel, piling
products, specialty bar products, merchant bar-quality rounds, reinforcing bar
and channels from facilities located in Texas and Virginia, for markets in North
America.

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 with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes 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 three-month period ended August 31,
2001, are not necessarily indicative of the results that may be expected for the
year ended May 31, 2002. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Company's annual
report on Form 10-K for the year ended May 31, 2001.

     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.

     Principles of Consolidation. The consolidated financial statements include
the accounts of the Company and all subsidiaries. Certain amounts in the prior
period financial statements has been reclassified to conform to the current
period presentation.

     Cash Equivalents. For cash flow purposes, temporary investments which have
maturities of less than 90 days when purchased are considered cash equivalents.

     Property, Plant and Equipment. Property, plant and equipment is recorded at
cost. Provisions for depreciation are computed generally using the straight-line
method. Provisions for depletion of mineral deposits are computed on the basis
of the estimated quantity of recoverable raw materials. Useful lives for the
Company's primary operating facilities range from 10 to 20 years. Maintenance
and repairs are charged to expense as incurred. Costs incurred for scheduled
shut-downs to refurbish Steel facilities are amortized over the production
period, typically 12 to 18 months.

     Intangible Assets. Effective June 1, 2001, the Company adopted Statement of
Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets,"
("SFAS No. 142") which requires that goodwill not be amortized but instead be
tested for impairment annually by each reporting unit. Goodwill identified with
CAC resulted from the acquisition of Riverside Cement Company. Goodwill
identified with Steel resulted from the acquisition of Chaparral Steel Company.
An independent evaluation determined that in each case the fair value of the
respective reporting unit exceeds its carrying value. The carrying value of
goodwill by business segment is summarized as follows:

     --------------------------------------------------------------
     In thousands                              August       May
     --------------------------------------------------------------
     CAC
       Gross carrying value                 $  66,766     66,766
       Accumulated amortization                 5,458      5,458
                                            ---------  ---------
     Steel                                     61,308     61,308
       Gross carrying value                   108,984    108,876
       Accumulated amortization                27,099     27,099
                                            ---------  ---------
                                               81,885     81,777
                                            ---------  ---------
                                            $ 143,193  $ 143,085
                                            =========  =========

                                       -6-

<PAGE>

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-Continued

     As required by SFAS No. 142, the results for periods prior to its adoption
have not been restated. The following reconciles the reported net income and
earnings per share to that which would have resulted had SFAS No. 142 been
applied to the three-month period ended August 31, 2000 (in thousands except per
share).

        Net income
          As reported                                   $   25,664
          Goodwill amortization net of tax                     990
                                                        ----------
          As adjusted                                   $   26,654
                                                        ==========
        Basic earnings per share
          As reported                                   $     1.21
          As adjusted                                   $     1.26
                                                        ==========
        Diluted earnings per share
          As reported                                   $     1.13
          As adjusted                                   $     1.16
                                                        ==========

     Deferred charges and intangibles include non-compete agreements and other
intangibles with finite lives being amortized in accordance with SFAS No. 142 on
a straight-line basis over periods of 2 to 15 years. Their carrying value
totaled $4.3 million and $4.6 million, net of accumulated amortization of $5.7
million and $5.4 million at August 31, 2001 and May 31, 2001, respectively.
Amortization expense of $300,000 was incurred in each of the three-month periods
ended August 31, 2001 and 2000. Annual amortization expense for each of the five
succeeding years is $1.1 million, $800,000, $400,000, $400,000 and $300,000.

     Real Estate and Investments. Surplus real estate and real estate acquired
for development of high quality industrial, office and multi-use parks totaled
$15.8 million and $15.9 million at August 31, 2001 and May 31, 2001,
respectively. Investments, composed primarily of life insurance contracts which
may be used to fund certain Company benefit agreements, totaled $24.0 million
and $23.8 million at August 31, 2001 and May 31, 2001, respectively.

     Debt Issuance Cost. Debt issuance costs associated with various debt issues
are being amortized over the terms of the related debt.

     Other Credits. Other credits, composed primarily of liabilities related to
the Company's retirement plans and deferred compensation agreements, totaled
$32.0 million at August 31, 2001 and $31.3 million at May 31, 2001.

     Net Sales. Sales, net of delivery costs, are recognized when title has
transferred and products are delivered.

     Income Taxes. Accounting for income taxes uses the liability method of
recognizing and classifying deferred income taxes. The 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.

     Earnings Per Share ("EPS"). Basic EPS is computed by dividing net income by
the weighted average number of common shares outstanding during the period
including certain contingently issuable shares. Diluted EPS adjusts net income
for the net dividends on preferred securities of subsidiary and the outstanding
shares for the dilutive effect of the preferred securities, stock options and
awards. Prior to the adoption of SFAS No. 142, net income was adjusted for the
amortization of additional goodwill in connection with a contingent payment for
the acquisition of Chaparral.

                                       -7-

<PAGE>

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-Continued

     Basic and Diluted EPS are calculated as follows:

                                                                  August 31,
       -------------------------------------------------------------------------
       In thousands except per share                           2001      2000
       -------------------------------------------------------------------------

       Earnings:
          Net income                                         $ 5,011    $25,664
          Contingent price amortization                           --         58
                                                             -------    -------
              Basic earnings                                   5,011     25,722
          Dividends on preferred securities - net of tax          --      1,788
                                                             -------    -------
              Diluted earnings                               $ 5,011    $27,510
                                                             =======    =======
       Shares:
          Weighted-average shares outstanding                 20,869     21,071
          Contingently issuable shares                           145        140
                                                             -------    -------
              Basic weighted-average shares                   21,014     21,211

          Preferred securities                                    --      2,889
          Stock option and award dilution                        471        325
                                                             -------    -------
              Diluted weighted-average shares /(1)/           21,485     24,425
                                                             =======    =======

       Basic earnings per share                              $   .24    $  1.21
                                                             =======    =======

       Diluted earnings per share                            $   .23    $  1.13
                                                             =======    =======

       /(1)/ Shares excluded due to antidilutive effect:
              Preferred securities                             2,889         --
              Stock options and awards                           595        819



WORKING CAPITAL

     Working capital totaled $153.4 million at August 31, 2001 and $193.0
million at May 31, 2001.

     Receivables included tax refund claims of $18.6 million at May 31, 2001.
Notes and accounts receivable totaling $74.0 million at August and $58.7 million
at May are presented net of allowances for doubtful receivables of $3.1 million
at August and $2.6 million at May.

     The Company has an agreement to sell, on a revolving basis, an interest in
a defined pool of trade receivables of up to $125 million. The agreement is
subject to annual renewal. The maximum amount outstanding varies based upon the
level of eligible receivables. Fees are variable and follow commercial paper
rates. The interest sold totaled $125 million at August and May. The sales are
reflected as accounts receivable reductions and as operating cash flows. As
collections reduce previously sold interests, new accounts receivable are
customarily sold. Fees and expenses of $1.4 million and $2.1 million are
included in selling, general and administrative expenses in the three-month
periods ended August 31, 2001 and 2000, respectively. The Company, as agent for
the purchaser, retains collection and administration responsibilities for the
participating interests of the defined pool.

                                       -8-

<PAGE>

WORKING CAPITAL-Continued

     Inventories are summarized as follows:

         -----------------------------------------------------------------------
         In thousands                                August        May
         -----------------------------------------------------------------------

         Finished products                       $   74,045      $   88,606
         Work in process                             43,934          48,572
         Raw materials and supplies                 127,230         125,233
                                                   --------        --------
                                                  $ 245,209      $  262,411
                                                    =======         =======

     Inventories are stated at cost (not in excess of market) with a majority of
inventories using the last-in first-out method (LIFO). If the average cost
method (which approximates current replacement cost) had been used, inventory
values would have been higher by $9.8 million at August and May.

LONG-TERM DEBT

     Long-term debt is comprised of the following:
<TABLE>
<CAPTION>

---------------------------------------------------------------------------------------------
In thousands                                                          August          May
---------------------------------------------------------------------------------------------
<S>                                                                  <C>           <C>
Revolving credit facility maturing in 2004, interest rates
      average 6.54%                                                  $150,000      $220,000
Senior notes
      Notes due through 2017, interest rates average 7.28%            200,000       200,000
      Notes due through 2008, interest rates average 7.28%             75,000        75,000
      Notes due through 2004, interest rates average 10.2%             24,000        24,000
Variable-rate industrial development revenue bonds
      Bonds maturing in 2028, interest rate approximately 2.5%         50,000        50,000
      Bonds maturing in 2029, interest rate approximately 2.5%         25,000        25,000
      Bonds maturing in 2029, interest rate approximately 2.5%         20,500        20,500
Pollution control bonds, due through 2007, interest
   rate 4.88% (75% of prime)                                            5,215         5,215
Other, maturing through 2009, interest rates
   from 7.5% to 10%                                                     3,732         3,772
                                                                     --------      --------
                                                                      553,447       623,487
Less current maturities                                                 9,225         9,237
                                                                     --------      --------
                                                                     $544,222      $614,250
                                                                     ========      ========
</TABLE>


     Annual maturities of long-term debt for each of the five succeeding years
are $9.2, $9.2, $204.3, $41.2 and $45.9 million.

     The Company has available a bank-financed $450 million long-term revolving
credit facility. An interest rate at the applicable margin above either prime or
LIBOR is selected at the time of each borrowing. Commitment fees at a current
annual rate of .5% are paid on the unused portion of this facility. There is
$150.0 million currently outstanding under this facility. In addition, $106.7
million has been utilized to support letters of credit issued primarily to
secure the Company's variable-rate industrial development revenue bonds, which
allows the interest rates on these bonds to closely follow the tax-exempt
commercial paper rates.

                                       -9-

<PAGE>

LONG-TERM DEBT-Continued

     Loan agreements contain covenants that provide for restrictions on the
payment of dividends on common stock and place limitations on incurring certain
indebtedness, purchasing treasury stock, and making capital expenditures and
certain investments. Under the most restrictive of these agreements, the
Company's total debt is limited based on the ratio of debt to earnings before
interest, taxes, depreciation and amortization ("EBITDA"). At August 31, 2001,
$80.7 million of additional borrowing could have been incurred. In addition, the
aggregate amount of annual fixed charges which includes cash dividends on common
stock is limited based on the ratio of EBITDA to fixed charges. At August 31,
2001, $11.6 million of additional fixed charges could have been incurred. The
Company is in compliance with all loan covenant restrictions.

     The amount of interest paid for the three-month periods presented was $6.2
million in 2001 and $7.8 million in 2000. Interest capitalized totaled $3.9
million in the 2000 period.

PREFERRED SECURITIES OF SUBSIDIARY

     On June 5, 1998, TXI Capital Trust I (the "Trust"), a Delaware business
trust wholly owned by the Company, issued 4,000,000 of its 5.5% Shared
Preference Redeemable Securities ("Preferred Securities") to the public for
gross proceeds of $200 million. The combined proceeds from the issuance of the
Preferred Securities and the issuance to the Company of the common securities of
the Trust were invested by the Trust in $206.2 million aggregate principal
amount of 5.5% convertible subordinated debentures due June 30, 2028 (the
"Debentures") issued by the Company. The Debentures are the sole assets of the
Trust.

     Holders of the Preferred Securities are entitled to receive cumulative cash
distributions at an annual rate of $2.75 per Preferred Security (equivalent to a
rate of 5.5% per annum of the stated liquidation amount of $50 per Preferred
Security). The Company has guaranteed, on a subordinated basis, distributions
and other payments due on the Preferred Securities, to the extent the Trust has
funds available therefor and subject to certain other limitations (the
"Guarantee"). The Guarantee, when taken together with the obligations of the
Company under the Debentures, the Indenture pursuant to which the Debentures
were issued, and the Amended and Restated Trust Agreement of the Trust
(including its obligations to pay costs, fees, expenses, debts and other
obligations of the Trust [other than with respect to the Preferred Securities
and the common securities of the Trust]), provide a full and unconditional
guarantee of amounts due on the Preferred Securities.

     The Debentures are redeemable for cash under certain circumstances relating
to federal income tax matters, or at the option of the Company, in whole or in
part, at par, plus accrued and unpaid interest. Upon any redemption of the
Debentures, a like aggregate liquidation amount of Preferred Securities will be
redeemed. The Preferred Securities do not have a stated maturity date, although
they are subject to mandatory redemption upon maturity of the Debentures on June
30, 2028, or upon earlier redemption.

     Each Preferred Security is convertible at any time prior to the close of
business on June 30, 2028, at the option of the holder into shares of the
Company's common stock at a conversion rate of .72218 shares of the Company's
common stock for each Preferred Security (equivalent to a conversion price of
$69.235 per share of TXI Common Stock).

SHAREHOLDERS' EQUITY

     Common stock consists of:

         -----------------------------------------------------------------------
         In thousands                                        August       May
         -----------------------------------------------------------------------

         Shares authorized                                   40,000     40,000
         Shares outstanding at end of period                 20,918     20,828
         Shares held in treasury                              4,149      4,239
         Shares reserved for stock options and other          3,602      3,698

                                      -10-

<PAGE>

SHAREHOLDER'S EQUITY-Continued

     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 25,000 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. Pursuant to a Rights Agreement, in November 1996, the Company distributed
a dividend of one preferred share purchase right for each outstanding share of
the Company's Common Stock. Each right entitles the holder to purchase from the
Company one two-thousandth of a share of the Series B Junior Participating
Preferred Stock at a price of $122.50, subject to adjustment. The rights will
expire on November 1, 2006 unless the date is extended or the rights are earlier
redeemed or exchanged by the Company pursuant to the Rights Agreement.

STOCK OPTION PLAN

     The Company's stock option plan provides that non-qualified and incentive
stock options to purchase Common Stock may be granted to directors, officers and
key employees at market prices at date of grant. Generally, options become
exercisable in installments beginning one year after date of grant and expire
ten years later.

     A summary of option transactions for the three-month period ended August
31, 2001, follows:

<TABLE>
<CAPTION>
        -----------------------------------------------------------------------------
                                                                     Weighted Average
                                       Shares Under Option             Option Price
        -----------------------------------------------------------------------------
        <S>                            <C>                           <C>
        Outstanding at June 1               2,402,005                     $30.02
           Exercised                          (93,490)                     22.64
           Cancelled                          (18,020)                     37.77
                                           ----------                      -----
        Outstanding at August 31            2,290,495                     $30.26
                                           ==========                      =====
</TABLE>

     At August 31, 2001, there were 1,353,232 shares exercisable and 1,146,580
shares available for future grants. Outstanding options expire on various dates
to April 24, 2011.


INCOME TAXES

     Federal income taxes for the interim periods ended August 31, 2001 and
2000, have been included in the accompanying financial statements on the basis
of an estimated annual rate. The estimated annualized tax rate is 31.7% for 2001
compared to 33.3% for 2000. The primary reason that these respective tax rates
differ from the 35% statutory corporate rate is due to percentage depletion
which is tax deductible and state income tax expense. The Company received
income tax refunds of $18.1 million in the three-month period ended August 31,
2001 and made income tax payments of $8.9 million in the three-month period
ended August 31, 2000.

                                      -11-

<PAGE>

LEGAL PROCEEDINGS AND CONTINGENT LIABILITIES

     The Company is subject to federal, state and local environmental laws and
regulations concerning among other matters, air emissions, furnace dust disposal
and wastewater discharge. The Company believes it is in substantial compliance
with applicable environmental laws and regulations, however, from time to time
the Company receives claims from federal and state environmental regulatory
agencies and entities asserting that the Company is or may be in violation of
certain environmental laws and regulations. Based on its experience and the
information currently available to it, the Company believes that such claims
will not have a material impact on its financial condition or results of
operations. Despite the Company's compliance and experience, it is possible that
the Company 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 the Company.

     The Company and subsidiaries are defendants in lawsuits which arose in the
normal course of business. In management's judgment (based on the opinion of
counsel) the ultimate liability, if any, from such legal proceedings will not
have a material effect on the consolidated financial position, results of
operations or liquidity of the Company.

     Information regarding the Company's litigation against certain graphite
electrode suppliers is presented on page 17 under "Other Items" of Management's
Discussion and Analysis of Financial Condition and Results of Operations.

BUSINESS SEGMENTS

The Company has two reportable segments: cement, aggregate and concrete products
(the "CAC" segment) and steel (the "Steel" segment). The Company's reportable
segments are strategic business units that offer different products and
services. They are managed separately because of significant differences in
manufacturing processes, distribution and markets served. Through the CAC
segment the Company produces and sells cement, stone, sand and gravel, expanded
shale and clay aggregate and concrete products. Through its Steel segment, the
Company produces and sells structural steel, piling products, specialty bar
products, merchant bar-quality rounds, reinforcing bar and channels. Operating
profit is net sales less operating costs and expenses, excluding general
corporate expenses and interest expense. Operating results and certain other
financial data for the Company's business segments are presented on pages 14 and
15 under "Business Segments" of Management's Discussion and Analysis of
Financial Condition and Results of Operations, and is incorporated herein by
reference.

                                      -12-

<PAGE>

                                    EXHIBIT A
                                    ---------

                     INDEPENDENT ACCOUNTANTS' REVIEW REPORT

Board of Directors
Texas Industries, Inc.



We have reviewed the accompanying condensed consolidated balance sheet of Texas
Industries, Inc. and subsidiaries (the Company) as of August 31, 2001 and the
related condensed consolidated statements of income and cash flows for the
three-month periods ended August 31, 2001 and 2000. These financial statements
are the responsibility of the Company's management.

We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data, and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, which will be performed
for the full year with the objective of expressing an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such an
opinion.

Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying condensed consolidated financial statements referred
to above for them to be in conformity with accounting principles generally
accepted in the United States.

We have previously audited, in accordance with auditing standards generally
accepted in the United States, the consolidated balance sheet of Texas
Industries, Inc. and subsidiaries as of May 31, 2001, and the related
consolidated statements of income, shareholders' equity, and cash flows for the
year then ended [not presented herein] and in our report dated July 11, 2001, we
expressed an unqualified opinion on those consolidated financial statements. In
our opinion, the information set forth in the accompanying condensed
consolidated balance sheet as of May 31, 2001, is fairly stated, in all material
respects, in relation to the consolidated balance sheet from which it has been
derived.



                          /s/  Ernst & Young LLP
                          ----------------------


September 19, 2001

                                      -13-

<PAGE>

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     Comparison of operations and financial condition for the three-month period
ended August 31, 2001 to the three-month period ended August 31, 2000.

BUSINESS SEGMENTS

     The Company is a leading supplier of construction materials through two
business segments: cement, aggregate and concrete products (the "CAC" segment);
and structural steel and specialty bar products (the "Steel" segment). Through
the CAC segment, the Company produces and sells cement, stone, sand and gravel,
expanded shale and clay aggregate and concrete products. Through its Steel
segment, the Company produces and sells structural steel, piling products,
specialty bar products, merchant bar-quality rounds, reinforcing bar and
channels.

     Corporate resources include administration, financial, legal,
environmental, human resources and real estate activities that are not allocated
to operations and are excluded from operating profit.

                                                         Three months ended
                                                              August 31,
        ------------------------------------------------------------------------
        In thousands                                     2001            2000
        ------------------------------------------------------------------------

        TOTAL SALES

             Cement                                 $    94,492      $    90,818
             Ready-mix                                   65,995           70,319
             Stone, sand & gravel                        34,555           31,434
             Structural mills                           127,407          139,942
             Bar mill                                    29,966           26,545

        UNITS SHIPPED

             Cement (tons)                                1,320            1,252
             Ready-mix (cubic yards)                      1,111            1,162
             Stone, sand & gravel (tons)                  6,113            5,764
             Structural mills (tons)                        404              362
             Bar mill (tons)                                101               77

        NET SALES

             Cement                                 $    75,117      $    70,226
             Ready-mix                                   65,933           70,202
             Stone, sand & gravel                        25,590           21,813
             Other products                              32,482           30,996
                                                      ---------         --------
             TOTAL CAC                                  199,122          193,237

             Structural mills                           127,407          139,942
             Bar mill                                    29,966           26,545
             Other                                        5,067            5,448
                                                      ---------         --------
             TOTAL STEEL                                162,440          171,935
                                                      ---------         --------
             TOTAL NET SALES                        $   361,562      $   365,172
                                                      =========         ========

                                      -14-

<PAGE>

<TABLE>
<CAPTION>
                                                                Three months ended
                                                                     August 31,
        ------------------------------------------------------------------------------
        In thousands                                            2001            2000
        ------------------------------------------------------------------------------
        <S>                                                   <C>             <C>
        CAC OPERATIONS
           Gross profit                                       $ 61,514        $ 64,391
           Less:  Depreciation, depletion &
                    amortization                                12,299           9,683
                  Selling, general & administrative             12,301          12,007
                  Other income                                    (458)           (520)
                                                              --------        --------
           OPERATING PROFIT                                     37,372          43,221

        STEEL OPERATIONS
           Gross profit                                         11,717          32,973
           Less:  Depreciation & amortization                   14,516          15,230
                  Selling, general & administrative              6,932           5,986
                  Other income                                  (2,837)         (1,416)
                                                              --------        --------
           OPERATING PROFIT (LOSS)                              (6,894)         13,173
                                                              --------        --------
        TOTAL OPERATING PROFIT                                  30,478          56,394

        CORPORATE RESOURCES
           Other income                                            443           2,464
           Less:  Depreciation & amortization                      368             273
                  Selling, general & administrative              8,106           8,059
                                                              --------        --------
                                                                (8,031)         (5,868)

        INTEREST EXPENSE                                       (12,364)         (9,307)
                                                              --------        --------

        INCOME BEFORE TAXES & OTHER ITEMS                     $ 10,083        $ 41,219
                                                              ========        ========
</TABLE>

RESULTS OF OPERATIONS

     Net Sales. Consolidated net sales for the August 2001 quarter were $361.6
million compared to $365.2 million for the prior year period. CAC sales at
$199.1 million were up 3%. Demand for building materials in the Company's CAC
markets remains at satisfactory levels. Total cement sales increased $3.7
million on 5% higher shipments. Average trade prices were comparable to the
prior year. Ready-mix sales declined $4.3 million on 4% lower volume and 2%
lower average prices. Aggregate sales increased $3.1 million on 6% higher
shipments with average selling prices up 7%. Steel sales at $162.4 million were
$9.5 million below the prior year period, but $21.8 million above the May 2001
quarter. Structural steel sales increased 22% from the May quarter on 19% higher
shipments and 3% higher realized prices. Prices remain 18% below the peak levels
of August 2000 when dumped imports began to take market share. Bar mill sales
declined 6% from the May quarter on 3% lower shipments and prices.

     Operating Costs. Consolidated cost of products sold including depreciation,
depletion and amortization was $314.6 million, an increase of $23.0 million over
the prior year period. CAC costs were $149.4 million, an increase of $11.9
million, due to increased cement shipments at higher unit costs. The expanded
Midlothian cement facility is now operating near its expected 2.8 million annual
ton capacity. Steel costs of $165.2 million increased $11.1 million on increased
shipments offset by lower unit production costs due to improving efficiencies at
the Virginia plant.

     CAC selling, general and administrative expenses including depreciation and
amortization at $12.8 million decreased $200,000 from the prior year period
primarily due to lower incentive accruals which offset increased bad debt
reserves. Steel expenses at $6.9 million were $900,000 above the prior year
period due to increased general expenses.

                                      -15-

<PAGE>

     Operating Profit. Operating profit at $30.5 million decreased 46% from the
prior year period. CAC profits declined $5.8 million as higher energy and
maintenance costs reduced margins. Steel operating profit declined $20.1 million
due to the impact of imports on prices after the August 2000 quarter. Profits
increased $22.5 million from the May 2001 quarter as reduced unit costs improved
margins.

     Corporate Resources. Selling, general and administrative expenses including
depreciation and amortization at $8.5 million increased $100,000 as costs
associated with the Company's agreement to sell receivables offset higher
incentive and administrative expenses. Other income decreased $2.0 million due
to lower real estate income.

     Interest Expense. Interest expense at $12.4 million was $3.0 million higher
than the prior year period. The increase was due to a $3.9 million decrease in
interest capitalized offset by a $900,000 decrease in interest resulting from
lower average outstanding debt. Lower interest rates are expected to reduce
interest expense from current levels over the near term.

     Income Taxes. The Company's current effective tax rate is estimated at
31.7% compared to 33.3% in the prior year period. The primary reason that the
tax rate differs from the 35% statutory corporate rate is due to percentage
depletion that is tax deductible and state income tax expense.

     Dividends on Preferred Securities - Net of Tax. Dividends on preferred
securities of subsidiary in the amount of $1.8 million net of tax benefit were
incurred in each period.

LIQUIDITY AND CAPITAL RESOURCES

     Lower operating profit in both CAC and Steel reduced net income $20.7
million from the prior year period. Cash from operations funded debt reductions
of $70.0 million. The Company has an agreement to sell, on a revolving basis, an
interest in a defined pool of trade accounts receivable of up to $125 million.
At August 31, 2001, the entire amount available under this agreement had been
sold. The Company has a $450 million revolving credit facility that expires in
March 2004. At August 31, 2001, $150 million was outstanding under the credit
facility and an additional $106.7 million had been utilized to support letters
of credit. The Company's total debt is limited based on the ratio of debt to
earnings before interest, taxes, depreciation and amortization. At August 31,
2001, $80.7 million of additional borrowing could have been incurred.

     Net cash provided by operating activities was $80.6 million, an increase of
$6.4 million over the prior year period as changes in Steel working capital
items offset lower operating profit in both CAC and Steel. Increased Steel
shipments reduced inventories $17.2 million and increased trade receivables
$16.4 million. Collection of an $18.1 million tax refund claim offset the
increase in trade receivables. Accounts payable and accrual expenses increased
$23.4 million due primarily to higher trade accounts payable. Sales of
receivables provided $40 million in operating cash flow in the prior year
period.

     Net cash used by investing activities was $5.5 million, compared to $55.2
million during the prior year period, consisting principally of capital
expenditure items. Capital expenditures for normal replacement and technological
upgrades of existing equipment and expansion of the Company's operations
excluding major plant expansions were $6.8 million compared to $32.6 million in
the prior year period. The fiscal year 2002 capital expenditure budget for these
activities is estimated currently at approximately $50 million. In the prior
year period, $22.2 million was incurred for the expansion of the Company's
Midlothian, Texas cement plant which was completed during the May 2001 quarter.

     Net cash used by financing activities was $70.1 million, compared to $18.1
million during the prior year period. The outstanding balance on the Company's
revolving credit facility was reduced $70.0 million. The Company's quarterly
cash dividend at $.075 per common share remained unchanged from the prior year
period.

     The Company generally finances its major capital expansion projects with
cash from operations and long-term borrowing. Maintenance capital expenditures
and working capital are funded by cash from operations. The Company expects cash
from operations and borrowings under its revolving credit facility to be
sufficient to provide funds for capital expenditure commitments, scheduled debt
repayments and working capital needs.

                                      -16-

<PAGE>

OTHER ITEMS

Litigation

     On November 25, 1998, Chaparral Steel Company ("Chaparral"), a wholly
owned subsidiary, filed an action seeking damages, trebled as allowed by law,
plus interest and costs, in the District Court of Ellis County, Texas against
Showa Denko Carbon, Inc. ("SDC"); Showa Financing, K.K.; Showa Denko, K.K.; The
Carbide/Graphite Group, Inc. ("CGG"); SGL Carbon Aktiengesellschaft and SGL
Carbon Corp. ("SGL"); and UCAR Carbon Company, Inc. and UCAR International, Inc.
("UCAR") (collectively "Defendants") asserting causes of action for illegal
restraints of trade in the sale of graphite electrodes. In December 1999, Nippon
Carbon Co., Ltd.; SEC Corporation; Tokai Carbon U.S.A., Inc.; Tokai Carbon
Company, Ltd.; VAW Aluminium Aktiengesellschaft; and VAW Carbon GMBH were added
by Chaparral to the action. SDC and its affiliates, UCAR and its affiliates, VAW
Aluminum Aktiengesellschaft, and VAW Carbon GMBH have settled with Chaparral and
have been removed from the action. In related criminal actions, two of the
remaining Defendants have pled guilty to criminal violations of the U.S.
antitrust laws and have paid fines, and a third Defendant has announced that it
has agreed to cooperate with the U.S. Department of Justice investigation into
the graphite electrode industry in exchange for immunity from criminal
prosecution for it and some of its executives. For these reasons, although the
Company's action is still in its discovery stages, the Company believes that it
should, subject to inherent uncertainties of litigation, prevail in its claims
against the remaining Defendants.

Environmental Matters

     The Company is subject to federal, state and local environmental laws and
regulations concerning, among other matters, air emissions, furnace dust
disposal and wastewater discharge. The Company believes it is in substantial
compliance with applicable environmental laws and regulations, however, from
time to time the Company receives claims from federal and state environmental
regulatory agencies and entities asserting that the Company is or may be in
violation of certain environmental laws and regulations. Based on its experience
and the information currently available to it, the Company believes that such
claims will not have a material impact on its financial condition or results of
operations. Despite the Company's compliance and experience, it is possible that
the Company 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 the Company.

Market Risk

     The Company does not enter into derivatives or other financial instruments
for trading or speculative purposes. Because of the short duration of the
Company's investments, changes in market interest rates would not have a
significant impact on their fair value. The current fair value of the Company's
long-term debt, including current maturities, does not exceed its carrying
value. Market risk, when estimated as the potential increase in fair value
resulting from a hypothetical 10% decrease in the Company's weighted average
long-term borrowing rate, would not have a significant impact on the carrying
value of long-term debt. Expected maturity dates and average interest rates of
long-term debt are essentially unchanged from May 31, 2001.

New Accounting Pronouncements

     Effective June 1, 2001, the Company adopted Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities," which establishes a comprehensive standard for the recognition and
measurement of derivatives and hedging activities. Due to the Company's limited
use of derivatives, the impact was not material.

     The Company adopted, effective June 1, 2001, Statement of Financial
Accounting Standards No. 142, "Goodwill and Other Intangible Assets," ("SFAS No.
142") which requires that goodwill not be amortized but instead be tested for
impairment annually by each reporting unit. An independent evaluation determined
that in each case the fair value of the respective reporting unit exceeds its
carrying value. Goodwill amortization that would have totaled $1.1 million in
the three-month period ended August 31, 2001 was eliminated.

                                      -17-

<PAGE>

Cautionary Statement for Purposes of  the "Safe Harbor" Provisions of the
Private Securities Litigation Reform Act of 1995

     Certain statements contained in this annual report are "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. 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 the Company's
business, construction activity in the Company's markets, abnormal periods of
inclement weather, changes in the cost of raw materials, fuel, and energy and
the impact of environmental laws and other regulations. For further information
refer to the Company's annual report on Form 10-K for the year ended May 31,
2001.

                                      -18-

<PAGE>

PART II.  OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

     The following exhibits are included herein:

         (15)   Letter re:  Unaudited Interim Financial Information

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

     The Registrant did not file any reports on Form 8-K during the three-month
period ended August 31, 2001.

                                      -19-

<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of the Securities 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.





October 11, 2001                    /s/  Richard M. Fowler
----------------                    ----------------------
                                    Richard M. Fowler
                                    Executive Vice President - Finance and Chief
                                    Financial Officer
                                    (Principal Financial Officer)

October 11, 2001                    /s/  James R. McCraw
----------------                    --------------------
                                    James R. McCraw
                                    Vice President - Accounting and Information
                                    Services
                                    (Principal Accounting Officer)

                                      -20-

<PAGE>

                                INDEX TO EXHIBITS

Exhibits                                                                   Page

  15.   Letter re:  Unaudited Interim Financial Information ..............  22


                                      -21-