Document


Fiscal 2020 Third Quarter and Nine Months Ended 31 December 2019

Exhibit 99.4


Management’s Analysis of Results

This Management’s Analysis of Results forms part of a package of information about James Hardie Industries plc’s results. It should be read in conjunction with the other parts of this package, including the Media Release, the Management Presentation and the condensed consolidated financial statements. Except as otherwise indicated in this Management’s Analysis of Results, James Hardie Industries plc is referred to as “JHI plc.” JHI plc, together with its direct and indirect wholly-owned subsidiaries, are collectively referred to as “James Hardie,” the “Company,” “we,” “our,” or “us.” Definitions for certain capitalized terms used in this Management’s Analysis of Results can be found in the section titled “Non-GAAP Financial Measures.”

This Management’s Analysis of Results includes financial measures that are not considered a measure of financial performance under generally accepted accounting principles in the United States (“US GAAP”). These non-GAAP financial measures should not be considered to be more meaningful than the equivalent US GAAP measures. Management has included such measures to provide investors with an alternative method for assessing its financial condition and operating results in a manner that is focused on the performance of its ongoing operations. These measures exclude the impact of certain legacy items, such as asbestos adjustments, or significant non-recurring items, such as debt restructuring and acquisition costs, asset impairments, as well as adjustments to tax expense. In addition, management provides an adjusted effective tax rate, which excludes the tax impact of the pre-tax special items (items listed above) and tax special items. Management believes that this non-GAAP tax measure provides an ongoing effective rate which investors may find useful for historical comparisons and for forecasting and is an alternative method of assessing the economic impact of taxes on the Company, as it more closely approximates payments to taxing authorities. Management uses such non-GAAP financial measures for the same purposes. These non-GAAP measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with US GAAP. These non-GAAP financial measures are not prepared in accordance with US GAAP, may not be reported by all of the Company’s competitors and may not be directly comparable to similarly titled measures of the Company’s competitors due to potential differences in the exact method of calculation. For additional information regarding the non-GAAP financial measures presented in this Management’s Analysis of Results, including a reconciliation of each non-GAAP financial measure to the equivalent US GAAP measure, see the section titled “Non-US GAAP Financial Measures.” In addition, this Management’s Analysis of Results includes financial measures and descriptions that are considered to not be in accordance with US GAAP, but which are consistent with financial measures reported by Australian companies. Since James Hardie prepares its condensed consolidated financial statements in accordance with US GAAP, the Company provides investors with a table and definitions presenting cross-references between each US GAAP financial measure used in the Company’s condensed consolidated financial statements to the equivalent non-US GAAP financial measure used in this Management’s Analysis of Results. See the section titled “Non-US GAAP Financial Measures.”

These documents, along with an audio webcast of the Management Presentation on 12 February 2020, are available from the Investor Relations area of our website at http://www.ir.jameshardie.com.au

Media/Analyst Enquiries:

Jason Miele

Vice President, Investor and Media Relations



Telephone:						+61 2 8845 3352
Email:						media@jameshardie.com.au


Management's Analysis of Results: James Hardie - 3rd Quarter and Nine Months Ended Fiscal Year 2020									1


GROUP RESULTS

James Hardie Industries plc

Results for the 3rd Quarter and Nine Months Ended 31 December


US$ Millions	Three Months and Nine Months Ended 31 December
		Q3 FY20		Q3 FY19		Change %	9 Months FY20		9 Months FY19		Change %
Net sales		$	616.7	$	586.2	5	$	1,933.6	$	1,881.8	3
Cost of goods sold		(396.1)		(394.0)		(1)	(1,239.8)		(1,261.4)		2
Gross profit		220.6		192.2		15	693.8		620.4		12

Selling, general and administrative expenses		(105.9)		(97.5)		(9)	(305.5)		(301.3)		(1)
Research and development expenses		(8.0)		(9.3)		14	(23.8)		(28.5)		16
Asset impairments		—		—			—		(13.1)
Asbestos adjustments		(18.5)		12.1			8.8		51.4		(83)
EBIT		88.2		97.5		(10)	373.3		328.9		13

Net interest expense		(13.2)		(13.7)		4	(41.1)		(36.8)		(12)
Loss on early debt extinguishment		—		(1.0)			—		(1.0)
Other (expense) income		—		(0.2)			(0.1)		0.1
Operating profit before income taxes		75.0		82.6		(9)	332.1		291.2		14
Income tax expense		(29.4)		(14.7)			(96.9)		(63.2)		(53)
Net operating profit		$	45.6	$	67.9	(33)	$	235.2	$	228.0	3

Earnings per share - basic (US cents)		10		15			53		52
Earnings per share - diluted (US cents)		10		15			53		51
Volume (mmsf)		912.6		861.1		6	2,830.0		2,727.8		4


Net sales for the quarter and nine months increased 5% and 3% from the prior corresponding periods to US$616.7 million and US$1,933.6 million, respectively, driven by higher net sales in the North America Fiber Cement segment, partially offset by lower USD net sales in the Asia Pacific Fiber Cement and Europe Building Products segments. Gross profit of US$220.6 million and US$693.8 million for the quarter and nine months increased 15% and 12%, respectively, compared to the prior corresponding periods. Gross profit margin of 35.8% for the quarter and nine months increased 3.0 and 2.9 percentage points, respectively, compared to the prior corresponding periods. Selling, general and administrative (“SG&A”) expenses for the quarter and nine months increased 9% and 1%, respectively, compared to the prior corresponding periods. The increase was primarily driven by higher General Corporate costs. Asset impairments for the nine months fiscal year 2019 reflects a US$10.1 million and a US$3.0 million asset impairment charge, related to our decision in the prior year to discontinue our Windows business and our Multiple Contour Trim ("MCT") product line, respectively.						Asbestos adjustments primarily reflects the non-cash foreign exchange re-measurement impact on asbestos related balance sheet items, driven by the change in the AUD/USD spot exchange rate. Interest expense decreased for the quarter and increased for the nine months, compared to the prior corresponding periods. The increase for the nine months was primarily due to a higher interest rate on our long-term Euro denominated debt. Other (expense) income for the quarter and nine months reflects the gains and losses on interest rate swaps. Income tax expense for the quarter and nine months increased, compared to the prior corresponding periods, due to a higher effective tax rate. The nine months was additionally impacted by higher operating profit before income taxes. Net operating profit decreased for the quarter, primarily driven by unfavorable asbestos adjustments and higher income tax expense, partially offset by the favorable underlying performance of the North America Fiber Cement segment. Net operating profit increased for the nine months, primarily driven by the favorable underlying performance of the North America Fiber Cement segment, partially offset by lower asbestos adjustments and higher income tax expenses.


Management's Analysis of Results: James Hardie - 3rd Quarter and Nine Months Ended Fiscal Year 2020									2


OPERATING RESULTS - SEGMENT


North America Fiber Cement Segment

Operating results for the North America Fiber Cement segment were as follows:


US$ Millions	Three Months and Nine Months Ended 31 December
		Q3 FY20	Q3 FY19	Change		9 Months FY20	9 Months FY19	Change
Volume (mmsf)		593.0	532.1	11	%	1,826.6	1,714.8	7	%
Average net sales price per unit (per msf)		US$719	US$715	1	%	US$728	US$723	1	%

Fiber cement net sales		430.0	385.5	12	%	1,341.9	1,254.9	7	%
Gross profit				22	%			14	%
Gross margin (%)				3.2 pts				2.4 pts
EBIT		112.3	86.1	30	%	350.5	287.4	22	%
EBIT margin (%)		26.1	22.3	3.8 pts		26.1	22.9	3.2 pts

EBIT excluding product line discontinuation¹		112.3	86.1	30	%	350.5	292.8	20	%
EBIT margin (%) excluding product line discontinuation¹		26.1	22.3	3.8 pts		26.1	23.3	2.8 pts
¹Excludes product line discontinuation expenses of US$5.4 million for the nine months FY19

Net sales for the quarter and nine months were favorably impacted by higher sales volumes and a higher average net sales price compared to the prior corresponding periods. The increase in volume includes growth in exteriors of 13% and 8% for the quarter and nine months, respectively, compared to the prior corresponding periods, reflecting strong primary demand growth as our commercial transformation gains traction. Interiors volume increased 3% for the quarter and was flat for the nine months, compared to the prior corresponding periods, reflecting continuous improvement and traction of our interiors strategy. The increase in average net sales price of 1% for the quarter and nine months primarily reflects the annual change in our strategic pricing effective April 2019, partially offset by mix.

We note that there are a number of data sources that measure US housing market growth. At the time of filing our results for the period ended 31 December 2019, only US Census Bureau data was available. According to the US Census Bureau, single family housing starts for the quarter were 214,100, or 15% above the prior corresponding period. For the nine months ended 31 December 2019, single family housing starts were 699,500, or 3% above the prior corresponding period. We note that the US Census Bureau's data can be different from other indices we use to measure US housing market growth, namely the McGraw-Hill Construction Residential Starts Data (also known as Dodge), the National Association of Home Builders and Fannie Mae.

The change in gross margin can be attributed to the following components:


For the Three Months Ended 31 December 2019:
Higher average net sales price			0.1 pts
Lower start-up costs			0.8 pts
Lower production costs			2.3 pts
Total percentage point change in gross margin			3.2 pts


Management's Analysis of Results: James Hardie - 3rd Quarter and Nine Months Ended Fiscal Year 2020									3


OPERATING RESULTS - SEGMENT


For the Nine Months Ended 31 December 2019:
Higher average net sales price			0.2pts
Lower start-up costs			0.6pts
Lower production costs			1.6pts
Total percentage point change in gross margin			2.4pts

Gross margin for the quarter increased 3.2 percentage points compared to the prior corresponding period, driven by improved plant performance, as well as lower input, freight and start-up costs. Gross margin for the nine months increased 2.4 percentage points, compared to the prior corresponding period, driven by improved plant performance and lower freight and start-up costs. In addition, gross margin for the nine months increased as a result of a one-time charge in fiscal year 2019 related to our decision to discontinue the MCT product line and certain excess and obsolete ColorPlus^® color palettes.

SG&A expenses for the quarter and nine months were higher compared to the prior corresponding periods primarily driven by higher labor related costs. As a percentage of sales, SG&A expenses decreased 0.5 percentage points for the quarter and nine months, compared to the prior corresponding periods.

EBIT for the quarter and nine months increased 30% and 22%, respectively, compared to the prior corresponding periods, primarily driven by a 22% and 14% increase in gross profit, respectively. EBIT margin of 26.1% for the quarter and nine months increased 3.8 and 3.2 percentage points, respectively, compared to the prior corresponding periods, driven by the increase in gross margin and the decrease in SG&A expenses as a percentage of sales.


Asia Pacific Fiber Cement Segment

The Asia Pacific Fiber Cement segment is comprised of the following businesses: (i) Australia Fiber Cement, (ii) New Zealand Fiber Cement and (iii) Philippines Fiber Cement.

Operating results for the Asia Pacific Fiber Cement segment in US dollars were as follows:


US$ Millions	Three Months and Nine Months Ended 31 December
		Q3 FY20	Q3 FY19	Change		9 Months FY20	9 Months FY19	Change
Volume (mmsf)		130.4	136.1	(4	%)	407.6	416.2	(2	%)
Average net sales price per unit (per msf)		US$699	US$713	(2	%)	US$704	US$731	(4	%)

Fiber cement net sales		102.0	110.1	(7	%)	322.6	344.5	(6	%)
Gross profit				(1	%)			(6	%)
Gross margin (%)				2.4 pts				0.3 pts
EBIT		23.4	23.5	—	%	75.2	79.3	(5	%)
EBIT margin (%)		22.9	21.3	1.6 pts		23.3	23.0	0.3 pts


Management's Analysis of Results: James Hardie - 3rd Quarter and Nine Months Ended Fiscal Year 2020									4


OPERATING RESULTS - SEGMENT

The Asia Pacific Fiber Cement segment results in US dollars were unfavorably impacted by average foreign exchange rate movements as detailed in the table below:


	Q3 FY20					9 Months FY20
	Results in AUD	Results in USD	Impact of FX	Results in AUD	Results in USD	Impact of FX
Average net sales price per unit (per msf)	+3%	-2%	-5%	+3%	-4%	-7%
Fiber cement net sales	-3%	-7%	-4%	FLAT	-6%	-6%
Gross profit	+4%	-1%	-5%	+1%	-6%	-7%
EBIT	+5%	FLAT	-5%	+1%	-5%	-6%

Operating results for the Asia Pacific Fiber Cement segment in Australian dollars were as follows:


A$ Millions	Three Months and Nine Months Ended 31 December
		Q3 FY20	Q3 FY19	Change		9 Months FY20	9 Months FY19	Change
Volume (mmsf)		130.4	136.1	(4	%)	407.6	416.2	(2	%)
Average net sales price per unit (per msf)		A$1,023	A$995	3	%	A$1,021	A$995	3	%

Fiber cement net sales		149.4	153.4	(3	%)	468.0	468.6	—	%
Gross profit				4	%			1	%
Gross margin (%)				2.4 pts				0.3 pts
EBIT		34.2	32.7	5	%	109.2	107.8	1	%
EBIT margin (%)		22.9	21.3	1.6 pts		23.3	23.0	0.3 pts

Net sales in Australian dollars for the quarter were unfavorably impacted by lower volumes, partially offset by a higher average net sales price compared to the prior corresponding period. Net sales in Australian dollars for the nine months were favorably impacted by a higher average net sales price, offset by lower volumes compared to the prior corresponding period. Volume decreased 4% and 2% for the quarter and nine months, respectively, compared to the prior corresponding periods, driven by a significant softening of the Australian market, partially offset by volume growth above the market index in Australia. The 3% increase in average net sales price for the quarter and nine months was primarily driven by our strategic price increase in Australia.

According to Australian Bureau of Statistics data, approvals for detached houses, a key driver of Australian business' sales volume, were 25,009 for the quarter, a decrease of 12%, compared to the prior corresponding period. For the nine months, approvals for detached houses were 78,010, a decrease of 14% compared to the prior corresponding period. The other key driver of our sales volume, the alterations and additions market, decreased 5% for the quarter ended 31 December 2019, compared to the prior corresponding period. For the nine months ended 31 December 2019, the alteration and additions market decreased 1%, compared to the prior corresponding period.

Gross profit in Australian dollars increased 4% for the quarter, compared to the prior corresponding period, driven by lower pulp costs and favorable plant performance in Australia, partially offset by higher freight costs. Gross profit in Australian dollars increased 1% for the nine months, compared to the prior corresponding period, primarily due to favorable plant performance in Australia and lower pulp costs, partially offset by higher freight costs and unfavorable plant performance in New Zealand.


Management's Analysis of Results: James Hardie - 3rd Quarter and Nine Months Ended Fiscal Year 2020									5


OPERATING RESULTS - SEGMENT

In Australian dollars, the change in gross margin can be attributed to the following components:


For the Three Months Ended 31 December 2019:
Higher average net sales price			1.7 pts
Lower production costs			0.7 pts
Total percentage point change in gross margin			2.4 pts


For the Nine Months Ended 31 December 2019:
Higher average net sales price			1.5 pts
Higher production costs			(1.2 pts)
Total percentage point change in gross margin			0.3 pts

As a percentage of sales, SG&A expenses in Australian dollars increased 0.7 percentage points for the quarter, compared to the prior corresponding period, primarily driven by higher marketing spend. As a percentage of sales, SG&A expenses in Australian dollars were flat for the nine months, compared to the prior corresponding period. EBIT in Australian dollars for the quarter and nine months increased 5% and 1% from the prior corresponding period, to A$34.2 million and A$109.2 million, respectively, primarily driven by an increase in gross profit of 4% and 1%, respectively.


Europe Building Products Segment

The Europe Building Products segment is comprised of: (i) Europe Fiber Cement and (ii) Europe Fiber Gypsum. Operating results for the Europe Building Products segment in US dollars were as follows:


US$ Millions	Three Months and Nine Months Ended 31 December
		Q3 FY20	Q3 FY19	Change		9 Months FY20	9 Months FY19	Change
Volume (mmsf)		189.2	192.9	(2	%)	595.8	596.8	—	%
Average net sales price per unit (per msf)		US$342	US$357	(4	%)	US$346	US$357	(3	%)

Fiber cement net sales		10.6	8.2	29	%	35.5	27.0	31	%
Fiber gypsum net sales¹		74.1	78.6	(6	%)	233.0	242.6	(4	%)
Net sales		84.7	86.8	(2	%)	268.5	269.6	—	%
Gross profit				(18	%)			6	%
Gross margin (%)				(5.3 pts)				1.8 pts
EBIT²		2.4	4.1	(41	%)	16.1	2.9
EBIT margin² (%)		2.8	4.7	(1.9 pts)		6.0	1.1	4.9 pts
Adjusted EBIT excluding costs associated with the acquisition³		6.7	8.0	(16	%)	25.7	27.9	(8	%)
Adjusted EBIT margin (%) excluding costs associated with the acquisition³		7.9	9.2	(1.3 pts)		9.6	10.3	(0.7 pts)

¹Also includes cement bonded board net sales ²Includes costs associated with the Fermacell acquisition ³Excludes costs associated with the Fermacell acquisition, which have not been excluded from Adjusted EBIT and Adjusted net operating profit as presented on pages 10 and 12, respectively


Management's Analysis of Results: James Hardie - 3rd Quarter and Nine Months Ended Fiscal Year 2020									6


OPERATING RESULTS - SEGMENT

Operating results for the Europe Building Products segment in Euros were as follows:


€ Millions	Three Months and Nine Months Ended 31 December
		Q3 FY20	Q3 FY19	Change		9 Months FY20	9 Months FY19	Change
Volume (mmsf)		189.2	192.9	(2	%)	595.8	596.8	—	%
Average net sales price per unit (per msf)		€309	€313	(1	%)	€310	€306	1	%

Fiber cement net sales		9.6	8.0	20	%	31.9	25.2	27	%
Fiber gypsum net sales¹		66.9	67.9	(1	%)	209.0	205.9	2	%
Net sales		76.5	75.9	1	%	240.9	231.1	4	%
Gross profit				(16	%)			10	%
Gross margin (%)				(5.3 pts)				1.8 pts
EBIT²		2.2	3.6	(39	%)	14.5	2.8
EBIT margin² (%)		2.8	4.7	(1.9 pts)		6.0	1.1	4.9 pts
Adjusted EBIT excluding costs associated with the acquisition³		6.1	7.0	(13	%)	23.1	23.9	(3	%)
Adjusted EBIT margin (%) excluding costs associated with the acquisition³		7.9	9.2	(1.3 pts)		9.6	10.3	(0.7 pts)

¹Also includes cement bonded board net sales ²Includes costs associated with the Fermacell acquisition ³Excludes costs associated with the Fermacell acquisition, which have not been excluded from Adjusted EBIT and Adjusted net operating profit as presented on pages 10 and 12, respectively

Net sales in Euros for the quarter and nine months increased 1% and 4%, respectively, compared to the prior corresponding periods, primarily driven by a 20% and 27% increase in fiber cement net sales, respectively, as we drive fiber cement penetration in our existing geographies. Fiber gypsum net sales, which includes cement bonded board net sales, decreased 1% for the quarter due to contracting underlying markets and lower cement bonded board volumes. For the nine months, fiber gypsum net sales increased 2% due to continued penetration of fiber gypsum, offset by lower cement bonded board net sales. Cement bonded board net sales decreased for both periods due to lower tunnel project sales as compared to the prior corresponding periods.

Gross profit in Euros decreased 16% for the quarter, compared to the prior corresponding period, primarily driven by higher freight costs. Gross profit increased 10% for the nine months, compared to the prior corresponding period, primarily due to higher net sales, partially offset by higher freight costs. The increase for the nine months was additionally impacted by a one time inventory fair value adjustment of €6.2 million (US$7.3 million) incurred in the first quarter of fiscal year 2019 following the acquisition of Fermacell.

EBIT for the quarter decreased €1.4 million, compared to the prior corresponding period, driven by a lower gross profit and higher integration costs. EBIT for the nine months increased €11.7 million, compared to the prior corresponding period, primarily due to lower costs associated with the acquisition of €12.5 million (US$15.4 million).

Adjusted EBIT excluding costs associated with the acquisition decreased €0.9 million for the quarter, compared to the prior corresponding period, driven by a lower gross profit. Adjusted EBIT excluding costs associated with the acquisition decreased €0.8 million for the nine months, compared to the prior corresponding period, driven by an increase in SG&A expenses, partially offset by a higher gross profit. The increase in SG&A expenses was primarily due to higher headcount.


Management's Analysis of Results: James Hardie - 3rd Quarter and Nine Months Ended Fiscal Year 2020									7


OPERATING RESULTS - SEGMENT


Other Businesses Segment


US$ Millions	Three Months and Nine Months Ended 31 December
		Q3 FY20	Q3 FY19	Change %	9 Months FY20	9 Months FY19	Change %
Net sales		—	3.8		0.6	12.8	(95)
EBIT		—	(7.4)		(0.1)	(26.5)

The Other Businesses segment is comprised of our former fiberglass windows business, which included a fiberglass windows assembly facility as well as a fiberglass pultrusion business. In fiscal year 2019, we made the decision to shut down the fiberglass windows business, closed the windows assembly business and recorded product line discontinuation costs associated with the shutdown of the business. In April 2019, we ceased operations and sold the fiberglass pultrusion portion of the business.


Research and Development Segment

We record R&D expenses depending on whether they are core R&D projects that are designed to benefit all business units, which are recorded in our R&D segment, or commercialization projects for the benefit of a particular business unit, which are recorded in the individual business unit’s segment results. The table below details the expenses of our R&D segment:


US$ Millions	Three Months and Nine Months Ended 31 December
		Q3 FY20		Q3 FY19		Change %	9 Months FY20		9 Months FY19		Change %
Segment R&D expenses		$	(5.9)	$	(6.9)	14	$	(17.4)	$	(20.6)	16
Segment R&D SG&A expenses		(0.7)		(0.5)		(40)	(2.3)		(1.3)		(77)
Total R&D EBIT		$	(6.6)	$	(7.4)	11	$	(19.7)	$	(21.9)	10

The change in segment R&D expenses for the quarter and nine months were driven by a change in the prioritization of R&D activities and projects, as well as normal variation among our R&D projects. The expense will fluctuate period to period depending on the nature and number of core R&D projects being worked on and the AUD/USD exchange rates during the period.

Other R&D expenses associated with commercialization projects in business units are recorded in the results of the respective business unit segment. Other R&D expenses associated with commercialization projects for the quarter and nine months were US$2.1 million and US$6.4 million, respectively, compared to US$2.4 million and US$7.9 million for the prior corresponding periods.


Management's Analysis of Results: James Hardie - 3rd Quarter and Nine Months Ended Fiscal Year 2020									8


OPERATING RESULTS - SEGMENT


General Corporate

Results for General Corporate were as follows:


US$ Millions	Three Months and Nine Months Ended 31 December
		Q3 FY20		Q3 FY19		Change %	9 Months FY20		9 Months FY19		Change %
General Corporate SG&A expenses		$	(24.3)	$	(13.1)	(85)	$	(56.2)	$	(42.6)	(32)

Asbestos:
Asbestos adjustments		(18.5)		12.1			8.8		51.4		(83)
AICF SG&A expenses¹		(0.5)		(0.4)		(25)	(1.3)		(1.1)		(18)
General Corporate EBIT		$	(43.3)	$	(1.4)		$	(48.7)	$	7.7

¹Relates to non-claims related operating costs incurred by AICF, which we consolidate into our financial results due to our pecuniary and contractual interests in AICF

General Corporate SG&A expenses increased US$11.2 million and US$13.6 million for the quarter and nine months, respectively, compared to the prior corresponding periods. The increase was primarily driven by higher stock compensation expense and the acceleration in the timing of accounting for expenses associated with a retired executive's non-compete and consulting arrangements.

Asbestos adjustments for both periods primarily reflect the non-cash foreign exchange re-measurement impact on asbestos related balance sheet items, driven by the change in the AUD/USD spot exchange rate from the beginning balance sheet date to the ending balance sheet date, for each respective period.

The AUD/USD spot exchange rates are shown in the table below:


Q3 FY20			Q3 FY19				9 Months FY20		9 Months FY19
30 September 2019	0.6757	30 September 2018	0.7212	31 March 2019	0.7096	31 March 2018		0.7681
31 December 2019	0.7009	31 December 2018	0.7058	31 December 2019	0.7009	31 December 2018		0.7058
Change ($)	0.0252	Change ($)	(0.0154)	Change ($)	(0.0087)	Change ($)		(0.0623)
Change (%)	4	Change (%)	(2)	Change (%)	(1)	Change (%)		(8)

Readers are referred to Note 9 of our 31 December 2019 condensed consolidated financial statements for further information on asbestos adjustments.


Management's Analysis of Results: James Hardie - 3rd Quarter and Nine Months Ended Fiscal Year 2020									9


OPERATING RESULTS - OTHER


EBIT

The table below summarizes EBIT results as discussed above:


US$ Millions	Three Months and Nine Months Ended 31 December
		Q3 FY20		Q3 FY19		Change %	9 Months FY20		9 Months FY19		Change %
North America Fiber Cement¹		$	112.3	$	86.1	30	$	350.5	$	292.8	20
Asia Pacific Fiber Cement		23.4		23.5		—	75.2		79.3		(5)
Europe Building Products		2.4		4.1		(41)	16.1		2.9
Other Businesses²		—		(2.6)			(0.1)		(5.9)		98
Research and Development		(6.6)		(7.4)		11	(19.7)		(21.9)		10
General Corporate³		(24.3)		(13.1)		(85)	(56.2)		(42.6)		(32)
Adjusted EBIT		107.2		90.6		18	365.8		304.6		20
Asbestos:
Asbestos adjustments		(18.5)		12.1			8.8		51.4		(83)
AICF SG&A expenses		(0.5)		(0.4)		(25)	(1.3)		(1.1)		(18)
Product line discontinuation⁴		—		(4.8)			—		(26.0)
EBIT		$	88.2	$	97.5	(10)	$	373.3	$	328.9	13

¹Excludes product line discontinuation expenses of US$5.4 million for the nine months fiscal year 2019, as a result of our decision to discontinue our MCT product line, as well as, certain excess and obsolete ColorPlus^® color palettes ²Excludes product line discontinuation expenses of US$4.8 million and US$20.6 million for the quarter and nine months fiscal year 2019, respectively, as a result of our decision to discontinue our windows business ³Excludes Asbestos-related expenses and adjustments ⁴Product line discontinuation expenses include asset impairments and other charges as a result of our decision in fiscal year 2019 to discontinue product lines in both our North America Fiber Cement segment and our Other Businesses segment


Net Interest Expense


US$ Millions	Three Months and Nine Months Ended 31 December
		Q3 FY20		Q3 FY19		Change %	9 Months FY20		9 Months FY19		Change %
Gross interest expense		$	(16.5)	$	(16.1)	(2)	$	(50.4)	$	(43.4)	(16)
Capitalized interest		2.5		1.2			6.9		3.7		86
Interest income		0.5		0.5		—	1.5		1.4		7
Net AICF interest income		0.3		0.7		(57)	0.9		1.5		(40)
Net interest expense		$	(13.2)	$	(13.7)	4	$	(41.1)	$	(36.8)	(12)

Gross interest expense for the quarter increased US$0.4 million, compared to the prior corresponding period, primarily due to a higher outstanding balance of our Revolving Credit Facility. For the nine months, gross interest expense increased US$7.0 million, compared to the prior corresponding period, primarily due to the higher interest rate on our long-term Euro denominated debt compared to the 364-day term loan facility used to initially finance the Fermacell acquisition in the prior year.


Management's Analysis of Results: James Hardie - 3rd Quarter and Nine Months Ended Fiscal Year 2020									10


OPERATING RESULTS - OTHER


Income Tax


	Three Months and Nine Months Ended 31 December
		Q3 FY20	Q3 FY19	9 Months FY20	9 Months FY19
Income tax expense (US$ Millions)		(29.4)	(14.7)	(96.9)	(63.2)
Effective tax rate (%)		39.2	17.8	29.2	21.7



Adjusted income tax expense¹ (US$ Millions)		(16.3)	(10.1)	(57.5)	(39.7)
Adjusted effective tax rate¹ (%)		17.4	13.3	17.8	14.9


¹Includes tax adjustments related to the amortization benefit of certain US intangible assets, asbestos, and other tax adjustments

Total income tax for the quarter increased US$14.7 million, compared to the prior corresponding period, primarily due to a 21.4 percentage point increase in the effective tax rate. Total income tax for the nine months increased US$33.7 million, compared to the prior corresponding period, due to higher operating profit before income taxes and a 7.5 percentage point increase in the effective tax rate. The increase in the effective tax rate for the quarter and nine months was driven by asbestos adjustments and a one-time impairment charge incurred in the prior corresponding periods.

Adjusted income tax expense for the nine months increased US$17.8 million, compared to the prior corresponding period, due to higher Adjusted operating income before income taxes and a 2.9 percentage point increase in the Adjusted effective tax rate. The increase in the Adjusted effective tax rate was primarily due to the proportional impact of tax adjustments related to the straight-line amortization benefit of certain US intangible assets on higher Adjusted operating profit before income taxes.

Readers are referred to Note 12 of our 31 December 2019 condensed consolidated financial statements for further information related to income tax.


Management's Analysis of Results: James Hardie - 3rd Quarter and Nine Months Ended Fiscal Year 2020									11


OPERATING RESULTS - OTHER


Net Operating Profit


US$ Millions	Three Months and Nine Months Ended 31 December
		Q3 FY20		Q3 FY19		Change %	9 Months FY20		9 Months FY19		Change %
EBIT		$	88.2	$	97.5	(10)	$	373.3	$	328.9	13

Net interest expense		(13.2)		(13.7)		4	(41.1)		(36.8)		(12)
Loss on early debt extinguishment		—		(1.0)			—		(1.0)
Other (expense) income		—		(0.2)			(0.1)		0.1
Income tax expense		(29.4)		(14.7)			(96.9)		(63.2)		(53)
Net operating profit		45.6		67.9		(33)	235.2		228.0		3

Excluding:
Asbestos:
Asbestos adjustments		18.5		(12.1)			(8.8)		(51.4)		83
AICF SG&A expenses		0.5		0.4		25	1.3		1.1		18
AICF interest income, net		(0.3)		(0.7)		57	(0.9)		(1.5)		40
Product line discontinuation¹		—		4.8			—		26.0
Loss on early debt extinguishment		—		1.0			—		1.0
Tax adjustments²		13.1		4.6			39.4		23.5		68
Adjusted net operating profit		77.4		65.9		17	266.2		226.7		17


Adjusted diluted earnings per share (US cents)		17		15			60		51

¹Product line discontinuation expenses include asset impairments and other charges as a result of our decision in fiscal year 2019 to discontinue product lines in both our North America Fiber Cement segment and our Other Businesses segment ²Includes tax adjustments related to the amortization benefit of certain US intangible assets, asbestos and other tax adjustments

Adjusted net operating profit of US$77.4 million for the quarter increased US$11.5 million, or 17%, compared to the prior corresponding period, driven by a US$16.6 million increase in Adjusted EBIT, partially offset by a higher Adjusted income tax expense of US$6.2 million. The Adjusted EBIT increase was driven by the increase in EBIT of US$26.2 million in the North America Fiber Cement segment, partially offset by a US$11.2 million increase in General Corporate SG&A expenses.

Adjusted net operating profit of US$266.2 million for the nine months increased US$39.5 million, or 17%, compared to the prior corresponding period, driven by a US$61.2 million increase in Adjusted EBIT, partially offset by a higher Adjusted income tax expense of US$17.8 million and a higher net interest expense of US$4.3 million. The Adjusted EBIT increase was driven by the underlying performance of the operating business units, as reflected by the increase in Adjusted EBIT of US$57.7 million in the North America Fiber Cement segment, and an increase in EBIT of US$13.2 million in the Europe Building Products segment. The increase was partially offset by a US$13.6 million increase in General Corporate SG&A expenses.


Management's Analysis of Results: James Hardie - 3rd Quarter and Nine Months Ended Fiscal Year 2020									12


OTHER INFORMATION


Cash Flow

Operating Activities

Cash provided by operating activities for the nine months increased US$84.1 million, compared to the prior corresponding period, to US$393.4 million. The increase in cash provided by operating activities was driven by an increase in net income adjusted for non-cash items of US$89.9 million.

Investing Activities

Cash used in investing activities for the nine months decreased US$607.8 million, compared to the prior corresponding period, to US$204.3 million. The decrease in cash used in investing activities was primarily driven by the US$558.7 million acquisition of Fermacell in the prior year.

Financing Activities

Cash used in financing activities for the nine months was US$126.1 million, compared to cash provided by financing activities of US$327.8 million in the prior corresponding period. The US$453.9 million change was driven by the net proceeds from debt of US$492.4 million utilized in the acquisition of Fermacell in the prior year, compared to nil in the current year, and higher dividend payments of US$27.3 million, partially offset by higher net proceeds from credit facilities of US$60.0 million.


Capacity Expansion

We continually evaluate the capacity required to service the housing markets in which we operate to ensure we meet demand and achieve our market penetration objectives. During the current quarter:

In North America we:

•Continued the construction of a greenfield expansion project in Prattville, Alabama, which is expected to be commissioned in the first half of fiscal year 2021 at an estimated total cost of US$240.0 million.

In Asia Pacific we:

•Completed the construction of a brownfield expansion project at our existing Carole Park facility in Australia with an estimated total cost of A$28.5 million. In our assessment of the Australian housing market and the estimated commissioning date, we have deferred the sheet machine commissioning date to the first quarter of fiscal year 2022, subject to our continued monitoring.


Management's Analysis of Results: James Hardie - 3rd Quarter and Nine Months Ended Fiscal Year 2020									13


OTHER INFORMATION


Liquidity and Capital Allocation

Our cash position increased from US$78.7 million at 31 March 2019 to US$148.9 million at 31 December 2019.

At 31 December 2019, we held two forms of debt: an unsecured revolving credit facility and senior unsecured notes. The effective weighted average interest rate on our total debt was 4.3% and 4.4% at 31 December 2019 and 31 March 2019, respectively. The weighted average term of all debt, including undrawn facilities, was 5.6 years and 6.3 years at 31 December 2019 and 31 March 2019, respectively.

At 31 December 2019, a total of US$180.0 million was drawn from our US$500.0 million unsecured revolving facility, compared to US$150.0 million at 31 March 2019. The unsecured revolving credit facility's expiration date is December 2022 and the size of the facility may be increased by up to US$250.0 million.

Based on our existing cash balances, together with anticipated operating cash flows arising during the year and unutilized committed credit facilities, we anticipate that we will have sufficient funds to meet our planned working capital and other expected cash requirements for the next twelve months.

We have historically met our working capital needs and capital expenditure requirements from a combination of cash flows from operations and credit facilities. Seasonal fluctuations in working capital generally have not had a significant impact on our short or long term liquidity.


Capital Management and Dividends

The following table summarizes the dividends declared or paid in respect of fiscal years 2020, 2019 and 2018:

US$ Millions

US Cents/
Security

Total US$
(Millions)

Announcement
Date

Record Date

Payment Date

FY 2020 first half dividend¹

0.10

41.9

7 November 2019

18 November 2019

20 December 2019

FY 2019 second half dividend

0.26

113.9

21 May 2019

6 June 2019

2 August 2019

FY 2019 first half dividend

0.10

43.6

8 November 2018

12 December 2018

22 February 2019

FY 2018 second half dividend

0.30

128.5

22 May 2018

7 June 2018

3 August 2018

FY 2018 first half dividend

0.10

46.2

9 November 2017

13 December 2017

23 February 2018

FY 2017 second half dividend

0.28

131.3

18 May 2017

8 June 2017

4 August 2017

¹The FY 2020 first half dividend paid during the three months ended 31 December 2019 excludes withholding tax which will be paid during the three months ending 31 March 2020

We periodically review our capital structure and capital allocation objectives and expect the following prioritization to remain:

•invest in R&D and capacity expansion to support organic growth;

•provide ordinary dividend payments within the payout ratio of 50-70% of net operating profit, excluding asbestos;

•maintain flexibility to manage through market cycles; and

•consider flexibility for accretive and strategic inorganic growth and/or other shareholder returns when appropriate.


Management's Analysis of Results: James Hardie - 3rd Quarter and Nine Months Ended Fiscal Year 2020									14


OTHER INFORMATION


Other Asbestos Information

Claims Data


	Three Months and Nine Months Ended 31 December
		Q3 FY20	Q3 FY19	Change %	9 Months FY20	9 Months FY19	Change %
Claims received		153	154	1	506	435	(16)
Actuarial estimate for the period		141	144	2	423	432	2
Difference in claims received to actuarial estimate		(12)	(10)		(83)	(3)

Average claim settlement¹ (A$)		282,000	279,000	(1)	281,000	275,000	(2)
Actuarial estimate for the period²		306,000	290,000	(6)	306,000	290,000	(6)
Difference in claims paid to actuarial estimate		24,000	11,000		25,000	15,000
¹Average claim settlement is derived as the total amount paid divided by the number of non-nil claim settlements ²This actuarial estimate is a function of the assumed experience by disease type and the relative mix of settlements assumed by disease type. Any variances in the assumed mix of settlements by disease type will have an impact on the average claim settlement experience

For the nine months ended 31 December 2019, we noted the following related to asbestos-related claims:

•Net cash outflow was 6% below actuarial expectations;

•Gross cash outflow was 1% above actuarial expectations;

•Claims received were 20% above actuarial expectations and 16% above the prior corresponding period;

•Mesothelioma claims reported were 19% above actuarial expectations and 15% higher than the prior corresponding period;

•The number of claims settled were 9% above actuarial expectations and 1% above the prior corresponding period;

•The average claim settlement was 8% below actuarial expectations and 2% above the prior corresponding period; and

•Average claim settlement sizes were lower than actuarial expectations for all mesothelioma age groups and for most other disease types.

AICF Funding

We funded US$108.9 million to AICF during the second quarter of fiscal year 2020, as provided under the AFFA. From the time AICF was established in February 2007 through the date of this Report, we have contributed approximately A$1,350.1 million to the fund. Readers are referred to Note 9 of our 31 December 2019 condensed consolidated financial statements for further information on asbestos.


Management's Analysis of Results: James Hardie - 3rd Quarter and Nine Months Ended Fiscal Year 2020									15


NON-US GAAP FINANCIAL MEASURES


Financial Measures - US GAAP equivalents

This document contains financial statement line item descriptions that are considered to be non-US GAAP, but are consistent with those used by Australian companies. Because we prepare our condensed consolidated financial statements under US GAAP, the following table cross-references each non-US GAAP line item description, as used in Management’s Analysis of Results and Media Release, to the equivalent US GAAP financial statement line item description used in our condensed consolidated financial statements:

Management’s Analysis of Results and Media Release

Consolidated Statements of Operations and Other Comprehensive Income (Loss) (US GAAP)

Net sales

Cost of goods sold

Gross profit

Selling, general and administrative expenses

Research and development expenses

Asbestos adjustments

EBIT*

Operating income (loss)

Net interest income (expense)*

Sum of interest expense and interest income

Other income (expense)

Operating profit (loss) before income taxes*

Income (loss) before income taxes

Income tax (expense) benefit

Net operating profit (loss)*

Net income (loss)

*- Represents non-US GAAP descriptions used by Australian companies.

EBIT – Earnings before interest and tax.

EBIT margin – EBIT margin is defined as EBIT as a percentage of net sales.

Sales Volume

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.


Management's Analysis of Results: James Hardie - 3rd Quarter and Nine Months Ended Fiscal Year 2020									16


NON-US GAAP FINANCIAL TERMS

This Management’s Analysis of Results includes certain financial information to supplement the Company’s condensed consolidated financial statements which are prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”). These financial measures are designed to provide investors with an alternative method for assessing our performance from on-going operations, capital efficiency and profit generation. Management uses these financial measure for the same purposes. These financial measures include:

•Adjusted EBIT;

•North America Fiber Cement Segment Adjusted EBIT excluding product line discontinuation;

•Europe Building Products Segment Adjusted EBIT excluding costs associated with the acquisition;

•Adjusted EBIT margin;

•North America Fiber Cement Segment Adjusted EBIT margin excluding product line discontinuation;

•Europe Building Products Segment Adjusted EBIT margin excluding costs associated with the acquisition;

•Adjusted net operating profit;

•Adjusted diluted earnings per share;

•Adjusted operating profit before income taxes;

•Adjusted income tax expense;

•Adjusted effective tax rate;

•Adjusted EBITDA;

•Adjusted EBITDA excluding Asbestos; and

•Adjusted selling, general and administrative expenses (“Adjusted SG&A”).

These financial measures are or may be non-US GAAP financial measures as defined in the rules of the U.S. Securities and Exchange Commission and may exclude or include amounts that are included or excluded, as applicable, in the calculation of the most directly comparable financial measures calculated in accordance with US GAAP. These financial measures are not meant to be considered in isolation or as a substitute for comparable US GAAP financial measures and should be read only in conjunction with the Company’s condensed consolidated financial statements prepared in accordance with US GAAP. In evaluating these financial measures, investors should note that other companies reporting or describing similarly titled financial measures may calculate them differently and investors should exercise caution in comparing the Company’s financial measures to similar titled measures by other companies.


Non-financial Terms

AFFA – Amended and Restated Final Funding Agreement

AICF – Asbestos Injuries Compensation Fund Ltd

Legacy New Zealand weathertightness claims ("New Zealand weathertightness") – Expenses arising from defending and resolving claims in New Zealand that allege generic defects in certain fiber cement products and systems, breach of duties including the failure to conduct appropriate testing of these products and systems, failure to warn and misleading and deceptive conduct in relation to the marketing and sale of the products and systems

New South Wales loan facility ("NSW Loan") – AICF has access to a secured loan facility made available by the New South Wales Government, which can be used by AICF to fund the payment of asbestos claims and certain operating and legal costs


Management's Analysis of Results: James Hardie - 3rd Quarter and Nine Months Ended Fiscal Year 2020									17


NON-US GAAP FINANCIAL MEASURES


Financial Measures - US GAAP equivalents

Adjusted EBIT


US$ Millions	Three Months and Nine Months Ended 31 December
		Q3 FY20			Q3 FY19			9 Months FY20			9 Months FY19
EBIT		$	88.2		$	97.5		$	373.3		$	328.9
Asbestos:
Asbestos adjustments		18.5			(12.1)			(8.8)			(51.4)
AICF SG&A expenses		0.5			0.4			1.3			1.1
Product line discontinuation		—			4.8			—			26.0
Adjusted EBIT		$	107.2		$	90.6		$	365.8		$	304.6
Net sales		616.7			586.2			1,933.6			1,881.8
Adjusted EBIT margin		17.4		%	15.5		%	18.9		%	16.2		%

North America Fiber Cement Segment Adjusted EBIT excluding product line discontinuation


US$ Millions	Three Months and Nine Months Ended 31 December
		Q3 FY20			Q3 FY19			9 Months FY20			9 Months FY19
North America Fiber Cement Segment EBIT		$	112.3		$	86.1		$	350.5		$	287.4

Product line discontinuation		—			—			—			5.4
North America Fiber Cement Segment Adjusted EBIT excluding product line discontinuation		$	112.3		$	86.1		$	350.5		$	292.8
North America Fiber Cement segment net sales		430.0			385.5			1,341.9			1,254.9
North America Fiber Cement Segment Adjusted EBIT margin excluding product line discontinuation		26.1		%	22.3		%	26.1		%	23.3		%

Europe Building Products Segment Adjusted EBIT excluding costs associated with the acquisition


US$ Millions	Three Months and Nine Months Ended 31 December
		Q3 FY20			Q3 FY19			9 Months FY20			9 Months FY19
Europe Building Products Segment EBIT		$	2.4		$	4.1		$	16.1		$	2.9

Inventory fair value adjustment¹		—			—			—			7.3
Transaction costs²		—			—			—			7.2
Integration costs³		4.3			3.9			9.6			10.5
Costs associated with the acquisition		$	4.3		$	3.9		$	9.6		$	25.0
Europe Building Products Segment Adjusted EBIT excluding costs associated with the acquisition		$	6.7		$	8.0		$	25.7		$	27.9
Europe Building Products segment net sales		84.7			86.8			268.5			269.6
Europe Building Products Segment Adjusted EBIT margin excluding costs associated with the acquisition		7.9		%	9.2		%	9.6		%	10.3		%
¹Under US GAAP, we were required to value the inventory acquired at fair market value. The revaluation resulted in a preliminary total inventory fair value adjustment of US$7.3 million. As this inventory was sold during the first quarter of FY19, the entire adjustment was recognized into cost of goods sold during that period ²Transaction costs include certain non-recurring fees incurred in conjunction with the acquisition of Fermacell ³Integration costs relate to professional, legal and other fees incurred in conjunction with the integration of Fermacell


Management's Analysis of Results: James Hardie - 3rd Quarter and Nine Months Ended Fiscal Year 2020									18


NON-US GAAP FINANCIAL MEASURES

Adjusted net operating profit


US$ Millions	Three Months and Nine Months Ended 31 December
		Q3 FY20		Q3 FY19		9 Months FY20		9 Months FY19
Net operating profit		$	45.6	$	67.9	$	235.2	$	228.0
Asbestos:
Asbestos adjustments		18.5		(12.1)		(8.8)		(51.4)
AICF SG&A expenses		0.5		0.4		1.3		1.1
AICF interest income, net		(0.3)		(0.7)		(0.9)		(1.5)
Loss on early debt extinguishment		—		1.0		—		1.0
Product line discontinuation		—		4.8		—		26.0
Tax adjustments¹		13.1		4.6		39.4		23.5
Adjusted net operating profit		$	77.4	$	65.9	$	266.2	$	226.7

¹Includes tax adjustments related to the amortization benefit of certain US intangible assets, asbestos, and other tax adjustments

Adjusted diluted earnings per share


	Three Months and Nine Months Ended 31 December
		Q3 FY20		Q3 FY19		9 Months FY20		9 Months FY19
Adjusted net operating profit (US$ millions)		$	77.4	$	65.9	$	266.2	$	226.7
Weighted average common shares outstanding - Diluted (millions)		444.9		443.1		444.7		442.9
Adjusted diluted earnings per share (US cents)		17		15		60		51

Adjusted effective tax rate


US$ Millions	Three Months and Nine Months Ended 31 December
		Q3 FY20			Q3 FY19			9 Months FY20			9 Months FY19
Operating profit before income taxes		$	75.0		$	82.6		$	332.1		$	291.2
Asbestos:
Asbestos adjustments		18.5			(12.1)			(8.8)			(51.4)
AICF SG&A expenses		0.5			0.4			1.3			1.1
AICF interest income, net		(0.3)			(0.7)			(0.9)			(1.5)
Loss on early debt extinguishment		—			1.0			—			1.0
Product line discontinuation		—			4.8			—			26.0
Adjusted operating profit before income taxes		$	93.7		$	76.0		$	323.7		$	266.4

Income tax expense		(29.4)			(14.7)			(96.9)			(63.2)
Tax adjustments¹		13.1			4.6			39.4			23.5
Adjusted income tax expense		$	(16.3)		$	(10.1)		$	(57.5)		$	(39.7)
Effective tax rate		39.2		%	17.8		%	29.2		%	21.7		%
Adjusted effective tax rate		17.4		%	13.3		%	17.8		%	14.9		%
¹Includes tax adjustments related to the amortization benefit of certain US intangible assets, asbestos, and other tax adjustments


Management's Analysis of Results: James Hardie - 3rd Quarter and Nine Months Ended Fiscal Year 2020									19


NON-US GAAP FINANCIAL MEASURES

Adjusted EBITDA excluding Asbestos


US$ Millions	Three Months and Nine Months Ended 31 December
		Q3 FY20		Q3 FY19		9 Months FY20		9 Months FY19
EBIT		$	88.2	$	97.5	$	373.3	$	328.9
Depreciation and amortization		30.2		29.8		93.8		88.7
Adjusted EBITDA		$	118.4	$	127.3	$	467.1	$	417.6
Asbestos:
Asbestos adjustments		18.5		(12.1)		(8.8)		(51.4)
AICF SG&A expenses		0.5		0.4		1.3		1.1
Adjusted EBITDA excluding Asbestos		$	137.4	$	115.6	$	459.6	$	367.3

Adjusted selling, general and administrative expenses (“Adjusted SG&A”)


US$ Millions	Three Months and Nine Months Ended 31 December
		Q3 FY20			Q3 FY19			9 Months FY20			9 Months FY19
SG&A expenses		$	105.9		$	97.5		$	305.5		$	301.3
Excluding:
AICF SG&A expenses		(0.5)			(0.4)			(1.3)			(1.1)
Product line discontinuation		—			(1.4)			—			(1.4)
Adjusted SG&A expenses		$	105.4		$	95.7		$	304.2		$	298.8
Net sales		616.7			586.2			1,933.6			1,881.8
SG&A expenses as a percentage of net sales		17.2		%	16.6		%	15.8		%	16.0		%
Adjusted SG&A expenses as a percentage of net sales		17.1		%	16.3		%	15.7		%	15.9		%


Management's Analysis of Results: James Hardie - 3rd Quarter and Nine Months Ended Fiscal Year 2020									20


SUPPLEMENTAL FINANCIAL INFORMATION

As set forth in Note 9 of the condensed consolidated financial statements, the net AFFA liability, while recurring, is based on periodic actuarial determinations, claims experience and currency fluctuations. The Company’s management measures its financial position, operating performance and year-over-year changes in operating results with and without the effect of the net AFFA liability.

Further, the Company's annual payment to AICF is determined by reference to the free cash flow as defined in the AFFA. Free cash flow for these purposes is defined as the Company's operating cash flow, based on US GAAP as of 21 December 2004. As there have been changes to US GAAP since the AFFA was entered into, the annual payment is no longer based upon the current US GAAP operating cash flow statement.

Accordingly, management believes that the following non-GAAP information is useful to it and investors in evaluating the company’s financial position and ongoing operating financial performance, as well as estimating the annual payment due to AICF. The following non-GAAP tables should be read in conjunction with the condensed consolidated financial statements and related notes contained therein.

James Hardie Industries plc

Supplementary Financial Information

31 December 2019

(Unaudited)


US$ Millions	Total Excluding Asbestos Compensation		Asbestos Compensation		As Reported (US GAAP)
Restricted cash and cash equivalents – Asbestos	$	—	$	28.9	28.9
Restricted short term investments – Asbestos	—		63.1		63.1
Insurance receivable – Asbestos¹	—		44.4		44.4
Workers compensation asset – Asbestos¹	—		27.5		27.5
Deferred income taxes – Asbestos	—		325.2		325.2

Asbestos liability¹	—		995.0		995.0
Workers compensation liability – Asbestos¹	—		27.5		27.5
Income taxes payable¹	57.7		(19.9)		37.8
Asbestos adjustments	—		8.8		8.8
Selling, general and administrative expenses	(304.2)		(1.3)		(305.5)
Net interest (expense) income	(42.0)		0.9		(41.1)
Income tax expense	(96.9)		—		(96.9)

¹The amounts shown on these lines are a summation of both the current and non-current portion of the respective asset or liability as presented on our consolidated balance sheets


Management's Analysis of Results: James Hardie - 3rd Quarter and Nine Months Ended Fiscal Year 2020									21


SUPPLEMENTAL FINANCIAL INFORMATION

James Hardie Industries plc

Supplementary Statements of Cash Flows

For the Nine Months Ended

31 December 2019

(Unaudited)


US$ Millions	US GAAP as of 21 December 2004		Reconciling Items to Current US GAAP		As Reported
Cash Flows From Operating Activities
Net income	$	234.8	$	0.4	$	235.2
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	93.8		—		93.8
Lease expense	—		15.2		15.2
Deferred income taxes	45.4		—		45.4
Stock-based compensation	10.2		—		10.2
Asbestos adjustments	(8.8)		—		(8.8)
Excess tax benefits from share-based awards	(0.4)		—		(0.4)
Other, net	15.1		—		15.1
Changes in operating assets and liabilities:
Restricted cash and cash equivalents - Asbestos	72.4		(72.4)		—
Payment to AICF	(108.9)		108.9		—
Accounts and other receivables	49.2		—		49.2
Inventories	(13.4)		—		(13.4)
Lease assets and liabilities, net	—		(12.8)		(12.8)
Prepaid expenses and other assets	(7.4)		—		(7.4)
Insurance receivable - Asbestos	6.1		—		6.1
Accounts payable and accrued liabilities	34.5		—		34.5
Asbestos liability	(79.9)		79.9		—
Claims and handling costs paid - Asbestos	—		(79.9)		(79.9)
Income taxes payable	(0.6)		—		(0.6)
Other accrued liabilities	14.1		(2.1)		12.0
Net cash provided by operating activities	$	356.2	$	37.2	$	393.4

Cash Flows From Investing Activities
Purchases of property, plant and equipment	$	(161.4)	—		$	(161.4)
Proceeds from sale of property, plant and equipment	8.0		—		8.0
Capitalized interest	(6.9)		—		(6.9)
Purchase of restricted short-term investments - Asbestos	—		(75.5)		(75.5)
Proceeds from sale of restricted short-term investments - Asbestos	—		31.5		31.5
Net cash used in investing activities	$	(160.3)	$	(44.0)	$	(204.3)

Cash Flows From Financing Activities
Proceeds from credit facilities	$	290.0	—		$	290.0
Repayments of credit facilities	(260.0)		—		(260.0)
Repayment of finance lease obligations and borrowings	—		(0.3)		(0.3)
Excess tax benefits from share-based awards	0.4		(0.4)		—
Dividends paid	(155.8)		—		(155.8)
Net cash used in financing activities	$	(125.4)	$	(0.7)	$	(126.1)
Effects of exchange rate changes on cash and cash equivalents, restricted cash and restricted cash - Asbestos	(0.3)		(3.3)		(3.6)
Net increase in cash and cash equivalents, restricted cash and restricted cash - Asbestos	$	70.2	$	(10.8)	$	59.4


Management's Analysis of Results: James Hardie - 3rd Quarter and Nine Months Ended Fiscal Year 2020									22


FORWARD-LOOKING STATEMENTS

This Management’s Analysis of Results contains forward-looking statements. James Hardie Industries plc (the “Company”) may from time to time make forward-looking statements in its periodic reports filed with or furnished to the Securities and Exchange Commission, 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:

▪statements about the Company’s future performance;

▪projections of the Company’s results of operations or financial condition;

▪statements regarding the Company’s plans, objectives or goals, including those relating to strategies, initiatives, competition, acquisitions, dispositions and/or its products;

▪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;

▪expectations concerning the costs associated with the significant capital expenditure projects at any of the Company’s plants and future plans with respect to any such projects;

▪expectations regarding the extension or renewal of the Company’s credit facilities including changes to terms, covenants or ratios;

▪expectations concerning dividend payments and share buy-backs;

▪statements concerning the Company’s corporate and tax domiciles and structures and potential changes to them, including potential tax charges;

▪uncertainty from the expected discontinuance of LIBOR and transition to any other interest rate benchmark;

▪statements regarding tax liabilities and related audits, reviews and proceedings;

▪statements regarding the possible consequences and/or potential outcome of legal proceedings brought against us and the potential liabilities, if any, associated with such proceedings;

▪expectations about the timing and amount of contributions to AICF, a special purpose fund for the compensation of proven Australian asbestos-related personal injury and death claims;

▪expectations concerning the adequacy of the Company’s warranty provisions and estimates for future warranty-related costs;

▪statements regarding the Company’s ability to manage legal and regulatory matters (including but not limited to product liability, environmental, intellectual property and competition law matters) and to resolve any such pending legal and regulatory matters within current estimates and in anticipation of certain third-party recoveries; and

▪statements about economic conditions, such as changes in the US economic or housing market conditions or changes in the market conditions in the Asia Pacific region, the levels of new home construction and home renovations, unemployment levels, changes in consumer income, 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 builder and consumer confidence.

Words such as “believe,” “anticipate,” “plan,” “expect,” “intend,” “target,” “estimate,” “project,” “predict,” “forecast,” “guideline,” “aim,” “will,” “should,” “likely,” “continue,” “may,” “objective,” “outlook” 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 Securities and Exchange Commission on 21 May 2019 and subsequently amended on 8 August 2019, 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 Company subsidiaries; required contributions to AICF, any shortfall in AICF and the effect of currency exchange rate movements on the amount recorded in the Company’s financial statements as an asbestos liability; the continuation or termination of the governmental loan facility to 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, putative consumer class action 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; 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; the integration of Fermacell into our business; and all other risks identified in the Company’s reports filed with Australian, Irish and US securities regulatory 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 referenced in the Company’s 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. The Company assumes no obligation to update any forward-looking statements or information except as required by law.


Management's Analysis of Results: James Hardie - 3rd Quarter and Nine Months Ended Fiscal Year 2020									23