EXTERNAL ENVIRONMENT &
BUSINESS FUNDAMENTALS
Matthew Marsh, EVP & CFO
Exhibit 99.3
PAGE 2
AGENDA
• U.S. Economic Conditions
• Housing Environment
• North America Capacity
PAGE 3
KEY ECONOMIC INDICATORS STABLE
GDP Growth
Source: Bureau of Economic Analysis
S&P Index
Source: Yahoo! Finance
GDP remains 2-3%. Market strong.
PAGE 4
KEY ECONOMIC INDICATORS STABLE
Crude Oil
USD$/Barrel
Consumer Confidence Index
Source: World Bank
Oil prices stable. Continued strength in consumer confidence.
Source: OECD
PAGE 5
KEY ECONOMIC INDICATORS STABLE
U.S. Unemployment Rate Average Hourly Wage
Source: Bureau of Labor Statistics Source: Bureau of Labor Statistics
U.S. returned to near full employment. Wage growth in line with inflation.
PAGE 6
POLITICAL ENVIRONMENT
( + ) Corporate Tax Reform
↔ Infrastructure Bill
↔ NAFTA
↔ Mortgage Interest Deduction
↔ Healthcare
( - ) Immigration Policy / DACA
PAGE 7
U.S. NATURAL DISASTERS
• Hurricanes Harvey and Irma marked the
first time two Atlantic Category 4
hurricanes have made U.S. landfall in the
same year.
• Comparatively, Sandy (‘12) and Katrina
(‘05) made landfall as Category 3s.
• Hurricane impacted area represents ~15%
of JH NA volume.
• Plant City manufacturing operations were
halted in anticipation of Hurricane Irma.
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SOLID CONFIDENCE & INVESTMENT IN HOUSING
Residential Fixed Investment as % of GDP
Source: Federal Reserve Economic Data,
Federal Reserve Bank of St. Louis
Real Estate Confidence Index
Source: National Association of Realtors,
Realtors Confidence Survey, June 2017
2008 2017
PAGE 9
GROWTH OF NEW HOUSING CONTINUES
Housing Permits
Source: U.S. Census Bureau
PAGE 10
GROWTH ACROSS NEW CONSTRUCTION SEGMENTS
Housing Starts by Segment
Thousands of Starts
Positive growth in all segments. Single-family continues to outpace multi-family.
Source: U.S. Census Bureau
PAGE 11
DEMAND EXCEEDING SUPPLY
Source: Core Logic Case-Schiller
Home Price Index
U.S. Housing Supply
# Months Supply
Case-Shiller Home Price Index
Supply remains tight. Prices continue to escalate.
Source: Federal Reserve Economic Data,
Federal Reserve Bank of St. Louis
PAGE 12
NEW OCCUPANT POPULATION EXISTS
U.S. Population by
Age
Young Adults, 18-34, Living at Home
Source: U.S. Census, American Community Survey Source: U.S. Census
New residence eligible population living at home
PAGE 13
AFFORDABILITY REMAINS SIGNIFICANT HEADWIND
Source: Urban Institute, CoreLogic, eMBS, HMDA, SIFMA
Outstanding Credit &
Student Loan Debt
Borrower FICO Score at Origination
Student debt continues to rise. Financing eligibility remains elevated.
Source: Federal Reserve Economic Data
PAGE 14
AVAILABILITY OF LABOR CONTINUED CONCERN
Source: NAHB
% Builders Reporting Labor Shortages
2016
PAGE 15
REPAIR & REMODEL REMAINS STABLE GROWTH SEGMENT
Source: U.S. Census Bureau, American Housing Survey Source: Hanley Wood
Repair & remodel projects continue to grow at ~5% annually
Average Age = 41 Years
Repair & Remodel Project
Growth
Age of Housing Stock
PAGE 16
HISTORIC MARKET SHARE
Present Future
100%
JH wins against wood-look alternatives
PAGE 17
DEMAND TO DETERMINE FUTURE CAPACITY
Future capacity decisions based on:
- Geographic demand
- Location
- Product mix
- Optimal delivered unit cost
- Materials sourcing
- Efficient freight
- Skilled labor availability
Peru, IL Pulaski, VA
Summerville, SC
Plant City, FL
Prattville, AL
Waxahachie, TX
Cleburne, TX
Fontana, CA
Reno, NV
Tacoma, WA
PAGE 18
HISTORIC & FUTURE CAPACITY UTILIZATION
Current gross hours utilization ~94%
FY09 FY11 FY13 FY15 FY17 FY19 FY21
• Protect 20% growth
• 85% utilization trigger
• Capacity adds to keep
supply ahead of demand
100%
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TACOMA, WASHINGTON
• Currently under construction
• Expected commissioning Q1 FY19
• Nameplate capacity - 300 mmsqft/year
• Plank, Backer, Heritage, ColorPlus®
Technology
• ~130 employees at full production
• Site benefits
• Low input cost
• Proximity to growing markets
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PRATTVILLE, ALABAMA GREENFIELD
• Anticipate ground breaking Q3 FY18
• Expected commissioning Q1 FY20
• Minimum nameplate capacity – 600 mmsqft/year
• Plan for diverse product capability
• Plank, Trim, Backer, Heritage, ColorPlus®
Technology
• ~200 – 275 employees at full production
• Site benefits
• Low input cost
• Skilled manufacturing workforce
• Proximity to growing markets
• Rail accessibility
PAGE 21
KEY MESSAGES
• U.S. economy strong
• Housing recovery slow but steady
• Capacity in place to support growth