<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 February 28, 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 April 9, 2001, 20,782,689 shares of Registrant's Common Stock, $1.00 par
value, were outstanding.

                                  Page 1 of 21
<PAGE>

                                     INDEX

                    TEXAS INDUSTRIES, INC. AND SUBSIDIARIES

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

            Consolidated Balance Sheets - February 28, 2001 and May 31, 2000...........................       3

            Consolidated Statements of Operations -- three months and nine months ended
                February 28, 2001 and February 29, 2000................................................       4

            Consolidated Statements of Cash Flows -- nine months ended February 28, 2001
                and February 29, 2000..................................................................       5

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

            Independent Accountants' Review Report.....................................................      12

Item 2.     Management's Discussion and Analysis of Operating Results
                and Financial Condition................................................................      13

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...........................................................      18
</TABLE>

SIGNATURES
----------

                                      -2-
<PAGE>

                          CONSOLIDATED BALANCE SHEETS
                    TEXAS INDUSTRIES, INC. AND SUBSIDIARIES

                                                          (Unaudited)
                                                         February 28,   May 31,
-------------------------------------------------------------------------------
In thousands                                                 2001       2000
-------------------------------------------------------------------------------

ASSETS
CURRENT ASSETS
  Cash                                                  $    4,635   $    6,988
  Notes and accounts receivable                             44,839       79,180
  Inventories                                              299,529      246,910
  Deferred taxes and prepaid expenses                       63,930       38,926
                                                        ----------   ----------
            TOTAL CURRENT ASSETS                           412,933      372,004

OTHER ASSETS
  Real estate and other investments                         16,054       18,572
  Goodwill and other intangibles                           149,113      152,309
  Other                                                     49,358       43,712
                                                        ----------   ----------
                                                           214,525      214,593

PROPERTY, PLANT AND EQUIPMENT
  Land and land improvements                               192,681      190,671
  Buildings                                                 95,381       90,160
  Machinery and equipment                                1,495,828    1,470,369
  Construction in progress                                 319,051      256,594
                                                        ----------   ----------
                                                         2,102,941    2,007,794
  Less allowances for depreciation                         843,324      778,711
                                                        ----------   ----------
                                                         1,259,617    1,229,083
                                                        ----------   ----------
                                                        $1,887,075   $1,815,680
                                                        ==========   ==========

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
  Trade accounts payable                               $   105,778       94,077
  Accrued interest, wages and other items                   53,077       64,815
  Current portion of long-term debt                          9,357        9,373
                                                        ----------   ----------
            TOTAL CURRENT LIABILITIES                      168,212      168,265

LONG-TERM DEBT                                             666,577      623,284

DEFERRED FEDERAL INCOME TAXES AND OTHER CREDITS            141,793      126,105

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                               258,456      258,325
  Retained earnings                                        523,522      504,161
  Cost of common shares in treasury                        (96,552)     (89,527)
                                                        ----------   ----------
                                                           710,493      698,026
                                                        ----------   ----------
                                                        $1,887,075   $1,815,680
                                                        ==========   ==========

See notes to consolidated financial statements.

                                      -3-
<PAGE>

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

<TABLE>
<CAPTION>
                                                                     Three months ended         Nine months ended
                                                                          February                  February
-------------------------------------------------------------------------------------------------------------------
In thousands except per share                                        2001         2000         2001         2000
-------------------------------------------------------------------------------------------------------------------
<S>                                                              <C>           <C>        <C>            <C>
NET SALES                                                         $ 254,437    $ 314,282    $ 920,181   $   943,417

COSTS AND EXPENSES (INCOME)
  Cost of products sold                                             235,856      262,575      783,926       782,058
  Selling, general and administrative                                26,732       28,032       79,155        83,771
  Interest                                                            9,465        9,721       27,775        22,882
  Other income                                                       (2,254)      (9,773)     (13,348)      (15,509)
                                                                  ---------    ---------    ---------   -----------
                                                                    269,799      290,555      877,508       873,202
                                                                  ---------    ---------    ---------   -----------
     INCOME (LOSS) BEFORE THE FOLLOWING ITEMS                       (15,362)      23,727       42,673        70,215

Income taxes (benefit)                                               (5,633)       8,055       13,231        23,902
                                                                  ---------    ---------    ---------   -----------
                                                                     (9,729)      15,672       29,442        46,313

Dividends on preferred securities - net of tax                       (1,788)      (1,788)      (5,363)       (5,363)
                                                                  ---------    ---------    ---------   -----------
     NET INCOME (LOSS)                                            $ (11,517)   $  13,884    $  24,079   $    40,950
                                                                  =========    =========    =========   ===========

BASIC
  Average shares                                                     20,905       21,190       21,086        21,161

  Earnings (loss) per share                                       $    (.55)    $    .65     $   1.15    $     1.94
                                                                  =========     ========     ========    ==========

DILUTED
  Average shares                                                     20,905       24,581       21,335        24,520

  Earnings (loss) per share                                       $    (.55)    $    .64     $   1.14    $     1.90
                                                                  =========     ========     ========    ==========

Cash dividends per share                                          $    .075     $   .075     $   .225    $     .225
                                                                  =========     ========     ========    ==========
</TABLE>

See notes to consolidated financial statements.

                                      -4-
<PAGE>

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

<TABLE>
<CAPTION>
                                                                                   Nine months ended
                                                                                       February
-------------------------------------------------------------------------------------------------------
In thousands                                                                      2001          2000
-------------------------------------------------------------------------------------------------------
<S>                                                                           <C>            <C>
OPERATING ACTIVITIES
 Net income                                                                   $  24,079      $  40,950
 Gain on disposal of assets                                                      (4,521)        (1,052)
 Non-cash items
  Depreciation, depletion and amortization                                       75,801         73,086
  Deferred taxes                                                                 18,257         12,466
  Other - net                                                                     4,646          6,398
Changes in operating assets and liabilities
  Receivables sold                                                               13,080             --
  Notes and accounts receivable                                                  21,162        (19,653)
  Inventories and prepaid expenses                                              (76,869)       (11,574)
  Accounts payable and accrued liabilities                                       (2,742)         8,543
  Real estate and investments                                                     2,518            393
                                                                              ---------      ---------
    Net cash provided by operations                                              75,411        109,557

INVESTING ACTIVITIES
 Capital expenditures - expansions                                              (44,191)      (213,598)
 Capital expenditures - other                                                   (64,810)       (38,655)
 Proceeds from disposal of assets                                                11,451          3,239
 Other - net                                                                     (9,157)       (11,743)
                                                                              ---------      ---------
    Net cash used by investing                                                 (106,707)      (260,757)

FINANCING ACTIVITIES
 Proceeds from long-term borrowing                                              301,547        230,200
 Debt retirements                                                              (258,274)       (83,905)
 Purchase of treasury shares                                                     (7,576)          (143)
 Common dividends paid                                                           (4,718)        (4,732)
 Other - net                                                                     (2,036)          (946)
                                                                              ---------      ---------
    Net cash provided by financing                                               28,943        140,474
                                                                              ---------      ---------
Decrease in cash                                                                 (2,353)       (10,726)

Cash at beginning of period                                                       6,988         17,652
                                                                              ---------      ---------
Cash at end of period                                                         $   4,635      $   6,926
                                                                              =========      =========
</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 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 nine-month period ended February 28,
2001, are not necessarily indicative of the results that may be expected for the
year ended May 31, 2001.  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, 2000.

  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.

  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.

  Intangible Assets. Goodwill and other intangibles is presented net of
accumulated amortization of $38.3 million at February 28, 2001 and $33.9 million
at May 31, 2000. Goodwill resulting from the acquisitions of Chaparral Steel
Company and Riverside Cement Company, totaling $144.2 million at February 28,
2001 and $146.5 million at May 31, 2000 (net of accumulated amortization), is
being amortized currently on a straight-line basis over 40-year periods. Other
intangibles consisting primarily of goodwill and non-compete agreements are
being amortized on a straight-line basis over periods of 2 to 15 years.
Management reviews remaining goodwill and other intangibles with consideration
toward recovery through future operating results (undiscounted) at the current
rates of amortization.

  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 $28.2
million at February 28, 2001 compared to $31.5 million at May 31, 2000.

  Net Sales. Sales are recognized when products are shipped.

                                      -6-
<PAGE>

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-Continued

  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 adjusting net income
(loss) for the amortization of additional goodwill in connection with a
contingent payment for the acquisition of Chaparral Steel Company, then dividing
by the weighted average number of common shares outstanding during the period
including certain contingently issuable shares.  Diluted EPS also adjusts net
income (loss) 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.

  Basic and Diluted EPS are calculated as follows:

<TABLE>
<CAPTION>
                                                          Three months ended   Nine months ended
                                                               February            February
     -------------------------------------------------------------------------------------------
     In thousands except per share                            2001      2000      2001     2000
     -------------------------------------------------------------------------------------------
     <S>                                                   <C>        <C>       <C>      <C>
     Earnings:
      Net income (loss)                                    $(11,517)  $13,884   $24,079  $40,950
      Contingent price amortization                              58        58       174      174
                                                           --------   -------   -------  -------
            Basic earnings (loss)                           (11,459)   13,942    24,253   41,124

      Dividends on preferred securities - net of tax             --     1,788        --    5,363
                                                           --------   -------   -------  -------
            Diluted earnings (loss)                        $(11,459)  $15,730   $24,253  $46,487
                                                           ========   =======   =======  =======
     Shares:
      Weighted average shares outstanding                    20,761    21,052    20,944   21,026
      Contingently issuable shares                              144       138       142      135
                                                           --------   -------   -------  -------
            Basic weighted-average shares                    20,905    21,190    21,086   21,161

      Preferred securities                                       --     2,889        --    2,889
      Stock option and award dilution                            --       502       249      470
                                                           --------   -------   -------  -------
            Diluted weighted-average shares/(1)/             20,905    24,581    21,335   24,520
                                                           ========   =======   =======  =======

     Basic earnings (loss) per share                       $   (.55)  $   .65   $  1.15  $  1.94
                                                           ========   =======   =======  =======

     Diluted earnings (loss ) per share                    $   (.55)  $   .64   $  1.14  $  1.90
                                                           ========   =======   =======  =======

      /(1)/ Shares excluded due to antidilutive effect:
                  Preferred securities                        2,889        --     2,889       --
                  Stock options and awards                    2,352       517       938      451
</TABLE>


WORKING CAPITAL

  Working capital totaled $244.7 million at February 28, 2001, compared to
$203.7 million at May 31, 2000.

  Notes and accounts receivable totaling $44.8 million at February and $79.2
million at May are presented net of allowances for doubtful receivables of $2.7
million at February and $3.3 million at May.

                                      -7-
<PAGE>

WORKING CAPITAL-Continued

  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 sales are reflected as accounts receivable reductions and as
operating cash flows.  As collections reduce previously sold interests, new
accounts receivable are customarily sold.  The interest sold totaled $98.1
million at February and $85 million at May.  Fees and expenses of $6.1 million
and $4.5 million are included in selling, general and administrative expenses in
the nine-month periods ended February 28, 2001 and February 29, 2000,
respectively.  The Company, as agent for the purchaser, retains collection and
administration responsibilities for the participating interests of the defined
pool.

  Inventories are summarized as follows:

          --------------------------------------------------
          In thousands                  February       May
          --------------------------------------------------

          Finished products             $ 96,409    $ 61,255
          Work in process                 53,498      51,785
          Raw materials and supplies     149,622     133,870
                                        --------    --------
                                        $299,529    $246,910
                                        ========    ========

  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 $8.3 million at February and $7.8 million at
May.


LONG-TERM DEBT

  Long-term debt is comprised of the following:

<TABLE>
<CAPTION>
          -------------------------------------------------------------------------------------
          In thousands                                                  February         May
          -------------------------------------------------------------------------------------
          <S>                                                           <C>           <C>

          Revolving credit facility maturing in 2004, interest rates
            average 6.99%                                               $263,600      $240,000
          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%          32,000        32,000
          Variable-rate industrial development revenue bonds
            Bonds maturing in 2028, interest rate approximately 4.5%      50,000        50,000
            Bonds maturing in 2029, interest rate approximately 4.5%      25,000        25,000
            Bonds maturing in 2029, interest rate approximately 4.5%      20,500           303
          Pollution control bonds, due through 2007, interest
            rate 6.38% (75% of prime)                                      5,555         5,895
          Other, maturing through 2009, interest rates
            from 7.5% to 10%                                               4,279         4,459
                                                                        --------      --------
                                                                         675,934       632,657
          Less current maturities                                          9,357         9,373
                                                                        --------      --------
                                                                        $666,577      $623,284
                                                                        ========      ========
</TABLE>

  Annual maturities of long-term debt for each of the five succeeding years are
$9.4, $9.2, $9.2, $317.8 and $41.2 million.

                                      -8-
<PAGE>

LONG-TERM DEBT-Continued

  The Company has available a bank-financed $450 million long-term revolving
credit facility.  In addition to the $263.6 million currently outstanding under
this facility, $109.9 million has been utilized to support letters of credit.
The Company may select at the time of borrowing an interest rate at either prime
or the applicable margin above LIBOR. Commitment fees at a current annual rate
of .30% are paid on the unused portion of this facility.

  Loan agreements contain covenants that provide for restrictions on the payment
of dividends on common stock, and limitations on purchases of treasury stock,
incurring certain indebtedness and making certain investments.  Under the most
restrictive of these agreements, the aggregate amount of annual fixed charges,
which includes cash dividends on common stock, is limited based on the ratio of
earnings before interest, taxes, depreciation and amortization to fixed charges.
At February 28, 2001, additional fixed charges in the amount of $45.9 million
could have been incurred.  The Company is in compliance with all loan covenant
restrictions.

  The amount of interest paid for the nine-month periods presented was $35.4
million in 2001 and $24.5 million in 2000.  Interest capitalized totaled $12.5
million and $9.6 million in the 2001 and 2000 periods, respectively.


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, at the option of the Company, in whole
or in part, on or after June 30, 2001, or under certain circumstances relating
to federal income tax matters, 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).

                                      -9-
<PAGE>

SHAREHOLDERS' EQUITY

  Common stock consists of:

     ---------------------------------------------------------------
     In thousands                                    February   May
     ---------------------------------------------------------------

     Shares authorized                                40,000  40,000
     Shares outstanding at end of period              20,766  21,070
     Shares held in treasury                           4,301   3,997
     Shares reserved for stock options and other       3,766   3,787


  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 nine-month period ended February 28,
2001, follows:

--------------------------------------------------------------------------------
                                                              Weighted Average
                                   Shares Under Option          Option Price
--------------------------------------------------------------------------------

Outstanding at June 1                  2,162,125                   $29.86
 Granted                                 387,850                    29.72
 Exercised                               (21,540)                   21.01
 Cancelled                               (51,750)                   35.10
                                       ---------                   ------
Outstanding at February 28             2,476,685                   $29.81
                                       =========                   ======


  At February 28, 2001, there were 1,481,125 shares exercisable and 1,122,360
shares available for future grants. Outstanding options expire on various dates
to January 17, 2011.


INCOME TAXES

  Federal income taxes for the interim periods ended February 28, 2001 and
February 29, 2000, have been included in the accompanying financial statements
on the basis of an estimated annual rate.  The estimated annualized tax rate is
30.1% for 2001 compared with 33.9% for 2000.  The primary reason that these
respective tax rates differ from the 35% statutory corporate rate is due to
goodwill expense which is not tax deductible, percentage depletion which is tax
deductible and state income tax expense.  The Company made income tax payments
of $13.7 million and $3.0 million in the nine-month periods ended February 28,
2001 and February 29, 2000, respectively.

                                      -10-
<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 liable
for environment cleanup costs and related damages.  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 of the Company.

  Information regarding the Company's litigation against certain graphite
electrode suppliers is presented on page 16 under "Other Items" of Management's
Discussion and Analysis of Financial Condition and Results of Operations.

                                      -11-
<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 as of February 28, 2001 and the related
condensed consolidated statements of operations for the three-month and nine-
month periods ended February 28, 2001 and February 29, 2000, and the condensed
consolidated statements of cash flows for the nine-month periods ended February
28, 2001 and February 29, 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, 2000, 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 12, 2000, 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, 2000, is fairly stated, in all material
respects, in relation to the consolidated balance sheet from which it has been
derived.




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


March 20, 2001
Dallas, Texas

                                      -12-
<PAGE>

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

  Comparison of operations and financial condition for the three-month and nine-
month periods ended February 28, 2001 to the three-month and nine-month periods
ended February 29, 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.

Business Segments

<TABLE>
<CAPTION>

                                    Three months ended   Nine months ended
                                         February            February
  -------------------------------------------------------------------------
  In thousands                        2001      2000      2001       2000
  -------------------------------------------------------------------------
  <S>                               <C>       <C>       <C>        <C>
  TOTAL SALES
      Cement                        $ 67,265  $ 69,635  $236,618   $228,622
      Ready-mix                       43,806    55,645   169,110    197,922
      Stone, sand & gravel            21,932    23,030    79,766     77,721
      Structural mills                93,692   134,948   347,271    351,492
      Bar mill                        23,353    26,193    73,512     79,328

  UNITS SHIPPED
      Cement (tons)                      960       937     3,306      3,001
      Ready-mix (cubic yards)            743       889     2,821      3,120
      Stone, sand & gravel (tons)      4,118     4,377    14,668     14,284
      Structural mills (tons)            281       378       946      1,074
      Bar mill (tons)                     73        79       219        238

  NET SALES
      Cement                        $ 52,311  $ 53,088  $183,977   $171,780
      Ready-mix                       43,730    55,548   168,793    197,555
      Stone, sand & gravel            15,412    15,869    55,437     54,316
      Other products                  22,212    24,611    78,368     77,618
                                    --------  --------  --------   --------
      TOTAL CAC                      133,665   149,116   486,575    501,269

      Structural mills                93,692   134,948   347,271    351,492
      Bar mill                        23,353    26,193    73,512     79,328
      Other                            3,727     4,025    12,823     11,328
                                    --------  --------  --------   --------
      TOTAL STEEL                    120,772   165,166   433,606    442,148
                                    --------  --------  --------   --------
      TOTAL NET SALES               $254,437  $314,282  $920,181   $943,417
                                    ========  ========  ========   ========
</TABLE>

                                      -13-
<PAGE>

Business Segments-Continued

<TABLE>
<CAPTION>
                                                             Three months ended       Nine months ended
                                                                  February                 February
  --------------------------------------------------------------------------------------------------------
  In thousands                                                2001       2000          2001       2000
  --------------------------------------------------------------------------------------------------------
  <S>                                                        <C>          <C>         <C>         <C>
  CAC OPERATIONS
     Gross profit                                             $ 31,747    $51,136      $140,856   $181,793
     Less:   Depreciation, depletion &
                 amortization                                    9,860      9,823        29,354     29,228
             Selling, general & administrative                  10,918      9,825        32,466     32,494
             Other income                                         (731)       (18)       (4,063)    (1,438)
                                                              --------    -------      --------   --------
     OPERATING PROFIT                                           11,700     31,506        83,099    121,509

  STEEL OPERATIONS
      Gross profit                                              10,694     25,150        67,240     48,614
      Less:  Depreciation & amortization                        15,016     15,825        45,561     43,048
             Selling, general & administrative                   6,643      7,453        17,856     20,023
             Other income                                         (756)    (9,099)       (3,080)   (11,771)
                                                              --------    -------      --------   --------
      OPERATING PROFIT (LOSS)                                  (10,209)    10,971         6,903     (2,686)
                                                              --------    -------      --------   --------
  TOTAL OPERATING PROFIT                                         1,491     42,477        90,002    118,823

  CORPORATE RESOURCES
      Other income                                                 767        656         6,205      2,300
      Less:  Depreciation & amortization                           326        289           886        810
             Selling, general & administrative                   7,829      9,396        24,873     27,216
                                                              --------    -------      --------   --------
                                                                (7,388)    (9,029)      (19,554)   (25,726)

  INTEREST EXPENSE                                              (9,465)    (9,721)      (27,775)   (22,882)
                                                              --------    -------      --------   --------

  INCOME (LOSS) BEFORE TAXES
      & OTHER ITEMS                                           $(15,362)   $23,727      $ 42,673   $ 70,215
                                                              ========    =======      ========   ========

</TABLE>

RESULTS OF OPERATIONS

  Net Sales. Consolidated net sales for the current quarter were $254.4 million,
compared to $314.3 million for the prior year period. Consolidated net sales for
the current nine-month period were $920.2 million, compared to $943.4 million
for the prior year period. Sales declined in both CAC and Steel segments.

  CAC net sales were down from the prior year periods, 10.4% for the quarter and
3% for the nine months. Abnormal weather in the current quarter severely limited
shipments, however, backlogs are at high levels reflecting the continued solid
demand for building materials in the Company's CAC markets. Total cement sales
for the quarter were down 3% from the prior year period on 5% lower average
trade prices. Total cement sales for the nine months were up 3% from the prior
year period on 10% higher shipments. Ready-mix sales declined from the prior
year periods, 21% for the quarter and 15% for the nine months. Volumes in the
quarter were 16% below the prior year period at 6% lower average prices.
Aggregates sales in the quarter declined 5% from the prior year period on lower
shipments.

  Steel sales for the quarter were down 27% from the prior year period on 23%
lower shipments at 6% lower realized prices. Competition from imports and higher
levels of customer inventories resulted in a decline in both shipments and
prices of structural products. Structural steel sales for the quarter were 31%
below the prior year period with shipments 26% lower at 6% lower realized
prices. Bar mill sales for the quarter were 11% below the prior year period on
7% lower shipments at 4% lower realized prices.

                                      -14-
<PAGE>

  Operating Costs. Consolidated cost of products sold including depreciation,
depletion and amortization for the current quarter was $235.9 million, a
decrease of $26.7 million from the prior year period. Costs for the current
nine-month period were $783.9 million, an increase of $1.9 million from the
prior year period. CAC costs increased $4.0 million in the quarter and $26.5
million in the nine months primarily due to increased cement shipments and the
impact of higher energy costs on unit costs. Steel costs decreased $30.7 million
in the quarter and $24.6 million in the nine months due to lower shipments
offset by higher unit production costs due to increased energy costs and start-
up inefficiencies at the Virginia plant.

  CAC selling, general and administrative expenses including depreciation and
amortization was $1.1 million higher in the quarter than the prior year period
due to increased administrative expenses attributed to operations. In the nine-
month period, however, lower incentive accruals offset the higher administrative
expenses. Steel expenses decreased $800,000 in the quarter and $2.2 million in
the nine months primarily due to lower incentive and selling and administrative
costs.

  Operating Profit. Operating profit was down from prior year periods, $41.0
million in the quarter and $28.8 million in the nine months. CAC operating
profit at $11.7 million for the quarter was down $19.8 million from the prior
year period due to the impact of weather on shipments and reduced margins from
lower realized prices and higher energy costs. Steel operating loss of $10.2
million in the quarter resulted from the impact on sales of import competition
and the growth in customer inventories. Increased energy costs also contributed
to reduced margins. Steel operating profit of $11.0 million in the prior year
quarter included $6.3 million in pre-tax income from the Company's litigation
against certain graphite electrode suppliers. In the near term Steel profit
margins will decline due to current low prices and higher unit costs as
production is reduced to lower inventories.

  Corporate Resources. Selling, general and administrative expenses including
depreciation and amortization decreased from the prior year $1.5 million for the
quarter and $2.3 million for the nine months. This reflects the increased
administrative expense attributable to operations and lower incentive accruals
offset by increased costs associated with the Company's agreement to sell
receivables. Other income increased $3.9 million in the current nine-month
period primarily due to higher real estate income.

  Interest Expense. Interest expense for the current nine-month period at $27.8
million was $4.9 million higher than the prior year period due to a $7.8 million
increase in interest resulting from higher average debt outstanding and a $2.9
million increase in interest capitalized.

  Income Taxes. The Company's current effective tax rate is estimated at 30.1%
compared to 33.9% in the prior year. The primary reason that the tax rate
differs from the 35% statutory corporate rate is due to goodwill expense that is
not tax deductible, 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 $5.4 million net of tax benefit were
incurred in each nine-month period.

                                      -15-
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

  Net cash provided by operating activities for the nine months was $75.4
million, a decrease of $34.1 million from the prior year period, primarily due
to lower net income and changes in working capital items. Sale of receivables
provided $13.1 million in operating cash flow in the current period. Lower sales
in both CAC and Steel segments reduced receivables $21.2 million. Inventories
increased $52.6 million due to the decline in Steel shipments. Prepaid expenses
increased $24.3 million due to higher Steel shutdown costs associated with the
normal, scheduled refurbishing of the production facilities and prepaid income
taxes. Accounts payable and accrued expenses decreased $2.7 million as higher
trade payables offset lower incentive and income tax accruals. During the prior
year period, CAC inventories grew. Increased Steel shipments and prices
increased receivables and decreased inventories. Accounts payable and accrued
expenses increased in part due to higher interest and income tax accruals.

  Net cash used by investing activities for the nine months was $106.7 million
compared to $260.8 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 $64.8 million compared to $38.7
million in the prior year period. The fiscal year 2001 capital expenditure
budget for these activities is estimated currently at $100 million. Capital
expenditures incurred for the expansion of the Company's Midlothian, Texas
cement plant were $44.2 million. Completion is expected during the May 2001
quarter. The project will expand the production of the plant from 1.3 to 2.8
million tons per year and required a capital commitment of approximately $250
million. During the prior year period, in addition to $146.3 million incurred
for the Midlothian cement plant expansion, $67.3 million was incurred towards
the completion of the Company's Virginia steel facility.

  Net cash provided by financing activities for the nine months was $28.9
million, compared to $140.5 million during the prior year period. The Company
has a $450 million revolving credit facility that expires in March 2004. At
February 28, 2001, $263.6 million was outstanding under the credit facility and
an additional $109.9 million has been utilized to support letters of credit.
During the current nine-month period the Company purchased approximately 333,000
shares of its Common Stock for general corporate purposes. 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 long-
term borrowing. Maintenance capital expenditures and working capital are funded
by cash from operations. The Company expects current financial resources and
cash from operations to be sufficient to provide funds for its capital
expenditure commitments, scheduled debt repayments and working capital needs.

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.

                                      -16-
<PAGE>

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 liable
for environment cleanup costs and related damages. 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, 2000.

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

  Certain statements contained in this quarterly report are "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. 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,
2000.

                                      -17-
<PAGE>

  PART II.  OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

  The following exhibit is 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 February 28, 2001.

                                      -18-
<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.



<TABLE>
                               TEXAS INDUSTRIES, INC.

<S>                            <C>
April 11, 2001                 /s/ Richard M. Fowler
--------------                 ----------------------
                               Richard M. Fowler
                               Executive Vice President - Finance and Chief Financial Officer
                               (Principal Financial Officer)


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

                                      -19-
<PAGE>

                               INDEX TO EXHIBITS



Exhibits                                                                  Page

   15.    Letter re: Unaudited Interim Financial Information.............  21

                                      -20-