Exhibit 99.4

James Hardie Industries N.V.
and Subsidiaries

Condensed Consolidated Financial Statements
as of and for the Period Ended 30 June 2009

James Hardie Industries N.V. and Subsidiaries
Index

			Page
Item 1. Condensed Consolidated Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets as of 30 June 2009 and 31 March 2009			F-3
Condensed Consolidated Statements of Operations for the Three Months Ended 30 June 2009 and 2008			F-4
Condensed Consolidated Statements of Cash Flows for the Three Months Ended 30 June 2009 and 2008			F-6
Condensed Consolidated Statements of Changes in Shareholders’ Deficit for the Three Months Ended 30 June 2009			F-8
Notes to Condensed Consolidated Financial Statements			F-9
Item 2. Quantitative and Qualitative Disclosures About Market Risk			F-29

Item 1. Financial Statements

James Hardie Industries N.V. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)

		(Millions of								(Millions of
		US dollars)								Australian dollars)
		30 June				31 March				30 June				31 March
		2009				2009				2009				2009
										(Unaudited)				(Unaudited)
Assets
Current assets:
Cash and cash equivalents		$	42.7			$	42.4			A$	52.5			A$	61.7
Restricted cash and cash equivalents			5.3				5.3				6.5				7.7
Restricted cash and cash equivalents — Asbestos			43.0				45.4				52.9				66.1
Restricted short-term investments — Asbestos			59.1				52.9				72.7				77.0
Accounts and notes receivable, net of allowance for doubtful accounts of $1.4 million (A $1.8 million) and $1.4 million (A $2.0 million) as of 30 June 2009 and 31 March 2009, respectively			123.1				111.4				151.5				162.1
Inventories			129.3				128.9				159.1				187.6
Prepaid expenses and other current assets			18.0				20.4				22.2				29.7
Insurance receivable — Asbestos			14.9				12.6				18.3				18.3
Workers’ compensation — Asbestos			0.7				0.6				0.9				0.9
Deferred income taxes			20.6				32.5				25.4				47.3
Deferred income taxes — Asbestos			14.6				12.3				18.0				17.9
Total current assets			471.3				464.7				580.0				676.3
Property, plant and equipment, net			706.6				700.8				869.5				1,019.8
Insurance receivable — Asbestos			172.0				149.0				211.7				216.9
Workers’ compensation — Asbestos			87.3				73.8				107.4				107.4
Deferred income taxes			2.1				2.1				2.6				3.1
Deferred income taxes — Asbestos			391.6				333.2				481.9				484.8
Deposit with Australian Taxation Office			208.8				173.5				256.9				252.5
Other assets			1.9				1.6				2.3				2.3
Total assets		$	2,041.6			$	1,898.7			A$	2,512.3			A$	2,763.1
Liabilities and Shareholders’ Deficit
Current liabilities:
Accounts payable and accrued liabilities		$	88.5			$	89.1			A$	108.9			A$	129.7
Short-term debt			50.0				93.3				61.5				135.8
Current portion of long-term debt			196.0				—				241.2				—
Accrued payroll and employee benefits			24.2				35.5				29.8				51.7
Accrued product warranties			6.8				7.4				8.4				10.8
Income taxes payable			1.3				1.4				1.6				2.0
Asbestos liability			92.5				78.2				113.8				113.8
Workers’ compensation — Asbestos			0.7				0.6				0.9				0.9
Other liabilities			13.6				9.5				16.7				13.8
Total current liabilities			473.6				315.0				582.8				458.5
Long-term debt			25.0				230.7				30.8				335.7
Deferred income taxes			106.4				100.8				130.9				146.7
Accrued product warranties			19.5				17.5				24.0				25.5
Asbestos liability			1,403.5				1,206.3				1,727.2				1,755.4
Workers’ compensation — Asbestos			87.3				73.8				107.4				107.4
Other liabilities			77.5				63.3				95.4				92.1
Total liabilities			2,192.8				2,007.4			A$	2,698.5			A$	2,921.3
Commitments and contingencies (Note 8)
Shareholders’ deficit:
Common stock, Euro 0.59 par value, 2.0 billion shares authorised; 432,263,720 shares issued at 30 June 2009 and 31 March 2009			219.2				219.2
Additional paid-in capital			24.7				22.7
Accumulated deficit			(430.7	)			(352.8	)
Accumulated other comprehensive income			35.6				2.2
Total shareholders’ deficit			(151.2	)			(108.7	)
Total liabilities and shareholders’ deficit		$	2,041.6			$	1,898.7

The accompanying notes are an integral part of these consolidated financial statements.

James Hardie Industries N.V. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)

		Three Months
		Ended 30 June
(Millions of US dollars, except per share data)		2009				2008
Net sales		$	284.5			$	365.0
Cost of goods sold			(174.1	)			(241.0	)
Gross profit			110.4				124.0
Selling, general and administrative expenses			(41.4	)			(54.2	)
Research and development expenses			(6.3	)			(6.4	)
Asbestos adjustments			(119.8	)			(40.5	)
Operating (loss) income			(57.1	)			22.9
Interest expense			(1.5	)			(2.6	)
Interest income			0.8				1.5
Other income			4.8				—
(Loss) income before income taxes			(53.0	)			21.8
Income tax expense			(24.9	)			(20.4	)
Net (loss) income		$	(77.9	)		$	1.4
Net loss per share — basic		$	(0.18	)		$	—
Net loss per share — diluted		$	(0.18	)		$	—
Weighted average common shares outstanding (Millions):
Basic			432.3				432.2
Diluted			432.3				432.2

The accompanying notes are an integral part of these consolidated financial statements.

James Hardie Industries N.V. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)

		Three Months
		Ended 30 June
(Millions of Australian dollars, except per share data)		2009				2008
Net sales		A$	374.9			A$	386.9
Cost of goods sold			(229.4	)			(255.5	)
Gross profit			145.5				131.4
Selling, general and administrative expenses			(54.6	)			(57.5	)
Research and development expenses			(8.3	)			(6.7	)
Asbestos adjustments			(157.9	)			(42.9	)
Operating (loss) income			(75.3	)			24.3
Interest expense			(2.0	)			(2.8	)
Interest income			1.1				1.6
Other income			6.3				—
(Loss) income before income taxes			(69.9	)			23.1
Income tax expense			(32.8	)			(21.6	)
Net (loss) income		A$	(102.7	)		A$	1.5
Net loss per share — basic		A$	(0.24	)		$	—
Net loss per share — diluted		A$	(0.24	)		$	—
Weighted average common shares outstanding (Millions):
Basic			432.3				432.2
Diluted			432.3				432.2

The accompanying notes are an integral part of these consolidated financial statements.

James Hardie Industries N.V. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)

		Three Months
		Ended 30 June
(Millions of US dollars)		2009				2008
Cash Flows From Operating Activities
Net (loss) income		$	(77.9	)		$	1.4
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortisation			15.0				14.0
Deferred income taxes			23.9				(6.9	)
Stock-based compensation			2.0				2.0
Asbestos adjustments			119.8				40.5
Changes in operating assets and liabilities:
Restricted cash and cash equivalents			17.2				22.1
Accounts and notes receivable			(25.2	)			(9.4	)
Inventories			(10.9	)			21.2
Prepaid expenses and other current assets			(0.1	)			10.6
Insurance receivable — Asbestos			3.9				5.1
Accounts payable and accrued liabilities			6.3				(15.2	)
Asbestos liability			(21.4	)			(27.7	)
Deposit with Australian Taxation Office			(2.3	)			(3.1	)
Other accrued liabilities and other liabilities			32.1				40.2
Net cash provided by operating activities			82.4				94.8
Cash Flows From Investing Activities
Purchases of property, plant and equipment			(9.7	)			(3.8	)
Net cash used in investing activities			(9.7	)			(3.8	)
Cash Flow s From Financing Activities
Proceeds from short-term borrowings			—				11.7
Repayments of short-term borrowings			(43.3	)			—
Proceeds from long-term borrowings			15.0				48.3
Repayments of long-term borrowings			(24.7	)			—
Proceeds from issuance of shares			—				0.1
Net cash (used in) provided by financing activities			(53.0	)			60.1
Effects of exchange rate changes on cash			(19.4	)			(15.2	)
Net increase in cash and cash equivalents			0.3				135.9
Cash and cash equivalents at beginning of period			42.4				35.4
Cash and cash equivalents at end of period		$	42.7			$	171.3
Components of Cash and Cash Equivalents
Cash at bank and on hand		$	13.7			$	136.3
Short-term deposits			29.0				35.0
Cash and cash equivalents at end of period		$	42.7			$	171.3

The accompanying notes are an integral part of these consolidated financial statements.

James Hardie Industries N.V. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)

		Three Months
		Ended 30 June
(Millions of Australian dollars)		2009				2008
Cash Flows From Operating Activities
Net (loss) income			A$(102.7	)		A$	1.5
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortisation			19.8				14.8
Deferred income taxes			31.5				(7.3	)
Stock-based compensation			2.6				2.1
Asbestos adjustments			157.9				42.9
Changes in operating assets and liabilities:
Restricted cash and cash equivalents			22.7				23.4
Accounts and notes receivable			(33.2	)			(10.0	)
Inventories			(14.4	)			22.5
Prepaid expenses and other current assets			(0.1	)			11.2
Insurance receivable — Asbestos			5.1				5.4
Accounts payable and accrued liabilities			8.3				(16.1	)
Asbestos liability			(28.2	)			(29.4	)
Deposit with Australian Taxation Office			(3.0	)			(3.3	)
Other accrued liabilities and other liabilities			42.3				42.6
Net cash provided by operating activities			108.6				100.3
Cash Flows From Investing Activities
Purchases of property, plant and equipment			(12.8	)			(4.0	)
Net cash used in investing activities			(12.8	)			(4.0	)
Cash Flows From Financing Activities
Proceeds from short-term borrowings			—				12.4
Repayments of short-term borrowings			(57.1	)			—
Proceeds from long-term borrowings			19.8				51.2
Repayments of long-term borrowings			(32.6	)			—
Proceeds from issuance of shares			—				0.1
Net cash (used in) provided by financing activities			(69.9	)			63.7
Effects of exchange rate changes on cash			(35.1	)			(20.5	)
Net increase in cash and cash equivalents			(9.2	)			139.5
Cash and cash equivalents at beginning of period			61.7				38.6
Cash and cash equivalents at end of period		A$	52.5			A$	178.1
Components of Cash and Cash Equivalents
Cash at bank and on hand		A$	16.9			A$	141.7
Short-term deposits			35.6				36.4
Cash and cash equivalents at end of period		A$	52.5			A$	178.1

The accompanying notes are an integral part of these consolidated financial statements.

James Hardie Industries N.V. and Subsidiaries
Condensed Consolidated Statements of Changes in Shareholders’ Deficit
(Unaudited)

														Accumulated
						Additional								Other
		Common				Paid-in				Accumulated				Comprehensive
(Millions of US dollars)		Stock				Capital				Deficit				Income				Total
Balances as of 31 March 2009		$	219.2			$	22.7			$	(352.8	)		$	2.2			$	(108.7	)
Comprehensive (loss) income:
Net loss			—				—				(77.9	)			—				(77.9	)
Pension and post-retirement benefit adjustments			—				—				—				0.2				0.2
Unrealised gain on investments			—				—				—				3.9				3.9
Foreign currency translation gain			—				—				—				29.3				29.3
Other comprehensive income			—				—				—				33.4				33.4
Total comprehensive loss																			(44.5	)
Stock-based compensation			—				2.0				—				—				2.0
Balances as of 30 June 2009		$	219.2			$	24.7			$	(430.7	)		$	35.6			$	(151.2	)

The accompanying notes are an integral part of these consolidated financial statements.

James Hardie Industries N.V. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)

1. Background and Basis of Presentation

Nature of Operations

The Company manufactures and sells fibre cement building products for interior and exterior building construction applications primarily in the United States, Australia, New Zealand, the Philippines and Europe.

Basis of Presentation

The consolidated financial statements represent the financial position, results of operations and cash flows of JHI NV and its current wholly owned subsidiaries and special purpose entities, collectively referred to as either the “Company” or “James Hardie” and JHI NV, together with its subsidiaries as of the time relevant to the applicable reference, the “James Hardie Group,” unless the context indicates otherwise. These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto, included in the Company’s Annual Report on Form 20-F for the fiscal year ended 31 March 2009, filed with the United States Securities and Exchange Commission on 25 June 2009.

The condensed consolidated financial statements included herein are unaudited; however, they contain all normal recurring adjustments which, in the opinion of the Company’s management, are necessary to state fairly the consolidated financial position of the Company at 30 June 2009, and the consolidated results of operations for the three months ended 30 June 2009 and 2008 and consolidated cash flows for the three months ended 30 June 2009 and 2008. The results of operations for the three months ended 30 June 2009 are not necessarily indicative of the results to be expected for the full year. The balance sheet at 31 March 2009 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“US GAAP”) for complete financial statements.

The assets, liabilities, statements of operations and statements of cash flows of the Company have been presented with accompanying Australian dollar (A$) convenience translations as the majority of the Company’s shareholder base is Australian. These A$ convenience translations are not prepared in accordance with US GAAP and have not been audited. The exchange rates used to calculate the convenience translations are as follows:

		31 March				30 June
(US$1 = A$)		2009				2009				2008
Assets and liabilities			1.4552				1.2306				1.0395
Statements of operations			n/a				1.3179				1.0601
Cash flows — beginning cash			n/a				1.4552				1.0903
Cash flows — ending cash			n/a				1.2306				1.0395
Cash flows — current period movements			n/a				1.3179				1.0601

We have evaluated all subsequent events through 18 August 2009, the date the financial statements were issued.

2. Summary of Significant Accounting Policies

Reclassifications

Certain prior year balances have been reclassified to conform to the current year presentation. The reclassifications do not impact shareholders’ deficit.

James Hardie Industries N.V. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)

Earnings Per Share

The Company is required to disclose basic and diluted earnings per share (“EPS”). Basic EPS is calculated using net income divided by the weighted average number of common shares outstanding during the period. Diluted EPS is similar to basic EPS except that the weighted average number of common shares outstanding is increased to include the number of additional common shares calculated using the treasury method that would have been outstanding if the dilutive potential common shares, such as options, had been issued. Accordingly, basic and dilutive common shares outstanding used in determining net income per share are as follows:

		Three Months
		Ended 30 June
(Millions of shares)		2009				2008
Basic common shares outstanding			432.3				432.2
Dilutive effect of stock awards			—				—
Diluted common shares outstanding			432.3				432.2

(US dollars)		2009				2008
Net loss per share — basic		$	(0.18	)		$	—
Net loss per share — diluted		$	(0.18	)		$	—

Potential common shares of 17.5 million and 19.6 million for the three months ended 30 June 2009 and 2008, respectively, have been excluded from the calculation of diluted common shares outstanding because the effect of their inclusion would be anti-dilutive.

Advertising

The Company expenses the production costs of advertising the first time the advertising takes place. Advertising expense was US$1.8 million and US$3.5 million during the three months ended 30 June 2009 and 2008, respectively.

Asbestos

At 31 March 2006, the Company recorded an asbestos provision based on the estimated economic impact of the Original Final Funding Agreement (“Original FFA”) entered into on 1 December 2005. The amount of the net asbestos provision of US$715.6 million was based on the terms of the Original FFA, which included an actuarial estimate prepared by KPMG Actuaries as of 31 March 2006 of the projected future cash outflows, undiscounted and uninflated, and the anticipated tax deduction arising from Australian legislation which came into force on 6 April 2006. The amount represented the net economic impact that the Company was prepared to assume as a result of its voluntary funding of the asbestos liability which was under negotiation with various parties.

In February 2007, the shareholders approved the Amended FFA entered into on 21 November 2006 to provide long-term funding to the Asbestos Injury Compensation Fund (“AICF”), a special purpose fund that provides compensation for Australian-related personal injuries for which certain former subsidiary companies of James Hardie in Australia (being Amaca Pty Ltd (“Amaca”), Amaba Pty Ltd (“Amaba”) and ABN 60 Pty Limited (“ABN 60”) (collectively, the “Former James Hardie Companies”)) are found liable.

Upon shareholder approval of the Amended FFA and in accordance with Financial Accounting Standards Board (“FASB”) Interpretation No. 46R, “Consolidation of Variable Interest Entities” (“FIN 46R”), the Company consolidated the AICF resulting in a separate recognition of the asbestos liability and certain other items including the related Australian income tax benefit. Among other items, the Company recorded a deferred tax asset for the anticipated tax benefit related to asbestos liabilities and a corresponding increase in the asbestos liability. As stated in “Deferred Income Taxes” below, James

James Hardie Industries N.V. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)

Hardie 117 Pty Ltd (the “Performing Subsidiary”) is able to claim a taxable deduction for contributions to the asbestos fund. For the year ended 31 March 2007, the Company classified the expense related to the increase of the asbestos liability as asbestos adjustments and the Company classified the benefit related to the recording of the related deferred tax asset as an income tax benefit (expense) on its consolidated statements of operations.

Amaca and Amaba separated from the James Hardie Group in February 2001. ABN 60 separated from the James Hardie Group in March 2003. Upon shareholder approval of the Amended FFA in February 2007, shares in the Former James Hardie Companies were transferred to the AICF. The Company appoints three of the AICF directors and the NSW state government appoints two of the AICF directors. The AICF manages Australian asbestos-related personal injury claims made against the Former James Hardie Companies and makes compensation payments in respect of those proven claims.

AICF

Under the terms of the Amended FFA, the Performing Subsidiary has a contractual liability to make payments to the AICF. This funding to the AICF results in the Company having a pecuniary interest in the AICF. The interest is considered variable because the potential impact on the Company will vary based upon the annual actuarial assessments obtained by the AICF with respect to asbestos-related personal injury claims against the Former James Hardie Companies. Due to the Company’s variable interest in the AICF, it consolidates the AICF in accordance with FIN 46R.

The AICF has operating costs that are claims related and non-claims related. Claims related costs incurred by the AICF are treated as reductions to the accrued asbestos liability balances previously reflected in the consolidated balance sheets. Non-claims related operating costs incurred by the AICF are expensed as incurred in the line item Selling, general and administrative expenses in the consolidated statements of operations. The AICF earns interest on its cash and cash equivalents and on its short-term investments; these amounts are included in the line item Interest income in the consolidated statements of operations.

Asbestos-Related Assets and Liabilities

The Company has recorded on its consolidated balance sheets certain assets and liabilities under the terms of the Amended FFA. These items are Australian dollar-denominated and are subject to translation into US dollars at each reporting date. These assets and liabilities are commonly referred to by the Company as Asbestos-Related Assets and Liabilities and include:

Asbestos Liability

The amount of the asbestos liability reflects the terms of the Amended FFA, which has been calculated by reference to (but is not exclusively based upon) the most recent actuarial estimate of projected future cash flows prepared by KPMG Actuaries. Based on KPMG Actuaries’ assumptions, KPMG Actuaries arrived at a range of possible total cash flows and proposed a central estimate which is intended to reflect an expected outcome. The Company views the central estimate as the basis for recording the asbestos liability in the Company’s financial statements, which under US GAAP, it considers the best estimate under SFAS No. 5, “Accounting for Contingencies” (“SFAS No. 5”). The asbestos liability includes these cash flows as undiscounted and uninflated on the basis that it is inappropriate to discount or inflate future cash flows when the timing and amounts of such cash flows is not fixed or readily determinable.

Adjustments in the asbestos liability due to changes in the actuarial estimate of projected future cash flows and changes in the estimate of future operating costs of the AICF are reflected in the consolidated statements of operations during the period in which they occur. Claims paid by the AICF and claims-handling costs incurred by the AICF are treated as reductions in the accrued balances previously reflected in the consolidated balance sheets.

Insurance Receivable

There are various insurance policies and insurance companies with exposure to the asbestos claims. The insurance receivable determined by KPMG Actuaries reflects the recoveries expected from all such policies based on the expected pattern of claims against such policies less an allowance for credit risk

James Hardie Industries N.V. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)

based on credit agency ratings. The insurance receivable generally includes these cash flows as undiscounted and uninflated on the basis that it is inappropriate to discount or inflate future cash flows when the timing and amounts of such cash flows are not fixed or readily determinable. The Company only records insurance receivables that it deems to be probable.

Included in insurance receivable is US$11.1 million recorded on a discounted basis because the timing of the recoveries has been agreed with the insurer.

Adjustments in insurance receivable due to changes in the actuarial estimate, or changes in the Company’s assessment of recoverability are reflected in the consolidated statements of operations during the period in which they occur. Insurance recoveries are treated as a reduction in the insurance receivable balance.

Workers’ Compensation

Workers’ compensation claims are claims made by former employees of the Former James Hardie Companies. Such past, current and future reported claims were insured with various insurance companies and the various Australian State-based workers’ compensation schemes (collectively “workers’ compensation schemes or policies”). An estimate of the liability related to workers’ compensation claims is prepared by KPMG Actuaries as part of the annual actuarial assessment. This estimate contains two components, amounts that will be met by a workers’ compensation scheme or policy, and amounts that will be met by the Former James Hardie Companies.

The portion of the KPMG Actuaries estimate that is expected to be met by the Former James Hardie Companies is included as part of the Asbestos Liability. Adjustments to this estimate are reflected in the consolidated statements of operations during the period in which they occur.

The portion of the KPMG Actuaries estimate that is expected to be met by the workers’ compensation schemes or policies of the Former James Hardie Companies is recorded by the Company as a workers’ compensation liability. Since these amounts are expected to be paid by the workers’ compensation schemes or policies, the Company records an equivalent workers’ compensation receivable.

Adjustments to the workers’ compensation liability result in an equal adjustment in the workers’ compensation receivable recorded by the Company and have no effect on the consolidated statements of operations.

Asbestos-Related Research and Education Contributions

The Company agreed to fund asbestos-related research and education initiatives for a period of 10 years, beginning in fiscal year 2007. The liabilities related to these agreements are included in “Other Liabilities” on the consolidated balance sheets.

Restricted Cash and Cash Equivalents

Cash and cash equivalents of the AICF are reflected as restricted assets, as the use of these assets is restricted to the settlement of asbestos claims and payment of the operating costs of the AICF.

Restricted Short-Term Investments

Short-term investments consist of highly liquid investments held in the custody of major financial institutions. All short-term investments are classified as available for sale and are recorded at market value using the specific identification method. Unrealised gains and losses on the market value of these investments are included as a separate component of accumulated other comprehensive income.

AICF – Other Assets and Liabilities

Other assets and liabilities of the AICF, including fixed assets, trade receivables and payables are included on the consolidated balance sheets under the appropriate captions and their use is restricted to the operations of the AICF.

James Hardie Industries N.V. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)

Deferred Income Taxes

The Performing Subsidiary is able to claim a taxation deduction for its contributions to the AICF over a five-year period from the date of contribution. Consequently, a deferred tax asset has been recognised equivalent to the anticipated tax benefit over the life of the Amended FFA. The current portion of the deferred tax asset represents Australian tax benefits that will be available to the Company during the subsequent twelve months.

Adjustments are made to the deferred income tax asset as adjustments to the asbestos-related assets and liabilities are recorded.

Foreign Currency Translation

The asbestos-related assets and liabilities are denominated in Australian dollars and thus the reported values of these asbestos-related assets and liabilities in the Company’s consolidated balance sheets in US dollars are subject to adjustment depending on the closing exchange rate between the two currencies at the balance sheet date. The effect of foreign exchange rate movements between these currencies is included in Asbestos Adjustments in the consolidated statements of operations.

Recent Accounting Pronouncements

The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles

In July 2009, the FASB issued SFAS No. 168 “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles—a replacement of FASB Statement No. 162” (“SFAS No. 168”).  SFAS No. 168 establishes the FASB Accounting Standards Codification as the single source of authoritative nongovernmental US GAAP. The Codification is effective for interim and annual periods ending after September 15, 2009.  The adoption of SFAS No. 168 is not expected to have a material impact on the Company’s financial statements.

Subsequent Events

In May 2009, the FASB issued SFAS No. 165 “Subsequent Events” (“SFAS No. 165”). SFAS No. 165 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. This statement is effective for interim or annual financial periods ending after 15 June 2009. During the three months ended 30 June 2009, the Company adopted SFAS No. 165.

Recognition and Presentation of Other-Than-Temporary Impairments

In April 2009, the FASB issued FSP FAS 115-2 and FAS 124-2, “Recognition and Presentation of Other-Than-Temporary Impairments” (“FSP FAS 115-2”). FSP FAS 115-2 amends the other-than-temporary impairment guidance for debt securities to make the guidance more operational and to improve the presentation and disclosure of other-than-temporary impairments on debt and equity securities in the financial statements. This statement is effective for interim and annual reporting periods ending after 15 June 2009. During the three months ended 30 June 2009, the Company adopted FSP FAS 115-2.

Interim Disclosures about Fair Value of Financial Instruments

In April 2009, the FASB issued Staff Position: FSP FAS No. 107-1 and APB No. 28-1, “Interim Disclosures about Fair Value of Financial Instruments” (“FSP FAS 107-1”), which requires disclosures about fair value of financial instruments for interim reporting periods as well as in annual financial statements. This statement is effective for interim and annual reporting periods ending after 15 June 2009. During the three months ended 30 June 2009, the Company adopted FSP FAS 107-1. The adoption of this standard has resulted in the disclosure of the fair values attributable to our debt instruments within our interim report. See Note 7 for further information.

James Hardie Industries N.V. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)

3. Inventories

Inventories consist of the following components:

		30 June				31 March
(Millions of US dollars)		2009				2009
Finished goods		$	82.3			$	82.5
Work-in-process			6.3				4.7
Raw materials and supplies			47.7				48.9
Provision for obsolete finished goods and raw materials			(7.0	)			(7.2	)
Total inventories		$	129.3			$	128.9

4. Property, Plant and Equipment

Property, plant and equipment consist of the following components:

										Machinery
										and				Construction
(Millions of US dollars)		Land				Buildings				Equipment				In Progress1				Total
Balance at 31 March 2009:
Cost			18.0				212.3				867.9				51.6				1,149.8
Accumulated depreciation			—				(61.4	)			(387.6	)			—				(449.0	)
Net book value		$	18.0			$	150.9			$	480.3			$	51.6			$	700.8
Changes in net book value:
Capital expenditures			—				0.7				3.5				5.5				9.7
Depreciation			—				(2.5	)			(12.5	)			—				(15.0	)
Other movements			—				—				20.7				(20.7	)			—
Foreign currency translation adjustments			—				—				11.1				—				11.1
Total changes			—				(1.8	)			22.8				(15.2	)			5.8
Balance at 30 June 2009:
Cost			18.0				213.0				903.2				36.4				1,170.6
Accumulated depreciation			—				(63.9	)			(400.1	)			—				(464.0	)
Net book value		$	18.0			$	149.1			$	503.1			$	36.4			$	706.6

5. Short and Long-Term Debt

Debt consists of the following components:

		30 June				31 March
(Millions of US dollars)		2009				2009
Short-term debt		$	50.0			$	93.3
Current portion of long-term debt			196.0				—
Long-term debt			25.0				230.7
Total debt1		$	271.0			$	324.0

James Hardie Industries N.V. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)

At 30 June 2009, the Company’s credit facilities consisted of :

		Effective				Total				Principal
Description		Interest Rate				Facility				Drawn
(US$ millions)
364-day facilities, can be drawn in US$, variable interest rates based on LIBOR plus margin, can be repaid and redrawn until November 2009			1.22	%			50.0				50.0
364-day facilities, can be drawn in US$, variable interest rates based on LIBOR plus margin, can be repaid and redrawn until June 2010			—				16.7				—
Term facilities, can be drawn in US$, variable interest rates based on LIBOR plus margin, can be repaid and redrawn until June 2010			1.08	%			245.0				196.0
Term facilities, can be drawn in US$, variable interest rates based on LIBOR plus margin, can be repaid and redrawn until February 2011			1.20	%			45.0				25.0
Term facilities, can be drawn in US$, variable interest rates based on LIBOR plus margin, can be repaid and redrawn until February 2013			—				90.0				—
Total						$	446.7			$	271.0

For all facilities, the interest rate is calculated two business days prior to the commencement of each draw-down period based on the US$ London Interbank Offered Rate (“LIBOR”) plus the margins of individual lenders and is payable at the end of each draw-down period. At 30 June 2009, there was US$271.0 million drawn under the combined facilities and US$175.7 million was unutilised and available.

At 30 June 2009, management believes that the Company was in compliance with all restrictive covenants contained in its credit facility agreements. Under the most restrictive of these covenants, the Company (i) is required to maintain certain ratios of indebtedness to equity which do not exceed certain maximums, excluding assets, liabilities and other balance sheet items of the AICF, Amaba, Amaca, ABN 60 and Marlew Mining Pty Limited, (ii) must maintain a minimum level of net worth, excluding assets, liabilities and other balance sheet items of the AICF; for these purposes “net worth” means the sum of the par value (or value stated in the books of the James Hardie Group) of the capital stock (but excluding treasury stock and capital stock subscribed or unissued) of the James Hardie Group, the paid in capital and retained earnings of the James Hardie Group and the aggregate amount of provisions made by the James Hardie Group for asbestos related liabilities, in each case, as such amounts would be shown in the consolidated balance sheet of the James Hardie Group if Amaba, Amaca, ABN 60 and Marlew Mining Pty Limited were not accounted for as subsidiaries of the Company, (iii) must meet or exceed a minimum ratio of earnings before interest and taxes to net interest charges, excluding all income, expense and other profit and loss statement impacts of the AICF, Amaba, Amaca, ABN 60 and Marlew Mining Pty Limited and (iv) must ensure that no more than 35% of Free Cash Flow (as defined in the Amended FFA) in any given Financial Year is contributed to the AICF on the payment dates under the Amended FFA in the next following Financial Year. The limit does not apply to payments of interest to the AICF. Such limits are consistent with the contractual liabilities of the Performing Subsidiary and the Company under the Amended FFA.

James Hardie Industries N.V. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)

6. Asbestos

The Amended FFA to provide long-term funding to the AICF was approved by shareholders in February 2007. The accounting policies utilised by the Company to account for the Amended FFA are described in Note 2, Summary of Significant Accounting Policies.

Asbestos Adjustments

The asbestos adjustments included in the consolidated statements of operations comprise the following:

		Three Months
		Ended 30 June
(Millions of US dollars)		2009				2008
Loss on foreign currency exchange		$	(119.8	)		$	(40.5	)
Total Asbestos Adjustments		$	(119.8	)		$	(40.5	)

James Hardie Industries N.V. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)

Asbestos-Related Assets and Liabilities

Under the terms of the Amended FFA, the Company has included on its consolidated balance sheets certain asbestos-related assets and liabilities. These amounts are detailed in the table below, and the net total of these asbestos-related assets and liabilities is commonly referred to by the Company as the “Net Amended FFA Liability”.

		30 June				31 March
(Millions of US dollars)		2009				2009
Asbestos liability — current		$	(92.5	)		$	(78.2	)
Asbestos liability — non-current			(1,403.5	)			(1,206.3	)
Asbestos liability — Total			(1,496.0	)			(1,284.5	)
Insurance receivable — current			14.9				12.6
Insurance receivable — non-current			172.0				149.0
Insurance receivable — Total			186.9				161.6
Workers’ compensation asset — current			0.7				0.6
Workers’ compensation asset — non-current			87.3				73.8
Workers’ compensation liability — current			(0.7	)			(0.6	)
Workers’ compensation liability — non-current			(87.3	)			(73.8	)
Workers’ compensation — Total			—				—
Deferred income taxes — current			14.6				12.3
Deferred income taxes — non-current			391.6				333.2
Deferred income taxes — Total			406.2				345.5
Income tax payable (reduction in income tax payable)			29.3				22.8
Other net liabilities			(2.0	)			(2.0	)
Net Amended FFA liability			(875.6	)			(756.6	)
Restricted cash and cash equivalents and restricted short-term investment assets of the AICF			102.1				98.3
Unfunded Net Amended FFA liability		$	(773.5	)		$	(658.3	)

James Hardie Industries N.V. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)

Asbestos Liability

The amount of the asbestos liability reflects the terms of the Amended FFA, which has been calculated by reference to (but is not exclusively based upon) the most recent actuarial estimate of the projected future asbestos-related cash flows prepared by KPMG Actuaries. The asbestos liability also includes an allowance for the future claims-handling costs of the AICF. The Company receives an updated actuarial estimate as of 31 March each year. The last actuarial assessment was performed as of 31 March 2009.

The changes in the asbestos liability for the three months ended 30 June 2009 are detailed in the table below:

		A$				A$ to US$				US$
		Millions				rate				Millions
Asbestos liability — 31 March 2009		A$	(1,869.2	)			1.4552			$	(1,284.5	)
Asbestos claims paid1			27.3				1.3179				20.7
AICF claims-handling costs incurred1			0.9				1.3179				0.7
Loss on foreign currency exchange											(232.9	)
Asbestos liability — 30 June 2009		A$	(1,841.0	)			1.2306			$	(1,496.0	)

Insurance Receivable — Asbestos

The changes in the insurance receivable for the three months ended 30 June 2009 are detailed in the table below:

		A$				A$ to US$				US$
		Millions				rate				Millions
Insurance receivable — 31 March 2009		A$	235.2				1.4552			$	161.6
Insurance recoveries1			(5.2	)			1.3179				(3.9	)
Gain on foreign currency exchange											29.2
Insurance receivable — 30 June 2009		A$	230.0				1.2306			$	186.9

Deferred Income Taxes — Asbestos

The changes in the deferred income taxes — asbestos for the three months ended 30 June 2009 are detailed in the table below:

		A$				A$ to US$				US$
		Millions				rate				Millions
Deferred tax assets — 31 March 2009		A$	502.7				1.4552			$	345.5
Amounts offset against income tax payable1			(2.8	)			1.3179				(2.1	)
Gain on foreign currency exchange											62.8
Deferred tax assets — 30 June 2009		A$	499.9				1.2306			$	406.2

Income Tax Payable

A portion of the deferred income tax asset is applied against the Company’s income tax payable. At 30 June 2009 and 31 March 2009, this amount was US$29.3 million and US$22.8 million, respectively. During the three months ended 30 June 2009, there was a US$4.3 million favourable effect of foreign currency exchange.

Other Net Liabilities

Other net liabilities include a provision for asbestos-related education and medical research contributions of US$2.6 million at 30 June 2009. Also included in other net liabilities are the other assets and liabilities

James Hardie Industries N.V. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)

of the AICF including trade receivables, prepayments, fixed assets, trade payables and accruals. These other assets and liabilities of the AICF were a net asset of US$0.6 million at 30 June 2009. During the three months ended 30 June 2009, there was a US$0.3 million unfavourable effect of foreign currency exchange on the other net liabilities.

Restricted Cash and Short-term Investments of the AICF

Cash and cash equivalents and short-term investments of the AICF are reflected as restricted assets as these assets are restricted for use in the settlement of asbestos claims and payment of the operating costs of the AICF. During the three months ended 30 June 2009, the AICF sold US$7.6 million (A$10.0 million) of its short-term investments which at 31 March 2009 had been adjusted to their fair market value of US$7.2 million (A$9.5 million). The sales in the first quarter resulted in the Company recording a realised gain of US$0.4 million (A$0.5 million) in the line item Other Income.

At 30 June 2009, the Company revalued the AICF’s remaining short-term investments available-for-sale resulting in a positive mark-to-market fair value adjustment of US$3.9 million (A$5.2 million). This appreciation in the value of the investments was recorded as an unrealised gain in Other Comprehensive Income.

The changes in the restricted cash and short-term investments of the AICF for the three months ended 30 June 2009 are detailed in the table below:

		A$				A$ to US$				US$
		Millions				rate				Millions
Restricted cash and cash equivalents and restricted short-term investments - 31 March 2009		A$	143.1				1.4552			$	98.3
Asbestos claims paid1			(27.3	)			1.3179				(20.7	)
AICF operating costs paid — claims-handling1			(0.9	)			1.3179				(0.7	)
AICF operating costs paid — non claims-handling1			(0.7	)			1.3179				(0.5	)
Insurance recoveries1			5.2				1.3179				3.9
Interest and investment income1			0.9				1.3179				0.7
Unrealised gain on investments1			5.2				1.3179				3.9
Gain on investments1			0.5				1.3179				0.4
Other1			(0.4	)			1.3179				(0.3	)
Gain on foreign currency exchange											17.1
Restricted cash and cash equivalents and restricted short-term investments - 30 June 2009		A$	125.6				1.2306			$	102.1

Claims Data

The AICF provides compensation payments for Australian asbestos-related personal injury claims against the Former James Hardie Companies. The claims data in this section are only reflective of these Australian asbestos-related personal injury claims against the Former James Hardie Companies.

James Hardie Industries N.V. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)

The following table, provided by KPMG Actuaries, shows the activity related to the numbers of open claims, new claims and closed claims during each of the past five years and the average settlement per settled claim and case closed:

		Three Months
		Ended				For the Years Ended 31 March
		30 June 2009				2009				2008				2007				20061
Number of open claims at beginning of period			534				523				490				564				712
Number of new claims			160				607				552				463				346
Number of closed claims			159				596				519				537				502
Number of open claims at end of period			535				534				523				490				556
Average settlement amount per settled claim		A$	180,602			A$	190,638			A$	147,349			A$	166,164			A$	151,883
Average settlement amount per case closed		A$	166,972			A$	168,248			A$	126,340			A$	128,723			A$	122,535
Average settlement amount per settled claim		US$	137,038			US$	151,300			US$	128,096			US$	127,163			US$	114,318
Average settlement amount per case closed		US$	126,696			US$	133,530			US$	109,832			US$	98,510			US$	92,229

Under the terms of the Amended FFA, the Company has obtained rights of access to actuarial information produced for the AICF by the actuary appointed by the AICF (the “Approved Actuary”). The Company’s future disclosures with respect to claims statistics are subject to it obtaining such information from the Approved Actuary. The Company has had no general right (and has not obtained any right under the Amended FFA) to audit or otherwise require independent verification of such information or the methodologies to be adopted by the Approved Actuary. As such, the Company will need to rely on the accuracy and completeness of the information and analysis of the Approved Actuary when making future disclosures with respect to claims statistics.

7. Fair Value Measurements

The Company’s financial instruments consist primarily of cash and cash equivalents, restricted cash and cash equivalents, restricted short-term investments, trade receivables, trade payables, debt and interest rate swaps.

Cash and cash equivalents, Restricted cash and cash equivalents, Trade receivables and Trade payables - These items are recorded in the financial statements at historical cost. The historical cost basis for these amounts is estimated to approximate their respective fair values due to the short maturity of these instruments.

Restricted short-term investments — Restricted short-term investments are recorded in the financial statements at fair value. The fair value of restricted short-term investments is based on quoted market prices. Changes in fair value are recorded, net of tax, as other comprehensive income and included as a component in shareholders’ deficit. Restricted short-term investments are held and managed by the AICF and are reported at their fair value. At 31 March 2009 the Company determined that these investments were other than temporarily impaired due to the current economic environment, the length of time the fair value of the assets were less than cost and the extent of the discount of the fair value compared to the cost of the assets. At 30 June 2009 the Company recorded an unrealised gain on these restricted short-term investments of US$3.9 million for the three months ended 30 June 2009. This unrealised gain is included as a separate component of accumulated other comprehensive income.

James Hardie Industries N.V. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)

Debt — Debt is generally recorded in the financial statements at historical cost. The carrying value of debt provided under the Company’s credit facilities approximates fair value since the interest rates charged under these credit facilities are tied directly to market rates and fluctuate as market rates change.

Interest Rate Swaps — Interest rate swaps are recorded in the financial statements at fair value. Changes in fair value are recorded in the statement of operations in Other Income. At 30 June 2009 the Company had interest rate swap contracts with a total principal of US$250.0 million. For all of these interest rate swap contracts, the Company has agreed to pay fixed interest rates while receiving a floating interest rate. These contracts were entered into to protect against upward movements in US$ LIBOR and the associated interest the Company pays on its external credit facilities. At 30 June 2009 the weighted average fixed interest rate of these contracts is 2.49% and the weighted average remaining life is 3.6 years. These contracts have a fair value of US$2.5 million, which is included in Accounts and Notes Receivable. For the three months ended 30 June 2009, the Company recorded an unrealized gain on interest rate swaps of US$4.4 million. There were no interest rate swap contracts for the three months ended 30 June 2008.

The following table sets forth by level within the fair value hierarchy, the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis at 30 June 2009 according to the valuation techniques the Company used to determine their fair values.

						Fair Value Measurements
		Fair Value at				Using Inputs Considered as
(Millions of US Dollars)		30 June 2009				Level 1				Level 2				Level 3
Assets
Cash and cash equivalents		$	42.7			$	42.7			$	—			$	—
Restricted cash and cash equivalents			48.3				48.3				—				—
Restricted short-term investments			59.1				59.1				—				—
Accounts and notes receivable			123.1				120.6				2.5				—
Total Assets		$	273.2			$	270.7			$	2.5			$	—
Liabilities
Accounts Payable		$	88.5			$	88.5			$	—			$	—
Debt			271.0				271.0				—				—
Total Liabilities		$	359.5			$	359.5			$	—			$	—

8. Commitment and Contingencies

ASIC Proceedings

On 23 April 2009, Justice Gzell delivered judgment in the civil proceedings commenced by the Australian Securities & Investments Commission (“ASIC”) in February 2007 in the Supreme Court of New South Wales against the Company, ABN 60 (formerly JHIL) and ten former directors and officers. Readers are referred to the audited consolidated financial statements and the notes thereto, included in the Company’s Annual Report on Form 20-F for the fiscal year ended 31 March 2009, filed with the United States Securities and Exchange Commission on 25 June 2009. On 27 July 2009, there was a further hearing in relation to exoneration, penalties and costs. Justice Gzell has reserved his decision.

James Hardie Industries N.V. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)

Chile Litigation

On 24 April 2009, a trial court in Santiago, Chile awarded the equivalent of US$13.4 million in damages against Fibrocementos Volcan Limitada (“FC Volcan”, the former James Hardie Chilean entity), in civil litigation brought by Industria Cementa Limitada (“Cementa”) in 2007. FC Volcan is appealing the decision to the Santiago Court of Appeal.

Cementa, a fibre cement manufacturer in Chile, commenced anti-trust proceedings in 2003 against the former James Hardie Chilean entity alleging that it had engaged in predatory pricing, by selling products below cost when it entered the Chilean market, in breach of the relevant anti-trust laws in Chile. Another fiber cement manufacturer in Chile, Producción Química y Electrónica Quimel S.A. (“Quimel”), also joined the proceedings.

As these actions existed prior to James Hardie’s sale of its Chilean business in July 2005, the Company had agreed to indemnify the buyer subject to certain conditions and limitations, for damages or penalties awarded against FC Volcan in relation to such proceedings, and the Company retained conduct of the defense of the matters.

After the anti-trust proceedings concluded in 2006, Cementa, in 2007, brought a separate civil action against FC Volcan claiming that Cementa had suffered damages, allegedly as a result of predatory pricing. This action resulted in the US$13.4 million damages award which is now the subject of the appeal by FC Volcan.

Quimel also filed a separate civil action against FC Volcan in 2007 claiming that it had suffered damages, allegedly as a result of predatory pricing. On 23 June 2009 the Chilean trial court dismissed the claim filed by Quimel against FC Volcan. Quimel has appealed the trial court decision, but a date for the appeal has not yet been set.

The Company denied and continues to deny the allegations of predatory pricing in Chile. The Company retained conduct of the appeal of the two civil damages matters. The Company intends to vigorously pursue all appellate and other alternatives as it does not concur with the decision of the trial court. The Company also intends to exercise its rights under the indemnification provisions, including applicable conditions and limitations.

As of 30 June 2009 management believes it has adequately provided for this contingency as required under SFAS No. 5.

Environmental and Legal

The operations of the Company, like those of other companies engaged in similar businesses, are subject to a number of laws and regulations on air and water quality, waste handling and disposal. The Company’s policy is to accrue for environmental costs when it is determined that it is probable that an obligation exists and the amount can be reasonably estimated. In the opinion of management, based on information presently known except as set forth above, the ultimate liability for such matters should not have a material adverse effect on either the Company’s consolidated financial position, results of operations or cash flows.

The Company is involved from time to time in various legal proceedings and administrative actions incidental or related to the normal conduct of its business. Although it is impossible to predict the outcome of any pending legal proceeding, management believes that such proceedings and actions should not, except as it relates to asbestos, the ASIC proceedings and income taxes as described in these financial statements, individually or in the aggregate, have a material adverse effect on its consolidated financial position, results of operations or cash flows.

James Hardie Industries N.V. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)

9. Income Taxes

The Company or one of its subsidiaries files income tax returns in the US federal jurisdiction, and various states and foreign jurisdictions including Australia and The Netherlands. The Company is no longer subject to US federal examinations by US Internal Revenue Service (“IRS”) for tax years prior to tax year 2007. The Company is no longer subject to examinations by The Netherlands tax authority, for tax years prior to tax year 2002. The Company is no longer subject to Australian federal examinations by the Australian Taxation Office (“ATO”) for tax years prior to tax year 2007.

ATO — 1999 Disputed Amended Assessment

In March 2006, RCI Pty Ltd (“RCI”), a wholly-owned subsidiary of the Company, received an amended assessment from the ATO in respect of RCI’s income tax return for the year ended 31 March 1999.

On 30 May 2007, the ATO issued a Notice of Decision disallowing the Company’s objection to the amended assessment (“Objection Decision”). On 11 July 2007, the Company filed an application appealing the Objection Decision with the Federal Court of Australia. The hearing for RCI’s trial is scheduled to commence on 7 September 2009.

The Company believes that it is more likely than not that the tax position reported in RCI’s tax return for the 1999 fiscal year will be upheld on appeal. Therefore, the Company believes that the requirements under FIN 48 for recording a liability have not been met and therefore it has not recorded any liability at 30 June 2009 for the amended assessment.

The Company expects that amounts paid in respect of the amended assessment will be recovered by RCI (with interest) at the time RCI is successful in its appeal against the amended assessment. As a result, the Company has treated all payments in respect of the amended assessment that have been made up to 30 June 2009 as a deposit and it is the Company’s intention to treat any payments to be made at a later date as a deposit. At 30 June 2009 and 31 March 2009, this deposit totaled US$208.8 million (A$256.9 million) and US$173.5 million (A$252.5 million), respectively.

FASB Interpretation No. 48

A reconciliation of the beginning and ending amount of unrecognised tax benefits and interest and penalties are as follows:

		Unrecognised				Interest and
(US$ millions)		tax benefits				Penalties
Balance at 31 March 2009		$	12.3			$	(16.0	)
Additions for tax positions of the current year			0.3				—
Additions for tax positions of prior year			3.7				(0.2	)
Foreign currency translation adjustment			—				(3.3	)
Balance at 30 June 2009		$	16.3			$	(19.5	)

As of 30 June 2009 the total amount of unrecognised tax benefits and the total amount of interest and penalties accrued related to unrecognised tax benefits that, if recognised, would affect the effective tax rate is US$16.3 million and an expense of US$19.5 million, respectively.

The Company recognises penalties and interest accrued related to unrecognised tax benefits in income tax expense. During the three months ended 30 June 2009, the total amount of interest and penalties recognised in tax expense as a benefit was US$0.2 million.

James Hardie Industries N.V. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)

The liabilities associated with FIN 48 are included in other non-current liabilities on the Company’s consolidated balance sheet.

A number of years may lapse before an uncertain tax position is audited and ultimately settled. It is difficult to predict the ultimate outcome or the timing of resolution for uncertain tax positions. It is reasonably possible that the amount of unrecognised tax benefits could significantly increase or decrease within the next twelve months. These changes could result from the settlement of ongoing litigation, the completion of ongoing examinations, the expiration of the statute of limitations, or other circumstances. At this time, an estimate of the range of the reasonably possible change cannot be made.

10. Stock-Based Compensation

At 30 June 2009, the Company had the following equity award plans: the Executive Share Purchase Plan; the JHI NV 2001 Equity Incentive Plan; the 2005 Managing Board Transition Stock Option Plan; the Long-Term Incentive Plan 2006 as amended in 2008 and the Supervisory Board Share Plan 2006.

Compensation expense arising from equity award grants as estimated using pricing models was US$2.0 million for each of the three months ended 30 June 2009 and 2008. As of 30 June 2009, the unrecorded deferred stock-based compensation balance related to equity awards was US$11.6 million after estimated forfeitures and will be recognised over an estimated weighted average amortisation period of 1.6 years.

Stock Options

The following table summarises all of the Company’s stock options available for grant and the movement in all of the Company’s outstanding options during the noted period:

						Outstanding Options
										Weighted
		Shares								Average
		Available for								Exercise
		Grant				Number				Price
Balance at 31 March 2009			23,747,833				18,272,928			A$	7.28
Forfeited			942,043				(942,043	)		A$	7.68
Balance at 30 June 2009			24,689,876				17,330,885			A$	7.25

The Company accounts for stock options in accordance with the fair value provisions of SFAS No. 123R, which requires the Company to estimate the value of stock options issued and recognise this estimated value as compensation expense over the periods in which the stock options vest.

The Company estimates the fair value of each option grant on the date of grant using either the Black-Scholes option-pricing model or a binomial lattice model that incorporates a Monte Carlo Simulation (the “Monte Carlo method”).

There were no stock options granted during the three months ended 30 June 2009 and 2008.

James Hardie Industries N.V. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)

Restricted Stock

The Company accounts for restricted stock in accordance with the fair value provisions of SFAS No. 123R, which requires the Company to estimate the value of restricted stock issued and recognise this estimated value as compensation expense over the periods in which the restricted stock vests.

The following table summarises all of the Company’s restricted stock activity during the noted period:

						Weighted
						Average Fair
						Value at Grant
		Shares				Date
Nonvested at 31 March 2009			2,991,061			A$	3.95
Granted			1,066,595			A$	4.32
Forfeited			(11,401	)		A$	4.44
Nonvested at 30 June 2009			4,046,255			A$	4.04

Restricted Stock — service vesting

The Company granted 1,066,595 restricted stock units (service vesting) to employees during the 3 months ended 30 June 2009, under the Long-Term Incentive Plan. In the 3 months ended 30 June 2008, the Company granted 698,440 restricted stock units (service vesting) to employees, under the JHI NV 2001 Equity Incentive Plan.

The fair value of each restricted stock unit (service vesting) is equal to the market value of the Company’s common stock on the date of grant, adjusted for the fair value of dividends as the restricted stock holder is not entitled to dividends over the vesting period.

The following table includes the assumptions used for restricted (time vesting) stock grants valued during the three months ended 30 June 2009 :

		30 June 2009				30 June 2008
		Grant				Grant
Dividend yield1		$0.00 per annum				$0.20 per annum
Risk free interest rate1			n/a				2.9	%
Expected life in years			2.0				2.0
JHX stock price at grant date		A$	4.31			A$	4.93
Number of restricted stock units			1,066,595				698,440

Restricted Stock — market condition

There were no restricted stock units (market condition) granted during the three months ended 30 June 2009 and 2008.

James Hardie Industries N.V. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)

11. Operating Segment Information

The Company has reported its operating segment information in the format that the operating segment information is available to and evaluated by the Managing Board of Directors. USA and Europe Fibre Cement manufactures fibre cement interior linings, exterior siding and related accessories products in the United States; these products are sold in the United States, Canada and Europe. Asia Pacific Fibre Cement includes all fibre cement manufactured in Australia, New Zealand and the Philippines and sold in Australia, New Zealand and Asia. Research and Development represents the cost incurred by the research and development centres. The Company’s operating segments are strategic operating units that are managed separately due to their different products and/or geographical location.

Operating Segments

The following are the Company’s operating segments and geographical information:

		Net Sales to Customers1
		Three Months Ended 30 June
(Millions of US dollars)		2009				2008
USA & Europe Fibre Cement		$	223.2			$	281.7
Asia Pacific Fibre Cement			61.3				83.3
Worldwide total		$	284.5			$	365.0

		(Loss) Income Before Income Taxes
		Three Months Ended 30 June
(Millions of US dollars)		2009				2008
USA & Europe Fibre Cement2		$	68.8			$	65.6
Asia Pacific Fibre Cement2			10.9				15.8
Research and Development2			(4.0	)			(5.0	)
Segments total			75.7				76.4
General Corporate3			(132.8	)			(53.5	)
Total operating (loss) income			(57.1	)			22.9
Net interest expense4			(0.7	)			(1.1	)
Other income			4.8				—
Worldwide total		$	(53.0	)		$	21.8