Exhibit 99.1
22 August 2011
1999 Disputed Amended Assessment
with the Australian Taxation Office
The Full Federal Court of Australia today delivered its decision on the appeal by RCI Pty Ltd
(RCI), a wholly-owned subsidiary of James Hardie Industries SE (JHISE or the company), in respect
of an amended assessment issued to RCI by the Australian Taxation Office (ATO) for the income tax
year ended 31 March 1999.
The Full Federal Court upheld RCI’s appeal.
The ATO has 28 days from the handing down of the judgment to make an application for special leave
to appeal the Court’s decision to the High Court of Australia. No cash will be exchanged between
the ATO and RCI until the matter has ultimately been resolved.
As a result of the favourable decision, the ATO should it elect not to seek leave to appeal the
Full Federal Court judgement to the High Court of Australia will be obliged to refund A$242.4
million plus interest and a portion of RCI’s legal costs. This amount includes A$184.3 million
which represents 50% of the original assessment plus general interest charges paid by RCI on the
unpaid portion of the original amended assessment.
If the refund is received before 31 March 2012 James Hardie will, subject to the terms and
conditions of the Amended and Restated Final Funding Agreement, contribute 35% of the refunded
amount to the Asbestos Injuries Compensation Fund in July 2012.
The company does not intend to comment further in relation to the matter.
Background
RCI received the amended assessment in March 2006. The amended assessment related to the amount of
net capital gain arising as a result of an internal corporate restructure carried out in 1998 and
was issued pursuant to the discretion granted to the Commissioner of Taxation under Part IVA of the
Income Tax Assessment Act 1936.
On 30 May 2007, the ATO issued a Notice of Decision disallowing RCI’s objection to the amended
assessment (Objection Decision). On 11 July 2007, RCI filed an application appealing the Objection
Decision with the Federal Court of Australia. The Federal Court hearing took place in September
2009.
James Hardie Industries SE, ARBN 097 829 895
Incorporated in Ireland, with registered office at Second
Floor, Europa House, Harcourt Centre, Harcourt
Street, Dublin 2,
Ireland and registered number 485719. The liability of its members is limited.
On 1 September, 2010 the Federal Court dismissed RCI’s appeal in respect of the amended assessment.
RCI then appealed to the Full Federal Court of Australia. The Full Federal Court hearing took
place in May 2011.
In fiscal year 2007, in accordance with the ATO Receivables Policy, 50% of the total amended
assessment (A$184.0 million) was paid and the company provided a guarantee in favour of the ATO for
the remaining unpaid 50% of the amended assessment, pending the outcome of the appeal.
General interest charges (GIC) on the unpaid balance of the amended assessment have also been paid
in arrears on a quarterly basis.
Prior to the Federal Court’s decision in September 2010 on RCI’s appeal, the company believed it
was more-likely-than-not that the tax position reported in RCI’s tax return for the 1999 financial
year would be upheld on appeal. As a result, until 31 August 2010, the company treated the payment
of 50% of the amended assessment, GIC and interest accrued on amounts paid to the ATO with respect
to the amended assessment as a deposit on its consolidated balance sheet.
As a result of the Federal Court’s decision in September 2010, the company re-assessed its tax
position with respect to the amended assessment and concluded that the ‘more-likely-than-not’
recognition threshold as prescribed by US GAAP was no longer met. Accordingly, effective 1
September 2010, the company removed the deposit with the ATO from its consolidated balance sheet
and recognised a non-cash expense of US$345.2 million (A$388.0 million) on its consolidated
statement of operations for the full year ended 31 March 2011. In addition, the company recognised
an uncertain tax position of US$190.4 million (A$184.3 million) on its consolidated balance sheet
relating to the unpaid portion of the amended assessment.
The company has regularly reported on the ATO — 1999 Disputed Amended Assessment in its quarterly
and annual results lodged with the Australian Securities Exchange and the US Securities and
Exchange Commission.
End
Media/Analyst Enquiries:
Sean O’Sullivan
Vice President, Investor and Media Relations
Disclaimer
This company announcement contains forward-looking statements. James Hardie may from time to time
make forward-looking statements in its periodic reports filed with or furnished to the SEC, on
Forms 20-F and 6-K, in its annual reports to shareholders, in offering circulars, invitation
memoranda and prospectuses, in media releases and other written materials and in oral statements
made by the company’s officers, directors or employees to analysts, institutional investors,
existing and potential lenders, representatives of the media and others. Statements that are not
historical facts are forward-looking statements and such forward-looking statements are statements
made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of
1995.
Examples of forward-looking statements include:
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statements about the company’s future performance; |
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projections of the company’s results of operations or financial condition; |
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statements regarding the company’s plans, objectives or goals, including those relating to
strategies, initiatives, competition, acquisitions, dispositions and/or our products; |
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expectations concerning the costs associated with the suspension or closure of operations
at any of the company’s plants and future plans with respect to any such plants; |
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expectations that the company’s credit facilities will be extended or renewed; |
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expectations concerning dividend payments and share buy-back; |
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statements concerning the company’s corporate and tax domiciles and potential changes to
them, including potential tax charges; |
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statements regarding tax liabilities and related audits, reviews and proceedings; |
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statements as to the possible consequences of proceedings brought against the company and
certain of its former directors and officers by the Australian Securities and Investments
Commission (ASIC); |
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expectations about the timing and amount of contributions to the Asbestos Injuries
Compensation Fund (AICF), a special purpose fund for the compensation of proven Australian
asbestos-related personal injury and death claims; |
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expectations concerning indemnification obligations; |
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statements about product or environmental liabilities; and |
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statements about economic conditions, such as economic or housing recovery, the levels of
new home construction, unemployment levels, changes or stability in housing values, the
availability of mortgages and other financing, mortgage and other interest rates, housing
affordability and supply, the levels of foreclosures and home resales, currency exchange rates
and consumer confidence. |
Words such as “believe,” “anticipate,” “plan,” “expect,” “intend,” “target,” “estimate,” “project,”
“predict,” “forecast,” “guideline,” “aim,” “will,” “should,” “likely,” “continue” and similar
expressions are intended to identify forward-looking statements but are not the exclusive means of
identifying such statements. Readers are cautioned not to place undue reliance on these
forward-looking statements and all such forward-looking statements are qualified in their entirety
by reference to the following cautionary statements.
Forward-looking statements are based on the company’s current expectations, estimates and
assumptions and because forward-looking statements address future results, events and conditions,
they, by their very nature, involve inherent risks and uncertainties, many of which are
unforeseeable and beyond the company’s control. Such known and unknown risks, uncertainties and
other factors may cause actual results, performance or other achievements to differ materially from
the anticipated results, performance or achievements expressed, projected or implied by these
forward-looking statements. These factors, some of which are discussed under “Risk Factors” in
Section 3 of the Form 20-F filed with the US Securities and Exchange Commission on 29 June 2011
include, but are not limited to: all matters relating to or arising out of the prior manufacture of
products that contained asbestos by current and former James Hardie subsidiaries; required
contributions to the AICF, any shortfall in the AICF and the effect of currency exchange rate
movements on the amount recorded in the company’s financial statements as an asbestos liability;
governmental loan facility to the AICF; compliance with and changes in tax laws and treatments;
competition and product pricing in the markets in which the company operates; the consequences of
product failures or defects; exposure to environmental, asbestos or other legal proceedings;
general economic and market conditions; the supply and cost of raw materials; possible increases in
competition and the potential that competitors could copy the company’s products; reliance on a
small number of customers; a customer’s inability to pay; compliance with and changes in
environmental and health and safety laws; risks of conducting business internationally; compliance
with and changes in laws and regulations; the effect of the transfer of the company’s corporate
domicile from The Netherlands to Ireland to become an Irish SE including employee relations,
changes in corporate governance and potential tax benefits; currency exchange risks; dependence on
customer preference and the concentration of the company’s customer base on large format retail
customers, distributors and dealers; dependence on residential and commercial construction markets;
the effect of adverse changes in climate or weather patterns; possible inability to renew credit
facilities on terms favorable to the company, or at all; acquisition or sale of businesses and
business segments; changes in the company’s key management personnel; inherent limitations on
internal controls; use of accounting estimates; and all other risks identified in the company’s
reports filed with Australian, Irish and US securities agencies and exchanges (as appropriate). The
company cautions you that the foregoing list of factors is not exhaustive and that other risks and
uncertainties may cause actual results to differ materially from those in forward-looking
statements. Forward-looking statements speak only as of the date they are made and are statements
of the company’s current expectations concerning future results, events and conditions.
