James Hardie Industries plc Annual and transition report of foreign private issuers pursuant to Section 13 or 15(d)

Annual and transition report of foreign private issuers pursuant to Section 13 or 15(d)

Property, Plant and Equipment

Property, Plant and Equipment

12 Months Ended

Mar. 31, 2013

7. Property, Plant and Equipment

Property, plant and equipment consist of the following components:


(Millions of US dollars)	Land		Buildings			Machinery and Equipment			Construction in Progress¹		Total

Cost or valuation:
At 31 March 2011	$	18.3	$	210.4		$	981.2		$	43.2	$	1,253.1
Additions		-		-			28.6			7.2		35.8
Disposals		-		-			(2.9	)		-		(2.9	)
Impairment		-		-			(26.0	)		-		(26.0	)
Exchange differences		-		0.1			4.0			-		4.1
Other		-		-			-			0.5		0.5

At 31 March 2012	$	18.3	$	210.5		$	984.9		$	50.9	$	1,264.6
Additions		0.2		3.0			47.7			10.2		61.1
Disposals		-		-			(7.3	)		-		(7.3	)
Impairment		-		(3.5	)		(33.6	)		-		(37.1	)
Exchange differences		-		0.2			3.0			-		3.2

At 31 March 2013	$	18.5	$	210.2		$	994.7		$	61.1	$	1,284.5


Accumulated depreciation:
At 31 March 2011	$	-	$	(67.3	)	$	(469.4	)	$	-	$	(536.7	)
Charge for the year		-		(8.8	)		(56.4	)		-		(65.2	)
Disposals		-		-			2.6			-		2.6
Impairment		-		-			11.7			-		11.7
Exchange differences		-		(0.1	)		(2.2	)		-		(2.3	)

At 31 March 2012	$	-	$	(76.2	)	$	(513.7	)	$	-	$	(589.9	)
Charge for the year		-		(8.8	)		(51.2	)		-		(60.0	)
Disposals		-		-			6.5			-		6.5
Impairment		-		-			20.2			-		20.2
Exchange differences		-		(0.2	)		(1.6	)		-		(1.8	)
Other		-		-			(0.6	)		-		(0.6	)

At 31 March 2013	$	-	$	(85.2	)	$	(540.4	)	$	-	$	(625.6	)


Net book amount:
At 31 March 2012	$	18.3	$	134.3		$	471.2		$	50.9	$	674.7
At 31 March 2013	$	18.5	$	125.0		$	454.3		$	61.1	$	658.9

¹	Construction in progress consists of plant expansions and upgrades.

Depreciation expense for the years ended 31 March 2013 and 2012 was US$60.0 million and US$65.2 million, respectively. Included in property, plant and equipment are restricted assets of AICF with a net book value of US$2.1 million and US$2.3 million as of 31 March 2013 and 2012, respectively.

Impairment of Long-Lived Assets

The Company performs an asset impairment review on a quarterly basis in connection with its assessment of production capabilities and the Company’s ability to meet market demand.

During the year ended 31 March 2013, the Company recorded asset impairment charges of US$16.9 million in the USA and Europe Fibre Cement segment. During the fourth quarter, the Company made the decision that it would not re-open its Blandon, Pennsylvania plant. As a result the Company recorded impairment charges of US$4.4 million for buildings, land and manufacturing equipment at the Blandon plant during the fourth quarter. The remaining impairment charges of US$12.5 million included US$2.8 million related to redundant equipment that is no longer utilised to manufacture products and US$9.7 million related to manufacturing equipment that is in the process of being replaced by plant and equipment with enhanced capability in order to expand production capacity in anticipation of the continued recovery in the US housing market. The estimated fair value for the impaired property, plant and equipment was based on a discounted cash flow analysis that considered, to the extent practicable, a market participant’s expectations and assumptions and the impaired assets’ highest and best use.

During the year ended 31 March 2012, the Company recorded an asset impairment charge of US$14.3 million related to machinery and equipment no longer in service that was utilised to produce materials for certain of the Company’s products. The asset impairment charge was recorded in the USA and Europe Fibre Cement segment. The impaired assets were reduced to a net book value of nil, which was the estimated fair value based on a discounted cash flow analysis that considered, to the extent practicable, a market participant’s expectations and assumptions and the impaired assets’ highest and best use.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

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