Exhibit 99.3
20 August 2008
James Hardie Industries N.V.
Results for the 1st Quarter Ended 30 June 2008
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Three Months Ended 30 June |
| US GAAP - US$ Millions |
|
FY 2009 |
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FY 2008 |
|
% Change |
Net Sales |
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USA and Europe Fibre Cement |
|
$ |
281.7 |
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$ |
353.2 |
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(20 |
) |
Asia Pacific Fibre Cement |
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83.3 |
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71.2 |
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17 |
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Total Net Sales |
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$ |
365.0 |
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$ |
424.4 |
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(14 |
) |
Cost of goods sold |
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(241.0 |
) |
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(257.5 |
) |
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6 |
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Gross profit |
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124.0 |
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166.9 |
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(26 |
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Selling, general and
administrative expenses |
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(53.3 |
) |
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(55.5 |
) |
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4 |
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Research & development
expenses |
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(7.3 |
) |
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(6.3 |
) |
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(16 |
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Asbestos adjustments |
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(40.5 |
) |
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(30.1 |
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(35 |
) |
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EBIT |
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22.9 |
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75.0 |
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(69 |
) |
Net interest (expense) income |
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(1.1 |
) |
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0.5 |
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— |
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Operating profit before
income taxes |
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21.8 |
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75.5 |
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(71 |
) |
Income tax expense |
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(20.4 |
) |
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(36.4 |
) |
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44 |
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Net operating profit |
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$ |
1.4 |
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$ |
39.1 |
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(96 |
) |
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Earnings per share — diluted
(US cents) |
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0.3 |
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8.3 |
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(96 |
) |
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Volume (mmsf) |
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USA and Europe Fibre
Cement |
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468.5 |
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584.6 |
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(20 |
) |
Asia Pacific Fibre Cement |
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101.9 |
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98.0 |
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4 |
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Average net sales price per
unit (per mmsf) |
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USA and Europe Fibre
Cement |
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US$ |
601 |
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US$ |
604 |
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— |
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Asia Pacific Fibre Cement |
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A$ |
867 |
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A$ |
873 |
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(1 |
) |
In this Management’s Analysis of Results, James Hardie may present financial measures, sales
volume terms, financial ratios, and Non-US GAAP financial measures included in the Definitions
section of this document starting on page 10. The company presents financial measures that it
believes are customarily used by its Australian investors. Specifically, these financial measures,
which are equivalent or derived from certain GAAP measures as explained in the definitions,
include “EBIT”, “EBIT margin”, “Operating profit” and “Net operating profit”. The company may also
present other terms for measuring its sales volumes (“million square feet” or “mmsf” and “thousand
square feet” or “msf”); financial ratios (“Gearing ratio”, “Net interest expense cover”, “Net
interest paid cover”, “Net debt payback”, “Net debt (cash)”; and Non-US GAAP financial measures
(“EBIT excluding asbestos”, “EBIT margin excluding asbestos”, “Net operating profit excluding
asbestos”, “Diluted earnings per share excluding asbestos”, “Operating profit before income taxes
excluding asbestos” and “Effective tax rate excluding asbestos” and EBITDA). Unless otherwise
stated, results and comparisons are of the 1st quarter of the current fiscal year
versus the 1st quarter of the prior fiscal year.
Management’s Analysis of Results: James Hardie – 1st Quarter FY09
1
Total Net Sales
Total net sales for the quarter decreased 14% compared to the same quarter of the previous year,
from US$424.4 million to US$365.0 million.
Net sales from USA and Europe Fibre Cement for the quarter decreased 20% from US$353.2 million to
US$281.7 million due to a reduction in sales volume and a slight reduction in average net sales
price.
Net sales from Asia Pacific Fibre Cement for the quarter increased 17% from US$71.2 million to
US$83.3 million due to favourable currency exchange rate movements and an increase in sales volume
partially offset by a slightly lower average net sales price.
USA and Europe Fibre Cement
Net sales decreased 20% from US$353.2 million in the first quarter of the prior fiscal year to
US$281.7 million due to decreased sales volume and a slight decrease in the average net sales
price.
Sales volume decreased 20% from 584.6 million square feet to 468.5 million square feet for the
quarter, primarily due to weaker demand for the company’s products in the US caused by continued
weakness in housing construction activity and deteriorating economic conditions.
The average net sales price decreased slightly from US$604 per thousand square feet to US$601 per
thousand square feet due to a shift in the product sales mix.
As announced on 22 May 2008, the company has closed the USA Hardie Pipe business. An insignificant
amount of sales were recorded in the quarter.
Discussion
Sales in our USA Fibre Cement business continued to be significantly affected by the ongoing
weakness in the US housing market, where housing starts fell 35% in the first quarter compared to
the same period last year. Our results were also affected by a moderate unfavourable shift in the
product mix caused by a relative increase in lower priced interior products.
Sales of exterior products declined as a result of lower demand for our siding, soffit and trim
products, in all regions except Canada. Sales of interior products were also lower across all
three regional divisions compared to the same period last year.
The business continued to focus on its strategy of aggressively growing demand for fibre cement
and on leveraging technology to offer differentiated products with superior value to reduce direct
competition. The differentiated ColorPlus® product line increased its market penetration in this
quarter, compared to the same period last year. The ColorPlus® range has since been rolled out in
the West and South and achieved moderate penetration rate gains compared to the same period last
year.
Repair and remodelling activity has decreased but it has not been affected to the same extent as
the new construction segment of the housing market. However, weakness in repair and remodelling
activity led to sales of our interior products being slightly lower compared to the same quarter
last year.
Management’s Analysis of Results: James Hardie – 1st Quarter FY09
2
Asia Pacific Fibre Cement
Net sales for the quarter increased 17% from US$71.2 million to US$83.3 million. Favorable
currency exchange rate movements in the Asia Pacific business’ currencies compared to the US
dollar accounted for 14% of this increase, while the underlying Australian dollar business results
accounted for the remaining 3% increase. In Australian dollars, net sales increased 3% due to a 4%
increase in sales volume partially offset by a 1% decrease in average net sales price.
Discussion
On-going growth in sales of differentiated products, along with a more favourable product mix,
allowed the Australian and New Zealand businesses to deliver good results in the weaker markets.
In Australia, the Australian Bureau of Statistics (ABS) reported building approvals fell 6.5% in
May on a seasonally-adjusted basis, while the Housing Industry Association (HIA) reported sales
down by nearly 8% year-on-year. Housing affordability was at its lowest level in ten years with
financial pressure on households caused by housing interest rates of over 9% per annum and rising
fuel costs.
During the quarter, the Australian business launched two new Scyon™ range products, in conjunction
with a marketing campaign aimed at the renovation and re-cladding markets.
The price of non-differentiated products remained under pressure from low-priced imports and local
competitors.
Residential construction in New Zealand continued to decline, with consents 17-18% lower than for
the same period last year, although the commercial market remained consistent and there was some
growth in renovations. The New Zealand business’ sales volume was off 6%.
In the Philippines, sales volumes and revenue declined in local currency compared to the same
quarter last year as a result of a reduction in export sales and a decline in the volume of
higher-priced products in the sales mix.
Gross Profit
Gross profit decreased 26% from US$166.9 million to US$124.0 million. The gross profit margin
decreased 5.3 percentage points from 39.3% to 34.0%.
USA and Europe Fibre Cement gross profit decreased 33% compared to the same quarter last year due
to lower sales volume, higher freight costs, higher average unit costs and a slightly lower
average net sales price. The gross profit margin of the USA and Europe Fibre Cement business
decreased by 6.6 percentage points.
Asia Pacific Fibre Cement gross profit increased 26% compared to the same period last year.
Favourable currency exchange rate movements in the Asia Pacific business’ currencies compared to
the US dollar accounted for 15% of this increase, while the underlying Australian dollar business
results accounted for the remaining 11% increase. The gross profit margin of the Asia Pacific
Fibre Cement business increased by 2.2 percentage points. In Australian dollars, gross profit
increased 11% as a result of the changing product mix, raw material cost management and consistent
manufacturing performance.
Management’s Analysis of Results: James Hardie – 1st Quarter FY09
3
Selling, General and Administrative (SG&A) Expenses
SG&A expenses decreased 4% for the quarter, from US$55.5 million to US$53.3 million. As a
percentage of sales, SG&A expenses increased 1.5 percentage points to 14.6%. SG&A expenses for the
quarter include non-claims handling related operating expenses of the AICF of US$0.6 million.
ASIC Proceedings
In February 2007, the Australian Securities and Investments Commission (ASIC) commenced civil
proceedings against JHI NV, a former subsidiary and ten then-present or former officers and
directors of the James Hardie group. The civil proceedings concern alleged contraventions of
certain provisions of the Corporations Law and/or the Corporations Act connected with the affairs
of the company and certain subsidiaries during the period February 2001 to June 2003.
There remains considerable uncertainty surrounding the likely outcome of the ASIC proceedings in
the longer term and there is a possibility that the company could become responsible for other
amounts in addition to the defence costs. However, at this stage, the company believes that,
while incurring such amounts is reasonably possible, the actual amount or range of amounts is not
estimable and accordingly as of 30 June 2008, has not recorded any related reserves.
Readers are referred to Note 8 of the company’s 30 June 2008 Condensed Consolidated Financial
Statements for further information on the ASIC Proceedings.
Research and Development Expenses
Research and development expenses include costs associated with “core” research projects that are
designed to benefit all business units. These costs are recorded in the Research and Development
segment rather than being attributed to individual business units. These costs were 23% higher
for the quarter at US$4.8 million.
Other research and development costs associated with commercialisation projects in business units
are included in the business unit segment results. In total, these costs were 4% higher for the
quarter at US$2.5 million.
Asbestos Adjustments
The asbestos adjustments are derived from an estimate of future Australian asbestos-related
liabilities in accordance with the Amended Final Funding Agreement (Amended FFA) that was signed
with the NSW Government on 21 November 2006 and approved by the company’s security holders on 7
February 2007.
The asbestos-related assets and liabilities are denominated in Australian dollars. Therefore the
reported value of these asbestos-related assets and liabilities in the company’s consolidated
balance sheets in US dollars is subject to adjustment, with a corresponding effect on the
company’s consolidated statement of operations, depending on the closing exchange rate between the
two currencies at the balance sheet date.
The asbestos adjustments for the quarter ended 30 June 2008 are as follows:
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Q1 |
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Q1 |
| US$ Million |
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FY 2009 |
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FY 2008 |
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Effect of foreign exchange |
|
$ |
(40.5 |
) |
|
$ |
(33.2 |
) |
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Other adjustments |
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— |
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3.1 |
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Asbestos adjustments |
|
$ |
(40.5 |
) |
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$ |
(30.1 |
) |
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Readers are referred to Note 7 of the company’s 30 June 2008 Condensed Consolidated Financial
Statements for further information on the asbestos adjustments.
Management’s
Analysis of Results: James Hardie – 1st Quarter FY09
4
EBIT
EBIT for the quarter decreased from US$75.0 million to US$22.9 million. EBIT for the quarter
includes net unfavourable asbestos adjustments of US$40.5 million and AICF SG&A expenses of US$0.6
million. For the same period in the prior year, EBIT included net unfavourable asbestos
adjustments of US$30.1 million and AICF SG&A expenses of US$0.6 million, as shown in the table
below.
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Three Months Ended 30 June |
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% |
| EBIT - US$ Millions |
|
FY 2009 |
|
FY 2008 |
|
Change |
USA and Europe Fibre
Cement |
|
$ |
65.6 |
|
|
$ |
113.1 |
|
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(42 |
) |
Asia Pacific Fibre Cement |
|
|
15.8 |
|
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|
12.4 |
|
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|
27 |
|
Research & Development |
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(5.0 |
) |
|
|
(4.1 |
) |
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|
(22 |
) |
General Corporate |
|
|
(12.4 |
) |
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(15.7 |
) |
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21 |
|
Asbestos adjustments |
|
|
(40.5 |
) |
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|
(30.1 |
) |
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(35 |
) |
AICF SG&A expenses |
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|
(0.6 |
) |
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|
(0.6 |
) |
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— |
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EBIT |
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|
22.9 |
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|
75.0 |
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(69 |
) |
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Excluding: |
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Asbestos: |
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Asbestos adjustments |
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|
40.5 |
|
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|
30.1 |
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|
35 |
|
AICF SG&A expenses |
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|
0.6 |
|
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|
0.6 |
|
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— |
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EBIT excluding asbestos |
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$ |
64.0 |
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$ |
105.7 |
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(39 |
) |
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Net sales |
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$ |
365.0 |
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$ |
424.4 |
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(14 |
) |
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EBIT margin excluding
asbestos |
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17.5 |
% |
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24.9 |
% |
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USA and Europe Fibre Cement EBIT
USA and Europe Fibre Cement EBIT for the quarter decreased 42% from US$113.1 million to US$65.6
million, primarily due to reduced gross profit performance in the US, which resulted from lower
sales volume, higher freight costs, higher average unit manufacturing costs and a slightly lower
average net sales price. The USA and Europe Fibre Cement EBIT margin was lower by 8.7 percentage
points at 23.3%.
As announced on 22 May 2008, the company has closed the USA Hardie Pipe business. A small EBIT
loss was recorded for the quarter.
Asia Pacific Fibre Cement EBIT
Asia Pacific Fibre Cement EBIT for the quarter increased 27% from US$12.4 million to US$15.8
million. Favourable currency exchange rate movements in the Asia Pacific business’ currencies
compared to the US dollar accounted for 12% of this increase, while the underlying Australian
dollar business results accounted for the remaining 15% increase. In Australian dollars, Asia
Pacific Fibre Cement EBIT for the quarter increased 15% due to an improved gross margin
performance, partially offset by increased SG&A expenses. The EBIT margin was 1.6 percentage
points higher at 19.0%.
Management’s
Analysis of Results: James Hardie – 1st Quarter FY09
5
General Corporate Costs
General corporate costs for the quarter decreased by US$3.3 million from US$15.7 million to
US$12.4 million as indicated in the table on page 5, primarily due to warranty provisions relating
to non-US activities of nil compared to US$4.0 million for the same period last year, partially
offset by the adverse impact of foreign exchange rate movements on the high proportion of
corporate costs incurred in Euros and Australian dollars, when translated into US dollars.
Net Interest (Expense) Income
Net interest (expense) income for the quarter decreased from income of US$0.5 million to an
expense of US$1.1 million. The decrease was primarily due to lower interest income earned on
investments and cash balances held by the AICF in the current quarter and an increase in net
interest expense resulting from the higher average level of net debt outstanding compared to the
same period in the prior year.
Income Tax
Income Tax Expense
Income tax expense for the quarter decreased from US$36.4 million to US$20.4 million.
The company’s effective tax rate on earnings excluding asbestos was 32.9% for the quarter compared
to 34.4% for the same quarter in the prior year. The decrease in the effective tax rate excluding
asbestos compared to the same period in the prior year is due to the impact of the change in the
geographical mix of earnings.
Australian Taxation Office (ATO) – 1999 Disputed Amended Assessment
As announced on 22 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. The amended assessment relates to the amount of net capital gains arising as
a result of an internal corporate restructure carried out in 1998 and has been 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 the company’s objection to the
amended assessment. On 11 July 2007, the company filed an application appealing the Objection
Decision with the Federal Court of Australia. The hearing of RCI’s appeal is presently scheduled
to commence in the Federal Court of Australia on 8 December 2008.
ATO – 2002 Tax Audit
The ATO is auditing the company’s Australian income tax returns for the years ended 31 March 2002
and 31 March 2004 through 31 March 2006.
On 8 August 2008, the Federal Court of Australia (Federal Court) made orders providing for the
reinstatement of the company’s former wholly-owned subsidiary James Hardie Australia Finance Pty
Limited (JHAF) to register of companies and appointing Max Donnelly of Ferrier Hodgson as the new
liquidator of JHAF. JHAF was deregistered on 23 August 2005 following a voluntary winding up. The
company understands that the reinstatement of JHAF is a necessary pre-requisite to the ATO issuing
an amended assessment in respect of one of the issues that has been the focus of the ATO’s
inquiries during the tax audit of fiscal year 2002.
The company is considering its position with respect to the merits of the potential amended
assessment and any obligations of JHAF to the ATO given its prior winding up.
Management’s
Analysis of Results: James Hardie – 1st Quarter FY09
6
Internal Revenue Service (IRS) — Notice of Proposed Adjustment (NOPA)
On 23 June 2008, the company announced that the IRS had issued it with a Notice of Proposed
Adjustment (NOPA) that concludes that the company does not satisfy the United States – Netherlands
Treaty Limitations on Benefits (LOB) provision of the US-NL Treaty applicable from early 2006 and
that accordingly it is not entitled to beneficial withholding tax rates on payments from the
company’s United States subsidiaries to its Netherlands companies. The company does not agree with
the conclusions reached by the IRS, and the company intends to contest the IRS’ findings through
the continuing audit process and, if necessary, through subsequent administrative appeals and
possibly litigation. If the IRS position ultimately were to prevail, the company would be liable
for a 30% withholding tax on dividend, interest and royalty payments made any time on or after 1
February 2006 by the company’s US subsidiaries to JHI NV or the company’s Dutch finance
subsidiary.
On 16 July 2008 the company issued a rebuttal response to the IRS NOPA. On 18 July 2008 the IRS
issued a 30 Day Letter that concludes that the company is not in compliance with the LOB provision
for calendar years 2006 and 2007 and that it is not entitled to reduced withholding tax rates on
payments from the United States to The Netherlands. The 30 Day Letter notice is a formal IRS
examination report that requires the company to either agree in full and pay the tax or file a
formal, written protest within 30 days of the 30 Day Letter to request consideration of the issues
with the Appeals Division of the IRS.
The company filed a formal protest on 18 August 2008 to exercise its rights to an impartial
hearing before the Appeals Division of the IRS.
Readers are referred to Note 11 of the company’s 30 June 2008 Condensed Consolidated Financial
Statements for further information on income taxes and income tax related issues.
Net Operating Profit
Net operating profit for the quarter decreased from US$39.1 million to US$1.4 million. Net
operating profit excluding asbestos decreased 39% from US$68.6 million to US$41.6 million as shown
in the table below.
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Three Months Ended 30 June |
| Net Operating Profit - US$ millions |
|
FY 2009 |
|
FY 2008 |
|
% Change |
Net operating profit |
|
$ |
1.4 |
|
|
$ |
39.1 |
|
|
|
(96 |
) |
|
|
|
|
|
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Excluding: |
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|
| |
Asbestos: |
|
|
|
|
|
|
|
|
|
|
|
|
Asbestos adjustments |
|
|
40.5 |
|
|
|
30.1 |
|
|
|
35 |
|
Tax expense related to asbestos
adjustments |
|
|
— |
|
|
|
0.4 |
|
|
|
— |
|
AICF SG&A costs |
|
|
0.6 |
|
|
|
0.6 |
|
|
|
— |
|
AICF interest income |
|
|
(0.9 |
) |
|
|
(1.6 |
) |
|
|
44 |
|
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Net operating profit excluding
asbestos |
|
$ |
41.6 |
|
|
|
68.6 |
|
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|
(39 |
) |
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Management’s Analysis of Results: James Hardie – 1st Quarter FY09
7
Liquidity and Capital Resources
The company has historically met its working capital needs and capital expenditure requirements
through a combination of cash flow from operations, proceeds from the divestiture of businesses,
credit facilities and other borrowings, proceeds from the sale of property, plant and equipment,
and proceeds from the redemption of investments. Seasonal fluctuations in working capital
generally have not had a significant impact on its short-term or long-term liquidity. The company
anticipates it will have sufficient funds to meet its planned working capital and other expected
cash requirements for the next 12 months based on its existing cash balances and anticipated
operating cash flows arising during the year. The company anticipates that any additional
requirements will be met from existing cash, unutilised committed facilities, anticipated future
net operating cash flows and proposed new facilities.
Excluding restricted cash, the company had cash and cash equivalents of US$171.3 million as of 30
June 2008. At that date, it also had credit facilities totalling US$490.0 million, of which
US$324.5 million was drawn. The credit facilities are all uncollateralised and consist of the
following:
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At 30 June 2008 |
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|
Effective |
|
|
Total |
|
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Principal |
|
| Description |
|
Interest Rate |
|
|
Facility |
|
|
Drawn |
|
| (US$ millions) |
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364-day facilities, can
be drawn in US$,
variable interest
rates based on LIBOR
plus margin, can be
repaid and
redrawn until December
2008 |
|
|
3.31 |
% |
|
$ |
55.0 |
|
|
$ |
50.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
364-day facilities, can
be drawn in US$,
variable interest
rates based on LIBOR
plus margin, can be
repaid and
redrawn until June 2009 |
|
|
3.38 |
% |
|
|
55.0 |
|
|
|
51.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Term facilities, can be
drawn in US$, variable
interest rates
based on LIBOR plus
margin, can be repaid
and redrawn
until June 2010 |
|
|
3.46 |
% |
|
|
245.0 |
|
|
|
212.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Term facilities, can be
drawn in US$, variable
interest rates
based on LIBOR plus
margin, can be repaid
and redrawn
until February 2011 |
|
|
3.58 |
% |
|
|
45.0 |
|
|
|
10.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Term facilities, can be
drawn in US$, variable
interest rates
based on LIBOR plus
margin, can be repaid
and redrawn
until February 2013 |
|
|
— |
|
|
|
90.0 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
Total |
|
|
|
|
|
$ |
490.0 |
|
|
$ |
324.5 |
|
| |
|
|
|
|
|
|
Our credit facilities as of 30 June 2008 consist of 364-day facilities in the amount of US$55.0
million, which as of 30 June 2008, mature in December 2008. We have requested extensions of the
maturity date of such credit facilities to June 2009.
At 30 June 2008, the company had net debt of US$153.2 million, a reduction of US$75.9 million from
net debt of US$229.1 million at 31 March 2008. The weighted average remaining term of the total
credit facilities, US$490.0 million, at 30 June 2008 was 2.2 years.
In July 2006, pursuant to an agreement negotiated with the ATO and in accordance with the ATO
Receivables Policy, the company made a payment of A$184.0 million (US$162.5 million) along with
the provision of a guarantee from JHI NV in favour of the ATO for the unpaid balance of the
assessment. The company has also agreed to pay general interest charges (GIC) accruing on the
unpaid balance of the assessment in arrears on a quarterly basis. Even if the company is
ultimately
Management’s
Analysis of Results: James Hardie – 1st Quarter FY09
8
successful in its appeal and the cash deposit is refunded, the procedural requirement to post a
cash deposit and pay ongoing payments of accruing GIC pending the outcome of the appeal could
materially and adversely affect the company’s financial position and liquidity in the intervening
period. See “Australian Taxation Office (ATO) – 1999 Disputed Amended Assessment” above for
further information on the ATO amended assessment.
If the company is unable to extend its credit facilities, or is unable to renew its credit
facilities on terms that are substantially similar to the ones it presently has, it may experience
liquidity issues and will have to reduce its levels of planned capital expenditures, reduce or
eliminate dividend payments and stock repurchases or take other measures to conserve cash in order
to meet its future cash flow requirements. The company anticipates being able to meet its future
payment obligations for the next 12 months from existing cash, unutilised committed facilities,
anticipated future net operating cash flows and proposed new facilities.
Share Buy-Back Program
The
company has previously announced a share buy-back program of up to approximately 46.8 million shares. Prior to April 2008 the company had repurchased 35.7 million shares. The company did not
purchase any shares during the period between 1 April 2008 and 20 August 2008. As the 12 month
period for the buy-back program has now ended, the company ceased the buy-back program on 20
August 2008.
Cash Flow
Operating cash flow for the quarter ended 30 June 2008 decreased from US$131.5 million to US$94.8
million. The decrease was driven primarily by the reduced contribution from the USA and Europe
Fibre Cement business.
Capital expenditures for the purchase of property, plant and equipment decreased from US$16.5
million to US$3.8 million. The company anticipates capital expenditures throughout fiscal year
2009 to be lower compared to the previous fiscal year.
Media/Analyst Enquiries:
Peter Baker
Executive Vice President – Asia Pacific
This Management’s Analysis of Results forms part of a package of information about James
Hardie’s results. It should be read in conjunction with the other parts of this package,
including a Media Release, a Management Presentation and a Financial Report.
These documents, along with a webcast of the presentation on 20 August 2008, are available from
the Investor Relations area of the James Hardie website at www.jameshardie.com
The company lodged its annual filing for the year ended 31 March 2008 with the SEC on 8 July 2008.
All holders of the company’s securities may receive, on request, a hard copy of our complete
audited financial statements, free of charge. Requests can be made via the Investor Relations
area of the company’s website or by contacting one of the company’s corporate offices. Contact
details are available on the company’s website.
Management’s
Analysis of Results: James Hardie – 1st Quarter FY09
9
Definitions
Financial Measures – US GAAP equivalents
EBIT and EBIT margin – EBIT, as used in this document, is equivalent to the US GAAP
measure of operating income. EBIT margin is defined as EBIT as a percentage of net sales. James
Hardie believes EBIT and EBIT margin to be relevant and useful information as these are the
primary measures used by management to measure the operating profit or loss of its business. EBIT
is one of several metrics used by management to measure the earnings generated by the company’s
operations, excluding interest and income tax expenses. Additionally, EBIT is believed to be a
primary measure and terminology used by its Australian investors. EBIT and EBIT margin should be
considered in addition to, but not as a substitute for, other measures of financial performance
reported in accordance with accounting principles generally accepted in the United States of
America. EBIT and EBIT margin, as the company has defined them, may not be comparable to similarly
titled measures reported by other companies.
Operating profit – is equivalent to the US GAAP measure of income.
Net operating profit – is equivalent to the US GAAP measure of net income.
Sales Volumes
mmsf – million square feet, where a square foot is defined as a standard square foot of
5/16” thickness.
msf – thousand square feet, where a square foot is defined as a standard square foot of
5/16” thickness.
Financial Ratios
Gearing Ratio – Net debt (cash) divided by net debt (cash) plus shareholders’ equity.
Net interest expense cover – EBIT divided by net interest expense.
Net interest paid cover – EBIT divided by cash paid during the period for interest, net of
amounts capitalised.
Net debt payback – Net debt (cash) divided by cash flow from operations.
Net debt (cash) – short-term and long-term debt less cash and cash equivalents.
Management’s
Analysis of Results: James Hardie – 1st Quarter FY09
10
Non-US GAAP Financial Measures
EBIT and EBIT margin excluding asbestos – EBIT and EBIT margin excluding asbestos are not
measures of financial performance under US GAAP and should not be considered to be more meaningful
than EBIT and EBIT margin. James Hardie has included these financial measures to provide investors
with an alternative method for assessing its operating results in a manner that is focussed on the
performance of its ongoing operations and provides useful information regarding its financial
condition and results of operations. The company uses these non-US GAAP measures for the same
purposes.
| |
|
|
|
|
|
|
|
|
| |
|
Q1 |
|
Q1 |
| US$ Millions |
|
FY 2009 |
|
FY 2008 |
| |
EBIT |
|
$ |
22.9 |
|
|
$ |
75.0 |
|
|
|
|
|
|
|
|
|
|
Asbestos: |
|
|
|
|
|
|
|
|
Asbestos adjustments |
|
|
40.5 |
|
|
|
30.1 |
|
AICF SG&A expenses |
|
|
0.6 |
|
|
|
0.6 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
EBIT excluding asbestos |
|
|
64.0 |
|
|
|
105.7 |
|
|
|
|
|
|
|
|
|
|
Net Sales |
|
$ |
365.0 |
|
|
$ |
424.4 |
|
|
|
|
|
|
|
|
|
|
EBIT margin excluding
asbestos |
|
|
17.5 |
% |
|
|
24.9 |
% |
| |
|
|
Net operating profit excluding asbestos – Net operating profit excluding asbestos is not a
measure of financial performance under US GAAP and should not be considered to be more meaningful
than net income. The company has included this financial measure to provide investors with an
alternative method for assessing its operating results in a manner that is focussed on the
performance of its ongoing operations. The company uses this non-US GAAP measure for the same
purposes.
| |
|
|
|
|
|
|
|
|
| |
|
Q1 |
|
Q1 |
| US$ Millions |
|
FY 2009 |
|
FY 2008 |
| |
Net operating profit |
|
$ |
1.4 |
|
|
$ |
39.1 |
|
|
|
|
|
|
|
|
|
|
Asbestos: |
|
|
|
|
|
|
|
|
Asbestos adjustments |
|
|
40.5 |
|
|
|
30.1 |
|
AICF SG&A expenses |
|
|
0.6 |
|
|
|
0.6 |
|
AICF interest income |
|
|
(0.9 |
) |
|
|
(1.6 |
) |
Tax expense related to as bestos adjustments |
|
|
— |
|
|
|
0.4 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
Net operating profit excluding asbestos |
|
$ |
41.6 |
|
|
$ |
68.6 |
|
| |
|
|
Diluted earnings per share excluding asbestos – Diluted earnings per share excluding
asbestos is not a measure of financial performance under US GAAP and should not be considered to
be more meaningful than diluted earnings per share. The company has included this financial
measure to provide investors with an alternative method for assessing its operating results in a
manner that is focussed on the performance of its ongoing operations. The company’s management
uses this non-US GAAP measure for the same purposes.
| |
|
|
|
|
|
|
|
|
| |
|
Q1 |
|
Q1 |
| US$ Millions |
|
FY 2009 |
|
FY 2008 |
| |
Net operating profit excluding asbestos |
|
$ |
41.6 |
|
|
$ |
68.6 |
|
Weighted average common shares outstanding — Diluted (millions) |
|
|
432.2 |
|
|
|
469.4 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share excluding asbestos (US cents) |
|
|
9.6 |
|
|
|
14.6 |
|
| |
|
|
Management’s
Analysis of Results: James Hardie – 1st Quarter FY09
11
Effective tax rate excluding asbestos – Effective tax rate excluding asbestos is not a
measure of financial performance under US GAAP and should not be considered to be more meaningful
than effective tax rate. The company has included this financial measure to provide investors with
an alternative method for assessing its operating results in a manner that is focussed on the
performance of its ongoing operations. The company’s management uses this non-US GAAP measure for
the same purposes.
| |
|
|
|
|
|
|
|
|
| |
|
Q1 |
|
Q1 |
| US$ Millions |
|
FY 2009 |
|
FY 2008 |
| |
Operating profit before income taxes |
|
$ |
21.8 |
|
|
$ |
75.5 |
|
|
|
|
|
|
|
|
|
|
Asbestos: |
|
|
|
|
|
|
|
|
Asbestos adjustments |
|
|
40.5 |
|
|
|
30.1 |
|
AICF SG&A expenses |
|
|
0.6 |
|
|
|
0.6 |
|
AICF interest income |
|
|
(0.9 |
) |
|
|
(1.6 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
Operating profit before income taxes excluding asbestos |
|
$ |
62.0 |
|
|
$ |
104.6 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
(20.4 |
) |
|
|
(36.4 |
) |
|
|
|
|
|
|
|
|
|
Tax expense related to asbestos adjustments |
|
|
— |
|
|
|
0.4 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
Income tax expense excluding asbestos |
|
|
(20.4 |
) |
|
|
(36.0 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate excluding asbestos |
|
|
32.9 |
% |
|
|
34.4 |
% |
| |
|
|
EBITDA – is not a measure of financial performance under US GAAP and should not be
considered an alternative to, or more meaningful than, income from operations, net income or cash
flows as defined by US GAAP or as a measure of profitability or liquidity. Not all companies
calculate EBITDA in the same manner as James Hardie has and, accordingly, EBITDA may not be
comparable with other companies. The company has included information concerning EBITDA because it
believes that this data is commonly used by investors to evaluate the ability of a company’s
earnings from its core business operations to satisfy its debt, capital expenditure and working
capital requirements.
| |
|
|
|
|
|
|
|
|
| |
|
Q1 |
|
Q1 |
| US$ Millions |
|
FY 2009 |
|
FY 2008 |
EBIT |
|
$ |
22.9 |
|
|
$ |
75.0 |
|
|
|
|
|
|
|
|
|
|
Depreciation and amortisation |
|
|
14.0 |
|
|
|
14.2 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
$ |
36.9 |
|
|
$ |
89.2 |
|
| |
|
|
Management’s Analysis of Results: James Hardie – 1st Quarter FY09
12
Supplemental Financial Information
James Hardie’s management measures its operating performance and analyses year-over-year changes
in operating results with and without the effect of the net Amended FFA liability recorded in the
fourth quarter of fiscal year 2006 and believes that security holders will do the same.
As set forth in Note 7 of the 30 June 2008 Financial Report, the net Amended FFA liability, while
recurring, is based on periodic actuarial determinations, claims experience and currency
fluctuations. It has no relation to the results of the company’s operations. Accordingly,
management believes that the following information is useful to it and investors in evaluating
ongoing operating financial performance.
The following tables are considered non-GAAP and are not intended to be used or viewed in any
respect as substitutes for the company’s GAAP consolidated financial statements. These non-GAAP
measures should only be viewed as a supplement to reported GAAP financial statements, and, in all
cases, the corresponding GAAP amounts are shown on the same line as the non-GAAP measure, to avoid
any possible confusion.
The following tables should be read in conjunction with JHI NV’s financial statements and related
notes contained in the company’s 30 June 2008 Consolidated Financial Statements.
Management’s Analysis of Results: James Hardie – 1st Quarter FY09
13
James Hardie Industries N.V.
Consolidated Balance Sheet
30 June 2008
(unaudited)
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Total Fibre Cement |
|
|
|
|
| |
|
Operations- excluding |
|
|
|
|
| |
|
Asbestos |
|
Asbestos |
|
|
| US$ Millions |
|
Compensation |
|
Compensation |
|
As Reported |
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
320.9 |
|
|
$ |
(149.6 |
) |
|
$ |
171.3 |
|
Restricted cash and cash
equivalents |
|
|
5.2 |
|
|
|
— |
|
|
|
5.2 |
|
Restricted cash and cash
equivalents — Asbestos |
|
|
— |
|
|
|
16.5 |
|
|
|
16.5 |
|
Restricted short-term
investments — Asbestos |
|
|
— |
|
|
|
82.3 |
|
|
|
82.3 |
|
Accounts and notes
receivable, net of allowance
for doubtful accounts of
$1.7 million |
|
|
140.5 |
|
|
|
0.1 |
|
|
|
140.6 |
|
Inventories |
|
|
159.0 |
|
|
|
— |
|
|
|
159.0 |
|
Prepaid expenses and other
current assets |
|
|
17.4 |
|
|
|
0.3 |
|
|
|
17.7 |
|
Insurance receivable -
Asbestos |
|
|
— |
|
|
|
14.7 |
|
|
|
14.7 |
|
Workers’ compensation -
Asbestos |
|
|
— |
|
|
|
7.2 |
|
|
|
7.2 |
|
Deferred income taxes |
|
|
18.5 |
|
|
|
— |
|
|
|
18.5 |
|
Deferred income taxes -
Asbestos |
|
|
— |
|
|
|
9.1 |
|
|
|
9.1 |
|
| |
|
|
|
|
|
|
Total current assets |
|
|
661.5 |
|
|
|
(19.4 |
) |
|
|
642.1 |
|
Property, plant and
equipment, net |
|
|
747.4 |
|
|
|
0.8 |
|
|
|
748.2 |
|
Insurance receivable -
Asbestos |
|
|
— |
|
|
|
198.7 |
|
|
|
198.7 |
|
Workers’ compensation -
Asbestos |
|
|
— |
|
|
|
82.4 |
|
|
|
82.4 |
|
Deferred income taxes |
|
|
47.6 |
|
|
|
— |
|
|
|
47.6 |
|
Deferred income taxes -
Asbestos |
|
|
— |
|
|
|
414.3 |
|
|
|
414.3 |
|
Deposit with Australian
Taxation Office |
|
|
222.8 |
|
|
|
— |
|
|
|
222.8 |
|
Other assets |
|
|
1.2 |
|
|
|
— |
|
|
|
1.2 |
|
| |
|
|
|
|
|
|
Total assets |
|
$ |
1,680.5 |
|
|
$ |
676.8 |
|
|
$ |
2,357.3 |
|
| |
|
|
|
|
|
|
| |
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued
liabilities |
|
$ |
91.3 |
|
|
$ |
1.1 |
|
|
$ |
92.4 |
|
Short-term debt |
|
|
101.7 |
|
|
|
— |
|
|
|
101.7 |
|
Dividends payable |
|
|
34.6 |
|
|
|
— |
|
|
|
34.6 |
|
Accrued payroll and employee
benefits |
|
|
20.8 |
|
|
|
0.2 |
|
|
|
21.0 |
|
Accrued product warranties |
|
|
7.8 |
|
|
|
— |
|
|
|
7.8 |
|
Income taxes payable |
|
|
35.9 |
|
|
|
(24.1 |
) |
|
|
11.8 |
|
Asbestos liability |
|
|
— |
|
|
|
82.5 |
|
|
|
82.5 |
|
Workers’ compensation -
Asbestos |
|
|
— |
|
|
|
7.2 |
|
|
|
7.2 |
|
Other liabilities |
|
|
36.8 |
|
|
|
— |
|
|
|
36.8 |
|
| |
|
|
|
|
|
|
Total current liabilities |
|
|
328.9 |
|
|
|
66.9 |
|
|
|
395.8 |
|
Long-term debt |
|
|
222.8 |
|
|
|
— |
|
|
|
222.8 |
|
Deferred income taxes |
|
|
126.0 |
|
|
|
— |
|
|
|
126.0 |
|
Accrued product warranties |
|
|
11.3 |
|
|
|
— |
|
|
|
11.3 |
|
Asbestos liability |
|
|
— |
|
|
|
1,542.8 |
|
|
|
1,542.8 |
|
Workers’ compensation -
Asbestos |
|
|
— |
|
|
|
82.4 |
|
|
|
82.4 |
|
Other liabilities |
|
|
210.3 |
|
|
|
3.5 |
|
|
|
213.8 |
|
| |
|
|
|
|
|
|
Total liabilities |
|
|
899.3 |
|
|
|
1,695.6 |
|
|
|
2,594.9 |
|
| |
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity (deficit) |
|
|
|
|
|
|
|
|
|
|
|
|
Common stock |
|
|
219.7 |
|
|
|
— |
|
|
|
219.7 |
|
Additional paid-in capital |
|
|
21.4 |
|
|
|
— |
|
|
|
21.4 |
|
Retained earnings
(accumulated deficit) |
|
|
527.5 |
|
|
|
(1,015.2 |
) |
|
|
(487.7 |
) |
Common stock in treasury |
|
|
(4.0 |
) |
|
|
— |
|
|
|
(4.0 |
) |
Accumulated other
comprehensive income |
|
|
16.6 |
|
|
|
(3.6 |
) |
|
|
13.0 |
|
| |
|
|
|
|
|
|
Total shareholders’
equity (deficit) |
|
|
781.2 |
|
|
|
(1,018.8 |
) |
|
|
(237.6 |
) |
| |
|
|
|
|
|
|
Total liabilities
and shareholders’
equity (deficit) |
|
$ |
1,680.5 |
|
|
$ |
676.8 |
|
|
$ |
2,357.3 |
|
| |
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Management’s Analysis of Results: James Hardie – 1st Quarter FY09
14
James Hardie Industries N.V.
Consolidated Statement of Operations
For the three months ended 30 June 2008
(unaudited)
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Total Fibre |
|
|
|
|
| |
|
Cement |
|
|
|
|
| |
|
Operations- |
|
|
|
|
| |
|
excluding |
|
|
|
|
| |
|
Asbestos |
|
Asbestos |
|
|
| US$ Millions |
|
Compensation |
|
Compensation |
|
As Reported |
Net Sales |
|
|
365.0 |
|
|
|
— |
|
|
|
365.0 |
|
Cost of goods sold |
|
|
(241.0 |
) |
|
|
— |
|
|
|
(241.0 |
) |
| |
|
|
|
|
|
|
Gross profit |
|
|
124.0 |
|
|
|
— |
|
|
|
124.0 |
|
Selling, general and
administrative expenses |
|
|
(52.7 |
) |
|
|
(0.6 |
) |
|
|
(53.3 |
) |
Research and development expenses |
|
|
(7.3 |
) |
|
|
— |
|
|
|
(7.3 |
) |
Asbestos adjustments |
|
|
— |
|
|
|
(40.5 |
) |
|
|
(40.5 |
) |
| |
|
|
|
|
|
|
EBIT |
|
|
64.0 |
|
|
|
(41.1 |
) |
|
|
22.9 |
|
Net Interest (expense) income |
|
|
(2.0 |
) |
|
|
0.9 |
|
|
|
(1.1 |
) |
| |
|
|
|
|
|
|
Operating profit (loss) before
income taxes |
|
|
62.0 |
|
|
|
(40.2 |
) |
|
|
21.8 |
|
Income tax expense |
|
|
(20.4 |
) |
|
|
— |
|
|
|
(20.4 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Operating Profit (Loss) |
|
$ |
41.6 |
|
|
$ |
(40.2 |
) |
|
$ |
1.4 |
|
| |
|
|
|
|
|
|
Management’s Analysis of Results: James Hardie – 1st Quarter FY09
15
James Hardie Industries N.V.
Consolidated Statement of Cash Flows
For the three months ended 30 June 2008
(unaudited)
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Total Fibre |
|
|
|
|
| |
|
Cement |
|
|
|
|
| |
|
Operations- |
|
|
|
|
| |
|
excluding |
|
|
|
|
| |
|
Asbestos |
|
Asbestos |
|
|
| US$ Millions |
|
Compensation |
|
Compensation |
|
As Reported |
Cash Flows from Operating Activities |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net Income (loss) |
|
$ |
41.6 |
|
|
$ |
(40.2 |
) |
|
$ |
1.4 |
|
Adjustments
to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
|
14.0 |
|
|
|
— |
|
|
|
14.0 |
|
Deferred income taxes |
|
|
(6.9 |
) |
|
|
— |
|
|
|
(6.9 |
) |
Stock-based compensation |
|
|
2.0 |
|
|
|
— |
|
|
|
2.0 |
|
Asbestos adjustments |
|
|
— |
|
|
|
40.5 |
|
|
|
40.5 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Restricted cash and cash equivalents |
|
|
(0.2 |
) |
|
|
22.3 |
|
|
|
22.1 |
|
Accounts and notes receivable |
|
|
(9.0 |
) |
|
|
(0.4 |
) |
|
|
(9.4 |
) |
Inventories |
|
|
21.2 |
|
|
|
— |
|
|
|
21.2 |
|
Prepaid expenses and other current assets |
|
|
10.5 |
|
|
|
0.1 |
|
|
|
10.6 |
|
Insurance receivable — Asbestos |
|
|
— |
|
|
|
5.1 |
|
|
|
5.1 |
|
Accounts payable and accrued liabilities |
|
|
(15.5 |
) |
|
|
0.3 |
|
|
|
(15.2 |
) |
Asbestos liability |
|
|
— |
|
|
|
(27.7 |
) |
|
|
(27.7 |
) |
Deposit with Australian Taxation Office |
|
|
(3.1 |
) |
|
|
— |
|
|
|
(3.1 |
) |
Other accrued liabilities and other liabilities |
|
|
40.2 |
|
|
|
— |
|
|
|
40.2 |
|
| |
|
|
|
|
|
|
Net cash provided by operating activities |
|
$ |
94.8 |
|
|
$ |
— |
|
|
$ |
94.8 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows From Investing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment |
|
|
(3.8 |
) |
|
|
— |
|
|
|
(3.8 |
) |
| |
|
|
|
|
|
|
Net cash used in investing activities |
|
$ |
(3.8 |
) |
|
$ |
— |
|
|
$ |
(3.8 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from short term borrowings |
|
|
11.7 |
|
|
|
— |
|
|
|
11.7 |
|
Proceeds from long term borrowings |
|
|
48.3 |
|
|
|
— |
|
|
|
48.3 |
|
Proceeds from issuance of shares |
|
|
0.1 |
|
|
|
— |
|
|
|
0.1 |
|
| |
|
|
|
|
|
|
Net cash provided by financing activities |
|
$ |
60.1 |
|
|
$ |
— |
|
|
$ |
60.1 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effects of exchange rate changes on cash |
|
|
(15.2 |
) |
|
|
— |
|
|
|
(15.2 |
) |
| |
|
|
|
|
|
|
Net increase in cash and cash equivalents |
|
|
135.9 |
|
|
|
— |
|
|
|
135.9 |
|
Cash and cash equivalents at beginning of period |
|
|
35.4 |
|
|
|
— |
|
|
|
35.4 |
|
| |
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
$ |
171.3 |
|
|
$ |
— |
|
|
$ |
171.3 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components of Cash and Cash Equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
Cash at bank and on hand |
|
|
136.3 |
|
|
|
— |
|
|
|
136.3 |
|
Short-term deposits |
|
|
35.0 |
|
|
|
— |
|
|
|
35.0 |
|
| |
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
$ |
171.3 |
|
|
$ |
— |
|
|
$ |
171.3 |
|
| |
|
|
|
|
|
|
Management’s
Analysis of Results: James Hardie – 1st Quarter FY09
16
Disclaimer
This Management’s Analysis of Results contains forward-looking statements. We may from time to
time make forward-looking statements in our periodic reports filed with or furnished to the United
States Securities and Exchange Commission on Forms 20-F and 6-K, in our annual reports to
shareholders, in offering circulars, invitation memoranda and prospectuses, in media releases and
other written materials and in oral statements made by our officers, directors or employees to
analysts, institutional investors, lenders and potential lenders, representatives of the media and
others. Examples of forward-looking statements include:
| • |
|
expectations about the timing and amount of payments to the Asbestos Injuries Compensation
Fund (AICF), a special purpose fund for the compensation of proven Australian
asbestos-related personal injury and death claims; |
| • |
|
statements regarding tax liabilities and related audits and proceedings; |
| • |
|
statements as to the possible consequences of proceedings brought against us and certain
of our former directors and officers by the Australian Securities and Investments Commission; |
| • |
|
expectations concerning indemnification obligations; |
| • |
|
expectations concerning the costs associated with the suspension of operations at our
Blandon, Pennsylvania and Plant City, Florida plants; |
| • |
|
expectations that our credit facilities will be extended or renewed; |
| • |
|
expectations concerning dividend payments; |
| • |
|
projections of our results of operations or financial condition; |
| • |
|
statements regarding our plans, objectives or goals, including those relating to
competition, acquisitions dispositions and our products; |
| • |
|
statements about our future performance; and |
| • |
|
statements about product or environmental liabilities. |
Words such as “believe,” “anticipate,” “plan,” “expect,” “intend,” “target,” “estimate,”
“project,” “predict,” “forecast,” “guideline,” “should,” “aim” and similar expressions are
intended to identify forward-looking statements but are not the exclusive means of identifying
such statements.
Forward-looking statements involve inherent risks and uncertainties. We caution you that a number
of important factors could cause actual results to differ materially from the plans, objectives,
expectations, estimates and intentions expressed in such forward-looking statements. These
factors, some of which are discussed under “Key Information – Risk Factors” beginning on page 6 of
our Form 20-F filed on 8 July 2008 with the Securities and Exchange Commission, 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 and the effect of foreign exchange on the amount recorded in our financial statements as an
asbestos liability; compliance with and changes in tax laws and treatments; competition and
product pricing in the markets in which we operate; 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; the success of our research and
development efforts; our reliance on a small number of customers; compliance with and changes in
environmental and health and safety laws; risks of conducting business internationally; compliance
with and changes in laws and regulations; foreign exchange risks; and the effect of natural
disasters and changes in our key management personnel. We caution you that the foregoing list of
factors is not exclusive 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.
Management’s Analysis of Results: James Hardie – 1st Quarter FY09
17
