CENTEX CONSTRUCTION PRODUCTS INC, 10-K405, 2000-06-21

CENTEX CONSTRUCTION PRODUCTS INC
10-K405, 2000-06-21
CEMENT, HYDRAULIC

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED MARCH 31, 2000

COMMISSION FILE NO. 1-12984

CENTEX CONSTRUCTION PRODUCTS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE
(STATE OF INCORPORATION)

75-2520779
(I.R.S. EMPLOYER IDENTIFICATION NO.)

3710 RAWLINS, SUITE 1600, LB 78, DALLAS, TEXAS 75219
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

(214) 559-6514
(REGISTRANT'S TELEPHONE NUMBER)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

NAME OF EACH
EXCHANGE ON WHICH
TITLE OF EACH CLASS REGISTERED
------------------- -------------------
COMMON STOCK NEW YORK STOCK
(PAR VALUE $.01 PER SHARE) EXCHANGE

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE

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
such registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X]. No [ ].

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K, or any
amendment to Form 10-K. [X].

Indicate the number of shares of the registrant's classes of common
stock (or other similar equity securities) outstanding as of the close of
business on June 16, 2000:

Common Stock 18,575,832 shares

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the following documents are incorporated by reference in Parts I,
II, and III, of this Report:

(a) 2000 Annual Report to Stockholders of Centex Construction Products,
Inc. for the fiscal year ended March 31, 2000.

(b) Proxy statement for the annual meeting of stockholders of Centex
Construction Products, Inc. to be held on July 20, 2000.

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TABLE OF CONTENTS
<TABLE>
<CAPTION>

PAGE
----
<S> <C> <C>
PART I

Item 1. Business:
General 1
Industry Segment Information 1
Employees 14
Forward-Looking Statements 14

Item 2. Properties 14

Item 3. Legal Proceedings 15

Item 4. Submission of Matters to a Vote of Security Holders 15

PART II

Item 5. Market for Registrant's Common Equity and
Related Stockholder Matters 16

Item 6. Selected Financial Data 16

Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations 16

Item 8. Financial Statements and Supplementary Data 16

Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure 16

PART III

Item 10. Directors and Executive Officers of the Registrant 17

Item 11. Executive Compensation 17

Item 12. Security Ownership of Certain Beneficial Owners and Management 17

Item 13. Certain Relationships and Related Transactions 17

PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K 17

SIGNATURES 19

INDEX TO EXHIBITS 20
</TABLE>

<PAGE> 3

PART I

ITEM 1. BUSINESS

GENERAL

Centex Construction Products, Inc. ("CXP" or the "Company") is a
producer of a variety of basic construction products used in residential,
industrial, commercial and infrastructure applications. The Company produces and
sells cement, gypsum wallboard, aggregates and readymix concrete. The Company is
incorporated in the state of Delaware. Prior to April 19, 1994, the Company was
a wholly-owned subsidiary of Centex Corporation ("Centex"). On April 19, 1994,
the Company completed an Initial Public Offering ("IPO") of 51% of its common
stock. As a result of the IPO, Centex's ownership of the Company was reduced to
49%. Unless the context indicates to the contrary, the terms "CXP" and the
"Company" as used herein, should be understood to include subsidiaries of CXP
and predecessor corporations. The Company's common stock, par value $0.01 per
share ("CXP Common Stock"), began trading publicly on April 19, 1994. As of June
16, 2000, 18,575,832 shares of CXP Common Stock, which are traded on the New
York Stock Exchange, were outstanding.

As previously disclosed, CXP's Board of Directors authorized CXP
management to repurchase 5,668,630 shares of CXP Common Stock as management
determines advisable. As a result of repurchases during fiscal years 2000, 1999,
1998 and 1997 by CXP of its common stock from the public, and certain purchases
of CXP common stock by Centex from the public, Centex now owns approximately
64.4% of the outstanding shares of CXP Common Stock at March 31, 2000.

CXP's involvement in the construction products business dates to 1963,
when it began construction of its first cement plant. Since that time, the
Company's operations have been expanded to include additional cement production
and distribution facilities and the production, distribution and sale of
aggregates, readymix concrete and gypsum wallboard. The Company's production
facilities are located principally in the western half of the U.S. and in
certain key southwestern states.

The Company operates four quarrying and manufacturing facilities and a
network of 11 terminals for the production and distribution of portland and
masonry cement. These facilities are located primarily in Texas, northern
Illinois, the Rocky Mountain area, Nevada and northern California. The Company
is also vertically integrated, to a limited extent, with readymix concrete
operations in the Austin, Texas area and in northern California. The Company
extracts and produces aggregates from its deposits near Sacramento, California
(the largest single permitted sand and gravel deposit in northern California)
and Austin, Texas. The Company operates two quarries in close proximity to its
gypsum wallboard manufacturing facilities which are located in Albuquerque and
nearby Bernalillo, New Mexico and Gypsum (near Vail), Colorado. The Company has
an associated cogeneration power facility, located at the Gypsum, Colorado
wallboard plant. The Company's wallboard production is shipped by rail and truck
to markets throughout the continental United States. The Company's corporate
office is in Dallas, Texas.

INDUSTRY SEGMENT INFORMATION

The following table presents revenues and earnings before interest and
income taxes contributed by each of the Company's industry segments during the
periods indicated. Identifiable assets, depreciation, depletion and
amortization, and capital expenditures by segment are presented in Note E of the
Notes to the Consolidated Financial Statements of CXP on pages 26 and 27 of
CXP's Annual Report to Stockholders for the fiscal year ended March 31, 2000
(the "2000 CXP Annual Report").

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FOR THE FISCAL YEARS ENDED MARCH 31,
----------------------------------------------------------

2000 1999 1998 1997 1996
------ ------ ------ ------ ------
(In Millions)
<S> <C> <C> <C> <C> <C>
Contribution to Revenues:
Cement $159.0 $152.4 $140.4 $133.3 $125.7
Gypsum Wallboard 209.3 141.6 118.7 72.2 58.3
Concrete and Aggregates 55.5 46.9 42.0 36.8 39.9
Other, net 1.2 1.7 1.9 1.8 2.8
------ ------ ------ ------ ------
425.0 342.6 303.0 244.1 226.7
Less Intersegment Sales (6.3) (6.5) (5.7) (4.7) (4.1)
------ ------ ------ ------ ------

Total Net Revenues $418.7 $336.1 $297.3 $239.4 $222.6
====== ====== ====== ====== ======

Contribution to Operating
Earnings:
Cement $ 53.0 $ 56.8 $ 48.1 $ 39.8 $ 35.3
Gypsum Wallboard 107.6 56.6 35.8 20.5 11.9
Concrete and Aggregates 9.3 7.4 4.5 4.8 5.6
Other, net 1.2 1.7 1.9 1.8 2.8
------ ------ ------ ------ ------
171.1 122.5 90.3 66.9 55.6
Corporate Overhead (4.7) (4.4) (3.8) (3.9) (2.5)
------ ------ ------ ------ ------

Total Earnings Before
Interest and Income Taxes $166.4 $118.1 $ 86.5 $ 63.0 $ 53.1
====== ====== ====== ====== ======
</TABLE>

Revenues for the past three years from each of the Company's industry
segments, expressed as a percentage of total consolidated net revenues, were as
follows:

Percentage of Total
Consolidated Net Revenues
-----------------------------
Segment: 2000 1999 1998
----- ----- -----
<S> <C> <C> <C>
Cement 36.6% 43.5% 45.4%
Gypsum Wallboard 50.0 42.1 39.9
Concrete and Aggregates:
Readymix Concrete 9.8 10.5 10.7
Aggregates 3.3 3.4 3.3
----- ----- -----
13.1 13.9 14.0
Other, net 0.3 0.5 0.7
----- ----- -----
Total Consolidated Net Revenues 100.0% 100.0% 100.0%
===== ===== =====
</TABLE>

CEMENT OPERATIONS

Company Operations. The Company's cement production facilities are
located in or near Buda, Texas; LaSalle, Illinois; Laramie, Wyoming; and
Fernley, Nevada. The Laramie, Wyoming and Fernley, Nevada facilities are
wholly-owned. The Buda, Texas plant is owned by Texas-Lehigh Cement Company, a
joint venture owned 50% by the Company and 50% by Lehigh Portland Cement
Company, a subsidiary of Heidelberger Zement AG. The LaSalle, Illinois plant is
owned by Illinois Cement Company, a joint venture owned 50% by CXP and 50% by
RAAM Limited Partnership, a partnership controlled by members of the Pritzker
family. The Company receives a management fee of $150,000 per year to manage the
Illinois joint venture. The Company's Laramie, Wyoming plant operates under the
name of Mountain Cement Company and the Fernley, Nevada plant under the name of
Nevada Cement Company.

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Cement is the basic binding agent for concrete, a primary construction
material. The manufacture of portland cement primarily involves the extracting,
crushing, grinding and blending of limestone and other raw materials into a
chemically proportioned mixture which is then burned in a rotary kiln at
extremely high temperatures to produce an intermediate product known as clinker.
The clinker is cooled and interground with a small amount of gypsum to the
consistency of face powder to produce finished cement. Clinker can be produced
utilizing either of two basic methods, a "wet" or a "dry" process. In the wet
process, the raw materials are mixed with water to the advantage of greater ease
in the handling and mixing of the raw materials. However, additional heat, and
therefore fuel, is required to evaporate the moisture before the raw materials
can react to form clinker. The dry process, a more fuel efficient technology,
excludes the addition of water into the process. Dry process plants are either
preheater plants, in which hot air is recycled from the rotary kiln to preheat
materials, or are precalciner plants, in which separate burners are added to
accomplish a significant portion of the chemical reaction prior to the
introduction of the raw materials into the kiln. As fuel is a major component in
the cost of producing clinker, most modern cement plants, including all four of
the plants operated by the Company, incorporate the more fuel efficient dry
process technology. At present, approximately 80% of the Company's net clinker
capacity is from preheater or preheater/precalciner kilns, compared to
approximately one-half of U.S. cement capacity manufactured from such kilns.

Rated Annual Estimated
Clinker Minimum
Capacity Number Limestone
(Thousand Manufacturing of Dedication Reserves
Location short tons)(1) Process Kilns Date (Years)
-------- ---------------- ------------------ --------- -------------- -------
<S> <C> <C> <C> <C> <C>
Buda, Texas (2) 1,200 Dry - 4 Stage 1 1978 60
Preheater
Flash Calciner 1983
LaSalle, Illinois (2) 620 Dry - 4 Stage 1 1974 40
Preheater
Laramie, Wyoming 600 Dry - 2 Stage 1 1988 30
Preheater
Dry - Long Dry 1 1996
Kiln
Fernley, Nevada 500 Dry - Long Dry 1 1964 15
Kiln
Dry - 1 Stage 1 1969
Preheater
------

Total - Gross(3) 2,920
======
- Net (3) 2,010
======
</TABLE>

--------------------

(1) One short ton equals 2,000 pounds.

(2) The amounts shown represent 100% of plant capacity and production.
These plants are owned by separate joint ventures, in each of which the
Company has a 50% interest.

(3) Generally, a plant's cement grinding production capacity is greater
than its clinker production capacity.

The Company's net cement production, excluding the joint venture
partners' 50% interest in the Buda and LaSalle plants, totaled 2.07 million tons
in fiscal 2000 and 2.05 million tons in fiscal 1999. Total net cement sales were
2.30 million tons in fiscal 2000 and 2.22 million tons in fiscal 1999 as all
plants sold all of the product they produced. Cement production is
capital-intensive and involves high fixed costs. As a result, plant capacity
utilization levels are an important measure of a plant's profitability, since
incremental sales volumes tend to generate increasing profit margins. During the
past two years, the Company purchased cement from others to be resold. Purchased
cement sales typically occur at lower gross profit margins. As a result of high
downtime coupled with the kiln renovation at the Laramie plant, the Company had
to purchase additional cement to replace lost manufactured cement sales. In
fiscal 2000,

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12.2% of the cement sold by the Company was acquired from outside sources,
compared to 6.9% in fiscal 1999. During the second quarter of FY 2000 the
Company completed a capital project that expanded the annual clinker capacity of
the LaSalle, Illinois plant by approximately 85,000 tons and added a new finish
mill.

Raw Materials and Fuel Supplies. The principal raw material used in the
production of portland cement is calcium carbonate in the form of limestone.
Limestone is obtained principally through the mining and extraction operations
conducted at quarries owned or leased by the Company (including its joint
ventures) and located in close proximity to its plants. The Company believes
that the estimated recoverable limestone reserves owned or leased by it (or its
joint ventures) will permit each of its plants to operate at its present
production capacity for at least 30 years or, in the case of the Company's
Nevada plant, at least 15 years. The Company expects that additional limestone
reserves for its Nevada plant will be available when needed on an economically
feasible basis, although such reserves may be more distant and more expensive to
transport than the Company's existing reserves. Other raw materials used in
substantially smaller quantities than limestone are sand, clay, iron ore and
gypsum, that are either obtained from Company-owned or leased reserves or are
purchased from outside suppliers.

The Company's cement plants use coal and coke as their primary fuel,
but are equipped to burn natural gas as an alternative. The Company has not used
hazardous waste-derived fuels in its plants. The Company's LaSalle, Illinois and
Buda, Texas plants have been permitted to burn scrap tires as a partial fuel
alternative. Electric power is also a major cost component in the manufacture of
cement. The Company has sought to diminish overall power costs by adopting
interruptible power supply agreements which may expose the Company to some
production interruptions during periods of power curtailment.

Sales and Distribution. Demand for cement is highly cyclical and
derived from the demand for concrete products which, in turn, is derived from
demand for construction. According to estimates of the Portland Cement
Association (the "PCA"), the industry's primary trade organization, the three
construction sectors that are the major components of cement consumption are (i)
public works construction, including public buildings, (ii) commercial and
industrial construction and (iii) residential construction, which comprised 52%,
20% and 28%, respectively, of U.S. cement consumption in 1998, the most recent
period for which such data is available. Public works construction was favorably
impacted when the U.S. Congress passed legislation in 1998 known as the
Transportation Equity Act for the 21st Century. This legislation authorized $218
billion in federal expenditures on highways, bridges and mass transit projects
over the next six years. This represents a 44% increase over the previous
six-year period, which ended in 1997. Construction spending and cement
consumption have historically fluctuated widely. The construction sector is
affected by the general condition of the economy and can exhibit substantial
variations across the country as a result of the differing structures of the
regional economies. Regional cement markets experience peaks and valleys
correlated with regional construction cycles. Also, demand for cement is
seasonal, particularly in northern states where inclement weather affects
construction activity. Sales are generally greater from spring through the
middle of autumn than during the remaining part of the year. While the impact on
the Company of construction cycles in individual regions may be mitigated to
some degree by the geographic diversification of the Company, profitability is
very sensitive to shifts in the balance between supply and demand. As a
consequence, the Company's cement segment sales and earnings follow a similar
cyclical pattern.

The following table sets forth certain information regarding the
geographic area served by each of the Company's cement plants and the location
of the Company's distribution terminals in each area. The Company has a total of
11 cement storage and distribution terminals that are strategically located to
extend the sales areas of its plants.

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Plant Location Principal Geographic Areas Distribution Terminals
-------------- -------------------------- ----------------------
<S> <C> <C>
Buda, Texas Texas and western Louisiana Corpus Christi, TX
Houston, TX
Orange, TX
Roanoke (Fort Worth), TX
Waco, TX

LaSalle, Illinois Illinois and southern Wisconsin Hartland, WI

Laramie, Wyoming Wyoming, Utah, northern Rock Springs, WY
Colorado, western Nebraska Salt Lake City, UT
and eastern Nevada Denver, CO
North Platte, NE

Fernley, Nevada Nevada (except Las Vegas) and Sacramento, CA
northern California
</TABLE>

Cement is distributed directly to customers principally by common
carriers, customer pick-up and, to a lesser extent, trucks owned by the Company.
The Company transports cement principally by rail to its storage and
distribution terminals. Cement is distributed primarily in bulk, but also in
paper bags. No single customer accounted for as much as 10% of the Company's
cement sales during fiscal 2000.

Sales are made on the basis of competitive prices in each area. As is
customary in the industry, the Company does not typically enter into long-term
sales contracts, except with respect to major construction projects.

Competition. The cement industry is extremely competitive as a result
of multiple domestic suppliers and the importation of foreign cement through
various terminal operations. Despite the price inelasticity with overall cement
demand, competition among producers and suppliers of cement is based primarily
on price, with consistency of quality and service to customers being important
but of lesser significance. Price competition among individual producers and
suppliers of cement within a geographic area is intense because of the fungible
nature of the product. The U.S. cement industry is fragmented into regional
geographic areas rather than a single national selling area. Because of cement's
low value-to-weight ratio, the relative cost of transporting cement is high and
limits the geographic area in which each company can market its products
economically. No one cement company has a distribution of plants extensive
enough to serve all geographic areas. The number of principal competitors of the
Company's Texas, Illinois, Wyoming and Nevada plants are six, six, four and six,
respectively, operating in these regional areas.

The United States cement industry comprises approximately 44 companies
which own 107 gray cement plants with approximately 86 million tons of clinker
manufacturing capacity (approximately 90 million tons of cement manufacturing
capacity, assuming a 105% conversion ratio). The PCA estimates that U.S.
portland cement demand totaled approximately 116 million tons in calendar 1999,
with approximately 28% of such demand being satisfied by imported cement.
Continued strength in all three construction sectors in calendar 1999 resulted
in the sixth consecutive year of record setting cement consumption in the U.S.
Based on the level of demand, the Company estimates that the cement industry as
a whole operated in excess of 98% of its aggregate manufacturing capacity during
calendar 1999. The PCA reports that, as of October 1999, approximately 26 plant
modernization and expansion projects, including six new cement plants, have been
announced or are underway. These projects, if completed, could add almost 22
million tons of new domestic cement manufacturing capacity and increase existing
capacity by 24%. The announced expansions represent a significant change for the
industry, but market forces and other factors may interfere with producers'
plans. The Company does not anticipate that all of the industry's announced
expansions will actually be constructed and because of the long lead times
associated with adding additional capacity, any increased production capability
is expected to be gradual over the next several years. The PCA has predicted
U.S. cement use will grow to 128 million tons by

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<PAGE> 8

2004, compared with an estimated 116 million tons of cement consumption in
calendar 1999. The Company, however, can offer no guarantee regarding this
predicted increase in near-term demand. In addition, the Company does not know
how much, if any, old, inefficient cement production capacity may be retired
during this period. Even if all announced expansions are completed, a capacity
deficit of approximately 16 million tons would still exist in 2004 if the PCA
consumption projections are valid.

Cement imports into the United States occur primarily to supplement
domestic cement production during peak demand periods. Throughout most of the
1980's, however, competition from low-priced imported cement in most coastal and
border areas of the U.S. grew significantly, which included the company's
Fernley, Nevada and Buda, Texas plants' markets. According to the PCA, the
1980's was a period of relatively high cement imports. This high level of
imports depressed cement prices during a period of strong U.S. cement demand. As
a result of antidumping petitions filed by a group of domestic cement producers,
significant antidumping duty cash deposit requirements have been imposed on
cement imported from Mexico since 1990 and from Japan since 1991. Venezuela
signed a suspension agreement requiring it not to export to the U.S. at dumped
prices. The existing antidumping orders and suspension agreement have
contributed substantially to an improvement in the condition of the U.S. cement
industry.

In the case of Mexico, margins to calculate cash deposit rates and the
resulting antidumping duties are subject to annual review by the Department of
Commerce and appeal to the U.S. Court of International Trade and the U.S. Court
of Appeals for the Federal Circuit or to binational dispute panels under the
North American Free Trade Agreement ("NAFTA").

Pursuant to the Uruguay Round Agreement, the General Agreement on
Tariffs and Trade ("GATT") and the GATT Antidumping Code were superseded on
January 1, 1995, by a new GATT that will be administered by the World Trade
Organization. The antidumping orders outstanding against cement and clinker from
Mexico and Japan and the suspension agreement on cement and clinker from
Venezuela will remain in force. As a result of legislation passed by the U.S.
Congress in 1994, Commerce and the ITC began conducting "sunset" reviews in 1999
of the antidumping orders and suspension agreements to determine whether they
should be revoked or remain in effect for another five years. Results of the
1999 review is expected later in calendar 2000.

NAFTA thus far has had no material adverse effect on the antidumping
duty cash deposit rates imposed on gray portland cement and clinker imported
from Mexico. The Company does not believe that NAFTA will have a material,
adverse effect on the foregoing antidumping duty cash deposit rates in the near
future. A substantial reduction or elimination of the existing antidumping
duties as a result of GATT, NAFTA or any other reason could adversely affect the
Company's results of operations.

U.S. imports of foreign cement began to increase in the mid-1990's as
the use of cement in the U.S. began to recover. The PCA has estimated that
imports represented approximately 28% of cement used in the U.S. during 1999 as
compared with approximately 23% in 1998 and 18% in 1997. Unlike the imports
during the 1980's, however, most of the recent imports have provided an
additional source of supply rather than disrupting the market with unfair
prices. During most of the recent period of strong demand, the prices of cement
imports rose. The increase was attributable, at least in part, to the influence
of the outstanding antidumping orders and suspension agreements. While the
average cost of imported cement rose during 1999, the cost of cement imports
from some countries, particularly those from Southeast Asia, are less. Moreover,
independently owned cement operators could undertake to construct new import
facilities and begin to purchase large quantities of low-priced cement from
countries not yet subject to antidumping orders, such as those in Asia, which
could compete with domestic producers, as has happened in the Company's Houston,
Texas market. The introduction of low-priced imported cement from such sources
usually results in a decrease in the Company's result of operations.

Capital Expenditures. Capital expenditures during fiscal 2000 amounted
to $10.3 million for the Company's cement segment compared with $7.5 million and
$3.5 million in fiscal 1999 and 1998,

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<PAGE> 9

respectively. Capital outlays in fiscal 2001 have been budgeted at approximately
$6.6 million. Approximately 27% of the budgeted fiscal 2001 total is related to
compliance with environmental regulations.

Environmental Matters. The cement manufacturing industry, including the
operations of the Company, is regulated by federal, state and local laws and
regulations pertaining to several areas including human health and safety and
environmental compliance. The Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 ("CERCLA"), as amended by the Superfund
Amendments and Reauthorization Act of 1986, as well as analogous laws in certain
states, create joint and several liability for the cost of cleaning up or
correcting releases to the environment of designated hazardous substances. Among
those who may be held jointly and severally liable are those who generated the
waste, those who arranged for disposal, those who owned or operated the disposal
site or facility at the time of disposal, and current owners. In general, this
liability is imposed in a series of governmental proceedings initiated by the
identification of a site for initial listing as a "Superfund site" on the
National Priorities List or a similar state list and the identification of
potentially responsible parties who may be liable for cleanup costs. None of the
Company's sites are listed as a "Superfund site."

The Company's operations are also potentially affected by the Resource
Conservation and Recovery Act ("RCRA"), which is the primary federal statute
governing the management of solid waste and which includes stringent regulation
of solid waste that is considered hazardous waste. The Company's operations
generate nonhazardous solid waste that may include cement kiln dust ("CKD").
Because of a RCRA exemption, known as the Bevill Amendment, CKD generated in the
Company's operations is currently not considered a hazardous waste under RCRA,
pending completion of a study and recommendations to Congress by the U.S.
Environmental Protection Agency ("U.S. EPA"). Nevertheless, such CKD is still
considered a solid waste and is regulated primarily under state environmental
laws and regulations. The U.S. EPA has completed its review of CKD and has
decided to promulgate regulations to govern the handling and disposal of CKD
which will supersede the Bevill Amendment. The Bevill Amendment will remain in
effect until those regulations are in place.

In the past, the Company collected and stored CKD on-site at its cement
plants. The Company continues to store such CKD at its Illinois, Nevada and
Wyoming cement plants and at a former plant site in Corpus Christi, Texas, which
is no longer in operation. Currently, the Company recycles substantially all CKD
related to present operations at all of its cement facilities. When the U.S. EPA
removes the CKD exemption and develops particular CKD management standards in
the future, the Company might be required to incur significant costs in
connection with its CKD. CKD that comes in contact with water might produce a
leachate with an alkalinity high enough to be classified as hazardous and might
also leach certain hazardous trace metals therein.

Another issue of potential significance to the Company is global
warming and the international accord on carbon dioxide stabilization/reduction.
Carbon dioxide is a green house gas many scientists and others believe
contributes to a warming of the Earth's atmosphere. In December 1997, the United
Nations held an international convention in Kyoto, Japan to take further
international action to ensure greenhouse gas stabilization and/or reduction
after the turn of the century. The conference agreed to a protocol to the United
Nations Framework Convention on Climate Change originally adopted in May 1992.
The protocol establishes quantified emission reduction commitments for certain
developed countries, including the U.S., and certain countries that are
undergoing the process of transition to a market economy. These reductions are
to be obtained by 2008-2012. The protocol was made available for signature by
member countries starting in the spring of 1998. The protocol will require
Senate ratification and enactment of implementing legislation before it becomes
effective in the United States.

The consequences of greenhouse gas reduction measures for cement
producers are potentially significant because carbon dioxide is generated from
combustion of fuels such as coal and coke in order to generate the high
temperatures necessary to manufacture cement clinker (which is then ground with

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<PAGE> 10

gypsum to make cement). In addition, carbon dioxide is generated in the
calcining of limestone to make cement clinker. Any imposition of raw material or
production limitations or fuel-use or carbon taxes could have a significant
impact on the cement manufacturing industry. It will not be possible to
determine the impact on the Company, if any, until governmental requirements are
defined and/or the Company can determine whether emission offsets and/or credits
are obtainable, and whether alternative cementitious products or alternative
fuel can be substituted.

The Company's cement kilns utilize coal, coke, natural gas, minimal
amounts of self-generated waste oil, and scrap tires in the Illinois and Texas
plants, as fuel.

In April 1992, one of the Company's subsidiaries, Nevada Cement Company
("NCC"), was identified as a potentially responsible party under CERCLA by the
U.S. EPA at the North American Environmental, Inc. storage facility in
Clearfield, Utah ("North American Environmental Site") because of allegations
that NCC arranged for the disposal of hazardous substances at that site. The
Company has records indicating that all of the hazardous substances originating
from NCC that were temporarily stored at the North American Environmental Site
were removed from the storage facility and destroyed in accordance with
applicable laws. The Company is aware of no current estimates of the total
remediation costs or the total volume of waste associated with this site. The
U.S. EPA has identified the NCC cement plant site in Fernley, Nevada, as a
potential hazardous waste site and entered it into the Comprehensive
Environmental Response, Compensation, and Liability Information System
("CERCLIS") database in January 1992. U.S. EPA performed an assessment in 1992
under CERCLA at the NCC plant because of concerns over an unlined disposal pond
and a citizen complaint about disposal of wastes. NCC cleaned up the
contaminated soil in the vicinity of this pond under the jurisdiction of the
Nevada Department of Conservation and Natural Resources, Division of
Environmental Protection at an immaterial cost to NCC. There can be no assurance
that the Company will not incur material liability in connection with the North
American Environmental Site or the contamination concerns at the Fernley, Nevada
plant site.

Another RCRA concern in the cement industry involves the historical
disposal of refractory brick containing chromium. Such refractory brick was
formerly widely used in the cement industry to line cement kilns. The Company
currently crushes spent refractory brick and uses it as raw feed, but such brick
does not contain chromium.

The Clean Air Act Amendments of 1990 (the "Amendments") provided
comprehensive federal regulation of all sources of air pollution and established
a new federal operating permit and fee program for virtually all manufacturing
operations. The Amendments will likely result in increased capital and
operational expenses for the Company in the future, the amounts of which are not
presently determinable. The Company's U.S. operations have submitted detailed
permit applications and will pay increased recurring permit fees. In addition,
the U.S. EPA is developing regulations for toxic air pollutants under these
Amendments for a broad spectrum of industrial sectors, including portland cement
manufacturing. The U.S. EPA has indicated that the new maximum available control
technology standards could require significant reduction of air pollutants below
existing levels prevalent in the industry. Management has no reason to believe,
however, that these new standards would place the Company at a competitive
disadvantage.

The Federal Water Pollution Control Act, commonly known as the Clean
Water Act ("Clean Water Act"), provides comprehensive federal regulation of all
sources of water pollution. All applicable facilities currently have National
Pollutant Discharge Elimination System ("NPDES") stormwater permits.

Management believes that the Company's current procedures and practices
in its operations, including those for handling and managing materials, are
consistent with industry standards. Nevertheless, because of the complexity of
operations and compliance with environmental laws, there can be no assurance
that past or future operations will not result in operational errors,
violations, remediation or other liabilities or claims. Moreover, the Company
cannot predict what environmental laws will be enacted or

8
<PAGE> 11

adopted in the future or how such future environmental laws will be administered
or interpreted. Compliance with more stringent environmental laws, as well as
potentially more vigorous enforcement policies of regulatory agencies or
stricter interpretation of existing environmental laws, could necessitate
significant capital outlays.

With respect to some of the Company's quarries used for the extraction
of raw materials for its cement and gypsum wallboard operations and for the
mining of aggregates for its aggregate operations, the Company is obligated
under certain of its permits and certain regulations to engage in reclamation of
land within the quarries upon completion of extraction and mining. The Company
generally accrues the reclamation costs for each specific quarry.

GYPSUM WALLBOARD OPERATIONS

Company Operations. The Company owns and operates three gypsum
wallboard manufacturing facilities, two located in Albuquerque and nearby
Bernalillo, New Mexico and one located in Gypsum (near Vail), Colorado. The
Company mines and extracts gypsum and then manufactures gypsum wallboard by
first pulverizing quarried gypsum, then placing it in a calciner for conversion
into plaster. The plaster is mixed with various chemicals and water to produce a
mixture known as slurry, which is inserted between two continuous sheets of
recycled paperboard on a high-speed production line and allowed to harden. The
resulting sheets of gypsum wallboard are then cut to appropriate lengths, dried
and bundled for sale. Gypsum wallboard is used to finish the interior walls and
ceilings in residential, commercial and institutional construction. These panel
products provide aesthetic as well as sound-dampening and fire-retarding value.

The Albuquerque plant was acquired in 1985, and was operated until
early 1991. Following the start-up of the new Bernalillo plant in the spring of
1990, the Company elected to suspend operations at the Albuquerque plant due to
weak market conditions. Operations at the Albuquerque plant were recommenced in
May 1993, due to improvements in wallboard demand and prices. The Gypsum,
Colorado gypsum wallboard plant and accompanying electric power cogeneration
facility were purchased in February 1997. The plant originally commenced
production in early 1990 and had been operated by an independent producer until
its acquisition by CXP.

The following table sets forth certain information regarding these
plants:
<TABLE>
<CAPTION>

Rated Annual Gypsum Estimated Minimum
Wallboard Capacity Gypsum Rock
Location (MMSF)(1) Reserves (years)(2)
-------- ------------------- --------------------
<S> <C> <C>
Albuquerque, New Mexico 390 80(3)
Bernalillo, New Mexico 470 80(3)
Gypsum, Colorado 630 35
------
Total 1,490
======
</TABLE>

---------
(1) Million Square Feet ("MMSF")
(2) Proven reserves only. See Raw Materials and Fuel Supplies section for
additional reserves.
(3) The same reserves serve both New Mexico plants.

The Company's net gypsum wallboard production totaled 1,375 MMSF in
fiscal 2000 and 1,151 MMSF in fiscal 1999. Total gypsum wallboard sales were
1,363 MMSF in fiscal 2000 and 1,155 MMSF in fiscal 1999.

During the third quarter of fiscal 1999, the Company completed a major
capital project to modernize, upgrade and expand its Albuquerque, New Mexico
plant that increased the plant's annual productive capacity by 60 MMSF, allowed
for the production of 54" gypsum wallboard and significantly

9
<PAGE> 12

reduced fuel cost. The Company also completed a major capital project early in
fiscal 2000 to expand the annual productive capacity of the Gypsum, Colorado
plant by approximately 60% or 240 MMSF.

Raw Materials and Fuel Supplies. The Company mines and extracts gypsum
rock, the principal raw material used in the manufacture of gypsum wallboard,
from mines and quarries owned, leased or subject to claims owned by the Company
and located near its plants. The New Mexico and Colorado mines and quarries are
estimated to contain approximately 50 million tons and 21 million tons of proven
and probable gypsum reserves, respectively. Based on its current production
capacity, the Company estimates that the life of its existing gypsum rock
reserves is approximately 80 years in New Mexico and 35 years Colorado.

Paper used in manufacturing gypsum wallboard is purchased by the
Company from third-party suppliers. Approximately 90% of the Company's paper
requirements are under two "evergreen" paper contracts, with both contracts
having a twelve month notice provision for termination. The remainder of the
Company's paper requirements are purchased on the open market from various
suppliers. The Company does not believe that the loss of a supplier would have a
material, adverse effect on its business.

The Company's gypsum wallboard manufacturing operations use large
quantities of natural gas and electrical power. Substantially all of the
Company's natural gas requirements for its gypsum wallboard plants are currently
provided by two gas producers under gas supply agreements expiring in May 2000
for both the New Mexico and Colorado plants. If the agreements are not renewed,
the Company expects to be able to obtain its gas supplies from other local gas
producers at competitive prices. Electrical power is supplied to the Company's
New Mexico plants at standard industrial rates by a local utility. The Company's
Albuquerque plant adopted an interruptible power supply agreement which may
expose it to some production interruptions during periods of power curtailment.
Power for the Gypsum, Colorado plant is supplied by the cogeneration power
facility that was acquired along with the gypsum wallboard plant in February
1997. Currently, the cogeneration power facility supplies only the power needs
of the gypsum wallboard plant and does not sell any power to third parties.

Sales and Distribution. The principal sources of demand for gypsum
wallboard are (i) residential construction, (ii) repair and remodeling, (iii)
non-residential construction, and (iv) other activities such as exports and
temporary construction, which the Company estimates accounted for approximately
42%, 37%, 15% and 6%, respectively, of calendar 1999 industry sales. While the
gypsum wallboard industry remains highly cyclical, recent growth in the repair
and remodeling segment, together with certain trends in new residential and
commercial construction activity, have partially mitigated the impact of
fluctuations in overall levels of new construction.

Although the percentage of gypsum wallboard shipments accounted for by
new residential construction has declined in recent years, new residential
construction remains the largest single source of gypsum wallboard demand. In
recent years, demand has been favorably impacted by a shift toward more
single-family detached housing within the new residential construction segment
and by an increase in the size of the average single-family detached home.

The size of the total residential repair and remodel market grew to an
estimated record $125 billion in 1998, up from $46 billion in 1980. Although
data on commercial repair and remodel activity are not readily available, the
Company believes that this segment has also grown significantly in recent years.
The growth of the repair and remodeling market is primarily due to the aging of
housing stock, remodeling of existing buildings and tenant turnover in
commercial space. In addition, repair and remodeling activity has benefitted
from the fact that it has increasingly come to be viewed by homeowners,
particularly in recessionary periods, as a low cost alternative to purchasing a
new house.

The Company sells gypsum wallboard to numerous building materials
dealers, gypsum wallboard specialty distributors, home center chains and other
customers located throughout the United States. One

10
<PAGE> 13

customer with multiple shipping locations accounted for approximately 11% of the
Company's total gypsum wallboard sales during fiscal 2000. However, the Company
does not believe that the loss of that customer would have a material adverse
affect on the Company and its subsidiaries taken as a whole.

During fiscal 2000, the principal states in which the Company had
gypsum wallboard sales were Colorado, Texas, Florida, New Mexico, and Illinois.
Prior to fiscal 1992, most of the Company's gypsum wallboard sales were made in
the western United States, with significant sales in California. However, due to
the sharp decline in construction activity in California during the early
1990's, the Company has focused the distribution of its gypsum wallboard in
various other areas of the country.

Although gypsum wallboard is distributed principally in regional areas,
the Company and certain other producers have the ability to ship gypsum
wallboard by rail outside their usual regional distribution areas to take
advantage of these other regional increases in demand. The Company owns or
leases 168 railcars for transporting gypsum wallboard. In addition, in order to
facilitate distribution in certain strategic areas, the Company maintains a
distribution center in Albuquerque, New Mexico and four reload yards in Florida,
Alabama and Illinois. The Company's rail distribution capabilities permit it to
reach customers in all states west of the Mississippi River and many eastern
states. During fiscal 2000, approximately 25% of the Company's sales volume of
gypsum wallboard was transported by rail.

Competition. There are eleven manufacturers of gypsum wallboard
operating a total of 82 plants. The Company estimates that the three largest
producers - USG Corporation, National Gypsum Company and Georgia-Pacific
Corporation - account for approximately 80% of gypsum wallboard sales in the
United States. In 1996 and early 1997, the industry experienced some
consolidation, the largest being Georgia-Pacific Corporation's purchase of the
gypsum wallboard business of Domtar, Inc. In general, a number of the Company's
competitors in the gypsum wallboard industry have greater financial,
manufacturing, marketing and distribution resources than the Company.
Furthermore, certain of its competitors have vertically integrated operations
consisting of gypsum wallboard manufacturing plants, paper mills and
distribution centers, which may provide them with certain cost advantages over
the Company.

Competition among gypsum wallboard producers is primarily on a regional
basis, with local producers benefitting from lower transportation costs, and to
a lesser extent on a national basis. Because of the commodity nature of the
product, competition is based principally on price and, to a lesser extent, on
product quality and customer service.

Total United States gypsum wallboard production capacity is estimated
currently at 31.6 billion square feet per year, a 9% rise from 1998. The Gypsum
Association, an industry trade group, estimates that total calendar 1999 gypsum
wallboard shipments were approximately 28.8 billion square feet, resulting in
industry capacity utilization of 100% until the fall of 1999 when new capacity
came on line.

During the past three years, a number of the Company's competitors in
the gypsum wallboard industry commenced, or announced an intention to commence,
capital expansion projects to construct new gypsum wallboard manufacturing
facilities or to expand existing facilities. The completion of these projects,
if all of them are actually started and carried through to completion, could
increase domestic industry capacity over the next two years by up to 14%.
However, some or all of this additional capacity could be absorbed if there is
an increase in domestic demand (over the past 25 years demand for gypsum
wallboard in the United States has increased at an average annual rate of 4%)
and/or if less efficient plants are shut down. Late in fiscal 2000, the gypsum
wallboard industry shifted from market allocations to an "over" supply
situation. Consequently, pricing peaked in October 1999 and started to decline.
If during the next two years there is no corresponding increase in domestic
demand for gypsum wallboard and/or no corresponding shut down of inefficient or
marginally efficient gypsum wallboard plants, gypsum wallboard prices will
likely decline further, thus negatively impacting future results in the
Company's Gypsum Wallboard group.

11
<PAGE> 14

Capital Expenditures. Capital expenditures during fiscal 2000 for the
gypsum wallboard segment amounted to $10.8 million; $24.2 million in fiscal year
1999; and $7.9 million in fiscal year 1998. Capital outlays in fiscal 2001 have
been budgeted at approximately $2.4 million with 35% of the expenditures related
to compliance with environmental regulation. The majority of the fiscal 1999
expenditures ($22.3 million) were for the Albuquerque, New Mexico and Gypsum,
Colorado plant upgrade projects.

Environmental Matters. The gypsum wallboard industry is subject to
environmental regulations similar to those governing the Company's cement
operations. None of the Company's gypsum wallboard operations are presently the
subject of any local, state or federal environmental proceedings or inquiries.
The Company does not, and has not, used asbestos in any of its gypsum wallboard
products.

In the fiscal year ended March 31, 1996, one of the Company's gypsum
wallboard subsidiaries entered into a consent order with the U.S. EPA to settle
claims of the U.S. EPA against potentially responsible parties with respect to a
waste disposal facility in Broomfield, Colorado. The Company's subsidiary
contracted with the facility for the disposal of a small amount of liquid waste.
The facility was eventually closed by governmental agencies. The Company's
subsidiary settled this matter by entering into the consent order and paying
approximately $50 into a settlement fund.

CONCRETE AND AGGREGATES OPERATIONS

Company Operations. Readymix concrete, a versatile, low-cost building
material used in almost all construction, involves the mixing of cement, sand,
gravel, crushed stone and water to form concrete which is then sold and
distributed to numerous construction contractors. Concrete is produced in batch
plants and transported to the customer's job site in mixer trucks.

The construction aggregates business consists of the mining,
extraction, production and sale of crushed stone, sand, gravel and lightweight
aggregates such as expanded clays and shales. Construction aggregates of
suitable characteristics are employed in virtually all types of construction,
including the production of portland and asphaltic cement concrete mixes and in
highway construction and maintenance.

As in the cement industry, the demand for readymix concrete and
aggregates largely depends on regional levels of construction activity. The
construction sector is subject to the vagaries of weather conditions, the
availability of financing at reasonable rates and overall fluctuations in
regional economies, and therefore tends to be cyclical. Both the concrete and
aggregates industries are highly fragmented, with numerous participants
operating in local areas. Because the cost of transporting concrete and
aggregates is very high relative to product values, producers of concrete and
aggregates typically can sell their products only in areas within 100 miles of
their production facilities. Barriers to entry in each industry are low, except
with respect to environmental permitting requirements for new aggregate
production facilities and zoning of land to permit mining and extraction of
aggregates.

The Company produces and distributes readymix concrete north of
Sacramento, California and in Austin, Texas. The following table sets forth
certain information regarding these operations:

Location Number of Plants Number of Trucks
-------- ---------------- ----------------

<S> <C> <C>
Northern California 5 41
Austin, Texas 5 73
--- ---
Total 10 114
=== ===
</TABLE>

The Company's production of readymix concrete reached a ten-year peak
of 992,000 cubic yards in 1986. In response to decreased demand in the northern
California and Austin areas, production declined to 430,000 cubic yards in
fiscal 1990. Since that date, production has increased each successive year as
market conditions continue to improve. The Company believes that it has the
capacity to increase its

12
<PAGE> 15

concrete production from existing levels by adding to its fleet of trucks. The
Company's net readymix concrete production was 788,000 cubic yards in fiscal
2000 and 706,000 cubic yards in fiscal 1999.

The Company conducts aggregate operations near its concrete facilities
in northern California and Austin, Texas. Aggregates are obtained principally by
mining and extracting from quarries owned or leased by the Company and located
in close proximity to its plants. The following table sets forth certain
information regarding these operations:

Estimated Annual
Production Capacity Estimated Minimum
Location Types of Aggregates (Thousand tons)(1) Reserves (Years)
-------- ------------------- -------------------- -------------------

<S> <C> <C> <C>
Northern California Sand and Gravel 1,400 100
Austin, Texas Limestone 2,300(2) 70
-----
Total 3,700
=====
</TABLE>

---------
(1) Based on single-shift operation.
(2) Buda and Georgetown Quarries.

The Company's total net aggregate sales were 3.4 million tons in fiscal
2000 and 2.9 million tons in fiscal 1999. Total aggregates production was 3.9
million tons in fiscal 2000 and 3.1 million tons in fiscal 1999. A portion of
the Company's total aggregates production is used internally by the Company's
readymix concrete operations.

Raw Materials. The Company supplies 100% and 64% of its cement
requirements for its Austin and northern California concrete operations,
respectively. The Company supplies approximately 36% and 28%, respectively, of
its aggregates requirements for its Austin and northern California concrete
operations. The Company obtains the balance of its cement and aggregates
requirements from multiple sources in each of these areas.

The Company is engaged in negotiations with state and federal
government agencies over issues of title to a portion of its principal
aggregates deposit in northern California. Even if the negotiations are
unsuccessful in resolving adverse claims, the undisputed portion of the
Company's California aggregate deposit contains sufficient reserves to serve the
Company's needs. See "Item 3, Legal Proceedings."

Sales and Distribution. The Company sells readymix concrete to numerous
contractors and other customers in each plant's selling area. The Company's
batch plants in Austin and northern California are strategically located to
serve each selling area. Concrete is delivered from batch plants by trucks owned
by the Company.

The Company sells aggregates to building contractors and other
customers engaged in a wide variety of construction activities. Aggregates are
delivered from the Company's aggregate plants by common carriers, customer
pick-up and, to a lesser extent, trucks owned by the Company. No single customer
accounted for more than 10% of the Company's concrete or aggregates sales during
fiscal 2000. The Company is attempting to secure a rail link from its principal
aggregates deposit north of Sacramento, California to extended markets.

Competition. Competition among concrete producers within the Company's
northern California and Austin selling areas is strong. The Company's
competitors include five small and four large concrete producers in the northern
California area and five large and four small concrete producers in the Austin
area.

Both concrete and aggregates are commodity products. Each type of
aggregate is sold in competition with other types of aggregates and in
competition with other producers of the same type of

13
<PAGE> 16

aggregates. Accordingly, competition in both the concrete and aggregates
businesses is based principally on price and, to a lesser extent, on product
quality and customer service.

Capital Expenditures. Capital expenditures during fiscal 2000 amounted
to $6.9 million for the concrete and aggregates segment compared with $2.1
million and $2.0 million in fiscal 1999 and 1998, respectively. Capital outlays
in fiscal 2001, have been budgeted at approximately $11.7 million. Approximately
2% of the budgeted fiscal 2001 total is related to compliance with environmental
regulations.

Environmental Matters. The concrete and aggregates industry is subject
to environmental regulations similar to those governing the Company's cement
operations. None of the Company's concrete or aggregates operations are
presently the subject of any local, state or federal environmental proceeding or
inquiries.

EMPLOYEES

The Company and its subsidiaries had approximately 1,190 employees at
March 31, 2000. Approximately 17% of the employees are represented by collective
bargaining units. The number of employees of the Company is 13.

FORWARD-LOOKING STATEMENTS

The Management's Discussion and Analysis of Financial Condition and
Results of Operations (incorporated by reference herein from the 2000 CXP Annual
Report) and other sections of the 2000 CXP Annual Report and this Annual Report
on Form 10-K contain forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of
1934 and the Private Securities Litigation Reform Act of 1995. Forward-looking
statements may be identified by the context of the statement and generally arise
when the Company is discussing its beliefs, estimates or expectations. These
statements are not guarantees of future performance and involve a number of
risks and uncertainties. These statements involve known and unknown risks and
uncertainties that may cause the Company's actual results to be materially
different from planned or expected results. Those risks and uncertainties
include, but are not limited to, the cyclical and seasonal nature of the
Company's business, public infrastructure expenditures, adverse weather,
availability of raw materials, unexpected operational difficulties, governmental
regulation and changes in governmental and public policy, changes in economic
conditions specific to any one or more of the Company's markets, competition,
announced increases in capacity in the gypsum wallboard and cement industries,
general economic conditions, and interest rates. Investors should take such
risks and uncertainties into account when making investment decisions. The
Company undertakes no obligation to update publicly any forward-looking
statements as a result of new information, future events or other factors.

ITEM 2. PROPERTIES

The Company operates cement plants, quarries and related facilities at
Buda, Texas; LaSalle, Illinois; Fernley, Nevada and Laramie, Wyoming. The Buda
and LaSalle plants are each owned by separate joint ventures in which CXP has a
50% interest. The Company's principal aggregate plants and quarries are located
in Austin, Texas and Marysville, California. In addition, the Company operates
gypsum wallboard plants in Albuquerque and nearby Bernalillo, New Mexico and
Gypsum, Colorado. None of the Company's facilities are pledged as security for
any debts.

See "Item 1. Business" on pages 1-14 of this Report for additional
information relating to the Company's properties.

14
<PAGE> 17

ITEM 3. LEGAL PROCEEDINGS

The Company's Western Aggregates, Inc. subsidiary ("WAI") has received
notices of possible title claims of the United States and State of California
relating to WAI's leasehold interest under a 99-year mineral lease on the
aggregates in 10,000 acres of property north of Sacramento, California commonly
known as the Yuba Goldfields. WAI is negotiating with the government authorities
in an effort to resolve these title claims. The Company cannot predict the
outcome of negotiations with the United States or the State of California.
However, even if such negotiations are unsuccessful in resolving the adverse
title claims to lands in the Yuba Goldfields, the Company believes that the
portion of WAI's mineral lease which is not in dispute contains sufficient
estimated reserves to meet WAI's current mining requirements for aggregates for
a period of more than 100 years. Accordingly, the Company believes that, the
title claims of the United States and the State of California to lands in the
Yuba Goldfields will not have a material, adverse effect on the financial
condition or the results of operations of the Company.

In addition to the matters described above, the Company is a party to
certain other ordinary legal proceedings incidental to its business. In general,
although the outcome of litigation is inherently uncertain, the Company believes
that none of the litigation matters in which the Company or any subsidiary is
involved, if determined unfavorably to the Company or any subsidiary, would have
a material, adverse effect on the consolidated financial condition or operations
of the Company.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

EXECUTIVE OFFICERS OF CXP (SEE ITEM 10 OF PART III)

The following is a listing of the Company's executive officers, as such
term is defined under the rules and regulations of the Securities and Exchange
Commission. All of these executive officers, except for Mr. House and Mr. Sells,
have been employed by the Company and/or one or more subsidiaries of the Company
for at least the past five years. All executive officers were elected by the
Board of Directors of the Company on July 15, 1999, to serve until the next
Annual Meeting of Directors or until their respective successors are duly
elected and qualified or appointed as the case may be. There is no family
relationship between any of these officers.

Name Age Positions with CXP
---------- ------ ---------------------------
<S> <C> <C>
Richard D. Jones, Jr. 54 President and Chief Executive Officer
(President since January 1998; Chief Executive
Officer since July 1999; Executive Vice President
from January 1990 through December 1997).

Arthur R. Zunker, Jr. 56 Senior Vice President - Finance and Treasurer
(Senior Vice President - Finance and Treasurer since
January 1994; Senior Vice President - Administration from
August 1984 to January 1994).

H. David House 58 Executive Vice President - Gypsum
(Executive Vice President - Gypsum since January 1998;
President of American Gypsum Company since June 1997;
President of James Hardie Gypsum Division from August 1993
through May 1996).
</TABLE>

15
<PAGE> 18
<TABLE>
<CAPTION>

Name Age Positions with CXP
---------- ------ ---------------------------------
<S> <C> <C>
Steven R. Rowley 47 Executive Vice President - Cement
(Executive Vice President - Cement since January 1998;
Executive V.P. of Illinois Cement Company from June 1995
through December 1997; Plant Manager at Nevada Cement
Company from April 1991 through May 1995).

Robert A. Sells 44 Executive Vice President - Concrete/Aggregates
(Executive Vice President - Concrete/Aggregates since
June 1999).

</TABLE>

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS

(See Item 7 below.)

ITEM 6. SELECTED FINANCIAL DATA

(See Item 7 below.)

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

The information called for by Items 5, 6 and 7 is incorporated herein
by reference to the information set forth under the following captions (on the
page or pages indicated) in the 2000 CXP Annual Report:

Items Caption in the 2000 CXP Annual Report Pages
----- ------------------------------------- -----
<S> <C> <C>
5 Stock Prices and Dividends Inside Front Cover
5 Indebtedness (Note C to Consolidated Financial Statements
of CXP) 24
6 Summary of Selected Financial Data 40-41
7 Short-term Borrowings and Long-term Debt (Note C to Consolidated
Financial Statements of CXP) 24
7 Management's Discussion and Analysis of Financial Condition and
Results of Operations 34-39
</TABLE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information called for in this Item 8 is incorporated herein by
reference to the 2000 CXP Annual Report as set forth in the index to
consolidated financial statements and schedules on page 18 of this Report (see
Item 14).

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE

None

16
<PAGE> 19

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

(See Item 11 below.)

ITEM 11. EXECUTIVE COMPENSATION

Except for the information relating to the executive officers of the
Company, which follows Item 4 of Part I of this Report, the information called
for by Items 10, 11, 12 and 13 is incorporated herein by reference to the
information included and referenced under the following captions (on the page or
pages indicated) in the Company's Proxy Statement dated June 21, 2000, for the
Company's July 20, 2000 Annual Meeting of Stockholders (the "2000 CXP Proxy
Statement"):

Items Caption in the 2000 CXP Proxy Statement Pages
----- --------------------------------------- -----
<S> <C> <C>
10 Election of Directors 2-4

10 Section 16(a) Compliance 16

11 Executive Compensation 10-15

12 Security Ownership of Management and
Certain Beneficial Owners 8-9

13 Certain Transactions 16
</TABLE>

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

(See Item 11 above.)

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

(See Item 11 above.)

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES AND REPORTS ON FORM 8-K

(a) The following documents are filed as part of this Report.

(1) and (2) See the Index to Consolidated Financial Statements and Schedules
below for a list of the Financial Statements and Financial Statement schedules
filed herewith.

17
<PAGE> 20

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES
<TABLE>
<CAPTION>

Reference
------------------
2000 CXP

CENTEX CONSTRUCTION PRODUCTS, INC. Annual Report Page
------------------

<S> <C>
Report of Independent Public Accountants ........................................................... 33
Statements of Consolidated Earnings for the years ended March 31, 2000, 1999 & 1998 ................. 16
Consolidated Balance Sheets as of March 31, 2000 & 1999 ............................................. 17
Statements of Consolidated Cash Flows for the years ended March 31, 2000, 1999 & 1998 ............... 18
Statements of Comprehensive Earnings for the years ended March 31, 2000, 1999 & 1998 ................ 19
Statements of Consolidated Stockholders' Equity for the years ended March 31, 2000, 1999 & 1998 ..... 20
Notes to Consolidated Financial Statements .......................................................... 21-32
Quarterly Results (Unaudited) ....................................................................... 42
</TABLE>

Consolidated supporting schedules have been omitted either because the
required information is contained in notes to the consolidated financial
statements or because such schedules are not required or are not applicable.

(3) Exhibits

The information on exhibits required by this Item 14 is set forth in the
CXP Index to Exhibits appearing on page 20 and 21 of this Report.

(b) Reports on Form 8-K:

None

18
<PAGE> 21

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant in the capacities and on the dates indicated.

<TABLE>

<S> <C>

June 20, 2000 /s/ RICHARD D. JONES, JR.
----------------------------------------------
Richard D. Jones, Jr., Director,
President and Chief Executive Officer
(principal executive officer)

June 20, 2000 /s/ ARTHUR R. ZUNKER, JR.
----------------------------------------------
Arthur R. Zunker, Jr., Senior Vice President -
Finance and Treasurer
(principal financial and accounting officer)

June 20, 2000 /s/ ROBERT L. CLARKE
----------------------------------------------
Robert L. Clarke, Director

June 20, 2000 /s/ LAURENCE E. HIRSCH
----------------------------------------------
Laurence E. Hirsch, Chairman

June 20, 2000 /s/ DAVID W. QUINN
----------------------------------------------
David W. Quinn, Director

June 20, 2000 /s/ HAROLD K. WORK
----------------------------------------------
Harold K. Work, Director
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<PAGE> 22

INDEX TO EXHIBITS
CENTEX CONSTRUCTION PRODUCTS, INC.
AND SUBSIDIARIES
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<CAPTION>

Exhibit
Number Description of Exhibits
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<S> <C>
3.1 Restated Certificate of Incorporation of Centex
Construction Products, Inc. (the "Company")(filed
as Exhibit 3.1 to the Form S-8 Registration Statement
of the Company (No. 33-82928)(the "S-8 Registration
Statement"), filed on August 16, 1994, and incorporated
herein by reference)

3.2 Amended and Restated Bylaws of the Company (filed as
Exhibit 3.2 to the S-8 Registration Statement and
incorporated herein by reference)

4.1 Form of Certificate evidencing Common Stock (filed as
Exhibit 4.1 to Amendment No. 3 to the Form S-1
Registration Statement of the Company (No. 33-74816),
filed on April 4, 1994, ("Amendment No. 3"), and
incorporated by reference herein)

4.2 Credit Agreement dated as of April 18, 1994, among the
Company, The First National Bank of Chicago, individually and
as agent, and the other lenders named therein (filed as
Exhibit 4.2 to the Annual Report on Form 10-K of the Company
(File No. 1-12984) for the fiscal year ended March 31, 1995
(the "Form 10-K") and incorporated herein by reference)

4.3 Amendment No. 1 to the Credit Agreement, dated as of
March 20, 1996, among the Company, the First National
Bank of Chicago, individually and as agent, and the other
lenders named therein (filed as Exhibit 4.3 to the Annual
Report on Form 10-K of the Company (File No. 1-12984)
for the fiscal year ended March 31, 1996 and incorporated
herein by reference)

4.4 Amendment No. 2 to the Credit Agreement, dated as of
March 27, 1998, among the Company, the First National
Bank of Chicago, individually and as agent, and the other
lenders named therein

10.1 Joint Venture Agreement between Ilce, Inc. (f/k/a
Illinois Cement Company, Inc.) and RAAM Limited
Partnership, dated April 1, 1972, as amended (filed
as Exhibit 10.1 to the Form S-1 Registration
Statement (No. 33-74816) of the Company, filed on
February 4, 1994, (the "S-1 Registration Statement")
and incorporated herein by reference)

10.2 Joint Venture Agreement by and among Texas Cement
Company, the Company, and Lehigh Portland Cement
Company, dated March 25, 1986, as amended (filed as
Exhibit 10.2 to the S-1 Registration Statement) and
incorporated herein by reference)

10.3 The Centex Construction Products, Inc. amended and restated
Stock Option Plan (filed as Exhibit 10.3 to the Annual Report
on Form 10-K of the Company (File No. 1-12984) for the fiscal
year ended March 31, 1997 and incorporated herein by reference)(1)
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20
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<S> <C>
10.4* Amended and Restated Supplemental Executive Retirement Plan of
Centex Construction Products, Inc.(1)

10.5 Indemnification Agreement dated as of April 19, 1994,
between the Company and Centex Corporation ("Centex")
(filed as Exhibit 10.5 to the 1995 Form 10-K
and incorporated herein by reference)

10.6 Tax Separation Agreement dated as of April 1, 1994,
among Centex, the Company and its subsidiaries
(filed as Exhibit 10.6 to the 1995 Form 10-K
and incorporated herein by reference)

10.7 Administrative Services Agreement dated as of
April 1, 1994, between the Company and Centex
Service Company (filed as Exhibit 10.7 to the 1995
Form 10-K and incorporated herein by reference)

10.8 Trademark License Agreement dated as of April 19, 1994,
between the Company and Centex (filed as Exhibit 10.8 to the
1995 Form 10-K and incorporated herein by reference)

10.9 Form of Indemnification Agreement between the
Company and each of its directors (filed as Exhibit
10.9 to Amendment No. 3 and incorporated herein by
reference)(1)

10.10 Limited Liability Company Unit Purchase Agreement (EGP), dated
as of December 5, 1997, among Centex American Gypsum Company,
Centex Eagle Gypsum Company, and Eagle-Gypsum Products (filed
as Exhibit 2.1 to the Company's Current Report on Form 8-K
(File No. 1-12984), filed on March 12, 1997, (the "Form 8-K")
and incorporated herein by reference)

10.11 Limited Liability Company Unit Purchase Agreement (NES),
dated as of December 5, 1997, among Centex American Gypsum
Company, CEGC Holding Company, and National Energy Systems,
Inc. (filed as Exhibit 2.2 to the Form 8-K and incorporated herein
by reference)

13** Annual Report to Stockholders of the Company for fiscal
year ended March 31, 2000 (the "Annual Report to Stockholders")

21* Subsidiaries of the Company

23* Consent of Independent Public Accountants

27* Financial Data Schedule
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* Filed herewith.

** With the exception of the information expressly incorporated by reference in
this Annual Report on Form 10-K from the Annual Report to Stockholders, the
Annual Report to Stockholders is not deemed filed with the Commission as a
part of this Annual Report on Form 10-K.

(1) Required to be identified as a management contract or a compensatory plan
or arrangement pursuant to Item 14(a)(3) of Form 10-K.