<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 November 30, 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 January 7, 2002, 20,921,728 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 - November 30, 2001 and May 31, 2001 ........................   3

          Consolidated Statements of Income -- three months and six months ended
            November 30, 2001 and November 30, 2000 ...............................................   4

          Consolidated Statements of Cash Flows -- six months ended November 30, 2001
            and November 30, 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 4.   Submission of Matters to a Vote of Security Holders .....................................  19

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

SIGNATURES
----------
</TABLE>

                                       -2-

<PAGE>

                           CONSOLIDATED BALANCE SHEETS
                     TEXAS INDUSTRIES, INC. AND SUBSIDIARIES

                                                      (Unaudited)
                                                      November 30,      May 31,
--------------------------------------------------------------------------------
In thousands                                              2001           2001
--------------------------------------------------------------------------------

ASSETS
CURRENT ASSETS
  Cash                                               $    14,857    $     8,734
  Receivables                                             57,106         77,297
  Inventories                                            254,321        262,411
  Deferred taxes and prepaid expenses                     33,191         36,510
                                                     -----------    -----------
            TOTAL CURRENT ASSETS                         359,475        384,952

OTHER ASSETS
  Goodwill                                               143,232        143,085
  Real estate and investments                             44,065         39,666
  Deferred charges and intangibles                        28,880         29,678
                                                     -----------    -----------
                                                         216,177        212,429

PROPERTY, PLANT AND EQUIPMENT
  Land and land improvements                             206,946        194,348
  Buildings                                              100,572         99,981
  Machinery and equipment                              1,756,893      1,740,178
  Construction in progress                                58,160         84,650
                                                     -----------    -----------
                                                       2,122,571      2,119,157
  Less allowances for depreciation                       908,957        859,177
                                                     -----------    -----------
                                                       1,213,614      1,259,980
                                                     -----------    -----------
                                                     $ 1,789,266    $ 1,857,361
                                                     ===========    ===========

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
  Trade accounts payable                             $   133,123    $   129,375
  Accrued interest, wages and other items                 60,082         53,348
  Current portion of long-term debt                        9,224          9,237
                                                     -----------    -----------
            TOTAL CURRENT LIABILITIES                    202,429        191,960

LONG-TERM DEBT                                           508,766        614,250

DEFERRED FEDERAL INCOME TAXES AND OTHER CREDITS          145,239        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                             258,941        258,531
  Retained earnings                                      542,569        524,104
  Cost of common shares in treasury                      (93,745)       (95,457)
                                                     -----------    -----------
                                                         732,832        712,245
                                                     -----------    -----------
                                                     $ 1,789,266    $ 1,857,361
                                                     ===========    ===========
See notes to consolidated financial statements.

                                       -3-

<PAGE>

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


<TABLE>
<CAPTION>
                                                    Three months ended        Six months ended
                                                        November 30,             November 30,
--------------------------------------------------------------------------------------------------
In thousands except per share                        2001         2000         2001        2000
--------------------------------------------------------------------------------------------------
<S>                                               <C>          <C>          <C>          <C>
NET SALES                                         $ 335,487    $ 300,572    $ 697,049    $ 665,744

COSTS AND EXPENSES (INCOME)
  Cost of products sold                             280,507      256,386      595,148      548,070
  Selling, general and administrative                28,009       25,061       56,221       52,423
  Interest                                           10,697        9,003       23,061       18,310
  Other income                                      (10,669)      (6,694)     (14,407)     (11,094)
                                                  ---------    ---------    ---------    ---------
                                                    308,544      283,756      660,023      607,709
                                                  ---------    ---------    ---------    ---------
              INCOME BEFORE THE FOLLOWING ITEMS      26,943       16,816       37,026       58,035

Income taxes                                          8,566        5,097       11,850       18,864
                                                  ---------    ---------    ---------    ---------
                                                     18,377       11,719       25,176       39,171


Dividends on preferred securities - net of tax       (1,787)      (1,787)      (3,575)      (3,575)
                                                  ---------    ---------    ---------    ---------
              NET INCOME                          $  16,590    $   9,932    $  21,601    $  35,596
                                                  =========    =========    =========    =========


BASIC
  Average shares                                     21,068       21,141       21,041       21,176

  Earnings per share                              $     .79    $     .47    $    1.03    $    1.69
                                                  =========    =========    =========    =========

DILUTED
  Average shares                                     24,284       21,345       21,440       24,329

  Earnings per share                              $     .76    $     .47    $    1.01    $    1.61
                                                  =========    =========    =========    =========


Cash dividends per share                          $    .075    $    .075    $     .15    $     .15
                                                  =========    =========    =========    =========
</TABLE>

See notes to consolidated financial statements.

                                       -4-

<PAGE>

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


                                                            Six months ended
                                                               November 30,
--------------------------------------------------------------------------------
In thousands                                             2001              2000
--------------------------------------------------------------------------------


OPERATING ACTIVITIES
  Net income                                            $  21,601     $  35,596
  Gain on disposal of assets                                 (858)       (4,299)
  Non-cash items
     Depreciation, depletion and amortization              53,061        50,599
     Deferred taxes                                         6,343         9,221
     Other - net                                              615         2,695
  Changes in operating assets and liabilities
     Receivables sold                                          --        34,548
     Receivables                                           20,292        13,032
     Inventories and prepaid expenses                      11,581       (35,904)
     Accounts payable and accrued liabilities               9,324       (22,783)
     Real estate and investments                           (1,321)        1,849
                                                        ---------     ---------
         Net cash provided by operations                  120,638        84,554

INVESTING ACTIVITIES
  Capital expenditures - expansions                            --       (31,487)
  Capital expenditures - other                            (10,880)      (49,377)
  Proceeds from disposal of assets                          4,650        10,838
  Other - net                                              (1,019)       (6,662)
                                                        ---------     ---------
         Net cash used by investing                        (7,249)      (76,688)

FINANCING ACTIVITIES
  Proceeds from long-term borrowing                       181,850       209,400
  Debt retirements                                       (287,349)     (197,861)
  Purchase of treasury shares                                (206)       (6,189)
  Common dividends paid                                    (3,136)       (3,161)
  Other - net                                               1,575        (1,874)
                                                        ---------     ---------
         Net cash provided (used) by financing           (107,266)          315
                                                        ---------     ---------
Increase in cash                                            6,123         8,181

Cash at beginning of period                                 8,734         6,988
                                                        ---------     ---------
Cash at end of period                                   $  14,857     $  15,169
                                                        =========     =========


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 six-month period ended November 30,
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 have 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                                   November      May
         ------------------------------------------------------------------

         CAC
           Gross carrying value                         $ 66,766     66,766
           Accumulated amortization                        5,458      5,458
                                                        --------   --------
                                                          61,308     61,308
         Steel
           Gross carrying value                          109,023    108,876
           Accumulated amortization                       27,099     27,099
                                                        --------   --------
                                                          81,924     81,777
                                                        --------   --------
                                                        $143,232   $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 and six-month periods ended November 30, 2000.

                                           Three months ended   Six months ended
                                               November 30,       November 30,
      --------------------------------------------------------------------------
      In thousands except per share                 2000              2000
      --------------------------------------------------------------------------

      Net income
         As reported                              $ 9,932             $   35,596
         Goodwill amortization net of tax             991                  1,981
                                                  -------             ----------
         As adjusted                              $10,923             $   37,577
                                                  =======             ==========
      Basic earnings per share
         As reported                              $   .47             $     1.69
         As adjusted                                  .52             $     1.77
                                                  =======             ==========
      Diluted earnings per share
         As reported                              $   .47             $     1.61
         As adjusted                              $   .51             $     1.69
                                                  =======             ==========

     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 $4.0 million and $4.6 million, net of accumulated amortization of $6.0
million and $5.4 million at November 30, 2001 and May 31, 2001, respectively.
Amortization expense of $600,000 and $700,000 was incurred in the six-month
periods ended November 30, 2001 and 2000, respectively. Annual amortization
expense for each of the five succeeding years is $1.0 million, $600,000,
$400,000, $300,000 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 November 30, 2001 and May 31, 2001,
respectively. Investments, composed primarily of life insurance contracts which
may be used to fund certain Company benefit agreements, totaled $28.3 million
and $23.8 million at November 30, 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
$31.1 million at November 30, 2001 and $31.3 million at May 31, 2001.

     Net Sales. Sales are recognized when title has transferred and products are
delivered and presented net of delivery costs as follows:

                                           Three months ended   Six months ended
                                               November 30,       November 30,
      --------------------------------------------------------------------------
      In thousands except per share         2001       2000      2001      2000
      --------------------------------------------------------------------------


      Total revenues                      $360,733  $323,100   $750,168 $713,892
      Freight and delivery costs            25,246    22,528     53,119   48,148
                                          --------  --------   -------- --------
      Net sales                           $335,487  $300,572   $697,049 $665,744
                                          ========  ========   ======== ========


     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.

                                       -7-

<PAGE>


SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-Continued

     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.

     Basic and Diluted EPS are calculated as follows:

<TABLE>
<CAPTION>
                                                                 Three months ended     Six months ended
                                                                     November 30,          November 30,
         -------------------------------------------------------------------------------------------------
         In thousands except per share                             2001       2000       2001       2000
         -------------------------------------------------------------------------------------------------
<S>                                                              <C>        <C>        <C>        <C>
         Earnings:
            Net income                                           $ 16,590   $  9,932   $ 21,601   $ 35,596
            Contingent price amortization                              --         58         --        116
                                                                 --------   --------   --------   --------
               Basic earnings                                      16,590      9,990     21,601     35,712
            Dividends on preferred securities - net of tax          1,787         --         --      3,575
                                                                 --------   --------   --------   --------
               Diluted earnings                                  $ 18,377   $  9,990   $ 21,601   $ 39,287
                                                                 ========   ========   ========   ========
         Shares:
            Weighted average shares outstanding                    20,923     20,999     20,896     21,035
            Contingently issuable shares                              145        142        145        141
                                                                 --------   --------   --------   --------
               Basic weighted-average shares                       21,068     21,141     21,041     21,176

            Preferred securities                                    2,889         --         --      2,889
            Stock option and award dilution                           327        204        399        264
                                                                 --------   --------   --------   --------
               Diluted weighted-average shares/(1)/                24,284     21,345     21,440     24,329
                                                                 ========   ========   ========   ========

         Basic earnings per share                                $    .79   $    .47   $   1.03   $   1.69
                                                                 ========   ========   ========   ========

         Diluted earnings per share                              $    .76   $    .47   $   1.01   $   1.61
                                                                 ========   ========   ========   ========

            /(1)/ Shares excluded due to antidilutive effect:
                       Preferred securities                            --      2,889      2,889         --
                       Stock options                                  584        909        589        864
</TABLE>


WORKING CAPITAL

     Working capital totaled $157.0 million at November 30, 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 $57.1 million at November and $58.7
million at May are presented net of allowances for doubtful receivables of $5.9
million at November 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 November 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 $2.6 million and $4.3 million are
included in selling, general and administrative expenses in the six-month
periods ended November 30, 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                                 November            May
         -----------------------------------------------------------------------

         Finished products                            $ 75,701         $ 88,606
         Work in process                                47,214           48,572
         Raw materials and supplies                    131,406          125,233
                                                      --------         --------
                                                      $254,321         $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 $9.5 million at November and $9.8 million at
May.

LONG-TERM DEBT

     Long-term debt is comprised of the following:

<TABLE>
<CAPTION>
         -----------------------------------------------------------------------------------------
         In thousands                                                        November     May
         -----------------------------------------------------------------------------------------
<S>                                                                         <C>        <C>
    Revolving credit facility maturing in 2004, interest rates
          average 5.79%                                                     $115,000   $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%              50,000     50,000
          Bonds maturing in 2029, interest rate approximately 2%              25,000     25,000
          Bonds maturing in 2029, interest rate approximately 2%              20,500     20,500
    Pollution control bonds, due through 2007, interest
          rate 3.75% (75% of prime)                                            4,875      5,215
    Other, maturing through 2009, interest rates
         from 7.5% to 10%                                                      3,615      3,772
                                                                            --------   --------
                                                                             517,990    623,487
    Less current maturities                                                    9,224      9,237
                                                                            --------   --------
                                                                            $508,766   $614,250
                                                                            ========   ========
</TABLE>


     Annual maturities of long-term debt for each of the five succeeding years
are $9.2, $9.2, $169.3, $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
$115.0 million currently outstanding under this facility. In addition, $109.1
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 November 30, 2001,
$102.3 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
November 30, 2001, $16.8 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 six-month periods presented was $25.5
million in 2001 and $28.8 million in 2000. Interest capitalized totaled $8.1
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                                      November         May
        ------------------------------------------------------------------------

         Shares authorized                                  40,000        40,000
         Shares outstanding at end of period                20,925        20,828
         Shares held in treasury                             4,142         4,239
         Shares reserved for stock options and other         3,596         3,698

                                      -10-

<PAGE>

SHAREHOLDERS' 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 six-month period ended November
30, 2001, follows:

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

         Outstanding at June 1                2,402,005              $30.02
            Granted                              15,000               31.74
            Exercised                          (100,690)              22.66
            Cancelled                           (29,480)              39.20
                                             ----------              ------
         Outstanding at November 30           2,286,835              $30.23
                                             ==========              ======

     At November 30, 2001, there were 1,365,115 shares exercisable and 1,143,040
shares available for future grants. Outstanding options expire on various dates
to October 16, 2011.

INCOME TAXES

     Federal income taxes for the interim periods ended November 30, 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 31.5% for 2001
compared to 32.2% 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 six-month period ended November 30,
2001 and made income tax payments of $600,000 and $13.6 million in the six-month
periods ended November 30, 2001 and 2000, respectively.


                                      -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 November 30, 2001 and the
related condensed consolidated statements of income for the three and six-month
periods ended November 30, 2001 and 2000, and the condensed consolidated
statements of cash flows for the six-month periods ended November 30, 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
                                                    ----------------------



December 19, 2001
Dallas, Texas


                                      -13-

<PAGE>

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


     Comparison of operations and financial condition for the three-month and
six-month periods ended November 30, 2001 to the three-month and six-month
periods ended November 30, 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     Six months ended
                                        November 30,           November 30,
     ------------------------------------------------------------------------
     In thousands                     2001       2000       2001      2000
     ------------------------------------------------------------------------

     TOTAL SALES

         Cement                     $ 86,236   $ 78,535   $180,728   $169,353
         Ready-mix                    58,287     54,985    124,282    125,304
         Stone, sand & gravel         29,761     26,400     64,316     57,834
         Structural mills            129,166    113,637    256,573    253,579
         Bar mill                     27,572     23,614     57,538     50,159

     UNITS SHIPPED

         Cement (tons)                 1,183      1,094      2,503      2,346
         Ready-mix (cubic yards)         983        916      2,094      2,078
         Stone, sand & gravel (tons)   5,027      4,786     11,140     10,550
         Structural mills (tons)         384        303        788        665
         Bar mill (tons)                  91         69        192        146

     NET SALES
         Cement                     $ 66,705   $ 61,440   $141,822   $131,666
         Ready-mix                    58,218     54,861    124,151    125,063
         Stone, sand & gravel         21,788     18,212     47,378     40,025
         Other products               25,816     25,160     58,298     56,156
                                    --------   --------   --------   --------
         TOTAL CAC                   172,527    159,673    371,649    352,910

         Structural mills            129,166    113,637    256,573    253,579
         Bar mill                     27,572     23,614     57,538     50,159
         Other                         6,222      3,648     11,289      9,096
                                    --------   --------   --------   --------
         TOTAL STEEL                 162,960    140,899    325,400    312,834
                                    --------   --------   --------   --------
         TOTAL NET SALES            $335,487   $300,572   $697,049   $665,744
                                    ========   ========   ========   ========


                                      -14-

<PAGE>

<TABLE>
<CAPTION>
                                                           Three months ended        Six months ended
                                                               November 30,            November 30,
     -------------------------------------------------------------------------------------------------
     In thousands                                         2001         2000         2001         2000
     -------------------------------------------------------------------------------------------------

     CAC OPERATIONS
<S>                                                   <C>          <C>          <C>          <C>
           Gross profit                               $  52,793    $  44,716    $ 114,307    $ 109,107
           Less:  Depreciation, depletion &
                       amortization                      10,995        9,809       23,294       19,492
                  Selling, general & administrative      11,680        9,541       23,981       21,548
                  Other income                           (1,196)      (2,812)      (1,654)      (3,332)
                                                      ---------    ---------    ---------    ---------
           OPERATING PROFIT                              31,314       28,178       68,686       71,399

     STEEL OPERATIONS
           Gross profit                                  27,214       23,573       38,931       56,546
           Less:  Depreciation & amortization            14,509       15,315       29,025       30,545
                  Selling, general & administrative       8,936        5,227       15,868       11,213
                  Other income                           (8,911)        (908)     (11,748)      (2,324)
                                                      ---------    ---------    ---------    ---------
           OPERATING PROFIT                              12,680        3,939        5,786       17,112
                                                      ---------    ---------    ---------    ---------
     TOTAL OPERATING PROFIT                              43,994       32,117       74,472       88,511

     CORPORATE RESOURCES
           Other income                                     562        2,974        1,005        5,438
           Less:  Depreciation & amortization               374          287          742          560
                  Selling, general & administrative       6,542        8,985       14,648       17,044
                                                      ---------    ---------    ---------    ---------
                                                         (6,354)      (6,298)     (14,385)     (12,166)

     INTEREST EXPENSE                                   (10,697)      (9,003)     (23,061)     (18,310)
                                                      ---------    ---------    ---------    ---------

     INCOME BEFORE TAXES & OTHER ITEMS                $  26,943    $  16,816    $  37,026    $  58,035
                                                      =========    =========    =========    =========
</TABLE>

RESULTS OF OPERATIONS

     Net Sales. Consolidated net sales for the current quarter were $335.5
million, compared to $300.6 million for the prior year quarter. Consolidated net
sales for the current six-month period were $697.0 million, compared to $665.7
million for the prior year period. Shipments were higher in both CAC and Steel
segments.

     CAC sales for the quarter were up 8% from the prior year period reflecting
increased shipments for the Company's major products at comparable prices.
Demand for building materials in the Company's CAC markets remained solid. Total
cement sales for the quarter increased $7.7 million from the prior year period
on 8% higher shipments. Sales for the six-month period increased $11.4 million
on 7% higher shipments. Average trade prices remained stable. Ready-mix sales
for the quarter increased $3.3 million from the prior year period on 7% higher
volume. Sales for the six-month period were down somewhat from the prior year
period on comparable volumes. Average trade prices for the periods were slightly
lower. Aggregates sales for the quarter increased $3.4 million from the prior
year period on 5% higher shipments and 2% higher prices. Sales for the six-month
period increased $6.5 million on 6% higher shipments and 5% higher prices.

     Steel sales for the quarter were up $22.1 million from the prior year
period on 28% higher shipments. Realized prices were 11% below the prior year
quarter, however, 6% above the August 2001 quarter. Structural steel sales
increased 14% from the prior year quarter on 27% higher shipments and 10% lower
realized prices. Reduced imports have improved the Company's market share. Bar
mill sales in the current quarter were up 17% from the prior year period on 33%
higher shipments at 12% lower prices.


                                      -15-

<PAGE>

     Operating Costs. Consolidated cost of products sold including depreciation,
depletion and amortization for the current quarter was $280.5 million, an
increase of $24.1 million from the prior year period. Costs for the current
six-month period were $595.1 million, an increase of $47.1 million from the
prior year period. CAC costs increased from the prior year $6.5 million in the
quarter and $18.4 million in the six-month period primarily due to increased
shipments and higher aggregate production. The expanded Midlothian cement
facility is now operating near its expected annual capacity of 2.8 million tons.
Steel costs increased from the prior year $17.6 million in the quarter and $28.7
million in the six-month period. Higher shipments increased costs $34.4 million
in the quarter and $54.3 million in the six-month period offset by lower unit
production costs due to improving efficiencies at the Virginia plant.

     CAC selling, general and administrative expenses including depreciation and
amortization increased from the prior year $1.6 million in the quarter and $1.4
million in the six-month period primarily due to higher incentive and insurance
accruals and increased bad debt reserves. Steel expense increased $3.7 million
in the quarter and $4.7 million in the six-month period primarily due to
increased bad debt reserves and general expenses.

     Operating Profit. Operating profit of $44.0 million for the current quarter
was $11.9 million higher than the prior year period. Operating profit of $74.5
million for the current six-month period was $14.0 million below the prior year
period. CAC operating profit for the current quarter improved $3.1 million over
the prior year period on lower average cement costs and increased aggregate
sales. Steel operating profit for the current quarter includes $8.5 million in
pre-tax income from the Company's litigation against certain graphite electrode
suppliers. Excluding this income Steel operating profit improved $11.1 million
from the August 2001 quarter as higher unit selling prices and reduced unit
costs improved margins.

     Corporate Resources. Selling, general and administrative expenses including
depreciation and amortization decreased $2.4 million for the quarter and $2.2
million for the six-month period on lower costs associated with the Company's
agreement to sell receivables and administrative expenses. Other income
decreased $2.4 million in the current quarter and $4.4 million in the current
six-month period due to lower real estate income.

     Interest Expense. Interest expense for the current six-month period at
$23.1 million was $4.8 million higher than the prior year period. The increase
was due to an $8.1 million decrease in interest capitalized offset by a $3.3
million 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
31.5% compared to 32.2% 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 $3.6 million net of tax benefit were
incurred in each six-month period.

LIQUIDITY AND CAPITAL RESOURCES

     Net income for the current six-month period declined $14.0 million from the
prior year period. Cash from operations funded debt reductions of $105.5
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
November 30, 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 November 30, 2001, $115 million was outstanding under the credit
facility and an additional $109.1 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 November 30,
2001, $102.3 million of additional borrowing could have been incurred.


                                      -16-

<PAGE>


     Net cash provided by operating activities for the current six-month period
was $120.6 million, an increase of $36.1 million over the prior year period as
increased depreciation, depletion and amortization expense and changes in
working capital items offset lower operating profit in both CAC and Steel. CAC
inventories grew $6.5 million and receivables declined $14.1 million. Increased
Steel shipments reduced inventories $14.6 million and increased trade
receivables $12.9 million. Collection of an $18.1 million tax refund claim also
reduced receivables. Accounts payable and accrued expenses increased $9.3
million. Sale of receivables provided $34.5 million in operating cash flow in
the prior year period.

     Net cash used by investing activities for the current six-month period was
$7.2 million, compared to $76.7 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 $10.9 million
compared to $49.4 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, $31.5 million was incurred for the
expansion of the Company's Midlothian, Texas cement plant that was completed
during the May 2001 quarter.

     Net cash used by financing activities for the current six-month period was
$107.3 million, compared to $300,000 provided during the prior year period. The
outstanding balance on the Company's revolving credit facility was reduced
$105.0 million. The Company's quarterly cash dividend in the amount of $.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.

OTHER ITEMS

Litigation

     In November 1998, Chaparral Steel Company ("Chaparral"), a wholly owned
subsidiary, filed an action in the District Court of Ellis County, Texas against
certain graphite electrode suppliers seeking damages for illegal restraints of
trade in the sale of graphite electrodes. The Company has obtained substantial
settlements from the major producers of graphite electrodes named in its action
and continues to pursue such action against the remainder of the 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.


                                      -17-

<PAGE>

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 $2.3 million in
the six-month period ended November 30, 2001 was eliminated.

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 4.  Submission of Matters to a Vote of Security Holders

     At the Annual Meeting of the Shareholders held October 16, 2001,
shareholders elected as Directors of the Company, Gerald R. Heffernan, David A.
Reed, Robert D. Rogers and Ian Wachtmeister to terms expiring in 2004. Votes
cast to elect Gerald R. Heffernan were 18,882,676 affirmative, 251,996 opposed
and 1,767,496 abstained or non-voted. Votes cast to elect David A. Reed were
18,890,122 affirmative, 244,550 opposed and 1,767,496 abstained or non-voted.
Votes cast to elect Robert D. Rogers were 16,199,196 affirmative, 2,935,476
opposed and 1,767,496 abstained or non-voted. Votes cast to elect Ian
Wachtmeister were 18,890,515 affirmative, 244,157 opposed and 1,767,496
abstained or non-voted. Terms of office expire for the continuing directors
Robert Alpert, Eugenio Clariond Reyes and Elizabeth Williams in 2002 and for the
continuing directors John M. Belk, Gordon E. Forward and James M. Hoak, Jr. in
2003.

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 November 30, 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.





January 10, 2002                        /s/  Richard M. Fowler
----------------                        ----------------------
                                        Richard M. Fowler
                                        Executive Vice President - Finance and
                                        Chief Financial Officer
                                        (Principal Financial Officer)



January 10, 2002                        /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-