A NEW JAMES HARDIE
2021 Annual Report
Fiscal Year Ending 31 March 2021
THE NEW JAMES HARDIE WILL BE A PREMIER, CONSUMER BRANDED
COMPANY THAT OFFERS ENDLESS DESIGN POSSIBILITIES TO THE
EXTERIORS AND INTERIORS OF THE HOME.
OUR MISSION IS TO BE A HIGH PERFORMANCE,
GLOBAL COMPANY THAT DELIVERS ORGANIC GROWTH
ABOVE MARKET WITH STRONG RETURNS, CONSISTENTLY.
In this Annual Report, pages 1-29, unless otherwise stated all items are denoted in U.S. dollars. Any financial metric referred
to as “Adjusted” is a Non-GAAP Financial measure. The items denoted as “Adjusted” are done so consistently with the
Company’s other financial reporting, please see Page 29, Financial Endnotes, for further explanation of Non-GAAP Financial
Information. All endnoted items within pages 1-29 are explained by reference in the financial endnotes on Page 29.
2021 Annual Report 1
LETTER TO
SHAREHOLDERS
DEAR SHAREHOLDERS,
At James Hardie, our mission is to be a HIGH
PERFORMANCE GLOBAL COMPANY that
delivers organic growth above market with strong
returns, consistently. We have transformed our
company to become A NEW JAMES HARDIE that
consistently provides value to our customers,
employees and you — OUR SHAREHOLDERS.
FY20 AND FY21: CREATING A NEW HARDIE
Over the past two fiscal years, we made significant
progress on our global strategic transformation across
multiple facets of the company.
Foundational to our organic global strategy to transform
and enable consistent profitable growth globally has been
the successful execution of the following key initiatives.
1. World Class Manufacturing via LEAN
The first transformation that we undertook was to become
a World Class Manufacturer through execution of LEAN
manufacturing strategy. Our network of plants is on a
continuous improvement path, which began back in 2019,
to reduce variation, increase efficiency and improve quality
to serve our customers better every day.
Exceptional progress to date has been made, as we have
generated $107 million in cumulative global LEAN savings,
including $78 million LEAN savings in North America.
Further, efforts in this regard have enabled us to
consistently and efficiently deliver premium quality
products and service our customers, and subsequently
the market, at a lower and more predictable cost.
LEAN SAVINGS
GLOBAL
$107M
NORTH AMERICA
$78M
PHOTO
2
Global Manufacturing Team Employees
2. Partnership with Customers
5. Delivering Consistent Financial Results
Over the past two years, we made a concerted effort to be
truly customer focused. We took direct steps to shift from
an organization focused solely on demand creation with
home builders and contractors, to partnering more closely
with our customers to enable profitable growth for them,
as well as for James Hardie. Instilling this true customer
focused mindset throughout our company was critical to
driving growth above market while taking market share, in
all three geographies that we participate in globally.
This increased connectivity to partner with our customers,
and a shift to a Push/Pull strategy, has helped to deliver
more than 7% growth above our addressable market for
8 straight quarters in North America, and global annual
Net Sales growth of 12% for fiscal year 2021.
3. Supply Chain Integration
Another key component of our transformation has been
the increased integration of our supply chain with our
customers. This critical integration ensured that we were
able to continuously and seamlessly service our customers,
providing them with the products they want, when they
need them.
This more integrated approach to actively manage the
supply chain with our customers, led to more optimal
working capital for both our customers and James Hardie.
4. Globally Integrated Management System
Underpinning our entire transformation was our globally
integrated management system. This management system
allows us to make better, more holistic, and faster
decisions across various levels within the company.
Additionally, it has enabled cross functional business
teams from across the globe to make appropriate
adjustments quickly and at the right time to keep our
transformation on track.
RECORD RESULTS IN FY21
The successful execution of our organic global strategic
plan and transformation is a testament to the hard work
and dedication of all James Hardie employees from
around the world. The considerable progress we have
made has allowed James Hardie to deliver record global
Net Sales, record Adjusted EBIT, record Adjusted Net
Income and record Operating Cash Flow in fiscal year
2021. In fact, for fiscal year 2021, all three of our operating
regions delivered double-digit growth in Adjusted EBIT, a
testament to the successful execution of our strategic
priorities as a global company.
The step change in financial results reinforced our
confidence in raising our operating targets highlighted
on pages 6 and 7.
While this step change in financial results has been
excellent, it is the broader transformation of our company
that has created the foundation that will enable us to scale
and drive future profitable growth, globally.
Customer Experience Team Employee
NET SALES
ADJUSTED EBIT
ADJUSTED NET INCOME
OPERATING CASH FLOW
$2,909M
↑ 12% from FY20
$629M
↑ 29% from FY20
$458M
↑ 30% from FY20
$787M
↑ 74% from FY20
2021 Annual Report 3
Global Marketing Team Employees
FY22 AND BEYOND
While the financial results delivered in fiscal year 2020 and
2021 were exceptional, I am just as excited about the solid
foundation we have built to drive even more profitable
growth, globally, into fiscal year 2022 and beyond.
There are three critical strategic initiatives that will enable
us to leverage the scale and connectivity generated during
the first two years of our transformation, and drive
profitable, organic global growth into the future.
1. Marketing to Homeowners
The first of our three critical initiatives is extending into a
global consumer brand by marketing directly to the
homeowner to create demand.
Historically, James Hardie has been a trusted and
appreciated brand, that has resonated strongest with
building professionals and contractors; with proven
products that are durable, low maintenance, and
non-combustible.
While these attributes focus on important functional
aspects of our product, we believe now is the time to
extend the James Hardie brand to become a true
consumer brand. In early May 2021 we launched a
360 degree, fully integrated marketing campaign, telling
homeowners that James Hardie can empower them to
achieve the home of their dreams by unlocking endless
design possibilities and long-lasting beauty, while
continuing to deliver the trusted protection they have
come to expect.
2. Penetrating Existing and New Markets
While historically we have had a strong business in the North
America repair and remodel segment, we believe that the
opportunity for future growth remains significant.
According to the US Census from 2019, approximately 44
million of the 79 million owner-occupied homes in the US,
are 40 years or older, having been built before 1979. These
homes represent a significant pool of opportunity from
which we can generate demand for James Hardie exterior
products. We plan to amplify and accelerate that demand
by marketing directly to homeowners, highlighting James
Hardie’s trusted brand and premium products that will
enable homeowners to realize their dream homes with
endless possibilities of design.
This same principle holds true in our other geographies,
where opportunities exist to further penetrate and
expand our repair and remodel businesses in Europe
and Asia Pacific.
4
3. Global Innovation
CLOSING
In order to maintain the considerable momentum of the
past two years, it is critical that we bring innovative new
products to market.
Our approach to innovation is about developing market
driven innovations that address unmet needs and
contribute to profitable, organic growth. Our global
innovation platform includes a focus on innovative
products that deliver endless possibilities of design and
aesthetics for the homeowner and also provide the
superior performance the market has come to expect from
James Hardie’s unique fiber cement technology: i)
durability, ii) low maintenance, and iii) non combustibility.
Fundamental to our global innovation strategy, is ensuring
that we are in a position to participate in the whole exterior
of the house. We firmly believe our market driven
innovations will create opportunities for growth by opening
new markets and expanding our organic growth prospects
in each of our three geographic regions.
It has been an exciting two years as your CEO, and I could
not be more proud of all of my colleagues around the
world. We have made great progress in our transformation.
While the past two years have been successful, I am even
more excited about the future. Our goal is to become a
high-performance, global company that delivers organic
growth above market with strong returns, consistently.
Welcome to the NEW JAMES HARDIE.
Dr. Jack Truong
CEO
JHX Share Price Performance
JHX
DJIA
S&P ASX 200
300
250
200
150
100
50
1-Feb-19
31-Mar-20
30-April-21
1 February 2019
30 April 2021
Share Price
Value of
Investment
Share Price
Value of
Investment
A$ 15.14
A$ 100
A$ 42.90
A$ 283.36
25,063.89
A$ 100
33,874.85
A$ 135.15
5,862.80
A$ 100
7,025.80
A$ 119.84
JHX
DJIA
S&P ASX
200
JHX share price performance from 1 February 2019 to 30 April 2021
compared to performance of Dow Jones Industrial Average (DJIA) and
S&P ASX 200. The comparison assumes that A$ 100 was invested in JHX
stock and the two indexes on 1 February 2019 and ignores dividends.
2021 Annual Report 5
Global Innovation Team Employee
4 Year
CAGR:
+14%
629
2 Year
CAGR
+25%
787
40
2 Year
CAGR
+20%
1.03
2 Year
CAGR
+23%
31
31
32
31
29
28
487
398
405
351
354
304
’15
’16
’17
’18
’19
’20
’21
’15
’16
’17
’18
’19
’20
’21
0.79
0.66
0.68
0.54
0.56
0.50
383
309
304
451
2 Year
CAGR
+61%
223
186
’15
’16
’17
’18
’19
’20
’21
’15
’16
’17
’18
’19
’20
’21
771.1
492.3
439.2
STEP CHANGE IN FINANCIAL RESULTS
A NEW JAMES HARDIE
2,054
1,922
1,657
1,728
2,507
4 Year
CAGR:
+7%1
398
405
351
354
304
243
249
221
301
291
309
304
292
260
180
4 Year
CAGR:
+7%
4 Year
CAGR:
+8%
’15
’16
’17
’18
’19
’15
’16
’17
’18
’19
’15
’16
’17
’18
’19
’15
’16
’17
’18
’19
2,507
2,054
1,922
1,657
1,728
351
304
398
354
405
2,507
301
291
405
309
304
292
301
291
398
2,054
1,922
221
Our transformation over the past two fiscal years has led to a step change in our financial results. Below, we
260
260
243
249
351
354
1,728
have provided six key financial metrics along with the two year compounded annual growth rate (CAGR) of
1,657
each metric, to illustrate the impact of our transformation.
1,922
1,728
1,657
180
304
180
309
309
243
249
221
2,909
304
309
2,607
292
2,507
1,657
1,728
304
1,657
1,728
351
354
398
405
4 Year
CAGR:
+7%
2,054
1,922
2,507
4 Year
CAGR:
+7%1
221
291
301
4 Year
CAGR:
351
+8%
354
243
249
304
398
405
4 Year
CAGR:
+7%
292
260
221
180
304
4 Year
CAGR:
243
+14%
249
291
301
4 Year
CAGR:
+8%
2,055
292
260
180
’15
’16
’17
’18
’15
’16
’17
’15
’17
’16
’18
4 Year
’19
CAGR:
+7%
Net Sales
Dollars in millions
’18
4 Year
’15
’19
CAGR:
+7%1
’16
’17
’15
’18
40
2,909
’16
4 Year
’19
CAGR:
+8%
’17
’18
4 Year
’19
’15
CAGR:
+7%
Adjusted EBIT
Dollars in millions
’16
’17
’15
’18
’15
’16
’17
’18
2,507
’19
’15
’16
’17
’15
29
’18
’16
31
’19
’17
31
’18
32
2,507
’19
2,607
’15
’16
31
2,055
28
1,922
’17
’15
’18
’16
’19
’17
’18
29
’19
31
’15
31
’16
32
’18
31
487
28
’18
4 Year
’19
CAGR:
+8%
’16
’15
’15
’17
Adjusted Net Income
Dollars in millions
’17
’19
’16
’18
’16
4 Year
’19
CAGR:
+14%
’17
40
629
’17
’15
’16
’19
’17
’18
’19
’15
’16
’17
’18
2,909
1,657
1,728
32
2,054
2,055
31
1,922
1,922
31
29
1,657
1,657
1,728
1,728
40
2,909
2,507
2,507
28
2,607
2 Year
2 Year
31
CAGR
CAGR
+8%
+20%
398
405
40
354
351
405
31
31
32
304
398
29
351
354
304
629
291
301
351
243
249
354
221
304
249
2 Year
2 Year
31
243
CAGR
CAGR
487
+20%
+25%
28
221
291
398
301
405
292
260
’15
’16
’17
’18
’19
’20
’15
’15
’16
’16
’17
’17
’18
’18
4 Year
CAGR:
+7%1
’19
’19
’20
2 Year
2 Year
’21
’20
’21
CAGR
CAGR
+8%
+20%
304
’15
’15
’16
’16
’16
’19
’17
’15
’19
’17
’15
’19
’17
’15
Adjusted Diluted EPS
Dollars/share
’18
’18
’18
291
0.66
301
0.68
243
0.54
249
0.56
221
0.50
2,507
2,055
1,922
291
0.66
301
0.68
1,657
1,728
243
0.54
249
0.56
221
0.50
’15
’16
’17
’18
’19
’20
’15
’15
’16
’16
’17
’17
’18
’18
’19
’19
398
405
354
351
4 Year
CAGR:
+7%
’16
’16
’17
’17
’18
’18
’19
’19
’20
2 Year
2 Year
’21
’20
’21
CAGR
CAGR
+20%
+25%
787
180
354
351
398
405
’16
’16
’17
’17
’18
’18
’19
’19
4 Year
CAGR:
+8%
304
’15
’15
458
1.03
’21
’21
’20
’20
353
0.79
’15
’16
’17
’18
’15
’15
’19
’16
’16
Adjusted ROCE
%
’17
’17
’18
’18
’15
1.03
’17
’16
’19
’19
’20
’20
’21
’21
0.79
’18
’19
0.66
0.68
451
383
0.56
0.54
31
223
309
32
31
304
28
40
787
1.03
31
2 Year
2 Year
CAGR
CAGR
+23%
+61%
0.79
2,909
458
1.03
2,607
2 Year
2 Year
CAGR
CAGR
+23%
+23%
353
0.79
’20
2 Year
2 Year
2 Year
’20
’21
’21
CAGR
CAGR
CAGR
+23%
+8%
+23%
0.50
29
186
0.50
’15
’15
186
’16
’17
’15
’19
’17
’15
Operating Cash Flow
2,908.7
Dollars in millions
’16
’18
2,492.0
383
309
304
1,905.2
223
186
2,507
4 Year
CAGR:
2,054
+7%1
1,922
4 Year
’19
CAGR:
+7%1
2,909
2,607
2,055
1,922
1,657
1,728
2,607
2,507
2 Year
CAGR
+8%
2,055
1,922
1,657
1,728
2 Year
CAGR
’21
+8%
458
458
2 Year
CAGR
353
+23%
2 Year
CAGR
’21
+23%
’15
’16
’17
’18
’19
’20
353
’21
301
291
243
249
221
301
291
243
249
221
304
4 Year
CAGR:
+14%
2 Year
CAGR
+8%
’18
’20
4 Year
’19
CAGR:
’21
+14%
458
629
’19
353
487
309
304
629
2 Year
2 Year
CAGR
CAGR
+23%
+25%
487
4 Year
CAGR:
’21
+14%
’21
2 Year
’20
’20
CAGR
+25%
787
’18
’20
’19
’21
451
787
629
2 Year
CAGR
+61%
487
0.66
0.68
451
0.54
383
0.56
’16
’16
223
’17
’17
309
’18
’18
304
’19
’19
2 Year
2 Year
2 Year
’21
’21
’20
’20
CAGR
CAGR
CAGR
+23%
+20%
+61%
351
354
383
’16
223
’17
304
’15
186
398
405
451
309
’18
304
’19
2 Year
2 Year
’20
CAGR
CAGR
+61%
+25%
’21
’17
’19
’21
’17
’19
’21
’15
’16
’17
’18
’19
’20
’21
’15
’15
’15
’16
’16
’16
’17
’17
’17
’18
’18
’18
’20
’20
’20
’21
’21
’21
’19
’19
’19
2,908.7
771.1
2,492.0
458
1,905.2
1,905.2
291
2,492.0
249
6
243
221
1,905.2
353
439.2
2,908.7
301
492.3
771.1
2 Year
CAGR
439.2
+23%
492.3
2,908.7
2,492.0
2,908.7
2,492.0
1,905.2
’15
’15
’15
’16
’16
’16
’17
’17
’17
’18
’18
’18
’19
’19
’19
’20
’20
’20
’21
’21
’21
’15
’15
’16
’16
’17
’17
’18
’18
’19
’19
’20
’20
’21
’21
771.1
1.03
492.3
439.2
0.79
771.1
787
0.66
0.68
0.54
0.56
0.50
2 Year
CAGR
439.2
+23%
492.3
223
186
383
309
304
451
2 Year
CAGR
+61%
’17
’19
’21
’17
’19
’21
’17
’19
’21
’17
’19
’21
’15
’16
’17
’18
’19
’20
’21
’15
’16
’17
’18
’19
’20
’21
’15
’16
’17
’18
’19
’20
’21
’17
’19
’21
’17
’19
’21
’17
’19
’21
’17
’19
’21
2,908.7
2,492.0
1,905.2
771.1
492.3
439.2
’17
’19
’21
’17
’19
’21
PROFITABLE GROWTH IN AN EXPANDING GLOBAL FOOTPRINT
As a high performance, global company, we expect to deliver growth above market and strong returns in
all three of the regions we operate in. As we transformed over the past two years into the NEW JAMES
HARDIE, the foundational improvements provided by LEAN, our Push/Pull strategy, and supply chain
integration with our customers, have provided us the confidence to raise the target Adjusted EBIT Margin
ranges in all three regions.
PRIOR TARGETS
NEW TARGETS (FY22-24)
North America Adjusted EBIT Margin1
APAC Adjusted EBIT Margin1
Europe Adjusted EBIT Margin2
20 to 25%
20 to 25%
10%
25 to 30%
25 to 30%
11 to 16%
2021 Annual Report 7
GLOBAL BUSINESS OVERVIEW
We continue to expand our global footprint while expanding global margins across our three operating
segments: (i) North America Fiber Cement, (ii) Europe Building Products and (iii) Asia Pacific Fiber
Cement. We operate 18 manufacturing facilities across four continents and sell our high-performance
building products in over 20 countries around the world. In this section we provide a review of the
performance of each of our three operating segments.
The photos shown here on pages 8 and 9 illustrate the importance of operating globally. As a global
company, we can see design trends and aesthetic preferences of homeowners around the world, and
can anticipate what trends will cross geographies. These photos illustrate a Modern style aesthetic,
which began in Australia and is now being utilized around the world.
California, USA
8
Queensland, Australia
Brittany, France
2021 Annual Report 9
“ We continue to partner closely with our
customers to enable profitable growth
for them and for us. In fiscal year 2021
we drove significant market share gains
by being closely integrated with our
customers.”
John Madson
Director of National Strategic
Accounts – North America
“ The implementation of Hardie Manufacturing
Operating System based on LEAN has enabled us
to deliver premium quality products and service to
our local customers in Texas and nearby states, at
Asif Mohammed
Plant Manager – Cleburne, Texas
a lower and more predictable cost.”
10
Net Sales
NORTH AMERICA FIBER CEMENT
2.5
2.0
1.5
2.04
1.82
1.68
1.58
1.49
Our North America business delivered outstanding results in fiscal year 2021. Partnering closely with our
1.0
customers, we were able to drive significant market share gain while servicing our customers and the
end users seamlessly. Our network of plants continued to improve under the Hardie Manufacturing
0.5
Operating System, delivering significant LEAN savings which was the foundation to the expansion of our
0.0
Adjusted EBIT Margin to 28.8% in fiscal year 2021.
’17
’18
’19
’20
’21
In North America, we sell high-value building materials into the Repair and Remodel and New
Construction markets. These products enable the homeowner to design the home of their dreams with
endless design possibilities. Amongst others, our high-value products include, (i) Hardie® brand planks,
panels, trims and soffits, (ii) Hardie® brand planks, panels, trims and soffits with ColorPlus® Technology,
Net Sales
588
and (iii) the newly introduced Hardie® Textured Panels line of products.
600
EBIT
471
Our North America team is focused on delivering Growth Above Market AND Strong Returns.
2.5
500
2.0
GROWTH ABOVE MARKET
300
400
■ Net Sales exceeded $2.0 billion in FY21, a new record
1.5
200
■ Net Sales increased +12% in FY21; following +8%
1.0
growth in FY20
100
■ Exteriors volume increased +11% in FY21; following
0.5
0
+9% growth in FY20
2.04
382 388
344
STRONG RETURNS
1.68
1.82
1.58
1.49
■ Adjusted EBIT growth of 25% in FY21; following +21%
growth in FY20
■ Delivered $78 million in cumulative LEAN savings in
FY20 and FY21
■ Adjusted EBIT Margin expanded to 28.8% in FY21
’19
’18
’17
’20
’21
■ Growth above market of 7+% for eight straight quarters
0.0
■ Adjusted EBITDA Margin expanded to 33.2% in FY21
in FY20 and FY21
’17
’18
’19
’20
’21
■ Announced raised Adjusted EBIT Margin target range of
25% - 30% for FY22 – FY24
Net Sales
Segment Net Sales
EBIT
% of total JHX3
EBIT Margin
Net Sales
Dollars in billions
Adjusted EBIT
Dollars in millions
Adjusted EBIT Margin %
600
70%
500
400
300
Segment Adjusted EBIT
200
% of total JHX3
100
77%
0
30
25
1.68
1.58
20
1.49
2.04
1.82
382 388
344
588
471
23.0
24.2
23.1
28.8
25.9
15
10
5
0
’17
’18
’19
’20
’21
’17
’18
’19
’20
’21
’17
’18
’19
’20
’21
2021 Annual Report 11
EBIT Margin
30
25
20
15
10
5
0
588
471
382 388
344
28.8
25.9
24.2
23.0
23.1
’17
’18
’19
’20
’21
’17
’18
’19
’20
’21
28.8
25.9
24.2
23.0
23.1
’17
’18
’19
’20
’21
2.5
2.0
1.5
1.0
0.5
0.0
EBIT
600
500
400
300
200
100
0
30
25
20
15
10
5
0
EBIT Margin
“ Talent acquisition and talent management are
foundational to our HR initiatives in Europe.
We have built a team that can think globally
while executing locally, as we are now fully
embedded into the James Hardie global team.”
Annette Brüseke
Director of Human
Resources – Europe
“ We exit fiscal year 2021 with significant
momentum, having delivered record Net Sales
of 105 million Euros and record Adjusted EBIT
Margin of 15% in the fourth quarter.”
Jörg Brinkmann
General Manager – Europe
12
Net Sales
EUROPE BUILDING PRODUCTS
350
400
318
334
351
300
250
200
Our European business delivered a dramatically improved performance in fiscal year 2021. The improvement
150
was driven by our focus on gaining end user demand of our high value products and LEAN savings. We
100
finished the year with significant momentum; in the fourth quarter we delivered record Net Sales, record
50
Adjusted EBIT, and record Adjusted EBIT Margin.
0
’19
’20
’21
In Europe we market and sell high-value exterior and interior building materials into the Repair and
Remodel, New Construction, and Commercial markets. Our high-value products include Hardie® brand
planks, trims and panels with ColorPlus® Technology, Fermacell® brand products utilized in interior wall
and flooring applications, and our Aestuver® brand of products focused on fire protection.
EBIT
Net Sales
Our Europe team is focused on delivering Growth Above Market AND Strong Returns.
40
35.9
400
35
30
350
25
GROWTH ABOVE MARKET
300
20
318
334
351
STRONG RETURNS
250
■ Net Sales of €350.6 million in FY21, a new record
15
200
■ Net Sales Increased +5% in FY21; following +5%
10
150
growth in FY20 (in Euros)
5
■ Adjusted EBIT growth of +141% in FY21 (in Euros)
14.9
■ Adjusted EBIT Margin of 10.4% in FY21
9.1
■ Record Adjusted EBIT Margin of 15.0% in Q4 FY21
■ Fiber Cement Net Sales increased +9% in FY21;
100
0
following +32% growth in FY20 (in Euros)
50
■ Fiber Cement Net Sales increased +24% in Q4 FY21
0
(in Euros)
■ Adjusted EBITDA Margin of 17.1% in FY21
’19
’20
’21
■ Announced raised Adjusted EBIT Margin target of
11% - 16% for FY22 – FY24
’19
’20
’21
Net Sales
Segment Net Sales
EBIT
% of total JHX3
EBIT Margin
Net Sales
Euros in millions
Adjusted EBIT
Euros in millions
Adjusted EBIT Margin %
40
14%
35
30
25
20
15
Segment Adjusted EBIT
% of total JHX3
10
5
6%
0
12
10
8
6
4
2
0
318
334
351
35.9
10.4
14.9
4.5
9.1
2.7
’19
’20
’21
’19
’20
’21
’19
’20
’21
2021 Annual Report 13
EBIT Margin
12
10
8
6
4
2
0
10.4
4.5
2.7
’19
’20
’21
14.9
9.1
’19
’20
’21
35.9
10.4
4.5
2.7
’19
’20
’21
400
350
300
250
200
150
100
50
0
EBIT
40
35
30
25
20
15
10
5
0
12
10
8
6
4
2
0
EBIT Margin
“ In the Philippines we continued to implement
best practices from other regions to ensure
we successfully execute our key strategic
initiatives, such as push/pull and customer
supply chain integration.”
Liza Alde
Marketing Manager –
Philippines
“ Our Australia and New Zealand regions expanded
their Adjusted EBIT Margins as we consolidated
our manufacturing operations to our Rosehill and
Carole Park plants, and drove market share gain
John Arneil
Country Manager –
Australia and New Zealand
by partnering more closely with our customers.”
14
Net Sales
ASIA PACIFIC FIBER CEMENT
700
800
600
500
612
614
635
550
494
Our Asia Pacific business continued to exhibit strong overall performance in fiscal year 2021. A keen focus
on adopting the Global strategy to build stronger partnerships with our customers, allowed us to drive
400
300
200
significant market share gain in our Australian and New Zealand businesses. By consolidating our Australia
100
and New Zealand regional production into our two Australian plants, and our continued execution of our
’21
’19
LEAN strategy, we were able to deliver a record Adjusted EBIT Margin of 28% in fiscal year 2021.
’18
’17
’20
0
In Australia and New Zealand, we sell high-value building materials into the Repair and Remodel and
New Construction markets. These products enable the homeowner to design the home of their dreams
with endless design possibilities. Our high-value products include the Hardie™ brand and Scyon™ brand
products utilized in the exteriors and interiors of homes.
Net Sales
EBIT
Our Asia Pacific team is focused on delivering Growth Above Market AND Strong Returns.
200
177
800
150
700
GROWTH ABOVE MARKET
600
■ Leveraging the global Push/Pull strategy, partnered
500
with our customers to deliver market share gains in
Australia and New Zealand in FY21
100
400
50
STRONG RETURNS
635
612
614
140 137 139
125
■ Consolidated production of our Australian and New
550
494
Zealand manufacturing operations
■ Adjusted EBIT growth of 27% for the fiscal year driven
■ Sales volume grew 2% for the fiscal year
300
by plant consolidation (in Australian Dollars)
■ Record Net Sales of A$635 million in FY21
200
0
100
■ Net Sales increased 4%, 9% and 11% in Q2FY21,
Q3FY21 and Q4FY21, respectively (in Australian Dollars)
0
■ Record Adjusted EBIT of A$177 million in FY21
■ Record Adjusted EBIT Margin of 28.0% in FY21
’17
’18
’19
’20
’21
■ Adjusted EBITDA Margin of 30.9% in FY21
’21
’20
’18
’17
’19
Net Sales
Segment Net Sales
EBIT
% of total JHX3
EBIT Margin
Net Sales
Australian dollars in millions
Adjusted EBIT
Australian dollars in millions
Adjusted EBIT Margin %
■ Announced raised Adjusted EBIT Margin target range
of 25% - 30% for FY22 – FY24
800
700
600
500
400
300
200
100
0
EBIT
200
150
100
50
0
30
25
20
15
10
5
0
EBIT Margin
200
16%
150
30
25
550
20
494
612
614
635
140 137 139
125
177
25.3 25.4
28.0
22.3 22.7
100
Segment Adjusted EBIT
% of total JHX3
50
17%
0
15
10
5
0
’17
’18
’19
’20
’21
’17
’18
’19
’20
’21
’17
’18
’19
’20
’21
2021 Annual Report 15
EBIT Margin
30
25
20
15
10
5
0
177
140 137 139
125
28.0
25.3 25.4
22.3 22.7
’17
’18
’19
’20
’21
’17
’18
’19
’20
’21
28.0
25.3 25.4
22.3 22.7
’17
’18
’19
’20
’21
GLOBAL CONSUMER BRANDING
MARKETING DIRECTLY TO HOMEOWNERS
16
2021 Annual Report 17
“ The It’s Possible™ campaign seeks to empower
homeowners to realize their dream home. This marks
our brand extension into a consumer-focused brand
that inspires homeowners to achieve their dream
exterior with endless design possibilities.”
Cathleya Buchanan
Head of Marketing – APAC
“ Our category-defining building solutions deliver lasting
beauty and trusted protection. We are excited to
communicate this message through an extraordinary
campaign that brings our brand to the forefront of
Marc Setty
Head of Marketing – North America
homeowners’ minds like never before.”
James Hardie
Sponsored
...
What if your home never stopped inspiring you?
Bring your vision to life with exterior solutions
by James Hardie.
18
JAMESHARDIE.COM
Home is what you make of it.
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GLOBAL CONSUMER BRANDING
In early May 2021, we launched a global, integrated marketing campaign to expand our reach to the
homeowners.
The It’s Possible™ campaign seeks to empower homeowners to realize their dream home. The campaign
is inclusive of television commercials, programmatic digital, social media, public relations, influencer and
dynamic media partnerships, and more. Starting in early May, James Hardie television commercials
began airing in major metro markets across the United States to mark the global launch of the It’s
Possible™ campaign.
In an industry where marketing heavily focuses on the trade and B2B community, this new consumer
marketing approach comes at an opportune time, with home renovations, remodels and sales rising
significantly. This new consumer marketing approach is yet another exciting step forward in our
strategic transformation.
360 DEGREE INTEGRATED MARKETING APPROACH
TELEVISION
COMMERCIALS
PROGRAMMATIC
DIGITAL MEDIA
SOCIAL
MEDIA
PUBLIC
RELATIONS
INFLUENCER AND DYNAMIC
MEDIA PARTNERSHIPS
2021 Annual Report 19
GLOBAL INNOVATION
TRANSFORM THE WAY THE WORLD BUILDS
20
2021 Annual Report 21
“ Our Innovation process starts with market insights.
Understanding the market’s unmet needs and
continuously getting market (homeowners,
customers, architects, etc) feedback throughout
the Innovation process is critical to successful new
product commercialization.”
Fran Flanagan
Head of Consumer Marketing
“ Our ability to combine lasting beauty and endless
design possibilities with trusted protection and low
maintenance, uniquely positions James Hardie to
expand our addressable markets globally.”
Sami Rahman
Head of Product Management
22
GLOBAL INNOVATION
We have transformed our approach to innovation. We focus on Market Driven insights to deliver high impact new
products that address homeowners’ unmet needs and to drive profitable organic growth.
We focus on mega trends in the market and conduct in depth discovery and testing with homeowners to generate
insights. We take these insights and prioritize product and platform concepts that truly deliver on the unmet market
needs and create value for homeowners, our customers, for James Hardie, and ultimately for our shareholders.
We leverage our global scale and know-how with over 100 R&D employees in our three research centers around the
world: Fontana (California), Dusseldorf (Germany), and Sydney (Australia).
Our Innovation platforms are poised to deliver new designs and aesthetics so homeowners can be inspired with
endless design possibilities to bring their dream home to reality. These designs are built on the key advantages of our
fiber cement technology that delivers durability, low maintenance and non-combustibility while continuing to make
these solutions easier to install to enhance labor productivity.
This combination of: (1) lasting beauty and endless design possibilities and (2) trusted protection and low
maintenance, uniquely positions us to expand our addressable markets in all of the regions we participate in.
In May 2021 we launched the following new products:
51%
49%
NORTH AMERICA
HARDIE® TEXTURED
PANELS
AUSTRALIA
HARDIETM FINE TEXTURE
CLADDING
EUROPE
HARDIE® BRAND
VL PLANK
Hardie® Textured Panels deliver a
unique look and design alternative to
traditional wet trade building materials
like Stucco or Render, as well as Brick
and Stone. This product offers a high
level of productivity through a single
step panel and texture, with an
efficient joint that also creates a
modern contemporary architectural
design element.
HardieTM Fine Texture Cladding
delivers a similarly unique look and
design alternative to traditional wet
trade building materials such as
Render. This product offers a high
level of productivity through a single
step panel and texture with an efficient
49%
joint that creates a contemporary
architectural design element.
51%
41%
Hardie® brand VL Plank is an innovative
interlocking system for the European
region that leverages the technology
expertise from the US and Australia. In
the European plank market, interlocking
systems represent close to 80% of the
plank market, and Hardie® brand
VL Plank offers clear benefits to
comparative market alternatives,
including a superior look and a faster
installation process.
59%
North America
Exterior Wall Material4
Australia and New Zealand
Exterior Wall Material4
Europe
Exterior Wall Material4
51%
49%
41%
59%
16%
84%
Currently Addressable
Future Possibilities
2021 Annual Report 23
16%
84%
41%
59%
16%
84%
SUSTAINABILITY
As we committed in May 2019, we are excited to deliver our first annual
Sustainability Report in July 2021, focused on building sustainable
communities.
24
2021 Annual Report 25
BUILDING SUSTAINABLE COMMUNITIES
James Hardie is committed to improving its sustainability performance and to proactively and carefully
manage its social and environmental impacts. Our sustainability strategy, which was formalized in fiscal
year 2021 focuses on four key pillars of zero harm, environment, community and innovation.
We carefully manage the impacts under our direct operational control through integrated operating
and management systems such as the Hardie Manufacturing Operating System (HMOS) and LEAN
manufacturing processes. We also seek out ways to influence the sustainability impacts in our value
chain where we have some level of influence as they relate to our operations.
ZERO HARM
Our Zero Harm culture
ensures the safety of our
employees, customers,
partners and communities.
INNOVATION
We are committed
to transforming new
technologies into high-
quality and sustainable
products, solutions and
building practices.
26
COMMUNITIES
With a global mindset,
we carefully manage
our business impacts
by employing, sourcing,
delivering and giving locally.
ENVIRONMENT
We seek to minimize
our impacts on the
environment and prioritize
the management of water,
waste, energy and emissions.
“ James Hardie is committed to building sustainable communities.
We operate with a global mindset and at the same time take great
care in how our business impacts local communities in which we
operate. We help to build better homes that last. We continue to
invest in innovation and technology to develop sustainable and
thriving communities around the globe. We look forward to
publishing our first annual Sustainability Report in July 2021.”
Dr. Jack Truong
CEO
ZERO HARM
COMMUNITIES
ENVIRONMENT
INNOVATION
0.83
Global Total
Reportable
Incident
Rate (TRIR)5
$800M
invested in
local communities
where we operate
UP TO
50%
recycled
content in
fiber gypsum
products
3
new products
developed or
launched
0.51
Total days away,
restricted or
transferred
(DART) rate5
83%
raw materials
sourced locally
99%
of exterior products
in AUS/NZ covered
by environmental
product declarations
$107M
cumulative cost
savings from
LEAN initiatives
2021 Annual Report 27
28
FINANCIAL ENDNOTES
Unless otherwise stated all items are in US currency and financial
information relates to fiscal year ended 31 March 2021.
NON-GAAP FINANCIAL INFORMATION
Pages 1-29 of this Annual Report contains financial measures
that are not considered a measure of financial performance under
US GAAP and should not be considered to be more meaningful
than the equivalent US GAAP measure. Management has
included such measures to provide investors with an alternative
method for assessing its operating results in a manner that is
focused on the performance of its ongoing operations.
Additionally, management uses such non-GAAP financial
measures for the same purposes. However, these non-GAAP
financial measures are not prepared in accordance with US
GAAP, may not be reported by all of James Hardie’s competitors
and may not be directly comparable to similarly titled measures
of James Hardie’s competitors due to potential differences in the
exact method of calculation. For additional information regarding
the non-GAAP financial measures presented in this Annual Report,
including a reconciliation of each non-GAAP financial measure to
the equivalent US GAAP measure, see the section titled “Glossary
of Abbreviations and Definitions” in James Hardie’s Annual Report
Form 20-F for the year ended 31 March 2021.
Footnote 1 (EBIT Margin Targets, page 7)
The Prior Targets for North America Fiber Cement segment and
the Asia Pacific Fiber Cement segment are historical long-term
Adjusted EBIT Margin target ranges communicated by
management in past presentations. The new targets (FY22-24)
represent targets for Annual Adjusted EBIT Margin in each
region for each fiscal year in the period of fiscal years 2022,
2023 and 2024.
Footnote 2 (EBIT Margin Targets, page 7)
The Prior Targets for the Europe Building Products segment is the
Average Annual Adjusted EBIT Margin excluding integration costs
for Fiscal Years FY19 - FY21. The new targets (FY22-FY24)
represent targets for Annual Adjusted EBIT Margin in each fiscal
year in the period of fiscal years 2022, 2023 and 2024.
Footnote 3 (Segment Net Sales and EBIT, pages 11, 13, 15)
Segment Net Sales percent of total JHX is calculated as the FY21
Net Sales of each segment divided by the sum of the total FY21
Net Sales of the following three segments – North America Fiber
Cement, Asia Pacific Fiber Cement and Europe Building
Products. Segment EBIT percent of total JHX is calculated as the
FY21 EBIT of each segment divided by the sum of the total FY21
EBIT of the following three segments – North America Fiber
Cement, Asia Pacific Fiber Cement and Europe Building
Products.
Footnote 4 (Global Innovation, page 23)
North America Exterior Wall Material. Exterior Cladding Material
used in New Construction (NAHBNow, 2020) Source: NAHBNow
8 October 2020 for the full year 2019
Australia and New Zealand Exterior Wall Material Source: BIS
Oxford, Australian Bureau of Statistics, BRANZ and Management
Estimates
Europe Exterior Wall Material Source: B+L (2018), Freedonia
(2015)
Footnote 5 (Zero Harm, page 27)
Global Total Recordable Incident Rate (TRIR) and Total Days
Away, Restricted or Transferred (DART) rate are reported across
our global operations and include employees and temporary/
contract workers. Calculations follow OSHA guidelines. TRIR is
the standard reporting term expected from GRI, ISS, MSCI and
Sustainalytics.
FORWARD-LOOKING STATEMENTS
Certain statements in this Annual Report may constitute
“forward-looking statements” as defined in the Private Securities
Litigation Reform Act of 1995. James Hardie uses such words 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 James Hardie’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. Many factors could cause the actual results, performance
or achievements of James Hardie to be materially different from
those expressed or implied in this Annual Report, including,
among others, the risks and uncertainties set forth in Section 3
“Risk Factors” in James Hardie’s Annual Report on Form 20-F for
the year ended 31 March 2021; changes in general economic,
political, governmental and business conditions globally and in the
countries in which James Hardie does business, including the
effect and consequences of the novel coronavirus public health
crisis; changes in interest rates, changes in inflation rates; changes
in exchange rates; the level of construction generally; changes in
cement demand and prices; changes in raw material and energy
prices; changes in business strategy and various other factors.
Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may
vary materially from those described herein. These forward-looking
statements are made as of the date of this Annual Report and
James Hardie does not assume any obligation to update them,
except as required by law. Investors are encouraged to review
James Hardie’s Annual Report on Form 20-F, and specifically the
risk factors discussed therein, as it contains important disclosures
regarding the risks attendant to investing in our securities.
2021 Annual Report 29
30
JAMES HARDIE INDUSTRIES
Form 20-F
2021 Annual Report 31
32
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 20-F
(Mark One)
☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT
OF 1934
OR
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended 31 March 2021
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
OR
☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
Date of event requiring this shell company report
For the transition period from to
Commission file number 1-15240
JAMES HARDIE INDUSTRIES plc
(Exact name of Registrant as specified in its charter)
N/A
(Translation of Registrant’s name into English)
Ireland
(Jurisdiction of incorporation or organization)
Europa House, 2nd Floor
Harcourt Centre
Harcourt Street, Dublin 2, D02, WR20, Ireland
(Address of principal executive offices)
Joseph C. Blasko
General Counsel & Company Secretary
(Contact name)
353 1411 6924 (Telephone) 353 1479 1128 (Facsimile)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
Title of each class:
Common stock, represented by CHESS Units of Foreign Securities
CHESS Units of Foreign Securities
American Depositary Shares, each representing one unit of CHESS Units of Foreign
Securities
* Listed, not for trading, but only in connection with the registered American Depositary Shares, pursuant to the requirements of the U.S.
Securities and Exchange Commission
Trading
Symbol:
JHX
JHX
JHX
Name of each exchange
on which registered:
New York Stock Exchange*
New York Stock Exchange*
New York Stock Exchange
Table of Contents
Securities registered or to be registered pursuant to Section 12(g) of the Act.
None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
None
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close
of the period covered by the Annual Report: 444,288,874 shares of common stock at 31 March 2021
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. ☒ Yes ☐ No
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. ☐ Yes ☒ No
Note — Checking the box will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 from their obligations under those Sections.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes
☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be
submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for
such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer, or an emerging growth company. See the definition of “large accelerated filer,” “accelerated filer” and “emerging
growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
Accelerated filer
Non-accelerated filer
Emerging growth company
☒
☐
☐
☐
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by
check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐
† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards
Board to its Accounting Standards Codification after 5 April 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s
assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the
Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its
audit report
☒
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements
included in this filing:
U.S. GAAP
International Financial Reporting Standards as issued by the International Accounting
Standards Board
Other
☒
☐
☐
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement
item the registrant has elected to follow: ☐ Item 17 ☐ Item 18
If this is an Annual Report, indicate by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
☐ Yes ☒ No
2021
ANNUAL REPORT
ON FORM 20-F
Table of Contents
James Hardie 2021 Annual Report on Form 20-F
TABLE OF CONTENTS
Form 20-F Cross-Reference Index
Section 1
Introduction
Information on the Company
History and Development of the Company
Business Overview
Organizational Structure
Property, Plants and Equipment
Directors, Senior Management and Employees
James Hardie Executive Team
Board of Directors
Remuneration Report
Corporate Governance Report
Section 2
Reading this Report
Management's Discussion and Analysis
Consolidated Financial Statements
Notes to Consolidated Financial Statements
Remuneration of Independent Registered Public Accounting Firm
Section 3
Risk Factors
Legal Proceedings
Controls and Procedures
Employees
Listing Details
Constitution
Material Contracts
Exchange Controls
Taxation
Quantitative and Qualitative Disclosures About Market Risk
Section 4
SHARE/CHESS Units of Foreign Securities Information
Glossary of Abbreviations and Definitions
Exhibit List
Signatures
i
Page(s)
ii
1
1
2
2
4
10
11
14
14
19
27
66
90
90
91
108
115
152
153
153
166
168
170
170
173
173
173
173
182
185
185
187
193
200
Table of Contents
James Hardie 2021 Annual Report on Form 20-F
ii
FORM 20-F CROSS REFERENCE
PART 1
Item 1. Identity of Directors, Senior Management and Advisers
Item 2. Offer Statistics and Expected Timetable
Item 3. Key Information
A. [Reserved]
B. Capitalization and Indebtedness
C. Reasons for the Offer and Use of Proceeds
D. Risk Factors
Item 4. Information on the Company
A. History and Development of the Company
B. Business Overview
C. Organizational Structure
D. Property, Plants and Equipment
Item 4A. Unresolved Staff Comments
Item 5. Operating and Financial Review and Prospects
A. Operating Results
B. Liquidity and Capital Resources
C. Research and Development, Patents and Licenses, etc.
D. Trend Information
E. Critical Accounting Estimates
Item 6. Directors, Senior Management and Employees
A. Directors and Senior Management
B. Compensation
C. Board Practices
D. Employees
E. Share Ownership
Item 7. Major Shareholders and Related Party Transactions
A. Major Shareholders
B. Related Party Transactions
C. Interests of Experts and Counsel
Item 8. Financial Information
A. Consolidated Statements and Other Financial Information
B. Significant Changes
Item 9. The Offer and Listing
A. Offer and Listing Details
B. Plan of Distribution
C. Markets
D. Selling Shareholders
E. Dilution
F. Expenses of the Issue
Page(s)
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
153-165
2-3; 13; 181
4-9
3; 10
11-13; 105
None
96-103
103-106
8-9
106-107
92-95
14-26
27-65
19-26; 66-89
170
53-56; 61-65
185-186
80
Not Applicable
108-151; 173
None
170-172
Not Applicable
170-171
Not Applicable
Not Applicable
Not Applicable
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James Hardie 2021 Annual Report on Form 20-F
iii
PART 1 (continued)
Item 10. Additional Information
A. Share Capital
B. Memorandum and Articles of Association
C. Material Contracts
D. Exchange Controls
E. Taxation
F. Dividends and Paying Agents
G. Statement by Experts
H. Documents on Display
I. Subsidiary Information
Item 11. Quantitative and Qualitative Disclosures About Market Risk
Item 12. Description of Securities Other Than Equity Securities
A. Debt Securities
B. Warrants and Rights
C. Other Securities
D. American Depositary Shares
PART II
Item 13. Defaults, Dividend Arrearages and Delinquencies
Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
Item 15. Controls and Procedures
Item 16A. Audit Committee Financial Expert
Item 16B. Code of Ethics
Item 16C. Principal Accountant Fees and Services
Item 16D. Exemptions from the Listing Standards for Audit Committees
Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
Item 16F. Change in Registrant’s Certifying Accountant
Item 16G. Corporate Governance
Item 16H. Mine Safety Disclosure
PART III
Item 17. Financial Statements
Item 18. Financial Statements
Item 19. Exhibits
Not Applicable
173
173
173
173-181
Not Applicable
Not Applicable
181
Not Applicable
182-184
Not Applicable
Not Applicable
Not Applicable
171-172
None
None
168-169
84
81-82
152
None
None
None
66-89
12
Not Applicable
108-151
193-199
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James Hardie 2021 Annual Report on Form 20-F
1
SECTION 1
INTRODUCTION
James Hardie Industries plc is a world leader in the manufacturing of fiber cement building solutions, and
a market leader in Europe for fiber gypsum products. Our current primary geographic markets include the
United States of America (“US,” “USA” or the “United States”), Australia, Europe, New Zealand, the
Philippines and Canada.
James Hardie Industries plc is a “public limited company,” incorporated and existing under the laws of
Ireland. Except as the context otherwise may require, references in this Annual Report on Form 20-F (this
“Annual Report”) to “James Hardie,” the “James Hardie Group,” the “Company,” “JHI plc,” “we,” “our” or
“us” refer to James Hardie Industries plc, together with its direct and indirect wholly owned subsidiaries as
of the time relevant to the applicable reference.
For certain information about the basis of preparing the financial information in this Annual Report as well
as an explanation of forward-looking statements and the risks, uncertainties and assumptions to which
they are subject, see “Section 2 – Reading this Report.” Further, a “Glossary of Abbreviations and
Definitions” has also been included under Section 4 of this Annual Report.
The term “fiscal year” refers to our fiscal year ended 31 March of such year; the term “dollars,” “US$” or
“$” refers to US dollars; the term “A$” refers to Australian dollars; and the term "EUR" or “€” refers to
Euros.
Information contained in or accessible through the websites mentioned in this Annual Report does not
form a part of this Annual Report unless we specifically state that it is incorporated by reference herein.
All references in this Annual Report to websites are inactive textual references and are for information
only.
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James Hardie 2021 Annual Report on Form 20-F
2
INFORMATION ON THE COMPANY
History and Development of the Company
About James Hardie
James Hardie Industries plc is incorporated and existing under the laws of Ireland. As an Irish plc, we are
governed by the Irish Companies Act 2014 and we operate under the regulatory requirements of
numerous jurisdictions and organizations, including the Australian Securities Exchange ("ASX"),
Australian Securities and Investments Commission ("ASIC"), the New York Stock Exchange (“NYSE”),
the United States Securities and Exchange Commission (“SEC”), the Irish Takeover Panel and various
other rulemaking bodies.
The address of our registered office in Ireland is Europa House, 2nd Floor, Harcourt Centre, Harcourt
Street, Dublin 2, D02 WR20, Ireland. The telephone number is +353 1411 6924. Our agent in the United
States is CT Corporation. Its office is located at 28 Liberty Street - 42nd Floor, New York, New York
10005. The address of our registered office in Australia is Level 20, 60 Castlereagh Street, Sydney NSW
2000 and the telephone number is +61 2 9638 9205. Our share registry is maintained by Computershare
Investor Services Pty Ltd. All inquiries and correspondence regarding holdings should be directed to:
Computershare Investor Services Pty Ltd, Level 5, 115 Grenfell Street, Adelaide, SA 5000; telephone:
+61 3 9415 4000 or toll free within Australia: 1300 855 080. Our American Depositary Receipt ("ADR")
register is maintained by Deutsche Bank. All inquiries and correspondence regarding American
Depositary Shares ("ADSs") should be directed to Deutsche Bank, 60 Wall Street, New York, New York
10005, United States; telephone 1-212-250-9100.
Our History
James Hardie was established in 1888 as an import business, listing on the ASX in 1951 to become a
publicly owned company in Australia. After becoming a listed company, we built a diverse portfolio of
building and industrial products. In the late-1970s, we pioneered the development of asbestos-free fiber
cement technology and in the early-1980’s began designing and manufacturing a wide range of fiber
cement building products that made use of the benefits that came from the products’ durability, versatility
and strength. Using the technical and manufacturing expertise developed in Australia, we expanded into
the United States, opening our first fiber cement plant in Fontana, California in February 1990. Since
then, we have expanded our product portfolio and global footprint, with fiber cement manufacturing plants
across the United States, Australia and the Philippines. In April 2018, we completed the acquisition of
Fermacell, a market leader in fiber gypsum and cement-bonded boards in Europe.
Our Agreement with Asbestos Injuries Compensation Fund
Prior to 1987, ABN 60 Pty Limited (formerly James Hardie Industries Limited, then the ultimate parent
company of the James Hardie Group) (“ABN 60”) and two of its former subsidiaries, Amaca Pty Limited
(“Amaca”) and Amaba Pty Limited (“Amaba”) (collectively, the “Former James Hardie Companies”),
manufactured products in Australia that contained asbestos. The manufacture and sale of these products
has resulted in liabilities for the Former James Hardie Companies in Australia.
In February 2007, our shareholders approved the Amended and Restated Final Funding Agreement
(“AFFA”) entered into on 21 November 2006 to provide long-term funding to Asbestos Injuries
Compensation Fund ("AICF") for the compensation of proven Australian-related personal injuries for
which the Former James Hardie Companies are found liable. AICF, an independent trust, subsequently
assumed ownership of the Former James Hardie Companies. We do not own AICF, however, we are
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James Hardie 2021 Annual Report on Form 20-F
3
entitled to appoint three directors, including the Chairman, and the New South Wales (“NSW”)
Government is entitled to appoint two directors.
Under the terms of the AFFA, James Hardie 117 Pty Ltd (the “Performing Subsidiary”) will make annual
payments to AICF. The amount of these annual payments is dependent on several factors, including our
free cash flow (as defined in the AFFA), actuarial estimations, actual claims paid, operating expenses of
AICF, changes in the AUD/USD exchange rate and the annual cash flow cap. JHI plc owns 100% of the
Performing Subsidiary and guarantees the Performing Subsidiary’s obligation. As a result, for US GAAP
purposes, we consider JHI plc to be the primary beneficiary of AICF.
Although we have no legal ownership in AICF, for financial reporting purposes, our interest in AICF is
considered variable and we consolidate AICF due to our pecuniary and contractual interests in AICF as a
result of the funding arrangements outlined in the AFFA. For additional information on our consolidation of
AICF and asbestos-related assets and liabilities, see Note 1 to our consolidated financial statements in
Section 2.
Corporate Structure
The following diagram summarizes our corporate structure at 31 March 2021:
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James Hardie 2021 Annual Report on Form 20-F
4
Business Overview
General Overview of Our Business
We are a world leader in the manufacture of fiber cement building materials. Based on net sales, we
believe we are the largest manufacturer of fiber cement products and systems for external and internal
building construction applications in the United States, Australia and the Philippines. We market our fiber
cement products and systems under various brand names, such as HardiePlank®, HardiePanel®,
HardieTrim® and HardieBacker®, and other brand names such as Aspyre Collection by James Hardie™,
Artisan®, Reveal®, Cemplank®, Scyon® and Linea®. We are also a market leader in the European
premium timber frame and dry lining business, especially in Germany, Switzerland and Denmark. We
market our fiber gypsum and cement-bonded boards under the Fermacell® brand and our fire-protection
boards under the AESTUVER® brand.
The Company currently has three operating segments: North America Fiber Cement, Asia Pacific Fiber
Cement and Europe Building Products. See Notes 2 and 18 to our consolidated financial statements in
Section 2 for a description of our operating segments and a breakdown of our net sales by operating
segment and geographic market for each of our last three fiscal years.
Products
We manufacture fiber cement, fiber gypsum and cement bonded boards. Our fiber cement building
materials includes a wide-range of products for both external and internal use across a broad range of
applications, including external applications: siding, cladding, trim, soffit; and internal applications: walls,
floors, ceilings. While there are some market specific products, our core fiber cement products, planks
and flat panels are sold across all of the markets in which we operate. Our fiber gypsum and cement-
bonded boards are used mainly for interior applications such as dry lining walls, walls in timber frame
buildings and flooring solutions. In addition, our cement-bonded boards are used in exterior and industrial
applications as well as for fire protection.
Products Used in External Applications
We developed a proprietary technology platform that enables us to produce thicker yet lighter-weight fiber
cement products that are generally easier to handle than most traditional building products. Further, we
believe that our fiber cement products provide certain durability and performance advantages leading to
improved maintenance, while offering comparable aesthetics to competing products, such as wood, and
superior aesthetics when compared to vinyl siding.
Performance and design advantages:
• Our fiber cement products exhibit resistance to the damaging effects of moisture, fire, impact and
termites compared to natural and engineered wood and wood-based products;
• Competing products do not duplicate fiber cement aesthetics;
• Our fiber cement products provide the ability to imprint designs that closely resemble the patterns
•
and profiles of traditional building materials such as wood and stucco;
The surface properties of our products provide an effective paint-holding finish, especially when
compared to natural and engineered wood products, allowing for greater periods of time between
necessary maintenance and repainting; and
• Compared to masonry construction, fiber cement is lightweight, physically flexible and can be cut
using readily available tools, making our products more appealing across a broad range of
architectural styles, be it of timber or steel-framed construction.
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5
We believe the benefits associated with our fiber cement products have enabled us to gain a competitive
advantage over competing products.
Products Used in Internal Applications
Compared to natural and oriented strand board ("OSB") and wood-based products, we believe our
product range for internal applications provide the same general advantages provided by our products for
external applications. In addition, our fiber cement products for internal applications exhibit less
movement in response to exposure to moisture and impact damage than many competing products,
providing a more consistent and durable substrate on which to install tiles. Further, we believe our
ceramic tile underlayment products exhibit better handling and installation characteristics compared to
fiberglass mesh cement boards. We believe our fiber gypsum products offer superior stability, fire safety
and sound insulation properties compared to OSB and gypsum plaster boards. Furthermore, we believe
our fiber gypsum flooring solutions offer superior handling properties, especially in the modernization of
existing buildings, compared to wet screed solutions.
Significant New Products
include Hydrodefense®
In North America, new products released over
HardieBacker® boards, expanded ColorPlus® Technology offering through the Dream CollectionTM and
Statement CollectionTM, and higher ventilation VentedPlus® HardieSoffit® boards.
three years
last
the
In Asia Pacific, we have extended our product portfolio in both wood look and non-wood look exteriors.
Over the last three years, the range of Linea®, Linea® Oblique and Stria® cladding products has been
broadened to increase design versatility in line with modern design trends.
In Europe, new fiber cement products released over the past three years include HardieFoamTM, a
solution for install of HardieBacker®. In our Fermacell business, new products released over the last
three years include AESTUVER® Tx board, a key milestone for our fire protection boards.
Principal Markets for Our Products
Fiber Cement
In the US and Canada, the largest application for fiber cement building products is in external siding for
the residential building industry.
Competition in this market comes primarily from substitute products, such as natural wood or OSB, vinyl,
stucco and brick. We believe we can continue to increase our market share from these competing
products through targeted marketing programs designed to educate customers and homeowners on our
brand and the performance, design and cost advantages of our products.
In the Asia Pacific region, we principally sell into the Australian, New Zealand and Philippines markets,
with the residential building industry representing the principal market for fiber cement products. The
largest applications of fiber cement across our three primary markets are in external applications: siding,
cladding, trim, soffit; and internal applications: walls, floors, ceilings.
In Australia, competition from imports and two locally based fiber cement manufacturers continues to be
strong. Additionally, we have competition from natural and engineered wood, wallboard, masonry and
brick products. In New Zealand and the Philippines, competitor fiber cement imports continue as
manufacturers look to supplement their primary operating environments with additional markets.
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In Europe, our fiber cement building products are used in both residential and commercial building
applications in external siding, soffits and internal tile underlayment for walls and floors.
Fiber Gypsum and Cement-Bonded Boards
James Hardie Europe's Fermacell brand products are sold into the residential repair and remodel,
commercial and residential new construction markets. Fermacell brand of products comprise fiber
gypsum and cement-bonded boards, two complementary products in the high performance board space,
mainly used in timber frame construction, commercial dry lining projects and repair and remodel. Cement
bonded boards are also used for several fire protection projects including tunnels.
Our key markets for Fermacell brand products in Europe include Germany, Switzerland, UK, Denmark,
France, Belgium, Netherlands and Luxembourg, where we sell our products to residential and
commercial new-build as well as to repair and remodel. In addition, our fire protection AESTUVER®
boards are sold to projects worldwide.
Seasonality
We do not have significant seasonality, however our businesses typically follow activity levels in the
building and construction industry.
Raw Materials
The principal raw materials used in the manufacture of our fiber cement products are cellulose fiber
(wood-based pulp), silica (sand), Portland cement and water. The key raw materials used in the
manufacture of our fiber gypsum products are gypsum, recycled paper and water. We have established
supplier relationships for all of our raw materials across the various markets in which we operate, and we
do not anticipate having difficulty in obtaining our required raw materials from these suppliers. The
purchase price of these raw materials and other materials can fluctuate depending on the supply-demand
situation at any given point in time.
We work hard to reduce the effect of both price fluctuations and supply interruptions by entering into
contracts with qualified suppliers and through continuous internal improvements in both our products and
manufacturing processes.
Cellulose Fiber
Reliable access to specialized and consistent quality pulp is critical to the production of fiber cement
building materials. As a result of our many years of experience and expertise in the industry, we share our
internal expertise with pulp producers in New Zealand, the United States, Canada and Chile to ensure
they are able to provide us with a highly specialized and proprietary formula crucial to the reinforcing
cement matrix of our fiber cement products. We have confidentiality agreements with our pulp producers,
and we have obtained patents in the United States and in certain other countries covering certain unique
aspects of our pulping formulas and processes that we believe cannot adequately be protected through
confidentiality agreements. However, we cannot be assured that our intellectual property and other
proprietary information will be protected in all cases. See “Section 3 – Risk Factors.”
Silica
High purity silica is sourced locally by the various production plants. In the majority of locations, we use
silica sand as a silica source. In certain other locations, however, we process quartz rock and beneficiate
silica sand to ensure the quality and consistency of this key raw material.
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Cement
Cement is acquired in bulk from local suppliers. We continue to evaluate options on agreements with
suppliers for the purchase of cement that can lock in our cement prices over longer periods of time.
Water
We primarily use local water supplies and process all wastewater to comply with environmental
requirements.
Gypsum
The primary types of gypsum used in the production of our fiber gypsum products are natural and
synthetic gypsum. Natural gypsum is extracted and processed in Germany and Spain. Synthetic gypsum
is obtained from power plants in Germany, Poland and the Netherlands. While synthetic gypsum will be
phased out due to the coal power plant phase-out in the European Union, we are well positioned for the
future with natural gypsum sources. In Germany, we have secured long-term contracts for the supply of
natural gypsum and we have invested in a natural gypsum mine in Spain.
Recycled Paper
Recycled paper is generally acquired from local suppliers and we currently maintain long-term contracts
with our key suppliers.
Sales, Marketing and Distribution
Our brand names, customer education in comparative product advantages, differentiated product range
and customer service, including technical advice and assistance, provide the basis for our marketing
strategy. In fiscal year 2022, the Company will be launching It's Possible™, a global integrated marketing
campaign that seeks to empower homeowners to realize their dream home. The campaign is inclusive of
television commercials, programmatic digital, social media, public relations, influencer and dynamic
media partnerships, and more.
We offer our customers support through a specialized sales force and customer service infrastructure in
North America, Australia, New Zealand, the Philippines and Europe.
Our customer service infrastructure includes inbound customer service support coordinated nationally in
each country, and is complemented by outbound telemarketing capability. Within each regional market,
we provide sales and marketing support to building products dealers and lumber yards and also provide
support directly to the customers of these distribution channels, principally homebuilders and building
contractors.
We maintain dedicated regional sales management teams in our major sales territories who maintain
relationships with national and other major accounts. Our various sales forces, which in some instances
manage specific product categories, include skilled trades people who provide on-site technical advice
and assistance.
In North America, we sell our exterior fiber cement products for repair and remodel and new residential
construction through a combination of distributors, dealers and lumber yards. Where sales are to
distributors, they then sell these products to dealers or lumber yards. Our interior fiber cement products in
North America are typically sold through the large home center retailers and specialist distributors or
dealers. Our products are distributed across North America primarily by road and, to a lesser extent, by
rail.
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In Australia and New Zealand, both new construction and repair and remodel products are sold through a
combination of distributors, dealers and lumber yards. In the Philippines, a network of thousands of small
to medium size retail outlets sell our fiber cement products to consumers, builders and real estate
developers and DIY type stores. The physical distribution of our product in each country is primarily by
road, rail or sea transport.
In Europe, both new construction and repair and remodel products are primarily sold to builder’s
merchants and DIY type stores. These customers then sell the products to applicators such as dry liners,
timber frame companies, smaller applicators and end consumers. Our products are distributed across
Europe primarily by road and rail and, to a lesser extent, by sea transport.
Despite the fact that distributors and dealers are generally our direct customers, we also aim to increase
primary demand for our products by marketing our products directly to homeowners, architects and
builders. We encourage them to specify and install our products because of the quality and craftsmanship
of our products.
Geographic expansion of our fiber cement business has occurred in markets where framed construction
is prevalent for residential applications or where there are opportunities to change building practices from
masonry to framed construction. Expansion is also possible where there are direct substitution
opportunities irrespective of the methods of construction. With the exception of our current major markets,
as well as Japan and certain rural areas in Asia, and Eastern Europe, most markets in the world
principally utilize masonry construction for external walls in residential construction. Accordingly, further
geographic expansion depends substantially on our ability to provide alternative construction solutions
and for those solutions to be accepted in those markets.
Dependence on Trade Secrets and Research and Development (“R&D”)
We pioneered the successful development of cellulose reinforced fiber cement and, since the
early-1980s, have progressively introduced products developed as a result of our proprietary product
formulation and process technology. The introduction of differentiated products is one of the core
components of our global business strategy. This product differentiation strategy is supported by our
significant investment in R&D activities.
We view spending on R&D as the key to sustaining our existing product leadership position, by providing
a continuous pipeline of innovative new products and technologies with sustainable performance and
unique design advantages over our competitors. Further, through our investments in new process
technology or by modifying existing process technology, we aim to keep reducing our capital and
operating costs and to find new ways to make existing and new products. As such, we expect to continue
allocating significant funding to these endeavors.
Our current patent portfolio is based mainly on fiber cement compositions, associated manufacturing
processes and the resulting products. Our non-patented technical intellectual property consists primarily
of our operating and manufacturing know-how and raw material and operating equipment specifications,
all of which are maintained as trade secret information. We have enhanced our abilities to effectively
create, manage and utilize our intellectual property and have implemented a strategy that increasingly
uses patenting and trade secret protection to protect and increase our competitive advantage.
In addition, we have a variety of industrial, commercial and financial contracts relating to our proprietary
manufacturing processes. While we are dependent on the competitive advantage that these items
provide as a whole, we are not dependent on any one of them individually and do not consider any one of
them individually to be material. We do not materially rely on intellectual property licensed from any
outside third parties. However, we cannot assure that our intellectual property and other proprietary
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James Hardie 2021 Annual Report on Form 20-F
9
information will be protected in all cases. In addition, if our R&D efforts fail to generate new, innovative
products or processes, our overall profit margins may decrease and demand for our products may fall.
See “Section 3 – Risk Factors.”
Governmental Regulation
As an Irish plc, we are governed by the Irish Companies Act 2014 and are also subject to all applicable
European Union level legislation. We also operate under the regulatory requirements of numerous
jurisdictions and organizations, including the ASX, ASIC, the NYSE, the SEC, the Irish Takeover Panel
and various other federal, state, local and foreign rulemaking bodies. See “Section 3 – Constitution” for
additional information regarding the Irish Companies Act 2014 and regulations to which we are subject.
Environmental, Health and Safety Regulation
Our operations and properties are subject to extensive federal, state, local and foreign environmental
protection, health and safety laws, regulations and ordinances governing activities and operations that
may have adverse environmental effects. As it relates to our operations, regulated material, including
wastewater and air emissions, may be produced at some of our manufacturing plants. The wastewater
produced from our manufacturing plants is internally recycled and reused before eventually being
discharged to publicly owned treatment works, a process which is monitored by us, as well as by
regulators. In addition, we actively monitor air emissions and other regulated materials produced by our
plants so as to ensure compliance with the various environmental regulations under which we operate.
Some environmental laws provide that a current or previous owner or operator of real property may be
liable for the costs of investigation, removal or remediation of certain regulated materials on, under, or in
that property or other impacted properties. In addition, persons who arrange, or are deemed to have
arranged, for the disposal or treatment of certain regulated materials may also be liable for the costs of
investigation, removal or remediation of the regulated materials at the disposal or treatment site,
regardless of whether the affected site is owned or operated by such person. Environmental laws often
impose liability whether or not the owner, operator, transporter or arranger knew of, or was responsible
for, the presence of such regulated materials. Also, third parties may make claims against owners or
operators of properties for personal injuries, property damage and/or for clean-up associated with
releases of certain regulated materials pursuant to applicable environmental laws and common law tort
theories, including strict liability.
In the past, from time to time, we have received notices of alleged discharges in excess of our water and
air permit limits. In each case, and in compliance with our Environmental Policy, we have addressed the
concerns raised in those notices, in part, through enhanced administrative controls and/or capital
expenditures intended to prevent future discharges in excess of permitted levels and, on occasion, the
payment of minor associated fines.
Environmental compliance costs in the future will depend, in part, on continued oversight of operations,
expansion of operations and manufacturing activities, regulatory developments and future requirements
that cannot presently be predicted.
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Organizational Structure
JHI plc is incorporated and domiciled in Ireland and the table below sets forth our significant subsidiaries,
all of which are wholly-owned by JHI plc, either directly or indirectly, as of 30 April 2021.
Name of Company
Fermacell B.V.
Fermacell Schraplau GmbH
James Hardie 117 Pty Ltd
James Hardie Australia Pty Ltd
James Hardie Building Products Inc.
James Hardie Europe B.V.
James Hardie Europe GmbH
James Hardie Europe Holdings GmbH
James Hardie Holdings Limited
James Hardie International Finance Designated Activity
Company
James Hardie International Group Limited
James Hardie International Holdings Limited
James Hardie NL1 B.V.
James Hardie NL2 B.V.
James Hardie NZ Holdings Limited
James Hardie North America, Inc
James Hardie Philippines Inc
James Hardie Research Pty Ltd
JH Research USA, LLC
James Hardie Spain S.L.U.
James Hardie Technology Holdings 1 Limited
James Hardie Technology Holdings 2 Limited
James Hardie Technology Limited
James Hardie U.S. Investments Sierra Inc.
RCI Holdings Pty Ltd
Jurisdiction of
Establishment
Netherlands
Germany
Australia
Australia
United States
Netherlands
Germany
Germany
Ireland
Ireland
Ireland
Ireland
Netherlands
Netherlands
New Zealand
United States
Philippines
Australia
United States
Spain
Ireland
Ireland
Bermuda
United States
Australia
Jurisdiction of
Tax Residence
Netherlands
Germany
Australia
Australia
United States
Netherlands
Germany
Germany
Ireland
Ireland
Ireland
Ireland
Netherlands
Netherlands
New Zealand
United States
Philippines
Australia
United States
Spain
Ireland
Ireland
Ireland
United States
Australia
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11
Property, Plants and Equipment
We believe we have some of the largest and lowest cost fiber cement manufacturing plants across the
United States, Australia and the Philippines, with our plants servicing both domestic and export markets.
We also have six manufacturing plants in Europe. Our plants are ideally located to take advantage of
established transportation networks, allowing us to distribute our products into key markets, while also
providing easy access to key raw materials.
Manufacturing Capacity
At 31 March 2021, we had manufacturing facilities at the following locations:
Plant Location
United States fiber cement
Cleburne, Texas
Peru, Illinois
Plant City, Florida
Pulaski, Virginia
Reno, Nevada
Tacoma, Washington
Waxahachie, Texas
Fontana, California
Prattville, Alabama 2
Asia Pacific fiber cement
Rosehill, New South Wales, Australia
Carole Park, Queensland, Australia
Cabuyao City, Philippines
Europe fiber gypsum
Münchehof, Germany
Orejo, Spain
Wijchen, the Netherlands
Siglingen, Germany
Other
Calbe, Germany 3
Schraplau, Germany 3
Owned /
Leased
Nameplate Capacity
(mmsf)1
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
666
560
600
600
300
500
360
250
300
180
260
172
441
275
273
154
41
N/A
____________
1
2
The calculated annual nameplate capacity in the United States, Europe and Asia Pacific is based on management’s historical
experience with our production process and is calculated assuming continuous operation, 24 hours per day, seven days per week,
producing 5/16” medium density product at a targeted operating speed. No accepted industry standard exists for the calculation of
our fiber cement, fiber gypsum and cement bonded board manufacturing facility nameplate, design and utilization capacities.
The first sheet machine in Prattville, Alabama was commissioned in Q4 of fiscal year 2021, with nameplate capacity of 300 mmsf.
The second sheet machine is expected to be commissioned in July 2021, for a total nameplate capacity in Prattville, Alabama of 600
mmsf at the end of fiscal year 2022.
3
Our Calbe, Germany plant produces cement bonded boards. Our Schraplau, Germany facility is a raw materials processing facility
for our fiber gypsum plants. As a result, no annual nameplate capacity is available.
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. For a discussion of significant
active and recently completed capacity expansion projects, see “Capital Expenditures” below.
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Management has determined that for measuring the annual design capacity of the fiber cement and fiber
gypsum network, the calculation should incorporate our expected production based upon our historical
experience with certain factors such as demand, product mix of varying thickness and density, batch size,
plant availability, differing production speeds and downtime expectations.
Based on the methodology noted above, for the year ended 31 March 2021 and 2020, we had an annual
fiber cement flat sheet design capacity of 4,180 mmsf and 4,330 mmsf in the United States, respectively,
and 720 mmsf and 730 mmsf in Asia Pacific, respectively. For the years ended 31 March 2021 and 2020,
we had an annual design capacity of 720 mmsf and 790 mmsf, respectively, for our European fiber
gypsum plants. It is important to note that annual design capacity does not necessarily reflect the actual
capacity utilization rates of our manufacturing facilities. Actual utilization is calculated using actual
production, which is affected by factors such as demand, product mix, batch size, plant availability and
production speeds. For fiscal year 2021, actual capacity utilization across our fiber cement and fiber
gypsum plants was an average of 83%, 79% and 84% in the United States, Europe and Asia Pacific,
respectively. For fiscal year 2020, actual capacity utilization across our fiber cement and fiber gypsum
plants was an average of 79%, 77% and 90% in the United States, Europe and Asia Pacific, respectively.
Mines
In North America, we lease silica quartz mine sites in Tacoma, Washington and Reno, Nevada. The lease
for our quartz mine in Tacoma, Washington expires in February 2022 (with additional options to renew).
The lease for our silica quartz mine site in Reno, Nevada expires in January 2024. We also own property
in Victorville, California which could be mined for silica. As of 30 April 2021, we have not begun to mine
this site and have no immediate plans to do so.
As a mine operator in the US, we are required by Section 1503(a) of the Dodd-Frank Wall Street Reform
and Consumer Protection Act (the “Dodd-Frank Act”), and rules promulgated by the SEC implementing
that section of the Dodd-Frank Act, to provide certain information concerning mine safety violations and
other regulatory matters concerning the operation of our mines. During fiscal year 2021, we did not
receive any notices, citations, orders, legal action or other communication from the US Department of
Labor’s Mine Safety and Health Administration that would necessitate additional disclosure under Section
1503(a) of the Dodd-Frank Act. Similarly, we have not experienced any mining-related fatalities in our
mining operations. There are currently no pending legal actions before the Federal Mine Safety and
Health Review Commission related to our mining operations.
Our Fermacell business has an operating license for a mining facility in Schraplau, Germany, however no
active mining is being undertaken, or allowed with respect to the former owner FELS-WERKE GmbH, and
the mine is only being used for storage of material. We also have an investment in a natural gypsum mine
in Spain.
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James Hardie 2021 Annual Report on Form 20-F
13
Capital Expenditures
We utilize a mix of operating cash flow and debt facilities to fund our capital expenditure projects and
investments. We continuously invest in safety, equipment maintenance and upgrades, and capacity to
ensure continued environmental compliance and operating effectiveness of our plants. The following
table sets forth our capital expenditures for the three most recent fiscal years:
North America Fiber Cement
Asia Pacific Fiber Cement
Europe Building Products
Other Businesses
R&D and Corporate
Total Capital Expenditures
Significant active capital expenditures
(Millions of US dollars)
2020
2019
2021
$
$
76.8 $
18.3
13.5
—
2.1
110.7 $
137.1 $
32.2
23.5
—
1.0
193.8 $
246.8
41.1
26.0
1.5
2.1
317.5
At 31 March 2021, the following significant capital expenditures related to capacity projects remain in
progress:
Project Description
Approximate
Investment
(US millions)
$
Investment
to date
(US millions)
Project
Start Date
Q4FY18
Expected
Commission
Date
FY22
Prattville Greenfield expansion
1 The first sheet machine in Prattville, Alabama was commissioned in Q4 of fiscal year 2021, with nameplate capacity of 300 mmsf. The second
sheet machine is expected to be commissioned in July 2021, for a total nameplate capacity in Prattville, Alabama of 600 mmsf at the end of
fiscal year 2022.
240.0 $
233.8
Expected
Nameplate
Capacity
Increase
(mmsf) 1
600
Significant completed capital expenditure projects
The following is a list of significant capital expenditure projects we have invested in over the three most
recent fiscal years:
Project Description
Philippines capacity expansion
Tacoma Greenfield expansion
Carole Park Brownfield expansion
Capital Divestitures
Total
Investment
(US Millions)
18.0
147.0
22.0
$
Fiscal Year of
Expenditure
FY16 - FY19
FY17 - FY20
FY19 - FY21
During the three most recent fiscal years, we did not make any material capital divestitures. We do not
consider the exit from our Penrose, New Zealand plant a material divestiture but a strategic decision to
shift to an import sales model.
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James Hardie 2021 Annual Report on Form 20-F
14
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
James Hardie Executive Team
Our management is overseen by our executive team, whose members cover the key areas of finance,
human resources, investor relations, legal, manufacturing, marketing, operations, production, R&D and
sales.
Members of our management executive team at 30 April 2021 are:
Jack Truong BS, PhD
Chief Executive Officer
Age 58
Dr Jack G. Truong joined James Hardie as President of International Operations in
April 2017. Dr Truong was announced Chief Executive Officer ("CEO") successor
and appointed President and Chief Operating Officer with the responsibility of
running the Company's global business in September 2018. He was officially
appointed CEO in January 2019.
Dr Truong’s ability to anticipate global market trends and deliver profitable revenue
growth is evidenced by his extensive multinational and multisector business
experience. Prior to James Hardie, Dr Truong was the President and Chief
Executive Officer of leading home appliance manufacturer, Electrolux North America
Inc, a $5+ billion revenue and 14,000+ employee business at the time of his
leadership.
Before joining Electrolux, Dr Truong enjoyed a successful 22-year career at 3M Company, where he
held senior leadership roles throughout the United States, Europe and Asia-Pacific, including Vice
President and General Manager of the Global Construction and Home Improvements Division and
Global Office Supplies Division.
As an engineer and inventor himself – earning his PhD in chemical engineering from the Rensselaer
Polytechnic Institute in New York – Dr Truong is the recipient of 11 U.S. patents and several
international patents. Dr Truong also enjoys giving time to philanthropic causes and professional
industry associations, receiving multiple accolades
for his humanitarian work and business
accomplishments.
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Jason Miele BA
Chief Financial Officer
Age 44
Jason Miele was appointed as Chief Financial Officer (“CFO”) in February 2020. As
CFO he oversees the Company’s overall financial activities, including accounting,
financial
tax,
operations, information systems, and investor and media relations.
treasury, performance and competitor analysis,
internal audit,
Mr Miele has over 14 years of experience with James Hardie and has served in a
number of important roles during his tenure, including most recently, as Vice
President – Investor and Media Relations, a position he held from February 2017. In
that role, Mr Miele had responsibility for overseeing James Hardie’s investor
relations strategy and communicating James Hardie’s business strategy and its
financial performance to various stakeholders including shareholders, investment
analysts, and the financial media.
Prior to that, Mr Miele served in a variety of roles of increasing responsibility, in finance functions such
as Treasury, Controllership and Operational Finance, including reporting to the CFO as the Global
Treasurer and later the Global Controller. Mr Miele has supported the James Hardie business during his
tenure, working in multiple geographies including Dublin, Ireland, Amsterdam, Netherlands, Mission
Viejo, California and Chicago, Illinois in the United States and most recently, Sydney, Australia.
Mr Miele has a Bachelor’s Degree from the University of California at Santa Barbara, where he
graduated with a degree in Business Economics with an emphasis in Accounting.
Julie Katigan BA, MA
Chief Human Resources Officer
Age 54
Julie Katigan joined James Hardie as Chief Human Resources Officer (“CHRO”) in
May 2019. As CHRO she has responsibility for the Company’s global human
resource activities,
talent
development and human resources strategy.
including employee engagement,
leadership and
Most recently, Ms Katigan was the Senior Vice President, Human Resources for
XPO Logistics’ Americas and Asia Pacific Supply Chain business unit, responsible
for approximately 25,000 employees in 400 locations across the globe.
Prior to XPO Logistics, Ms Katigan held senior human resources leadership roles
in both business partnering and specialty areas such as Talent Management and
Organizational Development, with well-established companies that included Colfax Corporation,
Electrolux, Mead Johnson Nutrition and Ford Motor Company.
Ms Katigan has a Bachelor of Arts degree in English and a Master’s degree in Labor and Industrial
Relations from Michigan State University.
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Joe Blasko BSFS, JD
General Counsel, Chief Compliance Officer and Company Secretary
Age 54
Joe Blasko joined James Hardie as General Counsel and Chief Compliance Officer
in June 2011 and was appointed Company Secretary in June 2020. Mr Blasko has
responsibility for the Company's legal and regulatory compliance, corporate
governance, enterprise risk management and government relations.
Before joining James Hardie, Mr Blasko was Assistant General Counsel, and later,
the General Counsel at Liebert Corporation, an Emerson Network Power Systems
company and wholly-owned subsidiary of Emerson Electric Co. In his four years with
Liebert/Emerson, Mr Blasko was responsible for establishing the legal department in
Columbus, Ohio, managing and overseeing all legal matters and working closely
with the executive management team. In this role, Mr Blasko also had global
responsibilities which required expertise across multiple jurisdictions.
From 2004 to 2006, Mr Blasko was Associate General Counsel at The Scotts Miracle-Gro Company,
serving as the effective “general counsel” to numerous corporate divisions within the organization. From
1997 to 2004, Mr Blasko gained considerable regulatory and litigation expertise working at Vorys, Sater,
Seymour and Pease LLP in Ohio.
Mr Blasko has a Juris Doctor from Case Western Reserve University in Cleveland, Ohio, USA and a
Bachelor of Science in Foreign Service from Georgetown University, USA, with a specialty in
International Relations, Law and Organizations.
Sean Gadd BEng, MBA
Executive Vice President – North America Commercial
Age 48
Sean Gadd joined James Hardie in 2004 as a Regional Engineering Manager for the
Asia Pacific business, and progressed to Plant Manager for both the Carole Park
and Rosehill facilities in Australia. Mr Gadd then moved to the US in 2006 to take
the role of Manufacturing Manager for Trim and various manufacturing facilities
across the US.
In 2009, Mr Gadd ran the US trim business for James Hardie with responsibility for
both Manufacturing and Sales, followed by a brief assignment leading Supply Chain.
In 2012, Mr Gadd was promoted to the role of Vice President of Sales for Western
USA and Canada. Over the next year, his role was expanded to include the Midwest
and Northeast of the USA.
Mr Gadd was appointed Executive General Manager in September 2013 with full responsibility for the
Northern Division and in October 2015, he was appointed Executive Vice President, Markets and
Segments, North America with responsibility for Strategic Marketing and Development. In December
2018, Mr Gadd was appointed Executive Vice President, North America Commercial with responsibility
for sales, products, segments and marketing.
Mr Gadd has a Bachelor of Engineering in Manufacturing Management and an executive MBA from the
Australian Graduate School of Management, Australia.
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Robert Stefansic, BSc, MBA
Executive Vice President – North America, End-to-End Supply Chain
Age 59
Bob Stefansic joined James Hardie as Executive Vice President, North America,
End-to-End Supply Chain in July 2020. In his role, Mr Stefansic is responsible for
driving operational efficiencies and improvements across the supply chain, with
emphasis on delivering business value via the Hardie Manufacturing Operating
System. His direct responsibilities include manufacturing, supply chain and all
central operations support functions.
Mr Stefansic held various Senior Operations leadership roles throughout his career
prior to joining James Hardie. Most recently he was the Chief Operations Officer at
Ingredion Incorporated, a $6 billion leading ingredients supplier to the food and
beverage industry. There he was responsible for all global operations including a
network of 50 manufacturing plants and supply chains across Asia, Europe, North America and South
America. Additionally, he previously held manufacturing leadership roles at Valspar, General Chemical
and Allied-Signal corporations.
Mr Stefansic is a graduate of the University of South Carolina, where he received an MBA and a
Bachelor of Science degree in Chemical Engineering.
Johnny Cope, BA
Senior Vice President – North America Sales
Age 53
Johnny Cope joined James Hardie in February 2019 as the Senior Vice President,
North America Sales with responsibility for delivering the James Hardie value
proposition, trusted brand and products, best-in-class supply chain and technical
service framework to the Company's most valued customers.
Mr Cope has 25 years of industry experience serving Dealers, Distributors, Builders
and Contractors. For the decade prior to this role, he was responsible for the
Builder/Contract business for Electrolux Major Appliances North America.
For the 10 years before joining Electrolux, Mr Cope had multiple Builder/Contract
roles in the Appliance division of the General Electric Company. During the last
6 years at GE, he was responsible for the Contract Appliance's South West Contract Region of the
United States.
Mr Cope has a Bachelor's Degree from Texas Tech University, where he graduated with a degree in
Business Administration with an emphasis on Marketing.
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Ryan Kilcullen BSc, MS
Senior Vice President – North America Supply Chain Operations
Age 40
Ryan Kilcullen joined James Hardie in 2007 as a PcI/PdI Engineer. Since then, he
has worked for the Company in various manufacturing and supply chain roles
including Process Engineer, Production Manager, and Supply Chain Engineer. In
2012, he became Supply Chain Manager, ColorPlus® Business Unit, responsible for
the end-to-end design and performance of our ColorPlus® product line supply chain.
In 2013, he became responsible for North American Supply Chain operations, with
responsibilities that included Procurement, Network Planning, Production Planning,
Transportation, Distribution Management, Customer Service, and Inside Sales. In
June 2015, he was appointed Vice President – Central Operations, responsible for
the Company’s Supply Chain Operations and Centralized Manufacturing functions.
In August 2016, he was appointed Executive Vice President – North America Operations, responsible
for the Company’s Supply Chain, Manufacturing, Engineering and Environmental, Health & Safety
Operations.
Mr Kilcullen has a Bachelor of Science in Industrial Engineering from Rensselaer Polytechnic Institute
and a Master of Engineering in Logistics from Massachusetts Institute of Technology.
Jörg Brinkmann MS, PhD
General Manager, Europe
Age 42
Dr Jörg Brinkmann joined James Hardie as General Manager, Europe in April 2018
as part of the Fermacell GmbH acquisition. In this role he is responsible for running
the Company’s European activities, which are headquartered in Düsseldorf,
Germany.
Before joining James Hardie, Dr Brinkmann held several German as well as
international leadership roles in Sales and Marketing at the Xella Group (the former
owner of the Fermacell business) starting in 2005. In 2014 he was appointed CEO
of the former Fermacell Company with responsibility for the entire business. Under
his leadership, the company achieved significant profitable growth.
Dr Brinkmann holds a Masters degree (“Diplom-Kaufmann”) from the University of Duisburg-Essen as
well as a PhD from the University of Hohenheim, Germany.
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19
Board of Directors
James Hardie’s non-executive directors have widespread experience, spanning general management,
finance, manufacturing, marketing and accounting. Each non-executive director also brings valuable
international experience that assists with James Hardie’s growth. For additional information, see "Section
1 - Corporate Governance Report" of this Annual Report.
Members of the Board of Directors (the “Board”) at 30 April 2021 are:
Michael Hammes BS, MBA
Age 79
Michael Hammes was elected as an independent non-executive director of James
Hardie in February 2007. He was appointed Chairman of the Board in January 2008
and is a member of the Remuneration Committee and the Nominating and
Governance Committee.
Experience: Mr Hammes has extensive commercial experience at a senior
executive level. He has held a number of executive positions in the medical
products, hardware and home improvement, and automobile sectors, including CEO
and Chairman of Sunrise Medical, Inc. (2000-2007), Chairman and CEO of Guide
Corporation (1998-2000), Chairman and CEO of Coleman Company,
Inc.
(1993-1997), Vice Chairman of Black & Decker Corporation (1992-1993) and
various senior executive roles with Chrysler Corporation (1986-1990) and Ford Motor Company
(1966-1986).
Directorships of listed companies in the past five years: Former – Director of Navistar International
Corporation (1996-2017); Director of DynaVox Mayer-Johnson (2010-2016).
Other: Resident of the United States.
Last elected: August 2018
Term expires: August 2021
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David D. Harrison BA, MBA, CMA
Age 74
David Harrison was appointed as an independent non-executive director of James
Hardie in May 2008. He is Chairman of the Remuneration Committee and a member
of the Audit Committee.
Experience: Mr Harrison is an experienced company director with a finance
background, having served in corporate finance roles, international operations and
information technology for 22 years with Borg Warner/General Electric Co. His
previous experience includes 10 years at Pentair, Inc., as Executive Vice President
and CFO (1994-1996 and 2000-2007) and Vice President and CFO roles at Scotts,
Inc. and Coltec Industries, Inc. (1996-2000).
Directorships of listed companies in the past five years: Current – Director of National Oilwell Varco
(since 2003).
Other: Resident of the United States.
Last elected: August 2019
Term expires: August 2022
Andrea Gisle Joosen MSc, BSc
Age 57
Andrea Gisle Joosen was appointed as an independent non-executive director of
James Hardie in March 2015. She is a member of the Audit Committee.
Experience: Ms Gisle Joosen is an experienced former executive with extensive
experience in marketing, brand management and business development across a
range of different consumer businesses. Her former roles include Chief Executive of
Boxer TV Access AB in Sweden and Managing Director (Nordic region) of
Panasonic, Chantelle AB and Twentieth Century Fox. Her early career involved
several senior marketing roles with Procter & Gamble and Johnson & Johnson.
Directorships of listed companies in the past five years: Current – Director of BillerudKorsnas AB (since
2015); Director of Dixons Carphone plc (since 2014); Director of ICA Gruppen AB (since 2010).
Former – Director of Mr Green AB (2015 - 2019).
Other: Director of Logent AB (since 2019); Director of Qred AB (since 2019); Director of Acast AB (since
2018); Director of Neopitch AB (since 2004); resident of Sweden.
Last elected: August 2018
Term expires: August 2021
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Persio V. Lisboa BS
Age 55
Persio Lisboa was appointed as an independent non-executive director of James
Hardie in February 2018. He is a member of the Remuneration Committee and the
Nominating and Governance Committee.
Experience: Mr Lisboa has extensive senior executive experience. He currently
serves as President and Chief Executive Officer of Navistar, Inc. (Navistar), a
leading manufacturer of commercial trucks, buses, defense vehicles and engines,
a position he has held since July 2020. Prior to that position, Mr Lisboa served as
the Executive Vice President and Chief Operating Officer of Navistar from March
2017 to July 2020. Prior to that, Mr Lisboa served as President, Operations of
Navistar from November 2014 to March 2017. Prior to that, Mr Lisboa served as
Senior Vice President, Chief Procurement Officer of Navistar from December 2012 to November 2014,
as Vice President, Purchasing and Logistics and Chief Procurement Officer of Navistar from October
2011 to November 2012, and as Vice President, Purchasing and Logistics of Navistar from August
2008 to October 2011. Prior to these positions, Mr Lisboa held various management positions within
Navistar’s North American and South American operations. Mr Lisboa began his career at Maxion
International Motores Brasil, followed by a move to International Engines Argentina S.A., and then to
MWM-International South America.
Directorships of listed companies in the past five years: Former - Director of Broadwind Energy, Inc.
(2016-2018).
Other: Resident of the United States.
Last elected: August 2018
Term expires: August 2021
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Anne Lloyd, BS, CPA
Age 59
Anne Lloyd was appointed as an independent non-executive director of James
Hardie in November 2018. She is Chair of the Audit Committee and a member of the
Remuneration Committee.
Experience: Ms Lloyd, an experienced corporate and finance executive, served as
Chief Financial Officer of Martin Marietta Materials, Inc. a leading supplier of
aggregates and heavy building materials, for over 12 years from June 2005 until her
retirement in August 2017. She joined Martin Marietta in 1998 as Vice President and
Controller and was promoted to Chief Accounting Officer in 1999. She was
subsequently appointed Treasurer (2006-2013) and promoted to Executive Vice
President in 2009. Earlier in her career, Ms Lloyd spent 14 years with Ernst & Young
LLP (1984-1998), latterly as a senior manager and client service executive for the natural resources,
mining, insurance and healthcare industries.
Directorships of listed companies in the past five years: Current - Director of Insteel Industries, Inc
(since April 2019); Director of Highwoods Properties, Inc. (since 2018). Former - Director of Terra
Nitrogen Company, L.P. (2009-2018).
Other: Resident of the United States.
Last elected: August 2019
Term expires: August 2022
Moe Nozari BA, MS, PhD and Postdoctoral Research Fellow
Age 78
Dr Moe Nozari was appointed as an independent non-executive director of James
Hardie in November 2019. He is a member of the Nominating and Governance
Committee.
Experience: Dr Nozari worked at 3M for thirty eight years. Latterly, he served as an
Executive Vice President of Consumer and Office Business at 3M Company, from
2002 until his retirement from 3M in July 2009. Prior to that he served as an
Executive Vice President of Consumer and Office Markets at 3M Company from
1999 to 2002 and served as its Group Vice President of Consumer and Office
Markets Group from 1996 to 1999. Dr Nozari joined 3M, in the Central Research
Laboratories in 1971 and advanced to the position of Technical Director of the
Photographic Products Division.
After a succession of managerial and business responsibilities in 1986 he was named a Division Vice
President, then a Group Vice President in 1996. While at 3M his focus was on the development of new
products, brands, identification, and development of people.
Other: Resident of the United States.
Last elected: August 2020
Term expires: August 2023
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23
Rada Rodriguez MSc
Age 62
Rada Rodriguez was appointed as an independent non-executive director of James
Hardie in November 2018. She is a member of the Nominating and Governance
Committee.
Experience: Ms Rodriguez serves as Chief Executive Officer of Signify DACH, part
of the Signify Group, a world leader in connected LED lighting systems, software
and services, since May 2021. She previously served as Chief Executive Officer of
Schneider Electric GmbH, part of Schneider Electric Group, a global energy
management and automation company and served as Senior Vice President,
Corporate Alliances until 2021. On joining the company in 1999, she held a
progression of senior roles including Head of International Research and Development for Schneider
Electric Sweden, and Senior Vice President and Zone President, Central and Eastern Europe. Prior to
joining Schneider Electric GmbH, she worked at Lexel Group (later acquired by Schneider) and before
that she worked for 5 years at Colasit Scandinavia AB, a Swiss industrial machinery manufacturer. She
started her career with K-Konsult AB, a Swedish technical consulting firm with a focus on installation
technology where she worked for 5 years as a design engineer.
Directorships of listed companies in the past five years: Former – Director of Eltel AB (2015-2017).
Other: Director of Messe Berlin GmbH (since 2019); Director of ZVEI (since 2014); resident of
Germany.
Last elected: August 2019
Term expires: August 2022
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Suzanne B Rowland MS, BS
Age 59
Suzanne B Rowland was appointed as an independent non-executive director of
James Hardie in February 2021. She is a member of the Audit Committee.
Experience: Ms Rowland has a diverse set of functional experiences and brings
business leadership experience across a wide range of complex global specialty
materials and industrial businesses. She most recently served as Group Vice
President of the Industrial Specialties business at Ashland Global Holdings Inc. from
2016 to 2019 where she aligned commercial and asset strategies and drove focused
execution resulting in profitable growth.
Prior to this, Ms Rowland served in separate Vice President and General Manager roles in Tyco
International between 2009 and 2015. During this time in multiple divisions of the company, she led
significant improvement in customer relationships, market position, and operational execution. Before
joining Tyco International, Ms Rowland worked for Rohm and Haas Company for over twenty years,
where she also held multiple senior executive roles.
Directorships of listed companies in the past five years: Current – Director of Sealed Air Corporation
(since 2020); Director of SPX Flow, Inc. (since 2018); Director of L.B. Foster Co. (since 2008).
Other: Resident of the United States.
Last elected: Ms Rowland will be standing for election at the August 2021 Annual General Meeting.
Dean Seavers MBA, BBA
Age 60
Dean Seavers was appointed as an independent non-executive director of James
Hardie in February 2021. He is a member of the Audit Committee.
Experience: Mr Seavers is a seasoned senior leader of transformation and
turnaround strategies and currently serves as Chairman of Pacific Gas & Electric
Utility. Mr Seavers most recently served as President and Executive Director of
National Grid plc’s U.S. business, in which he led a fundamental business
transformation with a focus on improving financial performance, safety and
employee engagement. Prior to holding this position, Mr Seavers served in senior
executive positions at Red Hawk Fire & Security LLC, United Technologies Fire &
Security Corp. and GE Security and spent seven years with Tyco International, holding multiple
senior operating roles. During this time, Mr Seavers advanced through learning and applying best in
class operating systems and tools such as Lean and Six Sigma. Earlier in his career, Mr Seavers
worked at Ford Motor Company and PepsiCo Inc., which led him to an entrepreneurial opportunity as
Managing Director and co-owner of Flex-Tech Communications.
Directorships of listed companies in the past five years: Current – Director of PG&E Corporation (since
2020); Chairman and Director of Pacific Gas & Electric Utility (since 2020); Director of Albemarle
Corporation (since 2018). Former – Director of National Grid plc (2015-2020).
Other: Resident of the United States.
Last elected: Mr Seavers will be standing for election at the August 2021 Annual General Meeting.
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Nigel Stein CA, BSc
Age 65
Nigel Stein was appointed as an independent non-executive director of James
Hardie in May 2020. He is the Chairman of the Nominating and Governance
Committee and is a member of the Audit Committee.
Experience: Mr Stein has extensive experience in the global automotive and
manufacturing sectors. He currently serves as Chairman of Inchcape plc (Inchcape),
an automotive distribution, retail and financing company, a position he has held
since May 2018. Mr Stein joined Inchcape as a non-executive director in October
2015.
Prior to holding this position, Mr Stein served as Chief Executive Officer of GKN plc
(GKN) from January 2012 to December 2017. He joined the automotive and aerospace components
supplier in 1994 and during his time with GKN held various senior positions in general management and
finance including six years as Group Chief Financial Officer. Earlier in his career, Mr Stein held senior
finance positions with Laird plc and Hestair plc. From 2003 until 2011, he served as an independent
non-executive director on the Board of Ferguson (formerly Wolseley) plc, the leading specialist
distributor of plumbing and heating products in North America and the UK. Mr Stein is a member of the
Institute of Chartered Accountants of Scotland.
Directorships of listed companies in the past five years: Current – Director of Inchcape plc (since 2015).
Former – Director of GKN plc (2001-2017).
Other: Resident of the United Kingdom.
Last elected: November 2020
Term expires: August 2023
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Harold Wiens BS
Age 74
Harold Wiens was appointed as an independent non-executive director of James
Hardie in May 2020. He is a member of the Remuneration Committee.
Experience: Mr Wiens worked at 3M Company (3M) for thirty-eight years. He served
as Executive Vice President, Industrial Business and Transportation Business from
1998 until his retirement from 3M in 2006. It is 3M’s largest and most diverse
business serving many different end markets ranging from electronic to automotive
and aerospace manufacturing. During this time, Mr Wiens restructured the business,
leading a global implementation of Six Sigma that drove significant international
growth.
Prior to holding this position, Mr Wiens served as Executive Vice President, Sumitomo 3M, 3M’s largest
subsidiary, headquartered in Tokyo, Japan, from 1995 to 1998 and served as Data Storage Business
Leader and Vice President from 1988 to 1995 and as Memory Technologies Group Manufacturing
Manager from 1983 to 1988. Mr Wiens began his career with 3M in 1968 and held many positions of
increasing responsibility over his first fifteen years with 3M.
Directorships of listed companies in the past five years: Current – Director of Bio-Techne Corporation
(since 2014).
Other: Resident of the United States.
Last elected: November 2020
Term expires: August 2023
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27
Remuneration Report
This Remuneration Report describes the executive remuneration philosophy, programs and objectives of
the Remuneration Committee and the Board of Directors (the “Board”), as well as the executive
remuneration plans and programs implemented by James Hardie.
We are not required to produce a remuneration report under applicable Irish, Australian or US rules or
regulations. However, taking into consideration our significant Australian and US shareholder bases and
our primary listing on the Australian Securities Exchange (“ASX”), we have voluntarily produced a
remuneration report consistent with those provided by similarly situated companies for non-binding
shareholder approval since 2005.
This Remuneration Report outlines the key remuneration plans and programs and share ownership
information for our Board of Directors and certain of our senior executive officers (Chief Executive Officer
(“CEO”), Chief Financial Officer (“CFO”) and the other three highest paid executive officers based on total
compensation that was earned or accrued for fiscal year 2021) (“Senior Executive Officers”) in fiscal year
2021, and also includes an outline of the key changes for fiscal year 2022. Further details of these
changes are set out in the 2021 Notice of Annual General Meeting (“AGM”).
For fiscal year 2021, our senior executive officers are:
• Dr Jack Truong, Chief Executive Officer;
•
Jason Miele, Chief Financial Officer;
• Sean Gadd, Executive Vice President, North America Commercial;
•
Joe Blasko, General Counsel and Chief Compliance Officer; and
• Ryan Kilcullen, Senior Vice President – North America Supply Chain Operations.
This Remuneration Report has been adopted by our Board on the recommendation of the Remuneration
Committee.
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28
EXECUTIVE SUMMARY
Fiscal Year 2021 Business Highlights1
Our operating results for fiscal year 2021 reflected strong and disciplined financial performance,
highlighted by adjusted net income of US$458 million and adjusted earnings before interest and taxes
(“EBIT”) of US$629 million, an increase of 30% and 29%, respectively, compared to fiscal year 2020. In
addition, we achieved net sales of US$2.9 billion, an increase of 12% compared to fiscal year 2020, and
US$1.03 adjusted diluted earnings per share.
The following graphs show our performance for key financial measures during fiscal year 2021, with a
comparison to prior corresponding periods:
____________
1
Please see the "Glossary of Abbreviations and Definitions" in Section 4 of this Annual Report for a reconciliation of non-GAAP financial
measures used in this Remuneration Report to the most directly comparable US GAAP financial measure.
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Fiscal Year 2021 Compensation Highlights
Our fiscal year 2021 compensation continued to reflect and promote our pay-for-performance philosophy
and our stated goal to position Senior Executive Officer fixed base salary and benefits at the median and
total target direct remuneration (comprising fixed and target variable remuneration) at the 75th percentile
of our Peer Group (defined herein), if stretch short- and long-term target performance goals are met.
The following is a summary of the key aspects and events that occurred relative to the Company’s
remuneration policies, programs and arrangements during the course of fiscal year 2021:
•
The core plan design for the FY2021 Company Performance Plan ("CP Plan") or Individual
Performance Plan ("IP Plan") did not change. The CP Plan continues to measure both Growth
and Returns when assessing Company performance and shareholder value creation. However, in
the unprecedented and unpredictable market conditions related to the COVID-19 pandemic, we
simplified the plan metrics, and strengthened the connection between consistent revenue growth
and strong returns. A complete description of the CP Plan for fiscal year 2021 is set out in the
section titled “Incentive Arrangements” later in this Remuneration Report.
• No changes were made to the design of the Long-Term Incentive ("LTI") Plan for fiscal year 2021.
The LTI plan remains similar to the fiscal year 2020 plan with updated financial targets. A
complete description of the LTI program, including the applicable performance hurdles, is set out
in the section titled “Incentive Arrangements” later in this Remuneration Report.
Fiscal Year 2021 Total Target Compensation
Remuneration packages for Senior Executive Officers reflect our remuneration philosophy and comprise
a mixture of fixed base salary, benefits and variable performance-based incentives. The Remuneration
Committee seeks to appropriately balance fixed and variable remuneration in order to align our total
compensation structure with our pay-for-performance philosophy. The following chart summarizes total
target compensation awarded to each Senior Executive Officer in fiscal year 2021:
Summary of Fiscal Year 2021 Senior Executive Officer Target Compensation
Senior Executive
Officer
FY2021 Annual
Base Salary (US$)
FY2021 STI Target
Value (US$)
FY2021 LTI Target
Value (US$)
J Truong
J Miele
S Gadd
J Blasko
R Kilcullen
900,000
416,000
577,830
459,900
380,544
1,125,000
3,475,000
249,600
346,698
275,940
228,326
450,000
800,000
500,000
400,000
FY2021 Total
Target
Compensation
(US$)
5,500,000
1,115,600
1,724,528
1,235,840
1,008,870
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Results of 2020 Remuneration Report Vote
In November 2020, our shareholders were asked to cast a non-binding advisory vote on our
remuneration report for the fiscal year ended 31 March 2020. Although we are not required under
applicable Irish, Australian or US laws or regulations to provide a shareholder vote on our executive
remuneration practices, the Board believes that it is important to engage shareholders on this important
issue and we have voluntarily submitted our remuneration report for non-binding shareholder approval on
an annual basis since 2005 and currently intend to continue to do so.
At our 2020 Annual General Meeting, our shareholders approved our remuneration report, with 97.5% of
the votes cast in support of our remuneration program. The Remuneration Committee considered the
results of this advisory vote, together with investor feedback and other factors and data associated with
strategic priorities discussed in this Remuneration Report, in determining our executive remuneration
policies, objectives and decisions and related shareholder engagement efforts for fiscal year 2021.
APPROACH TO SENIOR EXECUTIVE REMUNERATION
Remuneration Philosophy
As our main business and all of our Senior Executive Officers are located in the US, our remuneration
philosophy is to provide our Senior Executive Officers with an overall package that is competitive with
Peer Group companies exposed to the US housing and consumer durables market. Within this
philosophy, the executive remuneration framework emphasizes operational excellence and shareholder
value creation through incentives that link executive remuneration with the interests of shareholders. Our
remuneration plans and programs are structured to enable us to: (i) attract and retain talented executives;
(ii) reward outstanding individual and corporate performance; and (iii) align the interests of our executives
to the interests of our shareholders, with the ultimate goal of improving long-term value for our
shareholders. This pay-for-performance system continues to serve as the framework for executive
remuneration, aligning the remuneration received with the performance achieved.
Composition of Remuneration Packages
In line with our remuneration philosophy, our goal is to position Senior Executive Officer fixed base salary
and benefits at the median and total target direct remuneration (comprising fixed and target variable
remuneration) at the 75th percentile of our Peer Group, if stretch short- and long-term target performance
goals are met. Performance goals for target variable performance-based incentive remuneration are set
with the expectation that we will deliver results in the top quartile of our Peer Group. Performance below
this level will result in variable remuneration payments below target (and potentially zero for poor
performance). Performance above this level will result in variable remuneration payments above target.
`
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Relative Weightings of Fixed and Variable Remuneration
The charts below detail the relative weightings of fixed versus variable remuneration for the CEO and
other Senior Executive Officers for fiscal year 2021. Fixed remuneration includes base salary and
variable remuneration is comprised of target Short-Term Incentive ("STI") awards and the following three
LTI components: (i) Relative Total Shareholder Return ("TSR") Restricted Stock Units ("RSUs"); (ii)
Return on Capital Employed ("ROCE") RSUs; and (iii) Scorecard LTI at target, each of which are
discussed in more detail in this Remuneration Report.
Setting Remuneration Packages
Remuneration decisions are based on the executive remuneration philosophy and framework described
in this Remuneration Report. The Remuneration Committee reviews and the Board approves this
framework each year.
Remuneration packages for Senior Executive Officers are evaluated each year to make sure that they
continue to align with our compensation philosophy, are competitive with our Peer Group and
developments in the market, and continue to support our business structure and objectives. In making
decisions regarding individual Senior Executive Officers, the Remuneration Committee takes into account
both the results of an annual remuneration positioning review provided by the Remuneration Committee’s
independent advisers and the Senior Executive Officer’s responsibilities and performance.
All aspects of the remuneration package for our CEO and CFO are determined by the Remuneration
Committee and ratified by the Board. All aspects of the remuneration package for the remaining Senior
Executive Officers are determined by the Remuneration Committee on the recommendation of the CEO.
Remuneration Committee Governance
The remuneration program for our Senior Executive Officers is overseen by our Remuneration
Committee, the members of which are appointed by the Board. As prescribed by the Remuneration
Committee Charter, the duties of the Remuneration Committee include, among other things: (i)
administering and making recommendations on our
incentive compensation and equity-based
remuneration plans; (ii) reviewing the remuneration of directors; (iii) reviewing the remuneration
framework for the Company; and (iv) making recommendations to the Board on recruitment, retention
and termination policies and procedures for senior management. The current members of the
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Remuneration Committee are David Harrison (Chairman), Michael Hammes, Persio Lisboa, Anne Lloyd
and Harold Wiens, all of whom are independent non-executive directors. A more complete description of
these and other Remuneration Committee functions is contained in the Remuneration Committee’s
Charter, a copy of which is available in the Corporate Governance section of the Investor Relations page
on our website (www.ir.jameshardie.com.au).
Summary of Executive Compensation Practices
The following table summarizes certain of the key governance practices employed by the Remuneration
Committee relative to our executive compensation practices, including those practices which we believe
are important drivers of both short- and long-term corporate performance and those practices which we
believe are not aligned with the long-term interests of our shareholders:
Compensation Practices We Employ
ü
ü
ü
ü
ü
ü
ü
Retain independent compensation advisers reporting
directly to the Remuneration Committee
Pay for performance model, with approximately 84% of our
CEO’s total target compensation being performance-based
“at risk” compensation and an average of approximately
66% total target compensation being performance-based
“at risk” compensation for our other Senior Executive
Officers
Circuit breaker on annual STI awards to ensure that no
annual incentive awards are paid unless minimum NA
growth and corporate performance levels are achieved
Set share ownership requirements for all directors and
Senior Executive Officers
Broad clawback policy on performance-based
compensation
Set performance-based vesting conditions for all equity
grants to Senior Executive Officers
Provide the Remuneration Committee with ability to
exercise “negative” discretion when determining the
vesting and payout of our LTI programs
û
û
û
û
û
û
û
Prohibition on hedging of stock held by
executives and directors
Limited employment agreements and severance
arrangements
Limited change-in-control benefits
No dividends paid on unvested equity awards
Limited perquisites and other benefits
No annual time-based LTI equity grants to
Senior Executive Officers
No excessive retirement or deferred
compensation arrangements
Remuneration Advisers
As permitted by the Remuneration Committee Charter, the Remuneration Committee retained Aon Hewitt
(in the US) and Guerdon Associates (in Australia) as its independent advisers for matters regarding
remuneration for fiscal year 2021. The Remuneration Committee reviews the appointment of its advisers
each year. Both Aon Hewitt and Guerdon Associates provided the Remuneration Committee with written
certification during fiscal year 2021 to support their re-appointment. In those certifications, the advisers:
(i) confirmed that their pay recommendations were made without undue influence from any member of
our management; and (ii) provided detailed responses to the six independence factors a Remuneration
Committee should consider under relevant NYSE rules, and confirmed their independence based on
these factors.
The Remuneration Committee reviewed these certifications before re-appointing each adviser for fiscal
year 2022.
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Benchmarking Analysis
To assist the Remuneration Committee in making remuneration decisions, the Remuneration Committee
evaluates the remuneration of our Senior Executive Officers against a designated set of companies (the
“Peer Group”). The Peer Group, which is reviewed by the Remuneration Committee on an annual basis,
consists of companies that are similar to us in terms of certain factors, including size, industry, and
exposure to the US housing market. The Remuneration Committee believes that US market focused
companies are a more appropriate peer group than ASX-listed companies, as they are exposed to the
same macroeconomic factors in the US housing market as those we face. No changes were made to the
Peer Group for fiscal year 2021. Set forth below are the names of the 20 companies comprising the Peer
Group, which was used to benchmark the remuneration of our Senior Executive Officers in fiscal year
2021.
Acuity Brands, Inc
Lennox International, Inc
Quanex Building Products Corp
American Woodmark Corp
Louisiana-Pacific Corp
Simpson Manufacturing Co., Inc
Apogee Enterprises, Inc
Martin Marietta Materials, Inc
Trex Co., Inc
Armstrong World Industries, Inc
Masco Corporation
Valmont Industries, Inc
Cornerstone Building Brands, Inc.
Mohawk Industries, Inc
Vulcan Materials Co
Eagle Materials, Inc
Mueller Water Products, Inc
Watsco, Inc
Fortune Brands Home & Security
Owens Corning
Performance Linkage with Remuneration Policy
During its annual review, the Remuneration Committee assessed our performance in fiscal year 2021
against:
•
•
•
•
our historical performance;
our Peer Group;
the goals in our STI and LTI variable remuneration plans; and
the key objectives and measures the Board expects to see achieved, which are set forth in what is
referred to as the “Scorecard” and further discussed later in this Remuneration Report.
Based on that review, the Board and the Remuneration Committee concluded that management’s
performance in fiscal year 2021, during a pandemic, had on the whole extraordinary results of net sales
growth and EBIT growth: (i) significantly above target on growth measures and significantly above target
on return measures, resulting in STI variable remuneration outcomes above target for fiscal year 2021;
and (ii) when taken together with performance in fiscal years 2019 and 2020, at approximately the 90th
percentile of our Peer Group TSR performance (as of April 2021), significantly above expectations on
ROCE performance, and met or exceeded expectations on long-term strategic measures included in the
Scorecard, resulting in LTI variable remuneration being on average above target for fiscal years
2019-2021.
More details about this assessment are set out below in this Remuneration Report.
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DESCRIPTION OF 2021 REMUNERATION ELEMENTS
Base Salaries and Other Fixed Remuneration Benefits
Base salary provides a guaranteed level of income that recognizes the market value of the position and
internal equities between roles, as well as the individual’s capability, experience and performance.
Annual base salary increases are not automatic. Base salaries for Senior Executive Officers are
positioned around the market median for positions of similar responsibility and are reviewed by the
Remuneration Committee each year.
In addition, Senior Executive Officers may receive certain other limited fixed benefits, such as medical
and life insurance benefits, car allowances, participation in executive wellness programs and an annual
financial planning allowance. For fiscal year 2021, the base salary and value of other fixed benefits for
each of our Senior Executive Officers is provided in the Base Pay and Other Benefits columns of the
remuneration table in the section titled “Remuneration Paid to Senior Executive Officers”.
Retirement Plan
In every country in which we operate, we offer employees access to pension, superannuation or
individual retirement savings plans consistent with the laws of the respective country.
In the US, we sponsor a defined contribution plan, the James Hardie Retirement and Profit Sharing Plan
(the “401(k) Plan”). The 401(k) Plan is a tax-qualified retirement and savings plan covering all US
employees, including our Senior Executive Officers, subject to certain eligibility requirements as defined
by the Internal Revenue Service (the "IRS"). In addition, we match employee contributions dollar for
dollar up to a maximum of the first 6% of an employee’s eligible compensation.
Non-Qualified Deferred Compensation Plan
As of 1 January 2021, we sponsor a non-qualified deferred compensation plan, the James Hardie
Executive Deferred Compensation Plan (the "Deferred Compensation Plan"). Participation in the Deferred
Compensation Plan is generally limited to individuals whose annual salary exceeds the Internal Revenue
Service ("IRS") limits applicable to our qualified plans or are participants in our Long-Term Incentive Plan
(the "LTIP"). The Deferred Compensation Plan allows participants to elect to defer receipt of some or all
of their salary or earned cash incentive to a later date. The Deferred Compensation Plan also restores
matching employee contributions up to a maximum of the first 6% of an employee's eligible compensation
that would not be eligible in the 401(k) Plan due to IRS contribution limits so long as the participant defers
eligible compensation to the Deferred Compensation Plan.
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Incentive Arrangements
In addition to the base salary and other fixed benefits provided to our Senior Executive Officers, the
Remuneration Committee reviews and approves a combination of both short-term and long-term variable
incentive programs on an annual basis. For fiscal year 2021, our variable incentive plans for Senior
Executive Officers were as follows:
Duration
Plan Name
Amount
Form Incentive Paid
STI (1 year)
LTI (3 years)
IP Plan
CP Plan
LTIP
20% of STI Target
80% of STI Target
Cash
Cash
25% of LTI Target
ROCE RSUs
25% of LTI Target
TSR RSUs
50% of LTI Target
Cash (Scorecard LTI)
STI Plans
On an annual basis, the Remuneration Committee approves an STI target for all Senior Executive
Officers, expressed as a percentage of base salary, which is allocated between individual goals and
Company goals under the IP and CP Plans, respectively. For fiscal year 2021, the STI target percentage
for Dr Truong was 125% of base salary and 60% for Messrs Miele, Gadd, Blasko and Kilcullen, with 80%
allocated to the CP Plan and 20% allocated to the IP Plan for all Senior Executive Officers.
CP Plan
For fiscal year 2021, the core plan design was the same as prior years. We continued to measure both
Growth and Returns when assessing Company performance and shareholder value creation. However,
in the unprecedented and unpredictable market conditions related to the COVID-19 pandemic, we
simplified the plan metrics, and strengthened the connection between consistent revenue growth and
strong returns.
For fiscal year 2021, the metrics for all regions (North America, Asia Pacific and Europe) are a net
revenue measure (Growth) and a profit measure (Returns). The metrics are each set with a threshold,
target and maximum payout scale. Similar in concept to the matrices used previously and in order to
incentivize exceptional company performance in an uncertain and highly volatile market, both net
revenue AND profitability must be achieved together to derive a payout within the payout scale,
reinforcing shareholder value creation. The maximum payout is 3.0x of target.
All Senior Executive Officers continued to be tied to the NA multiple either in part or in whole. Executives
with NA responsibility are linked only to the NA multiple (Mr Gadd and Mr Kilcullen). For executives with
global responsibility (Dr Truong and Messrs Miele and Blasko), their STI will be based on the metrics for
North America and the net income of the Company.
IP Plan
Under the IP Plan, the Remuneration Committee approves a series of one-year individual performance
goals which, along with our leadership behaviors, are used to assess the performance of our Senior
Executive Officers. The IP Plan links financial rewards to the Senior Executive Officer’s achievement of
specific objectives aligned with the strategic plan and contributions to shareholder value, but are not
captured directly by financial measures in the CP Plan. Each Senior Executive Officer can receive
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36
between 0% and 150% of their STI target allocated to the IP Plan with Board discretion to award up to
300% of target for members of the Executive Leadership Team (ELT).
The Remuneration Committee has reserved for itself discretion to change the STI paid. An example of
when the Remuneration Committee would consider exercising this discretion includes external factors
outside of management’s control, such as, a general shift in the housing market that is considered to
have a sufficiently material impact on results. The Remuneration Committee will disclose the reasons for
any such exercise of its discretion.
The Remuneration Committee believes that the payout scales are appropriate because they provide
management with an incentive to achieve overall corporate goals, balance growth with returns, recognize
the need to flexibly respond to strategic opportunities, and incorporate Remuneration Committee
discretion to ensure appropriate outcomes.
STI Plan Performance for Fiscal Year 2021
Our CP Plan results and the subsequent STI payouts for fiscal year 2021 were significantly above target
as a result of:
•
•
•
The NA business performing significantly above target for both Net Revenue and EBIT
The Asia Pacific business performing above target driven by both strong Net Revenue and EBIT
growth in Australia, at target for objectives achieved in New Zealand and slightly below target for
performance in the Philippines.
The EU business performing significantly above target on Net Revenue and above target on EBIT
and EBIT Margin.
In regards to the IP Plan, the Senior Executive Officers’ performance and the subsequent STI payouts for
fiscal year 2021 were at or above target based on each Senior Executive Officer’s achievement of fiscal
year 2021 one-year individual performance and core organizational values and leadership behavior
goals.
For fiscal year 2021, the amount to be paid to each of our Senior Executive Officers under the STI Plans
is provided in the STI Award column of the remuneration table, in the section titled “Remuneration Paid to
Senior Executive Officers.”
LTI Plans
Each year, the Remuneration Committee approves an LTI target for all Senior Executive Officers. The
approved target is allocated between three separate components to ensure that each Senior Executive
Officer’s performance is assessed across factors considered important for sustainable long-term value
creation:
• ROCE RSUs are used as they are an indicator of high capital efficiency required over time;
• Relative TSR RSUs are used as they are an indicator of our performance relative to our US Peer
Group; and
• Scorecard LTI is an indicator of each Senior Executive Officer’s contribution to achieving our long-
term strategic goals.
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Awards issued under the LTI are issued pursuant to the terms of the LTIP. During fiscal year 2021, our
Senior Executive Officers were granted the following awards under the LTIP:
J Truong
J Miele
S Gadd
J Blasko
R Kilcullen
ROCE RSUs
TSR RSUs
Scorecard LTI
Units
82,131
10,636
18,908
11,817
9,454
127,083
246,394
16,457
29,256
18,285
14,628
31,907
56,724
35,452
28,362
RSUs issued under our LTI programs will be settled upon vesting in CHESS Units of Foreign Securities
("CUFS") on a 1-to-1 basis. Unless the context indicates otherwise, when we refer to our common stock,
we are referring to the shares of our common stock that are represented by CUFS.
ROCE RSUs (25% of target LTI for Fiscal Years 2021-2023)
The Remuneration Committee introduced ROCE RSUs in fiscal year 2013 because the US housing
market had stabilized to an extent which permitted the setting of multi-year financial metrics. The
Remuneration Committee believes ROCE RSUs remain an appropriate component of the LTI Plan
because they:
•
•
•
tie the reward’s value to share price which provides alignment with shareholder interests;
promote that we earn appropriate returns on capital invested;
reward performance that is under management’s direct influence and control; and focus
management on capital efficiency as the necessary precondition for the creation of additional
shareholder value;
Consistent with recent prior years, the maximum payout for the ROCE RSUs is 2.0x target LTI. ROCE is
determined by dividing Adjusted EBIT by Adjusted Capital Employed2. The ROCE hurdles will be indexed
for changes to US and Asia Pacific addressable housing starts. The resulting Adjusted Capital Employed
for each quarter of any fiscal year will be averaged to better reflect Capital Employed through a year
rather than at a single point in time.
ROCE hurdles for the ROCE RSUs are based on historical results and take into account the US housing
market and better optimization of our manufacturing plants. The three-year average ROCE for fiscal
years 2018, 2019 and 2020 was 33.8%.
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The hurdles for ROCE RSUs granted in fiscal year 2021 (for performance in fiscal years 2021 to 2023)
remained the same as those granted in fiscal year 2019 and 2020 as follows:
Fiscal Years 2021-2023
ROCE
Amount of Target
to Vest
< 24.0%
≥ 24.0%, but < 26.0%
≥ 26.0%, but < 27.5%
≥ 27.5%, but < 28.5%
> 28.5%
0.0x
0.5x
1.0x
1.5x
2.0x
At the conclusion of this three-year performance period, the Remuneration Committee will review
management’s performance based on the quality of the returns balanced against management’s delivery
of market share growth and performance against the Scorecard. Following this review, the Remuneration
Committee can exercise negative discretion to reduce the number of shares received on vesting of the
ROCE RSUs. This discretion can only be applied to reduce the number of shares which will vest.
____________
2
For purposes of ROCE RSU vesting, “Adjusted EBIT” and “Adjusted Capital Employed” will be calculated as follows:
“Adjusted EBIT” will be calculated as (i) EBIT as reported in our financial results; adjusted by (ii) excluding the earnings impact of legacy issues
(such as asbestos adjustments); and (iii) adding back asset impairment charges in the relevant period, unless otherwise determined by the
Remuneration Committee.
“Adjusted Capital Employed” will be calculated as Total Assets minus Current Liabilities as reported in our financial results; adjusted by: (i)
excluding balance sheet items related to legacy issues (such as asbestos adjustments), dividends payable and deferred taxes; (ii) adding back
asset impairment charges in the relevant period, unless otherwise determined by the Remuneration Committee; (iii) adding back leasehold
assets for manufacturing facilities and other material leased assets; and (iv) deducting all greenfield construction-in-progress, and any brownfield
construction-in-progress projects involving capacity expansion that are individually greater than US$20 million, until such assets reach
commercial production and are transferred to the fixed asset register
ROCE RSUs Vesting in Fiscal Year 2021 (for Fiscal Years 2019-2021)
As a component of the fiscal year 2019 LTI Plan, we granted ROCE RSUs in August 2018. The ROCE
RSUs comprised 25% of each Senior Executive Officer’s LTI target and were granted assuming 2.0x
target. Vesting of the ROCE RSUs is dependent on the average ROCE performance for fiscal years
2019-2021 and is subject to the Remuneration Committee’s negative discretion based on its judgment
regarding the quality of returns balanced against management’s delivery of market share growth. The
ROCE performance hurdles for this grant were approved as follows:
ROCE Performance Level
Amount of Target to
Vest
< 24.0%
≥ 24.0%, but < 26.0%
≥ 26.0%, but < 27.5%
≥ 27.5%, but < 28.5%
≥ 28.5%
0.0x
0.5x
1.0x
1.5x
2.0x
Based on the average ROCE result for fiscal years 2019-2021 of 33.0%, 2.0x target of the ROCE RSUs
granted will vest on August 17, 2021.
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Relative TSR RSUs (25% of target LTI for Fiscal Years 2021-2023)
The Remuneration Committee believes that Relative TSR RSUs continue to be an appropriate
component of the LTI Plan because they provide alignment with shareholders. Even if macro-economic
conditions create substantial shareholder value, Senior Executive Officers will only receive payouts if the
TSR of our shares exceeds a specified percentage of our Peer Group over a performance period.
Relative TSR RSUs have been a component of our LTI since fiscal year 2009. Consistent with recent
prior years, the maximum payout for Relative TSR RSUs granted in fiscal year 2021 is 2.0x target LTI.
Relative TSR measures changes in our share price and the share prices of our Peer Group; and
assumes all dividends and capital returns are reinvested when paid. For fiscal year 2021, our relative
TSR performance will be measured against the Peer Group over a three-year performance period from
grant date, with no re-testing. To eliminate the impact of short-term share price changes, the starting
point and test date are measured using a 20 trading-day average closing price. Relative TSR RSUs will
vest based on the following straight-line schedule:
Performance against Peer
Group
Amount of Target to
Vest
< 40th Percentile
40th Percentile
0.0x
0.5x
> 40th, but < 60th Percentile
Sliding Scale
60th Percentile
1.0x
> 60th, but < 80th Percentile
Sliding Scale
≥ 80th Percentile
2.0x
The Remuneration Committee will continue to monitor the design of the Relative TSR RSU component of
the LTI Plan for Senior Executive Officers with the aim of balancing investor preferences with the ability to
motivate and retain Senior Executive Officers.
TSR RSUs Vested in Fiscal Year 2021
TSR RSUs Vested for Fiscal Years 2018-2020
As part of the fiscal year 2018 LTI Plan, in August 2017 we granted three-year Relative TSR RSUs to
senior executives. Vesting of these Relative TSR RSUs was dependent on our TSR performance relative
to the Peer Group in place at that time, based on the following schedule:
Performance against Peer
Group
Amount of Target to
Vest
< 40th Percentile
40th Percentile
0.0x
0.5x
> 40th, but < 60th Percentile
Sliding Scale
60th Percentile
1.0x
> 60th, but < 80th Percentile
Sliding Scale
≥ 80th Percentile
2.0x
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In August 2020, the first and only test of Relative TSR performance was completed, resulting in our TSR
performance at the 80.9 percentile of the Peer Group in place at that time. As a result, 2.0x of target
outstanding Relative TSR RSUs vested.
TSR RSUs Vested for Fiscal Years 2017-2019
In addition, the second test of the FY17 TSR RSUs was completed, resulting in our TSR performance at
the 61.9 percentile of the Peer Group and as a result an additional .2875x of target vested. On 16 March
2021, the final test was completed resulting in TSR performance at the 76.1 percentile of the Peer Group
and as a result .355x of target vested and the balance were cancelled.
Scorecard LTI (50% of target LTI for Fiscal Years 2021-2023)
Scorecard LTI has been a component of our LTI Plan since fiscal year 2010. Each year, the
Remuneration Committee approves a number of key management objectives and the results it expects to
see achieved in relation to these objectives. These objectives are incorporated into that year’s grant of
Scorecard LTI. At the end of the three-year performance period, the Remuneration Committee assesses
our Senior Executive Officers’ collective performance on each key objective and each individual Senior
Executive Officer’s contribution to those achievements and the Board reviews this assessment. Senior
Executive Officers may receive different ratings depending on the contribution they have made during the
three-year performance period. Although most of the objectives in the Scorecard have quantitative
targets, we consider some of the targets to be commercial-in-confidence. Consistent since fiscal year
2010, the maximum payout for Scorecard LTI is 3.0x target LTI.
The Remuneration Committee believes that the Scorecard LTI continues to be an appropriate component
of its LTI Plan because it:
•
•
•
allows the Remuneration Committee to set targets for and reward executives on a balance of
longer-term financial, strategic, business, customer and organizational development goals which it
believes are important contributors to long-term creation of shareholder value;
ties the reward’s value to our share price over the medium-term; and
allows flexibility to apply rewards across different countries, while providing Senior Executive
Officers with liquidity to pay tax or other material commitments at a time that coincides with
vesting of shares (via the other components of the LTI Plan), as payment is in cash.
No specific weighting is applied to any single objective and the final Scorecard assessment reflects an
element of judgment by the Board. The Board may only exercise negative discretion (i.e., to reduce the
amount of Scorecard LTI that will ultimately vest). It cannot enhance the maximum reward that can be
received.
The amount received by Senior Executive Officers is based on both our share price performance over the
three-year performance period and the Senior Executive Officer’s Scorecard rating. At the start of the
three-year performance period, we calculate the number of units each Senior Executive Officer could
have acquired if they received a maximum payout on the Scorecard LTI at that time (based on a 20
trading-day average closing price). Depending on the Senior Executive Officer’s performance, between
0.0x and 3.0x of the Senior Executive Officer’s Scorecard LTI awards will vest at the end of the three-year
performance period. Each Senior Executive Officer will receive a cash payment based on our share price
at the end of the period (based on a 20 trading-day average closing price) multiplied by the number of
units they could have acquired at the start of the performance period, adjusted downward in accordance
with their Scorecard rating.
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Further details related to the Scorecard for fiscal year 2021, including the method of measurement,
historical performance against the proposed measures and the Board of Director’s expectations, were
previously set out in our Remuneration Report for fiscal year 2021. An assessment of our Scorecard
performance for fiscal years 2019-2021 is set out below. We will provide an explanation of the final
assessment of performance under the Scorecard for fiscal years 2021-2023 at the conclusion of fiscal
year 2023.
Scorecard LTI Vesting in Fiscal Year 2021 (for Fiscal Years 2019-2021)
After fiscal year 2021, the Remuneration Committee reviewed our performance over fiscal years
2019-2021 against the Scorecard objectives set forth in fiscal year 2019, and the contribution of individual
Senior Executive Officers towards the achievement of such objectives. As a result of this evaluation, the
Remuneration Committee determined that Senior Executive Officers would receive a weighted average
Scorecard rating between 0.75x and 3.0x of target.
Performance Measure/Rationale
Grow market share in all our
businesses and geographies
Performance Metric/Results
Goal: NA Primary Demand Growth ("PDG")
above market, EBIT Margin, EBIT Growth.
Board Assessment for the
Three-year Period
Performance exceeded
expectations
A key strategy for the Company is to
maximize its market share growth/
retention of the exterior cladding market
for new housing starts and for repair &
remodel markets.
Result: Recognized significant growth in NA
exteriors over the three-year period with
FY2021 PDG of +9%.. In addition, EBIT
Margin for FY21 was 28.8% with EBIT
Growth of 25%.
People
Continue to invest in the development
and promotion of our people and reduce
turnover.
Performance exceeded
expectations
Goal: Continued focus on turnover, driving
the North American turnover to below 15%
by the end of the three year period. Execute
a successful succession plan. Successful
recruitment, hiring and onboarding of
business leaders and development of bench
strength.
Result: Succession plan successfully
executed resulting in appointment of Dr Jack
Truong as CEO on 31 January 2019.
Significant improvements in the hiring of key
talent at the executive level. Average total
annual turnover decreased from 19.7% to
8.6% during the 3-year period and exceeded
the turnover target. Demonstrated
improvement in the critical areas of
leadership behaviors and cultural change.
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James Hardie 2021 Annual Report on Form 20-F
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Performance Measure/Rationale
Safety — Zero Harm
The safety of our employees is an
essential objective of the Company.
Hardie Advantage Manufacturing
Adequate capacity, and effective
machine utilization, product quality, and
service are critical to delivering future
growth and optimizing returns through a
more efficient manufacturing network.
International: APAC and Europe
Pursue organic growth in all international
markets.
Board Assessment for the
Three-year Period
Performance exceeded
expectations
Performance exceeded
expectations
Performance met expectations
Performance Metric/Results
Goal: The safety of all employees is an
essential objective of the company. Zero
Harm (zero fatalities) and implement a
housekeeping, facility maintenance and
safety management system in our plants
globally.
Result: Implemented Zero Harm strategy
during the three year period. Implemented
the Hardie Maintenance and Operating
System (HMOS) in all plants in Australia, NA
during FY2020 and Europe in FY2021 with
great success resulting in more engaged
employees, decreased employee turnover
and safer more efficient manufacturing
processes.
Goal: First pass quality and service as well
as sheet machine Pcl/Pdl metrics for sheet
machine. Reduce unit costs by 3% indexed
for mix and PPV.
Result: Implemented HMOS in all plants in
NA, Australia and Europe. Realized savings
through Lean in North America of $51.5M
since implementing in Q4 FY19. Unit cost
was reduced by approximately 7% from
FY19.
Goal: James Hardie Australia ("JHA") growth
above market of 3.5% while maintaining
category share. James Hardie New Zealand
("JHNZ") annual growth above market of
3.5% while maintaining category share.
Growth of Scyon product line and
introduction of new products in APAC over
the three-year period. James Hardie Europe
("JHEU") was to successfully integrate, grow
the Fermacell business and develop a
business plan to manufacture fiber cement
products that meet European market needs.
Result: JHA average annual growth has not
met expectation. Category share has been
retained. Scyon revenue growth on average
increased 7.7% share, which exceeded
three-year goals.
JHNZ did not perform well in FY2020 and
rebounded in FY2021 with a PDG of 6.3%
compared to -10.5% in FY2020.
JHEU: Successful acquisition of Fermacell
in FY2018 with the transition completed in
FY2019. Fiber Cement sales increased
since FY2018 on average 16% annually.
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43
CHANGES TO REMUNERATION FOR FISCAL YEAR 2021
Remuneration for Fiscal Year 2022
During May 2021, the Board, with the assistance of the Remuneration Committee and its independent
remuneration advisers, undertook its annual review of our existing remuneration policies, programs and
arrangements and determined to implement certain changes for fiscal year 2022.
CEO Compensation
For fiscal year 2022, the CEO’s base salary will be increased 11% to US$1,000,000, which will bring base
salary closer to the market median of the peer group. In addition, Dr Truong’s LTI target will be increased
to US$5,750,000 for FY2022.
Other Senior Executive Officer Compensation
Base pay, target STI and LTI increases in fiscal year 2022 for the CEO and other Senior Executive
Officers are as follows:
Name
J Truong
J Miele
S Gadd
J Blasko
Base Salary
Target STI
LTI Target
Fiscal Year
2021 (US$)
Fiscal Year
2022 (US$)
Fiscal Year
2021 (US$)
Fiscal Year
2022 (US$)
Fiscal Year
2021 (US$)
Fiscal Year
2022 (US$)
900,000
1,000,000
125%
125%
3,475,000
5,750,000
416,000
500,000
577,830
577,830
459,900
471,398
60%
60%
60%
60%
60%
60%
60%
60%
450,000
600,000
800,000
500,000
800,000
500,000
400,000
300,000
R Kilcullen
380,544
380,544
Mr Miele is receiving a merit increase of 5% in addition to a market increase in his base salary to bring
base salary closer to the median of the peer group of other CFOs. In addition, Mr Miele is receiving an
increase in his LTI target since he is currently below the 25th percentile of the peer group. Mr Kilcullen's
LTI target is being reduced to be closer to the market median as well; otherwise, there are no other target
LTI changes for the Senior Executive Officers for fiscal year 2022. Base salary increases, if any, are
made in line with our annual compensation review guidelines and were adjusted as required to maintain
positioning relative to market merit increase levels.
STI Plans
For fiscal year 2022, the plan design will continue to be the same as fiscal year 2021. We will continue to
measure both Growth and Returns when assessing Company performance and shareholder value
creation. We will continue to use the same the plan metrics, and continue to strengthen the connection
between consistent revenue growth and strong returns. As in FY2021, the metrics for all regions (North
America, Asia Pacific and Europe) will be a net revenue measure (Growth) and a profit measure
(Returns). The metrics are each set with a threshold, target and maximum payout scale. The metrics
and scales will incentivize exceptional company performance in a unpredictable market, both net revenue
AND profitability must be achieved together to derive a payout within the payout scale, reinforcing
shareholder value creation. The maximum payout will be 3.0x of target.
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For fiscal year 2022, Messrs Gadd and Kilcullen will continue to be tied to the NA multiple. For
executives with global responsibility (Dr Truong and Messrs Miele and Blasko), their STI will be based on
the metrics for North America and the net income of the Company.
There will be no material change to the operation of the IP or CP Plans for fiscal year 2022.
LTI Plan
The Remuneration Committee believes the three components of the LTI Plan continue to (i) align
management objectives with shareholder interests (Relative TSR RSU component), (ii) promote the
appropriate internal management behaviors related to operating efficiency and the profitability of the
Company's assets (ROCE RSU component), and (iii) emphasize strategic long-term priorities (Scorecard
LTI component). As such, the fiscal year 2022 LTI Plan is consistent with the plan for fiscal year 2021
with updates to ROCE target measures and the Scorecard objectives.
The 2021 Notice of AGM will contain further details on the Relative TSR RSU and ROCE RSU grants for
fiscal year 2022.
For fiscal year 2022, the Remuneration Committee has set the following eight Scorecard goals for each
region (for the performance period in fiscal years 2022 to 2024) to ensure alignment with our strategic
priorities:
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James Hardie 2021 Annual Report on Form 20-F
45
Organic revenue growth
High Value Product Mix
Lean - Cumulative over
3 Years (FY22 – 24)
EBIT Margin
Zero Harm
Innovation
People & Culture
Environment, Social &
Governance ("ESG")
APAC
11%+
Europe
6%+
North America
11%+
FY22 38%; FY23 42%; FY24
44%
FY22 39%; FY23 41%; FY24
43%
FY22 66%; FY23 67%; FY24
68%
USD $78M vs FY19 Base
USD $63M vs FY19 Base
USD $200M vs FY19 Base
25% - 30%
11% - 16%
25% - 30%
• Empower all employees to
be Zero Harm Leaders
• Execute on the critical ZH
priorities thru ZH culture
shift
• DART rate: FY22 = 0.07;
FY23=0.06; FY24= 0.05
• Empower all employees to
• Empower all employees to
be Zero Harm leaders
• Execute on the critical ZH
priorities thru ZH culture
shift
• DART Rate: FY22=0.55;
FY23=0.44; FY24=0.35
be Zero Harm leaders
• Execute on the critical ZH
priorities thru ZH culture
shift
• DART rate: FY22=0.51;
FY23=0.41; FY24=0.33
• Commercial-in-confidence
metrics for products and
process efficiencies
• Commercial-in-confidence
metrics for products and
process efficiencies
• Commercial-in-confidence
metrics for products and
process efficiencies
• Turnover: <11%
• Enhance leadership
capabilities in targeted
areas
• Turnover: <7.5%
• Enhance leadership
capabilities in targeted
areas
• Turnover: <11%
• Enhance leadership
capabilities in targeted
areas
• Talent and Performance
• Talent and Performance
• Talent and Performance
Management
• Execute region
Management
• Execute region
deliverables for I&D
strategy to attract, develop
and retain diverse talent
• Diversity Target: Maintain
deliverables for I&D
strategy to attract, develop
and retain diverse talent
• Diversity Target: Enhance
or enhance gender
diversity Sr. Leadership,
grow to 20% or more all
mgmt. positions and 20%
or more in total workforce.
gender diversity Sr.
Leadership, grow to 20%
or more all mgmt. positions
and 17% or more in total
workforce.
Management
• Execute region deliverables
for I&D strategy to attract,
develop and retain diverse
talent
• Diversity Target: 20% or
more female representation
in Mgmt & Sr. Leadership
roles and 14% or more in
total workforce; 45% or
more total employee
population with diverse
characteristics.
FY22:
•
•
FY23:
•
•
•
FY24:
•
•
•
FY22 ESG Report shows improvement across areas management flagged in FY21 report
Receive zero negative shareholder votes across any resolution whereby the shareholder
notes the vote was due to lack of clarity on ESG initiatives
Strengthen CDP disclosures with TCFD recommendations
Refresh materiality assessment with expanded stakeholder groups
FY23 ESG Report shows improvement across areas reported on
Improved CDP reporting with progress towards goals
Expanded Task Force for Climate Change Disclosure (TFCD) reporting
FY24 reporting shows improvement & PDCA as required based on stakeholder feedback
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James Hardie 2021 Annual Report on Form 20-F
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OTHER EXECUTIVE COMPENSATION PRACTICES
Clawback Provisions
The Remuneration Committee has established an executive performance-based compensation clawback
policy in connection with performance-based compensation paid or awarded to certain executives. The
clawback policy provides that the Board may, in all appropriate circumstances, recover from any current
or former executive regardless of fault, that portion of any performance-based compensation erroneously
awarded: (i) based on financial information required to be reported under applicable US or Australian
securities laws or applicable exchange listing standards that would not have been paid in the three
completed fiscal years preceding the year(s) in which an accounting restatement is required to correct a
material error; or (ii) during the previous three completed fiscal years as a result of any errors or
omissions in objective, calculable performance measures contained in formal papers presented to and
relied upon by the Board for purposes of determining compensation to be paid or awarded, where the
absence of such errors or omissions would have resulted in there being a material negative impact on the
amount of performance-based compensation paid or awarded.
The clawback policy applies to any person designated as a participant by the Board in the annual LTI
Plan and applies to any compensation that is granted, earned or vested based wholly or in part upon the
attainment of any financial or other objective, calculable performance measure under any incentive,
bonus, retirement or equity compensation plan maintained by the Company, including, without limitation,
the STI Plan and LTI Plan. Salaries, discretionary bonuses, time-based equity awards and bonuses or
equity awards based on subjective, non-financial measures, including strategic or personal performance
metrics, are excluded.
The excess compensation requiring recovery shall be the amount of performance-based compensation
that an executive received, based on the erroneous data, less the amount that would have been paid to
the executive based on the restated or corrected data. All recoverable amounts shall be calculated on a
pre-tax basis. For equity awards still held at the time of the recovery, the recoverable amount shall be the
amount vested in excess of the number that should have vested under the restated or corrected financial
reporting measure. For vested equity awards which have already been sold, the recoverable amount
shall be the sale proceeds the executive received with respect to the excess number of shares.
In addition, all fiscal year 2021 LTI grants made to Dr Truong and Messrs Miele, Gadd, Blasko and
Kilcullen are subject to a specific clawback provision for violation of a limited non-compete provision that
specifically prohibits executives from working for designated competitors or for any company that may
enter the fiber cement market within two years of departure. For fiscal year 2022, all LTI grants made to
Senior Executive Officers will be subject to the clawback provision.
Stock Ownership Guidelines
The Remuneration Committee believes that Senior Executive Officers should hold a meaningful level of
our stock to further align their interests with those of our shareholders. We have adopted stock
ownership guidelines for the CEO and other Senior Executive Officers, respectively, which require them
to accumulate holdings of three times and one times their base salary, respectively, in our stock over a
period of five years from the effective date of the guidelines (1 April 2009) or the date the Senior
Executive Officer first becomes subject to the applicable guideline.
Until the stock ownership guidelines have been met, Senior Executive Officers are required to retain at
least 75% of shares obtained under our LTI Plans (net of taxes and other costs). Once Senior Executive
Officers have met or exceeded their stock ownership guidelines, they are required to retain at least 25%
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James Hardie 2021 Annual Report on Form 20-F
47
of shares issued under our LTI Plans through the vesting of RSUs (net of taxes and other costs) for a
period of two years (by way of a holding lock), after which time those shares can be sold (provided the
Senior Executive Officer remains at or above the stock ownership guideline).
As of 31 March 2021, all Senior Executive Officers have either achieved the minimum share ownership
threshold or are within the initial five year accumulation period.
Equity Award Practices
The FY2022 annual equity awards under the LTI Plan were approved by the Remuneration Committee in
May with awards generally issued in August of each year. We do not time the granting of equity awards
to the disclosure of material information.
For details of the application of our insider-trading policy for equity award grant participants, including our
prohibition on employee hedging transactions, see the “Insider Trading” section of this Annual Report.
Loans
We did not grant loans to Senior Executive Officers during fiscal year 2021. There are no loans
outstanding to Senior Executive Officers.
Employment and Severance Arrangements
During fiscal year 2021, we maintained employment or severance agreements with Dr Truong and each
of Messrs Gadd and Miele. Other than as provided under the terms of their respective employment
agreements, no other termination payments are payable, except as required under the terms of the
applicable STI or LTI plans.
Employment Agreement with Dr Jack Truong
Below is a summary of the key terms of Dr Truong’s current employment agreement:
The Employment Agreement is effective 31 January 2019 providing for service as CEO.
•
• Dr Truong is an employee-at-will and either he or the Company may terminate his employment at
any time or for any reason.
• Base salary at an initial annual rate of US$800,000, subject to annual review and approval by the
Remuneration Committee.
• Participation in the Company’s annual STI and LTI Plans, with a minimum STI target of 100% of
his annual base salary, as established by the Company’s Board.
•
• Participation in the Company’s benefit, health and welfare plans and certain fringe benefits made
generally available to Senior Executive Officers in accordance with his agreement and Company
policies.
In the event that Dr Truong’s employment is terminated by the Company for any reason other than
for “Cause”, or if Dr Truong voluntarily terminates his employment for “Good Reason”, in addition
to those benefits that would be considered standard for any employee at termination (i.e., unpaid
base salary, accrued vacation, unreimbursed business expenses and the payment of any earned
but unpaid annual incentive award) Dr Truong will be entitled to receive the following benefits:
◦ An aggregate amount equal to the sum of: (i) two times Dr Truong’s base salary plus (ii)
two times Dr Truong’s target annual incentive, payable in substantially equal periodic
installments over the two year period following the date of termination;
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◦ An amount, if any, with respect to the annual incentive award opportunity for the fiscal year
in which termination of employment occurs, as determined under the terms and conditions
of annual incentive program(s) then in-effect;
◦ All outstanding equity awards will be subject to the terms and conditions of the applicable
equity incentive plan and any corresponding award agreement(s); provided, however, that
(i) if the date of termination occurs prior to 21 August 2022, any service-based vesting
criteria on the long-term incentive awards granted to Dr Truong on 21 August 2017 that
were designated as retention awards will be deemed satisfied in full (but any performance
criteria then still applicable to those awards will remain in effect);
◦ Monthly payments for a period of up to 24 months following the date of termination equal
to the premium Dr Truong would be required to pay for continuing coverage under the
Company’s health benefit plans; and
◦ Reasonable professional outplacement services for a period of up to 24 months following
the date of termination.
Offer of Employment with Jason Miele
Below is a summary of the key terms provided in Mr Miele's Offer of Employment, which was entered into
in conjunction with his promotion to Senior Vice President, Chief Financial Officer effective 25 February
2020:
• Mr Miele is an employee-at-will and either he or the Company may terminate his employment at
any time or any reason.
• Base salary at an initial annual rate of US$400,000, subject to annual review and approval by the
Remuneration Committee.
• Participation in the Company’s annual STI and LTI Plans, with a STI target of 60% of his annual
base salary.
•
• Participation in the Company’s benefit, health and welfare plans and certain fringe benefits made
generally available to Senior Executive Officers in accordance with his agreement and Company
policies.
In the event that Mr Miele is terminated by the Company without "Cause" or terminated by Mr
Miele for "Good Reason", in addition to those benefits that would be considered standard for any
employee at termination (i.e., unpaid base salary, accrued vacation, unreimbursed business
expenses and the payment of any earned but unpaid annual incentive award) Mr Miele will be
entitled to receive the following benefits:
◦ Salary continuation for the one year period following the date of termination, provided the
aggregate amount of such continuation payments shall be equal to the sum of (i) one
times the base salary plus (ii) one times the annual incentive award opportunity, as then in-
effect;
◦ All outstanding equity awards under the Company's equity incentive plans will be subject
to the terms and conditions of the applicable plan and any corresponding award
agreement(s);
◦ Monthly payments for a period of 12 months following the date of termination equal to the
premium Mr Miele would be required to pay for continuing coverage under the Company’s
health benefit plans; and
◦ Reasonable professional outplacement services for a period of up to 12 months following
the date of termination.
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Severance Agreement with Sean Gadd
During fiscal year 2019, we entered into a severance agreement with Mr Gadd in order to provide him
with certain severance benefits under various termination scenarios. In the event of termination by the
Company without cause or by the executive for good reason or death and disability, these benefits would
be in addition to what would be considered standard for any employee at termination (i.e., lump sum
unpaid base salary, accrued vacation, unreimbursed business expenses and the payment of any earned
but unpaid annual incentive award) and would include: (i) salary continuation for one and one-half years
provided the aggregate amount of such payments is equal to the sum of (a) one and one-half times the
executive’s base salary, plus (b) one times the executive’s annual incentive opportunity, as then in effect;
(ii) monthly payments for a period of 18 months following termination equal to the premium the executive
would be required to pay for COBRA continuation coverage under the Company’s health benefit plans
based on the level of coverage the executive has immediately prior to termination. Executive is not
required to purchase COBRA continuation coverage or use these payments towards any payment of
applicable premiums for COBRA continuation coverage; and (iii) reasonable outplacement services
through a provider of the Company’s choice. Services terminate when the executive finds other
employment and may not continue for more than 12 months following termination.
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James Hardie 2021 Annual Report on Form 20-F
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REMUNERATION PAID TO SENIOR EXECUTIVE OFFICERS
Total Remuneration for Senior Executive Officers
Details of the remuneration for Senior Executive Officers in fiscal years 2021, 2020 and 2019 are set out
below:
(US dollars)
Primary
Post-
employment
Equity Awards
Other
Name
Base Pay1
STI
Award2
Other
Benefits3
401(k)
Ongoing
Vesting 4
Mark-to
Market5
J Truong7
TOTAL
Relocation
Allowances,
and Other
Nonrecurring6
Fiscal year 2021
873,077
3,037,500
Fiscal Year 2020
800,000
2,160,000
Fiscal Year 2019
679,396
949,362
73,377
75,038
46,902
17,100
5,740,243
9,973,788
— 19,715,085
17,366
3,329,423
(316,615)
3,051
6,068,263
17,226
1,412,235
(337,627)
30,528
2,798,022
J Miele
Fiscal year 2021
411,692
648,960
111,469
17,100
533,914
754,806
283,744
2,761,685
Fiscal Year 2020
292,840
269,233
39,384
18,076
255,805
(3,427)
382,089
1,254,000
S Gadd
Fiscal year 2021
573,299
901,415
Fiscal Year 2020
558,038
747,252
Fiscal Year 2019
525,289
373,200
J Blasko
Fiscal year 2021
457,472
717,444
Fiscal Year 2020
447,347
489,117
Fiscal Year 2019
434,317
321,484
R Kilcullen
Fiscal year 2021
379,030
593,649
Fiscal Year 2020
371,038
476,898
TOTAL
38,808
35,249
47,548
71,350
54,088
59,065
33,788
26,046
17,100
1,438,684
3,082,202
—
6,051,508
18,230
1,347,237
(29,332)
—
2,676,674
17,210
1,389,526
(467,763)
100,000
1,985,010
17,100
609,857
1,129,200
—
3,002,423
17,012
568,651
11,022
—
1,587,237
16,677
688,153
(240,355)
—
1,279,341
12,453
635,010
1,132,357
—
2,786,287
18,022
552,189
(11,661)
—
1,432,532
Fiscal Year 2021
2,694,570
5,898,968
328,792
80,853
8,957,708
16,072,353
283,744 34,316,988
Fiscal Year 2020
2,469,263
4,142,500
229,805
88,706
6,053,305
(350,013)
385,140 13,018,706
____________
1
2
3
4
5
Base pay for fiscal years 2021, 2020 and 2019 includes salary paid to Senior Executive Officers for the 26 bi-weekly paychecks received
during the fiscal years.
For further details on STI awards paid for fiscal year 2021, see “Incentive Arrangements” above in this Remuneration section. Amounts
reflect actual STI awards to be paid in June 2021 and paid in June 2020 and 2019, for fiscal years 2021, 2020 and 2019, respectively
Includes the aggregate amount of all other benefits received in the year indicated. Examples of benefits that may be received include
medical and life insurance benefits, car allowances, membership in executive wellness programs, and financial planning and tax services.
Includes equity award expense for grants of Scorecard LTI awards, relative TSR RSUs and ROCE RSUs. Relative TSR RSUs are valued
using a Monte Carlo simulation method. ROCE RSUs and Scorecard LTI awards are valued based on the Company’s share price at each
balance sheet date adjusted for the fair value of estimated dividends as well as the Remuneration Committee’s current expectation of the
amount of the RSUs or awards which will vest. The fair value of equity awards granted are included in compensation over the periods in
which the equity awards vest. For ROCE RSUs and Scorecard LTI awards, this amount excludes adjustments to the equity award
expense in previous fiscal years resulting from changes in the Company’s share price, which is disclosed separately in the Equity Awards
“Mark-to-Market” column.
The amount included in this column is the equity award expense in relation to ROCE RSUs and Scorecard LTI awards resulting from
changes in fair market value of the US dollar share price during the fiscal years 2021, 2020 and 2019 as well as adjustments to
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James Hardie 2021 Annual Report on Form 20-F
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performance ratings based on review by Executive Management and the Board of Directors. During fiscal year 2021, there was a
164.7% increase in our share price from US$11.44 to US$30.28. During fiscal year 2020, there was a 11.1% decrease in our share price
from US$12.87 to US$11.44.
6
7
Includes the aggregate of non-recurring payments or other benefits received in the year indicated. Examples include one-time signing
bonus or other limited payments connected to initial retention, one-time discretionary bonus payments, relocation allowances and costs
and severance payments.
J Truong's base pay includes US$205,734 in fiscal year 2021, which is allocated for tax purposes to his services on the Company’s
Board.
Additional Summary Remuneration Table
This table shows the compensation provided to the executive that more closely reflects the amount of pay
earned during each fiscal year reported. The footnotes below the table define each compensation
component. The main difference between the two tables is the equity incentives. This table shows the
value of the LTI Scorecard payout (not shown in previous table) in the Non-Equity Incentive Plan
Compensation column, which also includes the annual STI payout. The Stock Awards column shows the
value of the FY21-23 equity awards that were granted to each executive.
Name
Base Pay1
Bonus2
J Truong7
Stock
Awards3
Options
Awards4
Non-Equity
Incentive Plan
Compensation5
Fiscal year 2021
873,077
—
1,737,499
Fiscal Year 2020
800,000
—
1,049,998
Fiscal Year 2019
679,396
—
500,000
J Miele
Fiscal year 2021
411,692
Fiscal Year 2020
292,840
S Gadd
Fiscal year 2021
573,299
Fiscal Year 2020
558,038
—
—
—
—
225,005
124,997
399,998
399,999
Fiscal Year 2019
525,289
100,000
399,999
J Blasko
Fiscal year 2021
457,472
Fiscal Year 2020
447,347
Fiscal Year 2019
434,317
R Kilcullen
Fiscal year 2021
379,030
Fiscal Year 2020
371,038
TOTAL
—
—
—
—
—
249,993
250,000
249,999
199,999
200,003
Fiscal Year 2021
2,694,570
—
2,812,494
Fiscal Year 2020
2,469,263
—
2,024,997
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
5,983,696
2,160,000
949,362
795,901
312,260
2,095,596
933,695
631,300
1,056,239
618,197
480,317
985,476
548,614
10,916,908
4,572,766
Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
All Other
Compensation6
Total
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
90,477
8,684,749
95,455
4,105,453
94,656
2,223,414
412,313
1,844,911
439,550
1,169,647
55,907
3,124,800
53,479
1,945,211
64,757
1,721,345
88,450
1,852,154
71,101
1,386,645
75,741
1,240,374
46,241
1,610,746
44,068
1,163,723
693,388 17,117,360
703,653
9,770,679
Table of Contents
James Hardie 2021 Annual Report on Form 20-F
52
____________
1
2
3
4
5
6
7
Base pay for fiscal years 2021, 2020 and 2019 includes salary paid to Senior Executive Officers for the 26 bi-weekly paychecks
received during the fiscal years.
Includes non-performance bonuses such as a special award for retention or a sign-on bonus for a new hire. Examples include one-time
signing bonus or other limited payments connected to initial retention, one-time discretionary bonus payments.
Shows the value on the date of grant for the TSR RSUs and ROCE RSUs granted to the executive during each fiscal year. Relative
TSR RSUs are valued using a Monte Carlo simulation method. ROCE RSUs are valued based on the Company’s share price on the
grant date. The TSR RSU valuation for fiscal year 2021 is US$13.67 and ROCE RSU 20-day average share price of US$21.16.
We do not grant stock options to executives.
For further details on STI awards paid for fiscal year 2021, see “Incentive Arrangements” above in this Remuneration section. Amounts
reflect actual STI awards to be paid in June 2021 and paid in June 2020 and 2019, for fiscal years 2021, 2020 and 2019, respectively.
In addition, the LTI Scorecard cash payouts are included that were paid in August 2020, 2019 and 2018.
Includes the aggregate amount of all other benefits received in the year indicated. Examples of benefits that may be received include
medical and life insurance benefits, 401(K) company match, car allowances, membership in executive wellness programs, and
financial planning and tax services.
J Truong's base pay includes US$205,734 in fiscal year 2021, which a portion is allocated for tax purposes to his services on the
Company’s Board.
Variable Remuneration Payable in Future Years
Details of the accounting cost of the variable remuneration for fiscal year 2021 that may be paid to Senior
Executive Officers in future years are set out below. The minimum amount payable is nil in all cases.
The maximum amount payable will depend on the share price at time of vesting, and is therefore not
possible to determine. The table below is based on the fair value of the RSUs and Scorecard LTI
according to US GAAP and our estimate of the rating to be applied to Scorecard LTI.
Scorecard LTI1
(US dollars)
J Truong
J Miele
S Gadd
J Blasko
FY2021
FY2022
FY2023
FY2024
TOTAL
1,105,220
2,047,742
2,047,742
779,825
5,980,529
96,951
179,631
179,631
68,407
524,620
113,266
209,859
209,859
79,919
612,903
50,012
92,662
92,662
35,288
270,624
R Kilcullen
55,399
102,642
102,642
39,088
299,771
1,420,848
2,632,536
2,632,536
1,002,527
7,688,447
ROCE RSUs2
(US dollars)
J Truong
J Miele
S Gadd
J Blasko
FY2021
FY2022
FY2023
FY2024
TOTAL
213,677
534,192
534,192
203,432
1,485,493
35,547
65,861
65,861
25,081
192,350
63,196
117,090
117,090
44,590
341,966
39,495
73,176
73,176
27,867
213,714
R Kilcullen
31,598
58,545
58,545
22,295
170,983
383,513
848,864
848,864
323,265
2,404,506
Table of Contents
James Hardie 2021 Annual Report on Form 20-F
53
Relative TSR RSUs3
(US dollars)
J Truong
J Miele
S Gadd
J Blasko
FY2021
FY2022
FY2023
FY2024
TOTAL
340,226
850,566
850,566
323,914
2,365,272
44,317
82,111
82,111
31,269
239,808
78,784
145,970
145,970
55,589
426,313
49,240
91,231
91,231
34,743
266,445
R Kilcullen
39,392
72,985
72,985
27,794
213,156
551,959
1,242,863
1,242,863
473,309
3,510,994
____________
1
2
3
Represents annual SG&A expense for Scorecard LTI granted in fiscal year 2021. The fair value of each award is adjusted for changes
in JHI plc’s common stock price at each balance sheet date until the final scorecard rating is applied in August 2023 at which time the
final values are based on the Company’s share price and the senior executive’s scorecard rating at time of vesting.
Represents annual SG&A expense for the ROCE RSUs granted in fiscal year 2021. The fair value of each RSU is adjusted for
changes in JHI plc’s common stock price at each balance sheet date until August 2023 when ROCE results are known and the
Remuneration Committee makes a determination on the amount of negative discretion to be applied and some, all or none of the
awards become vested.
Represents annual SG&A expense for the Relative TSR RSUs granted in fiscal 2021 with fair market value estimated using a binomial
lattice model that incorporates a Monte Carlo simulation.
OUTSTANDING EQUITY AWARDS HELD BY SENIOR EXECUTIVE OFFICERS
The following tables set forth information regarding outstanding equity awards held by our Senior
Executive Officers as of 30 April 2021.
Options
As of 30 April 2021, no Senior Executive Officers held stock options.
Table of Contents
James Hardie 2021 Annual Report on Form 20-F
54
Restricted Stock Units
Name
J Truong
J Miele
S Gadd
J Blasko
Grant
Date
21-Aug-173
21-Aug-174
21-Aug-175
21-Aug-176
17-Aug-183
17-Aug-184
6-Sep-183
6-Sep-184
9-Aug-193
9-Aug-194
17-Aug-193
17-Aug-194
17-Aug-203
17-Aug-204
16-Sep-168
21-Aug-173
21-Aug-174
17-Aug-183
17-Aug-184
17-Aug-193
17-Aug-194
25-Feb-205
25-Feb-205
17-Aug-203
17-Aug-204
16-Sep-168
21-Aug-173
21-Aug-174
21-Aug-175
21-Aug-176
17-Aug-183
17-Aug-184
17-Aug-193
17-Aug-194
17-Aug-203
17-Aug-204
16-Sep-168
21-Aug-173
21-Aug-174
17-Aug-183
17-Aug-184
17-Aug-193
17-Aug-194
17-Aug-203
17-Aug-204
Release
Date
21-Aug-20
21-Aug-20
21-Aug-20
21-Aug-20
17-Aug-21
17-Aug-21
17-Aug-21
17-Aug-21
17-Aug-21
17-Aug-21
17-Aug-22
17-Aug-22
17-Aug-23
17-Aug-23
16-Sep-19
21-Aug-20
21-Aug-20
17-Aug-21
17-Aug-21
17-Aug-22
17-Aug-22
17-Aug-22
17-Aug-22
17-Aug-23
17-Aug-23
16-Sep-19
21-Aug-20
21-Aug-20
21-Aug-20
21-Aug-20
17-Aug-21
17-Aug-21
17-Aug-22
17-Aug-22
17-Aug-23
17-Aug-23
16-Sep-19
21-Aug-20
21-Aug-20
17-Aug-21
17-Aug-21
17-Aug-22
17-Aug-22
17-Aug-23
17-Aug-23
Holding and
Unvested at
2020
Granted
Total
Value at
Grant¹
(US$)
Vested
Lapsed
Holding and
Unvested at
30 April 2021
Fair
Value
per RSU2
(US$)
61,726
61,726 $
471,019
(61,726)
—
34,110
34,110 $
484,086
(21,319)
(12,791)
— $
— $
61,726
61,726 $
471,019
(20,576)
—
41,150 $
7.63
14.19
7.63
34,110
34,110 $
484,086
(7,107)
(4,263)
22,740 $
14.19
56,677
56,677 $
494,864
30,553
30,553 $
444,375
49,381
49,381 $
334,255
25,385
25,385 $
343,817
18,518
18,518 $
138,885
9,519
9,519 $
131,933
139,432
139,432 $
1,489,134
75,545
75,545 $
1,050,831
—
—
127,083 $
2,365,015
82,131 $
2,104,196
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
4,878
8,181 $
87,547
(4,080)
(798)
9,259
9,259 $
70,654
(9,259)
—
5,117
5,117 $
72,620
(3,198)
(1,919)
11,335
11,335 $
98,969
6,111
6,111 $
88,881
16,599
16,599 $
177,277
8,993
8,993 $
125,093
6,676
6,676 $
90,660
4,767
4,767 $
85,186
—
—
16,457 $
239,778
10,636 $
236,226
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
21,138
35,451 $
379,372
(17,681)
(3,457)
49,380
49,380 $
376,809
(49,380)
—
27,288
27,288 $
387,269
(17,055)
(10,233)
56,677 $
8.73
30,553 $
14.54
49,381 $
6.77
25,385 $
13.54
18,518 $
9,519 $
139,432 $
75,545 $
127,083 $
82,131 $
— $
— $
— $
11,335 $
6,111 $
16,599 $
8,993 $
6,676 $
4,767 $
16,457 $
10,636 $
— $
— $
— $
7.50
13.86
10.68
13.91
18.61
25.62
10.70
7.63
14.19
8.73
14.54
10.68
13.91
13.58
17.87
14.57
22.21
10.70
7.63
14.19
7.63
49,380
49,380 $
376,809
(16,460)
—
32,920 $
27,288
27,288 $
387,269
(5,685)
(3,411)
18,192 $
14.19
45,342
45,342 $
395,895
24,442
24,442 $
355,494
53,117
53,117 $
567,290
28,779
28,779 $
400,316
—
—
29,256 $
426,260
18,908 $
419,947
—
—
—
—
—
—
—
—
—
—
—
—
14,634
24,543 $
262,642
(12,241)
(2,393)
30,863
30,863 $
235,509
(30,863)
—
17,055
17,055 $
242,043
(10,659)
(6,396)
28,339
28,339 $
247,436
15,276
15,276 $
222,113
33,198
33,198 $
354,555
17,987
17,987 $
250,199
—
—
18,285 $
266,412
11,817 $
262,456
—
—
—
—
—
—
—
—
—
—
—
—
45,342 $
24,442 $
53,117 $
28,779 $
29,256 $
18,908 $
— $
— $
— $
28,339 $
15,276 $
33,198 $
17,987 $
18,285 $
11,817 $
8.73
14.54
10.68
13.91
14.57
22.21
10.70
7.63
14.19
8.73
14.54
10.68
13.91
14.57
22.21
Table of Contents
James Hardie 2021 Annual Report on Form 20-F
55
Restricted Stock Units (continued)
Name
R Kilcullen
Grant
Date
16-Sep-168
21-Aug-173
21-Aug-174
17-Aug-183
17-Aug-184
1-Mar-197
17-Aug-193
17-Aug-194
17-Aug-203
17-Aug-204
Release
Date
16-Sep-19
21-Aug-20
21-Aug-20
17-Aug-21
17-Aug-21
9-Dec-19
17-Aug-22
17-Aug-22
17-Aug-23
17-Aug-23
Holding and
Unvested at
1 April 2019
Granted
Total
Value at
Grant¹
(US$)
Vested
Lapsed
Holding and
Unvested at
30 April 2020
Fair
Value
per RSU2
(US$)
8,130
13,635 $
145,912
(6,800)
(1,330)
24,690
24,690 $
188,404
(24,690)
—
13,644
13,644 $
193,634
(8,528)
(5,116)
22,671
22,671 $
197,947
12,221
12,221 $
177,747
—
—
5,439
8,159 $
99,213
(2,720)
26,559
26,559 $
283,650
14,390
14,390 $
200,165
—
—
14,628 $
213,130
9,454 $
209,973
—
—
—
—
—
—
—
—
—
—
—
— $
— $
— $
22,671 $
12,221 $
2,719 $
26,559 $
14,390 $
14,628 $
9,454 $
10.70
7.63
14.19
8.73
14.54
12.16
10.68
13.91
14.57
22.21
____________
1
2
3
4
5
6
7
8
Total Value at Grant = Fair Value per RSU multiplied by number of RSUs granted. The number of RSUs granted are at maximum
achievement.
The Fair Value of TSR RSUs is estimated on the date of grant using the binomial lattice model that incorporates a Monte Carlo
simulation. The Fair Value for all other RSUs is the share price on the date of grant adjusted for the fair value of estimated dividends as
the RSU holder is not entitled to dividends over the vesting period.
Relative TSR RSUs granted under the LTIP. These RSUs are subject to performance hurdles.
ROCE RSUs granted under the LTIP. These RSUs are subject to performance hurdles as well as the potential application of negative
discretion.
Special one-time retention grant of Relative TSR RSUs granted under the LTIP. These RSUs are subject to performance hurdles and
service-based vesting criteria.
Special one-time retention grant of ROCE RSUs granted under the LTIP. These RSUs are subject to performance hurdles and
service-based vesting criteria as well as the potential application of negative discretion.
Special one-time retention grant of time-based RSUs granted under the 2001 Equity Incentive Plan ("2001 Plan"). These RSUs vest
one-third in December 2019, 2020 and 2021
RSUs vested on 16 September 2020 and on 16 March 2021 in accordance with grant terms.
Table of Contents
James Hardie 2021 Annual Report on Form 20-F
56
Scorecard LTI
Name
J Truong
Grant
Date
Release Date
Holding at
1 April
2020
Granted
Vested1
Lapsed
Holding at 30
April 20212
21-Aug-17
21-Aug-173
21-Aug-20
21-Aug-20
102,331
102,331
(102,331)
102,331
102,331
(34,111)
17-Aug-18
17-Aug-21
91,659
91,659
6-Sep-18
17-Aug-21
76,155
76,155
31-Jan-19
17-Aug-21
28,558
28,558
17-Aug-19
17-Aug-22
226,636
226,636
17-Aug-20
17-Aug-23
—
246,394
—
—
—
—
—
—
—
—
—
—
—
—
J Miele
21-Aug-17
21-Aug-20
15,350
15,350
(6,805)
(8,545)
17-Aug-18
17-Aug-21
18,332
18,332
17-Aug-19
25-Feb-204
17-Aug-22
17-Aug-22
26,980
26,980
14,301
14,301
17-Aug-20
17-Aug-23
—
31,907
—
—
—
—
—
—
—
—
S Gadd
21-Aug-17
21-Aug-173
21-Aug-20
21-Aug-20
81,865
81,865
(41,478)
(40,387)
81,865
81,865
(13,826)
(13,463)
17-Aug-18
17-Aug-21
73,327
73,327
17-Aug-19
17-Aug-22
86,337
86,337
17-Aug-20
17-Aug-23
—
56,724
—
—
—
—
—
—
J Blasko
21-Aug-17
21-Aug-20
51,165
51,165
(15,690)
(35,475)
17-Aug-18
17-Aug-21
45,829
45,829
17-Aug-19
17-Aug-22
53,961
53,961
17-Aug-20
17-Aug-23
—
35,452
—
—
—
—
—
—
R Kilcullen
21-Aug-17
21-Aug-20
40,932
40,932
(18,146)
(22,786)
17-Aug-18
17-Aug-21
36,663
36,663
17-Aug-19
17-Aug-22
43,169
43,169
17-Aug-20
17-Aug-23
—
28,362
—
—
—
—
—
—
—
68,220
91,659
76,155
28,558
226,636
246,394
—
18,332
26,980
14,301
31,907
—
54,576
73,327
86,337
56,724
—
45,829
53,961
35,452
—
36,663
43,169
28,362
____________
1 Represents the number of Scorecard LTI awards vesting after the Remuneration Committee’s application of the Scorecard in respect of
fiscal years 2017-2079. A detailed assessment of the reasons for the Scorecard ratings was set out in the fiscal year 2019 Remuneration
Report.
2 Scorecard LTI awards in respect of fiscal years 2019-2021 will vest on 17 August 2021. A detailed assessment of the Remuneration
Committee’s assessment of management’s performance is set out on pages 18 to 20 of this Remuneration Report.
3 Special one-time retention grant of Scorecard LTI awards granted under the LTIP, which are also subject to service-based vesting criteria.
4 Granted upon promotion to SVP, CFO; performance period ends 17 August 2022 with vesting one-third on 17 August 2022, 2023 and
2024.
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James Hardie 2021 Annual Report on Form 20-F
57
REMUNERATION FOR NON-EXECUTIVE DIRECTORS
Fees paid to non-executive directors are determined by the Board, with the advice of the Remuneration
Committee’s independent external remuneration advisers, within the maximum total amount of base and
committee fees pool approved by shareholders from time-to-time. Shareholders at the 2019 AGM
approved the current maximum aggregate base and committee fee pool of US$3.8 million per annum.
Remuneration Structure
Non-executive directors are paid a base fee for service on the Board. Additional fees are paid to the
person occupying the positions of Chairman and Board Committee Chairmen, as well as for attendance
at ad-hoc sub-committee meetings.
There was no increase to the non-executive director fees in fiscal year 2021.
Position
Chairman
Board member
Audit Committee Chair
Remuneration Committee Chair
Nominating & Governance Committee Chair
Ad-hoc Board sub-committee attendance1
____________
1
Fee is payable in respect of each ad-hoc Board sub-committee attended.
Fiscal Year
2021 (US$)
420,794
205,734
20,000
20,000
20,000
3,000
During fiscal year 2016, the Remuneration Committee reviewed and approved changes to its
remuneration policy for non-executive directors, in order to ensure that the Company continues to attract
highly qualified persons to serve on the Board irrespective of their tax residence. In accordance with the
policy, the Company will ensure that each non-executive director does not have an increased income tax
liability as a direct result of their appointment to the Board. Accordingly, non-executive directors who are
resident outside of Ireland may receive supplemental compensation depending on their country of
residence, if Irish income taxes levied on their director compensation exceed net income taxes owed on
such compensation in their country of tax residence, assuming it had been derived solely in their country
of tax residence.
On occasion, the Remuneration Committee may approve special exertion fees in the event of an
extraordinary workload imposed on a director in special circumstances.
As the focus of the Board is on maintaining the Company’s long-term direction and well-being, there is no
direct link between non-executive directors’ remuneration and the Company’s short-term results.
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James Hardie 2021 Annual Report on Form 20-F
58
Board Accumulation Guidelines
Non-executive directors are encouraged to accumulate a minimum of 1.5 times (and two times for the
Chairman) the non-executive director base fee in shares of the Company’s common stock (either
personally, in the name of their spouse, or through a personal superannuation or pension plan). The
Remuneration Committee reviews the guidelines and non-executive directors’ shareholdings on a
periodic basis.
Director Retirement Benefits
We do not provide any benefits for our non-executive directors upon termination of their service on the
Board.
Table of Contents
James Hardie 2021 Annual Report on Form 20-F
59
Total Remuneration for Non-Executive Directors for the Years Ended 31 March 2021 and 2020
The table below sets out the remuneration for those non-executive directors who served on the Board
during the fiscal years ended 31 March 2021 and 2020:
(US dollars)
Name
M Hammes
Fiscal Year 2021
Fiscal Year 2020
B Anderson
Fiscal Year 2021
Fiscal Year 2020
D Harrison
Fiscal Year 2021
Fiscal Year 2020
A Littley
Fiscal Year 2021
Fiscal Year 2020
R van der Meer
Fiscal Year 2021
Fiscal Year 2020
R Chenu4
Fiscal Year 2021
Fiscal Year 2020
A Gisle Joosen
Fiscal Year 2021
Fiscal Year 2020
P Lisboa
Fiscal Year 2021
Fiscal Year 2020
A Lloyd
Fiscal Year 2021
Fiscal Year 2020
R Rodriguez
Fiscal Year 2021
Fiscal Year 2020
M Nozari
Fiscal Year 2021
Fiscal Year 2020
N Stein
Fiscal Year 2021
Fiscal Year 2020
H Wiens
Fiscal Year 2021
Fiscal Year 2020
S Rowland
Fiscal Year 2021
Fiscal Year 2020
D Seavers
Fiscal Year 2021
Fiscal Year 2020
Primary
Directors’ Fees1
Other Payments2
Other Benefits3
TOTAL
432,794
429,794
129,950
225,734
231,734
228,734
—
76,796
—
73,796
122,993
208,734
217,734
208,734
217,093
225,734
221,777
205,734
217,734
211,734
205,734
80,417
190,072
—
181,430
—
31,565
—
31,565
—
703,651
634,231
—
—
112,498
168,533
—
—
—
—
—
—
—
—
—
—
—
511,305
—
—
12,937
—
—
—
—
—
—
—
—
—
3,873
30,762
—
30,516
1,195
27,002
—
487
—
781
—
1,811
—
16,621
—
27,441
—
34,337
—
20,680
—
22,248
—
—
—
—
—
—
—
—
1,140,318
1,094,787
129,950
256,250
345,427
424,269
—
77,283
—
74,577
122,993
210,545
217,734
225,355
217,093
253,175
221,777
751,376
217,734
232,414
218,671
102,665
190,072
—
180,430
—
31,565
—
31,565
—
Total Compensation for Non-Executive Directors
Fiscal Year 2021
Fiscal Year 2020
2,432,175
2,175,941
829,086
1,314,069
5,068
212,686
3,266,329
3,702,696
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James Hardie 2021 Annual Report on Form 20-F
60
____________
1
2
3
4
Amount includes base, Chairman and Committee Chairman fees, as well as fees for attendance at ad hoc sub-committee meetings.
Amount for M Hammes for fiscal year 2021 relates to a supplemental compensation payment of (i) US$497,791 in relation to income for the
year ended 31 December 2019; and (ii) US$205,860 in relation to income for the year ended 31 December 2020 in circumstances where
Irish income taxes levied on director compensation exceeded net income taxes owed on such compensation in their country of tax
residence and paid in accordance with the remuneration policy for non-executive directors.
Amount for D Harrison for fiscal year 2021 relates to a supplemental compensation payment of US$112,498 in relation to income for the
year ending 31 December 2019 in circumstances where Irish income taxes levied on director compensation exceeded net income taxes
owed on such compensation in their country of tax residence and paid in accordance with the remuneration policy for non-executive
directors.
Amount for M Nozari for fiscal year 2021 relates to a supplemental compensation payment of US$12,937 in relation to income for the year
ending 31 December 2019 in circumstances where Irish income taxes levied on director compensation exceeded net income taxes owed on
such compensation in their country of tax residence and paid in accordance with the remuneration policy for non-executive directors.
Amount includes the cost of non-executive directors’ fiscal compliance in Ireland, other costs connected with Board-related events paid for
by the Company and tax services related to tax equalization benefits.
In addition to the compensation set forth above, Mr Chenu continues to receive certain tax services from the Company, and remains eligible
for certain tax equalization benefits relative to the vesting of previously granted equity awards, stemming from his prior service as an
executive officer of the Company.
Director Remuneration for the years ended 31 March 2021 and 2020
For Irish reporting purposes, the breakdown of director’s remuneration between managerial services
(which only relate to Dr Truong) and director services is:
(In US dollars)
Managerial Services1
Director Services2
Years Ended 31 March
2021
2020
$
$
19,509,351
$
3,472,063
22,981,414
$
5,862,529
3,908,420
9,770,949
____________
1
2
Includes cash payments, non-cash benefits (examples include medical and life insurance benefits, car allowances, membership in executive
wellness programs, financial planning and tax services), 401(k) benefits, and amounts expensed for outstanding equity awards for CEO J
Truong.
Includes compensation for all non-executive directors, which includes base, Chairman, supplemental compensation fees (as described in
footnote 2 of the table above which sets out the remuneration for non-executive directors), Committee Chairman fee and cost of non-
employee directors’ fiscal compliance in Ireland. It includes costs connected with Board-related events paid for by the Company and it
includes a proportion of the former CEO's remuneration paid as fees for his service on the JHI plc Board in fiscal years 2021 and 2020.
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James Hardie 2021 Annual Report on Form 20-F
61
SHARE OWNERSHIP AND STOCK BASED COMPENSATION ARRANGEMENTS
As of 30 April 2021 and 30 April 2020, the number of CUFS and RSUs beneficially owned by Senior
Executive Officers is set forth below:
Name
CUFS at
30 April
2021
CUFS at
30 April
2020
RSUs at
30 April
2021
RSUs at
30 April
2020
J Truong
J Miele
S Gadd
J Blasko
R Kilcullen
61,669
29,997
89,216
98,578
21,875
—
18,592
67,928
64,861
—
678,114
81,574
250,956
124,902
102,642
596,682
73,735
326,154
157,352
127,744
As of 30 April 2021 and 30 April 2020, the number of CUFS and RSUs beneficially owned by non-
executive directors is set forth below:
Name
CUFS at
30 April
2021
CUFS at
30 April
2020
M Hammes 1
A Gisle Joosen
D Harrison 2
P Lisboa 3
A Lloyd 4
M Nozari 5
R Rodriguez
S Rowland 6
D Seavers 7
N Stein 8
H Wiens 9
____________
44,109
3,920
19,259
3,089
18,000
10,000
270
2,000
81
3,653
6,633
44,109
3,920
19,259
2,389
18,000
1,000
—
—
—
—
—
1
2
3
4
5
6
7
8
9
35,109 CUFS held in the name of Mr and Mrs Hammes and 9,000 CUFS held as ADSs in the name of Mr and Mrs Hammes.
2,384 CUFS held in the name of Mr Harrison, 1,000 CUFS held as ADSs in the name of Mr Harrison and 15,875 CUFS held as ADSs in the
name of Mr and Mrs Harrison.
3,089 CUFS held as ADSs in the name of Mr Lisboa.
18,000 CUFS held as ADSs in the name of Ms Lloyd.
10,000 CUFS held as ADSs in the name of Mr Nozari.
2,000 CUFS held as ADSs in the name of Ms Rowland.
81 CUFS held as ADSs in the name of Mr Seavers.
3,400 CUFS held in the name of Mr Stein and 253 CUFS held as ADSs in the name of Mr Stein.
6,633 CUFS held as ADSs in the name of Mr Wiens.
Based on 444,288,874 shares of common stock outstanding at 30 April 2021 (all of which are subject to
CUFS), no director or Senior Executive Officer beneficially owned 1% or more of the outstanding shares
of the Company at 30 April 2021 and none of the shares held by directors or Senior Executive Officers
have any special voting rights. As of 30 April 2021, there were no options outstanding under any of the
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62
Company’s stock-based compensation arrangements. Individual’s holding RSUs have no voting or
investment power over these units.
Stock-Based Compensation Arrangements
At 31 March 2021, we had the following equity award plans:
•
•
the LTIP; and
the 2001 Plan.
LTIP
The Company uses the LTIP as the plan for LTI grants to Senior Executive Officers and selected
members of executive management. Participants in the LTIP receive grants of RSUs and Scorecard LTI,
each of which is subject to performance goals. Participants and award levels are approved by the
Remuneration Committee based on local market standards, and the individual’s responsibility,
performance and potential to enhance shareholder value. The LTIP was first approved at our 2006 AGM,
and our shareholders have subsequently approved amendments to the LTIP in 2008, 2009, 2010, 2012,
2015 and 2018.
The LTIP provides for plan participants’ early exercise of certain benefits or early payout under the plan in
the event of a “change in control,” takeover by certain organizations or liquidation. For RSUs, a “change
of control” is deemed to occur if (1) a takeover bid is made to acquire all of the shares of the Company
and it is recommended by the Board or becomes unconditional, (2) a transaction is announced which
would result in one person owning all the issued shares in the Company, (3) a person owns or controls
sufficient shares to enable them to influence the composition of the Board, or (4) a similar transaction
occurs which the Board determines to be a control event. On a change of control, the Board can
determine that all or some RSUs have vested on any conditions it determines, and any remaining RSUs
lapse.
RSUs - From fiscal year 2009, the Company commenced using RSUs granted under the LTIP. RSUs
issued under the LTIP are unfunded and unsecured contractual entitlements and generally provide for
settlement in shares of our common stock, subject to performance vesting hurdles prior to vesting.
Additionally, the Company has on occasion issued a small number of cash settled awards.
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63
As of 31 March 2021, there were 2,013,210 RSUs granted and outstanding under the LTIP, as follows:
Restricted Stock Units
Grant Type
Grant Date
TSR - Retention
August 2017
ROCE - Retention
August 2017
TSR
ROCE
TSR
ROCE
TSR
ROCE
TSR
ROCE
TSR
ROCE
August 2018
August 2018
September 2018
September 2018
August 2019
August 2019
February 2020
February 2020
August 2020
August 2020
Granted
246,903
136,440
663,738
357,797
49,381
25,385
496,497
268,491
6,676
4,767
289,347
186,998
Vested as of
31 March 2021
Outstanding as of
31 March 2021
42,591
14,327
—
—
—
—
—
—
—
—
—
—
74,070
40,932
461,370
248,706
49,381
25,385
406,078
219,500
6,676
4,767
289,347
186,998
Total Outstanding
2,013,210
Scorecard LTI - From fiscal year 2010, the Company commenced using Scorecard LTI units granted
under the LTIP. The Scorecard LTI is used by the Remuneration Committee to set strategic objectives
which change from year to year, and for which performance can only be assessed over a period of time.
The vesting of Scorecard LTI units is subject to the Remuneration Committee’s exercise of negative
discretion. The cash payment paid to award recipients is based on JHI plc’s share price on the vesting
date (which was amended from fiscal year 2012 to be based on a 20 trading-day closing average price).
As of 31 March 2021, there were 2,178,879 Scorecard LTI units granted and outstanding under the LTIP,
as follows:
Scorecard LTI
Grant Type
Scorecard - Retention
Scorecard
Grant Date
August 2017
August 2018
Scorecard
Scorecard
Scorecard
Scorecard
Scorecard
September 2018
January 2019
August 2019
February 2020
August 2020
Granted and
Outstanding as of
31 March 2021
122,796
746,125
76,155
28,558
629,947
14,301
560,997
2,178,879
For additional information regarding the LTIP and award grants made thereunder, see Note 16 to our
consolidated financial statements.
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64
2001 Plan
The 2001 Plan is intended to promote the Company’s long-term financial interests by encouraging
management below the senior executive level to acquire an ownership position in the Company and align
their interests with our shareholders. Selected employees under the 2001 Plan are eligible to receive
awards in the form of RSUs, nonqualified stock options, performance awards, restricted stock grants,
stock appreciation rights, dividend equivalent rights, phantom stock or other stock-based benefits. Award
levels are determined based on the Remuneration Committee’s review of local market standards and the
individual’s responsibility, performance and potential to enhance shareholder value.
The 2001 Plan was first approved by our shareholders and Board in 2001 and reapproved to continue
until September 2021 at the 2011 AGM. An aggregate of 45,077,100 shares of common stock were
made available for issuance under the 2001 Plan, subject to adjustment in the event of a number of
prescribed events set out on the 2001 Plan. Outstanding RSUs granted under the 2001 Plan generally
vest at the rate of 25% on the 1st anniversary of the grant, 25% on the 2nd anniversary date and 50% on
the 3rd anniversary date.
The 2001 Plan is administered by our Remuneration Committee, and the Remuneration Committee or its
delegate is authorized to determine: (i) who may participate in the 2001 Plan; (ii) the number and types of
awards made to each participant; and (iii) the terms, conditions and limitations applicable to each award.
The Remuneration Committee has the exclusive power to interpret and adopt rules and regulations to
administer the 2001 Plan, including a limited power to amend, modify or terminate the 2001 Plan to meet
any changes in legal requirements or for any other purpose permitted by law.
The purchase or exercise price of any award granted under the 2001 Plan may be paid in cash or other
consideration at the discretion of our Remuneration Committee, including cashless exercises.
The exercise price for all options is the market value of the shares on the date of grant. The Company
may not reduce the exercise price of such an option or exchange such an option or stock appreciation
right for cash, or other awards or a new option at a reduced exercise price without shareholder approval
or as permitted under specific restructuring events.
No unexercised options or unvested RSUs issued under the 2001 Plan are entitled to dividends or
dividend equivalent rights.
The 2001 Plan also permits the Remuneration Committee to grant stock options, performance awards,
restricted stock awards, stock appreciation rights, dividend equivalent rights or other stock based
benefits.
The 2001 Plan provides for the automatic acceleration of certain benefits and the termination of the plan
under certain circumstances in the event of a “change in control.” A change in control will be deemed to
have occurred if either (1) any person or group acquires beneficial ownership equivalent to 30% of our
voting securities, (2) individuals who are currently members of our Board cease to constitute at least a
majority of the members of our Board, or (3) there occurs the consummation of certain mergers (other
than a merger that results in existing voting securities continuing to represent more than 5% of the voting
power of the merged entity or a recapitalization or reincorporation that does not result in a material
change in the beneficial ownership of the voting securities of the Company), the sale of substantially all of
our assets or our complete liquidation or dissolution.
Options - Until fiscal year 2008, the Company issued options to purchase shares of our common stock
issued under the 2001 Plan. As of 31 March 2021, there were no options outstanding under the 2001
Plan.
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65
RSUs - Since fiscal year 2009, the Company has issued restricted stock units under the 2001 Plan, which
are unfunded and unsecured contractual entitlements for shares to be issued in the future and may be
subject to time vesting or performance hurdles prior to vesting. On vesting, restricted stock units convert
into shares. We granted 358,922 restricted stock units under the 2001 Plan in the fiscal year ended 31
March 2021. As of 31 March 2021, there were 593,950 restricted stock units outstanding under this plan,
divided as follows:
Restricted Stock Units
Vested as of
31 March 2021
Outstanding as of
31 March 2021
Grant Date
December 2018
March 2019
June 2019
June 2020
August 2020
December 2020
February 2021
Granted
545,185
72,608
23,486
330,961
30,628
7,792
425
230,424
35,461
11,743
1,024
Total Outstanding
194,395
28,890
11,743
318,077
32,628
7,792
425
593,950
For additional information regarding the 2001 Plan and award grants made thereunder, see Note 16 to
our consolidated financial statements.
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James Hardie 2021 Annual Report on Form 20-F
66
CORPORATE GOVERNANCE REPORT
Corporate Governance Statement
The Company believes strong corporate governance is essential to achieving both its short and long-term
performance goals and to maintaining the trust and confidence of investors, employees, regulatory
agencies, customers and other stakeholders. The Board follows, both formally and informally, corporate
governance principles designed to assure that the Board, through its membership, composition, Board
committee structure and governance practices, is able to provide informed, competent and independent
guidance and oversight and thereby promote long-term shareholder value. This Corporate Governance
Statement (this “Statement”) describes the key aspects of the Company’s corporate governance
framework.
During fiscal year 2021, the Board evaluated the Company’s corporate governance framework and
practices and approved this Statement. This Statement is current as at 30 April 2021.
Overall Approach to Corporate Governance
The Company operates under the regulatory requirements of numerous jurisdictions, including those of
its corporate domicile (Ireland) and its principal stock exchange listings (Australia and the United States).
In presenting this Statement, the Board has evaluated the Company’s corporate governance framework
in relation to the ASX Corporate Governance Council’s Corporate Governance Principles and
Recommendations (4th Edition) (the “ASX Principles”), as well as the NYSE Corporate Governance
Standards (the “NYSE Standards”).
ASX Principles
Pursuant to ASX Listing Rule 4.10.3, the Company is required to disclose in this Annual Report the extent
to which it has followed the ASX Principles for fiscal year 2021 and must identify any areas where the
Company has determined not to follow the ASX Principles and provide the reasons for not following them.
NYSE Standards
As a foreign private issuer with ADSs listed on the NYSE, the Company is required to disclose in this
Annual Report any significant ways in which its corporate governance practices differ from those followed
by domestic companies under NYSE listing standards. Based on the requirements of the NYSE
Standards, the Company believes that its corporate governance framework and practices were consistent
with the NYSE Standards during fiscal year 2021, except as otherwise noted below:
• Generally, in the United States, an audit committee of a public company is directly responsible for
appointing the company’s independent registered public accounting firm, with such appointment
being subsequently ratified by shareholders. Under Irish law, the independent registered public
accounting firm is directly appointed by the shareholders where there is a new appointment.
Otherwise, the appointment is deemed to continue unless the firm retires, is asked to retire or is
unable to perform their duties; and
• NYSE rules require each issuer to have an audit committee, a compensation committee
(equivalent to a remuneration committee) and a nominating committee composed entirely of
independent directors. As a foreign private issuer, the Company does not have to comply with this
requirement; however, the Board committee charters reflect Australian and Irish practices, in that
such Board committees have a majority of independent directors, unless a higher number or
percentage is mandated.
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James Hardie 2021 Annual Report on Form 20-F
67
Availability of Key Governance Documents
This Statement, as well as the Company’s Constitution, Board committee charters and the other key
governance and corporate policies referenced in this Statement, as updated from time to time, are
available
investor relations website
(www.ir.jameshardie.com.au) or by requesting a copy from the Company Secretary at the Company’s
corporate headquarters, Europa House, 2nd Floor, Harcourt Centre, Harcourt Street, Dublin 2, D02
WR20, Ireland.
the Corporate Governance section of
the Company’s
in
The Board committee charters and other key governance and corporate policies referenced in this
Statement were reviewed by the Board during fiscal year 2021.
Discussion of Corporate Governance Framework and Practices
The following discussion of the Company’s corporate governance framework and practices incorporates
the disclosures required by the ASX Principles, and generally follows the order of the ASX Principles.
Principle 1: Lay Solid Foundations for Management and Oversight
The Role of the Board and Management
The principal role of the Board is to promote and protect shareholder value by providing strategic
guidance to management and overseeing management’s implementation of the Company’s strategic
goals and objectives. On an annual basis, the Board reviews the Company’s strategic priorities with
management, including the Company’s business plan, and leads discussions on execution strategy,
including budgetary considerations, to ensure that the Company has the appropriate resources to deliver
the agreed strategy. The Board also monitors management, operational and financial performance
against the Company’s goals on an ongoing basis throughout the year. To enable it to do this, the Board
receives operational and financial updates at every scheduled Board meeting.
The Board is accountable to shareholders by whom they are elected for delivering long-term shareholder
value. To achieve this, the Board ensures that the Company has in place a framework of controls, which
enables management to appraise and manage risk effectively with oversight from the Board, through
clear and robust procedures and delegated authorities.
In accordance with the provisions of the Company’s Constitution, the Board committee charters and other
applicable governance and corporate policies, the Board has delegated a number of powers to Board
committees and responsibility for the day-to-day management of the Company’s affairs and the
implementation of corporate strategy to the CEO. The responsibilities delegated to the CEO are
established by the Board and include limits on the way in which the CEO can exercise such authority. In
addition, the Board has also reserved certain matters to itself for decision, including:
•
•
•
•
•
•
appointing, removing and assessing the performance and remuneration of the CEO and CFO;
the appointment and removal of the Company Secretary;
succession planning for the Board and the CEO and defining the Company’s management
structure and responsibilities;
approving the overall strategy for the Company, including the business plan and annual operating
and capital expenditure budgets;
ensuring that the Company has in place an appropriate risk management framework and that the
risk appetite and tolerances are set at an appropriate level;
ensuring that the Company has in place an appropriate framework for relevant information to be
reported by management to the Board;
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James Hardie 2021 Annual Report on Form 20-F
68
•
•
•
•
•
•
•
•
•
•
the dividend policy and
convening and monitoring the operation of shareholder meetings and approving matters to be
submitted to shareholders for their consideration;
approving annual and periodic reports, results announcements and related media releases, and
notices of shareholder meetings;
approving
recommendations to shareholders regarding the annual dividend;
reviewing the authority levels of the CEO and management;
approving the remuneration framework for the Company;
overseeing corporate governance matters for the Company;
approving corporate-level Company policies;
considering management’s recommendations on various matters which are above the authority
levels delegated to the CEO or management;
oversight of sustainability-related topics and strategy; and
any other matter which the Board considers appropriate to be approved by the Board.
interim dividends and, when appropriate, making
In discharging its duties, the Board aims to take into account, within the context of the industry in which
the Company operates, the interests of the Company (including the interests of its employees),
shareholders, and other stakeholders, and where possible, aligns its activities with current best practices
in the jurisdictions in which the Company operates.
The full list of those matters reserved to the Board is formalized in our Board Charter. The Board Charter
is available
relations website
(www.ir.jameshardie.com.au).
the Corporate Governance section of our
investor
in
Board Committees
In order to ensure that the Board properly discharges its responsibilities and fulfills its oversight role, the
Board has established the following standing Board committees:
• Audit Committee;
• Remuneration Committee; and
• Nominating and Governance Committee.
Additionally, from time to time, the Board may establish ad hoc Board committees to address particular
matters. Each standing Board committee meets at least quarterly and has scheduled an annual calendar
of meetings and discussion topics to assist it to properly discharge all of its responsibilities. Each Board
committee Chair reports to the Board at each scheduled Board meeting on their activities.
Each of the standing Board committees operates under a written charter adopted by the Board. On an
annual basis, each committee, with the assistance of the Nominating and Governance Committee,
undertakes a review of its charter for consistency with applicable regulatory requirements and current
corporate governance principles and practices. Each of the standing Board committee charters is
available on
investor relations website
(www.ir.jameshardie.com.au).
the Corporate Governance section of
the Company’s
Full discussions of the role and oversight responsibilities for each standing committee are provided below
under Principle 2 (Nominating and Governance Committee), Principle 4 (Audit Committee) and Principle
8 (Remuneration Committee).
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69
Board and Board Committee Meetings
The Board and each of the standing Board committees meet formally at least four times a year and on an
ad hoc basis as deemed necessary or appropriate. Scheduled Board meetings are normally held over a
period of one or two days, with Board committee meetings also taking place during such time. This
meeting structure enhances the effectiveness of the Board and the Board committees. Board and Board
committee meetings are generally held at the Company’s corporate headquarters in Ireland. At each
scheduled meeting, the Board meets in executive session without management present for at least part
of the meeting.
Prior to each scheduled Board or Board committee meeting, directors are provided timely and necessary
information by Company management to allow them to fulfill their duties. The Nominating and
Governance Committee periodically reviews the format, timeliness and content of information provided to
the Board and Board committees. All directors receive access to all Board committee materials and may
attend any Board committee meeting, whether or not they are members of such committee. Directors
also receive the minutes of each committee’s deliberations and findings, as well as oral reports from each
Board committee Chair, at each scheduled Board meeting.
In discharging their duties, directors are provided with direct access to executive management and
outside advisors and auditors.
The Board has regular discussions with the CEO and executive management regarding the Company’s
strategy and performance, during which Board members formally review the Company’s progress. During
the year, the Board and each Board committee develop and review an annual work plan created from the
standing Board committee charters so that the responsibilities of each Board committee are addressed at
appropriate times throughout the year.
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70
The following table provides the composition of each standing Board committee during fiscal year 2021,
as well as sets out the number of Board and Board committee meetings held, and each director’s
attendance:
Board
Audit
Remuneration
Nominating &
Governance
Name
M Hammes
B Anderson1
R Chenu2
D Harrison
A Gisle Joosen
P Lisboa
A Lloyd
M Nozari
R Rodriguez
S Rowland3
D Seavers4
N Stein
H Wiens
____________
H
5
3
3
5
5
5
5
5
5
2
2
5
5
5
3
3
5
5
5
5
5
5
2
2
5
5
A
Member
H
3
4
4
3
A
3
4
4
3
•
•
•
C
•
4
4
Member
•
•
•
C
•
•
•
•
H
5
2
2
3
5
3
2
A
5
1
2
3
5
3
2
4
4
Member
•
•
•
•
•
•
•
C
H
4
2
2
2
4
1
4
2
A
4
2
2
2
4
1
4
2
●
C
H
A
1
2
3
4
Board Committee member
Board Committee chair
Number of meetings held during the time the director held office or was a member of the Board committee during the fiscal year.
Number of meetings attended during the time the director held office or was a member of the Board committee during the fiscal year.
Non-committee members may also attend Board committee meetings from time to time; these attendances are not shown.
B Anderson retired as director at 2020 Annual General Meeting.
R Chenu retired as director at 2020 Annual General Meeting.
S Rowland appointed as director in February 2021.
D Seavers appointed as director in February 2021.
Company Secretary
The Company Secretary is accountable to the Board through the Chair of the Board on all matters
relative to the proper functioning of the Board. The Company Secretary is also responsible for ensuring
that Board procedures are complied with. All directors have access to the Company Secretary for advice
and services. The Board appoints and removes the Company Secretary. The duties required of the
Company Secretary include:
advising the Board and its committees on governance matters;
•
• monitoring that Board and committee policy and procedures are followed;
•
•
coordinating the timely completion and dispatch of Board and committee papers;
ensuring that the business at Board and committee meetings is accurately captured in the minutes;
and
helping to organize and facilitate the induction and professional development of directors.
•
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James Hardie 2021 Annual Report on Form 20-F
71
Evaluation of Director Candidates
Before appointing a director or nominating a candidate to shareholders for election as a director, the
Company typically undertakes background checks, including checks as to the candidate’s education,
experience, criminal history, bankruptcy and character. To facilitate shareholders making an informed
decision on whether or not to elect or re-elect a director, the Board details in the Notice of Meeting all
material information it possesses relevant to the decision. This information includes biographical details,
relevant qualifications and experience and the skills they bring to the Board and details of any other
material directorships currently held by the candidate as well as the term of office currently served by the
director, and if the Board considers that the director is independent.
In addition, when a director is being elected for the first time, the following information will be presented in
the Notice of Meeting:
• material adverse information revealed by the checks the Company has performed about the
director;
details of any interest, position, association or influence in a material respect; and
if the Board considers that the candidate if elected, will qualify as an independent director.
•
•
Agreements with Directors and Senior Executives
Each incoming director receives a letter of appointment setting out the key terms and conditions of his or
her appointment and the Company’s expectations of them in that role. No benefits are provided to our
non-executive directors upon termination of appointment. The Company has executive agreements in
place with certain senior executives where it is in the Company’s strategic interest. Certain senior
executives have more specific written agreements and details of such agreements can be found in the
Company’s remuneration information contained in “Section 1 – Remuneration” of this Annual Report. The
letter of appointment includes:
•
•
•
•
•
•
•
a requirement to disclose directors’ interests and any matters which could affect the director’s
independence;
the requirement to comply with key corporate policies, including the Company’s Code of Conduct,
its Anti-Bribery and Corruption Policy and its Insider Trading policy;
the requirement to notify the Company of, or to seek the Company's approval before accepting,
any new role that could impact upon the time commitment expected of the directors or give rise to
a conflict of interest;
the Company’s policy on when directors may seek independent professional advice at the expense
of the Company;
indemnity and insurance arrangements;
ongoing rights of access to corporate information; and
ongoing confidentiality obligations.
Management Performance Evaluations
On an annual basis, the Remuneration Committee, and subsequently the Board, review the performance
of the CEO against performance measures approved by the Board and Remuneration Committee. The
CEO reviews the performance of each of the CEO’s direct reports throughout the year, assessing their
performance against performance measures approved by the Remuneration Committee and the Board
and reports to the Board through the Remuneration Committee on the outcome of those reviews annually.
Performance evaluations for fiscal year 2021 were conducted in accordance with the process outlined
above in April and May 2021. Further details on the assessment criteria for the CEO and other senior
executive officers are set out in “Section 1 – Remuneration Report” of this Annual Report.
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Board & Board Committee's Performance Evaluation
The Nominating and Governance Committee oversees the Board and Board committee's evaluation
process and makes recommendations to the Board. During fiscal year 2021, the process, which was
undertaken in February 2021, involved the completion of purpose-designed surveys by each director and
a private discussion between the Chair of the Board and each director, and the results were reviewed and
discussed by the Nominating and Governance Committee and the Board. Further, during fiscal year
2021, the Chair of the Nominating and Governance Committee discussed with the Board, the Chair’s
performance and contribution to the effectiveness of the Board.
Workplace Diversity
James Hardie is fully committed to becoming an inclusive and globally diverse workplace, free from any
form of discrimination, prejudice, inequality or injustice, with a workforce that reflects the communities we
operate in and the markets we serve. We believe fostering an environment where employees have a
sense of belonging, feel comfortable and are able to do their best work, is part of our overall commitment
to employee wellbeing. We recognize the value of the diverse perspectives, experiences, skills and
capabilities of our global team and expect each of our employees will always be treated with respect
whether in the plant, office or at a customer / vendor site and unequivocally reject any form of intolerance.
The Workplace Diversity Policy, which is located in the Corporate Governance section of the Company’s
investor relations website (www.ir.jameshardie.com.au), applies to all individuals recruited or employed
by the Company and reflects the organization’s inclusive view of diversity, which embraces individual
differences related to race, gender, age, national origin, religion, sexual orientation or disability.
The Board, with assistance from management, is responsible for approving and monitoring the
Company’s diversity policy and measurable objectives in the context of the Company’s unique
circumstances and industry. The Board assesses the policy and objectives annually and the Company’s
progress in achieving them.
The Board has delegated responsibility to the Nominating and Governance Committee for monitoring the
effectiveness of this policy to the extent it relates to diversity of the Board’s composition, senior
leadership, management, and the organization as a whole and for reviewing and recommending any
updates to this policy, as deemed necessary.
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Details of diversity composition across various levels of the organization at the end of fiscal year 2021 are
set out below:
Level
James Hardie Board1
US BUSINESS 2
Senior leadership positions3
All management positions
Total workforce
NON-US BUSINESSES 4
Senior leadership positions3
All management positions
Total workforce
____________
Percentage of female
employees
36% (4 of 11)
Percentage of
employees with
diversity
characteristics
55% (6 of 11)
16% (26 of 162)
16% (71 of 437)
28% (46 of 162)
33% (145 of 437)
12% (357 of 2,904)
40% (1,156 of 2,904)
24% (14 of 58)
17% (43 of 258)
17% (311 of 1,883)
1
2
3
4
Includes gender and race diversity characteristics for the Board. CEO is reported with US Business Senior leadership positions.
Includes US employees with diversity characteristics including gender, race or national origin.
Senior Leaders are defined as individuals at senior manager and director level and above who participate in the Company and
Individual Performance (CIP) Plan.
Race/national origin diversity characteristics vary between countries and are therefore not captured in aggregate for Non-US
businesses.
The Board has a goal to maintain:
diversity characteristics in excess of 30%; and
•
• women in excess of 20% among non-executive directors.
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With regard to the Company’s senior leadership, management, and the organization as a whole, the
following table outlines the organization’s five primary objectives in promoting diversity during fiscal year
2021, the actions in place or undertaken to achieve these objectives, the progress made against these
objectives during fiscal year 2021 and the fiscal year 2022 plans.
Objectives
FY21 Actions and Outcomes
FY22 Plans
To promote a culture of
inclusion and diversity
(which includes ethnicity,
gender, skills, experience,
and other elements that
reflect a broad
representation of individuals
with various backgrounds).
• Developed and launched a global inclusion and diversity
program. Objectives are to align and refine our culture,
define employee value proposition, grow and develop talent,
and improve our hiring processes.
Introduced and launched two new Employee Resource
Groups in North America; one for Hispanic/Latino
employees and the other for African/African American
employees.
•
• Built/retrofit 4 new “mother’s rooms” with appropriate
•
accommodations and refrigeration for lactating working
mothers in our NA Headquarters building.
In Asia Pacific, an Inclusion and Diversity survey was
undertaken to establish base line demographic data and
Inclusion and Diversity committees were established across
each country in the APAC region with specific localized
country plans developed targeting areas identified in the
survey.
• Asia Pacific workplaces have been reviewed and where
appropriate changes have been made to cater to diverse
requirements (i.e. religious and nursing mother facilities).
• Europe launched periodic pulse checks for the first time to
improve engagement and seek feedback regarding diversity
from the European workforce.
To ensure that recruitment
and selection processes are
based on merit.
• Continued showcasing diverse talent on LinkedIn and other
recruiting platforms to attract more diverse talent into the
organization.
• As of the end of FY21 total new hires in North America were
14% female, with 4 out of 11 (36%) open Leadership roles
filled by women.
• Results for North America’s Engineering Development
Program (EDP) recruits, 10 out of 28 (35%) hires were
either female and/or diverse.
• Standardized assessments and interview methodology
•
•
strategies were implemented in North America to enhance
selection in recruiting diverse talent.
In APAC, included a requirement for our agency panel
participants to have a diverse and balanced shortlist for all
roles in their service contract.
Introduced global talent and organizational review
processes for senior leadership roles to identify strengths,
gaps and future succession.
• Rolled out new global leadership behaviors to all employees
•
and included these behaviors as part of our annual
performance management evaluation for each employee.
Introduced global workforce planning process to determine
key talent and staffing needs and skills needed on a future
forward basis.
• Continued our Women’s Initiative Network group in North
America and introduced new Hispanic/Latino and African/
Africa American employee resource groups.
In Australia, members of the management team have
continued to participate in a women’s mentoring program as
mentors and mentees.
•
To provide talent
management and
development opportunities
which provide equal
opportunities for all current
employees.
• A global employee engagement survey will be
launched and results reviewed with eye
towards development of programs and
initiatives to improve engagement, support
diversity and further enhance our culture.
• Asia Pacific region will be implementing
localized specific country plans for inclusion
and diversity with a focus on education across
the three countries.
Install new locker rooms in Wijchen
Netherlands plant as gender diversity at facility
has progressed.
•
• Recruitment of diverse candidates for
management roles will continue to be a focus
across all global locations including
requirements to have diverse candidates
interview as part of each leadership opening
globally.
• Require our temporary employee agency
partners in APAC to have a diverse and
balanced shortlist for all roles in their service
contract.
Introduce a scholarship program for high
school students local to our operations in
North America with diversity characteristics as
one of the selection criteria in order to create a
pipeline of local talent for our organization.
•
•
• Conduct global talent and organizational
review processes, including succession
planning throughout the organization including
levels below senior leadership.
Introduce employee development
opportunities for corporate and office staff
according to balanced gender ratio in Europe.
Introduce a women’s network in Europe and
APAC, including outside speakers,
development and networking opportunities.
•
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Objectives
To reward and remunerate
employees fairly across the
globe.
FY21 Actions and Outcomes
• Conducted the annual employee wage benchmarking study
to ensure remuneration is aligned with the Company
remuneration philosophy. The study again included all
corporate and plant locations.
• Conducted a global benefits review to better understand our
offerings related to local market practice and our global
population’s preferences and needs.
• The Workplace Gender Equality Act (WGEA) report is
submitted to the Australian government on an annual basis.
The WGEA confirmed that JH Australia is compliant with the
Workplace Gender Equality Act 2012 (Act).
FY22 Plans
• Complete a global job structure and market-
based pay review in order to standardize job
levels and job titles across the organization.
Review will include evaluating compensation
and incentive levels to ensure we are
competitive with the local markets where we
operate.
• Asia Pacific will extend the WEGA gender pay
review and analysis across all countries to
identify any gender pay gaps and establish an
action plan to address any issues identified.
To provide flexible work
practices across the globe.
• Flexible working arrangements were offered across all
global locations as job requirements allowed due to
COVID-19 and continue to be discussed with employees
throughout the organization.
• Paid Time-Off (PTO), family and parental leave programs
were reviewed and evaluated in North America, with
updated program proposed to better align with market and
current best practices in FY22.
• In Asia Pacific, developed and launched Hardie Flex, a
policy and guidelines to allow for flexible working
arrangements where job requirements allow.
• Provided family services and employee assistance to assist
in balancing work life for women and emergency cases in
Europe.
•
•
Introduce and implement new and updated
PTO, family and parental leave programs in
North America.
Improve part time employment opportunities
within and across certain roles in Europe.
• Review and update the APAC Hardie Families
Policy as it has been in place for 24 months.
Principle 2: Structure the Board to Add Value
Composition of the Board
As of the date of this report, the Board comprises eleven non-executive directors and one executive
director (being the CEO). In accordance with the Company’s Constitution, the Board must have no less
than three and not more than twelve directors, with the precise number to be determined by the Board.
Director
Michael Hammes
Jack Truong
David Harrison
Board tenure
7 February 2007
31 January 2019
19 May 2008
Independence
Independent non-executive Chair
Chief Executive Officer, Executive director
Independent non-executive director
Andrea Gisle Joosen
20 March 2015
Independent non-executive director
Persio Lisboa
Anne Lloyd
2 February 2018
4 November 2018
Independent non-executive director
Independent non-executive director
Rada Rodriguez
13 November 2018
Independent non-executive director
Moe Nozari
Nigel Stein
Harold Wiens
6 November 2019
Independent non-executive director
14 May 2020
14 May 2020
Independent non-executive director
Independent non-executive director
Suzanne B. Rowland
4 February 2021
Independent non-executive director
Dean Seavers
4 February 2021
Independent non-executive director
Mr Nigel Stein and Mr Harold Wiens were appointed to the Board on 14 May 2020. Ms Suzanne Rowland
and Mr Dean Seavers were appointed to the Board on 4 February 2021. For additional information on
each director, see “Section 1 – Directors, Senior Management and Employees” of this Annual Report.
Mr Brian Anderson and Mr Russell Chenu retired as non-executive directors of the Board on 5 November
2020. These retirements were in line with the Board’s ongoing succession plan.
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Directors may be elected by the Company's shareholders at general meetings or appointed by the Board
and elected at the next general meeting if there is a vacancy. A person appointed as a director by the
Board must submit him or herself for election at the next AGM. The Board and our shareholders have the
right to nominate candidates for the Board. Directors may be dismissed by the Company's shareholders
at a general meeting. In accordance with the Company’s Constitution and the ASX Listing Rules, no
director (other than the CEO) shall hold office for a continuous period of more than three years without
being re-elected by shareholders at an AGM. The Company’s Constitution provides for a classified Board
structure and the Board is divided into three classes (excluding the CEO). Upon the expiration of the
term of a class of directors at an AGM, each director in that class may, if willing to act and if the Board so
recommends, put themselves forward for re-election at that same AGM to serve from the time of re-
election until the third AGM following his or her re-election.
The Board’s overriding desire is to maximize its effectiveness by appointing the best candidates for
vacancies and closely reviewing the performance of directors subject to re-election. Directors are not
automatically nominated for re-election. Nomination for re-election is based on a number of factors,
including an assessment of their individual performance, independence, tenure, and their skills and
experience relative to the needs of the Company. The Nominating and Governance Committee and the
Board discuss the performance of each director due to stand for re-election at the next AGM before
deciding whether to recommend their re-election.
As part of the appointment process, the Nominating and Governance Committee, in consultation with the
Board, considers the size and composition of the Board, the current range of skills, competencies and
experience and the desired range of skills, as well as Board renewal, succession and diversity plans. The
Nominating and Governance Committee identifies suitable candidates, with assistance from an external
consultant, where appropriate, and a number of directors meet with those candidates. Prior to the Board
selecting the most suitable candidate (based on a recommendation from the Nominating and Governance
Committee), the Board, with the assistance of external consultants, conducts appropriate background
and reference checks.
During fiscal year 2021, the Nominating and Governance Committee continued to execute its forward-
looking plan for Board and Committee succession, to ensure orderly succession to key posts (including
for the Chair of the Board), effective recruitment and smooth onboarding of new members (including any
required transition). The plan is under regular review by the Board supported by updates and reports to
the Board from the Nominating and Governance Committee.
Board refreshment and renewal continued in fiscal year 2021 with the retirement of two non-executive
directors and the appointment of four new non-executive directors. It is anticipated that during fiscal year
2022, further Board refreshment and renewal will take place.
Director Independence
In accordance with the ASX Principles and the NYSE Standards, the Company requires that a majority of
directors on the Board and the Board committees, as well as the Chair of the Board and each committee,
be independent, unless a greater number is required to be independent under the rules and regulations
of the ASX, the NYSE or other applicable regulatory body.
All directors are expected to bring their independent views and judgment to the Board and Board
committees and must declare any potential or actual conflicts of interest. For a director to be considered
independent, the Board must determine the director does not have any direct or indirect business or other
relationship that could materially interfere with such director’s exercise of independent judgment. In
assessing the independence of each director, the Board considers the standards for determining director
independence set forth in the ASX Principles and the NYSE Standards and evaluates all potential
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conflicting relationships on a case-by-case basis, considering the materiality of each potential or actual
conflict of interest.
During fiscal year 2021, the Board, with the assistance of the Nominating and Governance Committee,
undertook an independence assessment of each director. The Board determined that, with the exception
of Jack Truong, as CEO of the Company, each of Michael Hammes, Andrea Gisle Joosen, David
Harrison, Persio Lisboa, Anne Lloyd, Moe Nozari, Rada Rodriguez, Suzanne B. Rowland, Dean Seavers,
Nigel Stein and Harold Wiens is independent.
In assessing Ms Lloyd’s independence, the Board considered her role as interim Chief Financial Officer of
the Company for a six month period, from August 2019 to February 2020 and determined that
notwithstanding her performing this role, given its short term nature she remains independent. The
position held will not interfere with Ms Lloyd's capacity to bring an independent judgment to bear on
issues before the Board and to act in the best interests of the Company as a whole.
In assessing the independence of Mr Hammes, the Board considered his expanded role (which
concluded in late 2019) in management succession planning and, notwithstanding (i) the additional time
the Chair of the Board spent with the management team, and (ii) his length of tenure, the Board believes
that he has not formed an association with management that could interfere with his ability to exercise
independent judgment.
The Board also believes that, notwithstanding the length of Mr Harrison's tenure, he remains independent
in character and judgment and has not formed an association with management that could interfere with
his ability to exercise independent judgment.
Director Qualifications and Board Diversity
The Board seeks to achieve a mix of skills, experience and expertise to maximize the effectiveness of the
Board and utilizes a skills matrix in reviewing Board composition and in succession planning. The
following lists the mix of skills, experience and diversity the Board has and is looking to achieve, taking
into consideration the strategic objectives of the Company.
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Key Board Skills and Experience
Skill and Experience
Executive leadership
Definition
• Successful business history at a senior executive level, including international
business management.
Board experience
Succession planning
• Experience as a non-executive director of a listed company.
• Experience in identifying and growing talent to fill leadership and business-critical
positions.
Strategy
• Demonstrable ability to develop and implement successful business strategy.
• Experience in overseeing management for the delivery of strategic objectives.
Governance
• Awareness of global governance practices and trends.
• Experience in the identification and resolution of regulatory issues across a wide
range of jurisdictions.
Financial acumen/ Corporate
finance
• Experience in financial accounting and reporting and evaluating financial risks and
the adequacy of financial controls.
• Understanding of key financial drivers of business and corporate finance.
• Understanding of capital markets.
Risk management
• Experience in anticipating, evaluating and managing risks across various countries,
regulatory systems or business environments.
Global experience
• Experience in developing and implementing successful and sustainable operational/
Health, safety and
environmental
Human resources and executive
remuneration
governance structures in new geographies and jurisdictions.
• Exposure to different political, cultural and regulatory business environments.
• Experience in a role with responsibility for the health and safety of employees.
• Experience implementing and improving health and safety processes/ management
systems.
• Experience with social responsibility issues.
• Experience leading large, diverse and geographically distributed teams, promoting
inclusion and diversity.
• Experience in talent management and culture.
• Senior executive role or board experience of remuneration frameworks that aim to
attract and retain high caliber of executives and other employees.
Manufacturing
• Senior executive experience or technical experience in the manufacturing sector,
including end-to-end supply chain and LEAN Manufacturing.
Market experience/ Customer
Centricity/Innovation
• Experience in next generation insight, digital and customer experience.
• Experience in technical innovation and new product development.
• Experience in retail industry and merchandise expertise.
• Industry Knowledge.
Commercial Brand
Management/ Marketing
• Experience in brand building and consumer marketing.
• Experience in new products commercialization.
The Board regularly reviews its skills matrix to make sure it covers the skills needed to address existing
and emerging business and governance issues relevant to the Company. During the year, we identified
retail experience as an area which could be strengthened on the Board and is a key consideration in the
Board renewal process, which also aligns with the Company's strategic plan.
Information regarding Board diversity can be found in the “Workplace Diversity” section above.
Directors must be able to devote a sufficient amount of time to prepare for, and effectively participate in,
Board and Board committee meetings. The Nominating and Governance Committee reviews the other
commitments of directors annually and otherwise, as required. In fiscal year 2021, the Nominating and
Governance Committee noted that Ms Lloyd, who is considered a financial expert by virtue of her
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qualifications and previous experience, serves on a total of three public company audit committees
(including the Company’s Audit Committee). The Board has determined that such simultaneous service
does not impair the ability of Ms Lloyd to effectively serve as Chair of the Company’s Audit Committee.
Biographical information for each member of the Board, along with the skills, qualifications, experience
and relevant expertise for each director, and his or her date and term of appointment, are summarized in
the Board biography section of this Annual Report and also appear in the Corporate Governance section
of the Company’s investor relations website (www.ir.jameshardie.com.au).
Nominating and Governance Committee
Director
Committee tenure
Independence
Nigel Stein – Committee Chair
21 October 2020
Independent non-executive director
Michael Hammes
Rada Rodriguez
Moe Nozari
Persio Lisboa
16 November 2009
Independent non-executive Chair
13 November 2018
Independent non-executive director
7 February 2020
21 October 2020
Independent non-executive director
Independent non-executive director
The Board has established the Nominating and Governance Committee to identify and recommend to the
Board individuals qualified to become members of the Board, develop and recommend to the Board a set
of corporate governance principles, and perform a leadership role in shaping the Company’s corporate
governance policies. The duties and responsibilities of the Nominating and Governance Committee
include:
•
•
identifying and recommending to the Board individuals qualified to become directors;
overseeing the evaluation of the Board and senior management and formulating succession plans
for the CEO, CFO and senior executives;
assessing the independence of each director;
reviewing the remuneration of directors;
reviewing the conduct of the AGM; and
performing a leadership role in shaping the Company’s culture and corporate governance policies.
•
•
•
•
A more complete description of these duties and responsibilities and other Nominating and Governance
Committee functions is contained in the Nominating and Governance Committee’s Charter, a copy of
which is available in the Corporate Governance section of the Company’s investor relations website
(www.ir.jameshardie.com.au).
Management Succession Planning
The Board, together with the Nominating and Governance Committee, has developed, and periodically
reviews with the CEO, management succession plans, policies and procedures for the CEO and certain
other members of executive management.
Retirement and Tenure Policy
The Company does not have a retirement and tenure policy. The length of tenure of individual directors is
one of many factors considered by the Board when assessing the independence, performance and
contribution of a director, in succession planning, and as part of the Board’s decision-making process
when considering whether a director should be recommended by the Board for re-election.
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Related Party Transactions
Other than the compensation arrangements with our executive officers and directors, which are disclosed
in “Section 1 – Remuneration” of this Annual Report, the Company has not entered into any related party
transactions requiring disclosure during fiscal year 2021.
Induction and Continuing Development
The Company has an induction program for new directors, tailored to their existing skills, knowledge and
experience, to position them to discharge their responsibilities effectively and to add value. The program
includes an overview of the Company’s governance arrangements and directors’ duties in Ireland, the
United States and Australia, plant and market tours to understand the Company’s strategic plans and
impart relevant industry knowledge, briefings on the Company’s risk management and control framework,
financial results and key risks and issues, and meeting other directors, the CEO and members of
management. New directors are also provided with comprehensive orientation materials including
relevant corporate documents and policies.
The Nominating and Governance Committee regularly assesses whether the directors as a group have
the skills, knowledge and experience to deal with new and emerging business and governance issues
and professional development is provided for identified gaps. For example, training on key accounting
matters is provided through internal and external sources for directors with little accounting skills or
knowledge.
In addition, the Company regularly schedules time at Board meetings to develop the Board’s
understanding of the Company’s operations, regulatory environment and material developments in laws,
including updates on topical developments from management and external experts.
Board Leadership Structure
In an effort to promote the efficient undertaking of its roles and responsibilities, the Board has appointed
one of its independent, non-executive members, Michael Hammes, as Chair of the Board. In his role as
Chair of the Board, Mr Hammes co-ordinates the Board’s duties and responsibilities and acts as an active
liaison between management and the Company’s non-executive directors, maintaining frequent contact
with the CEO and being advised generally on the progress of Board and Board committee meetings. In
his role as Chair of the Board, Mr Hammes also:
provides leadership to the Board;
chairs Board and shareholder meetings;
facilitates Board discussions;
•
•
•
• monitors, evaluates and assesses the performance of the Board and Board committees; and
•
is a member of and attends meetings of the Remuneration and Nominating and Governance
committees.
At the behest of the Board, Mr Hammes remained heavily engaged in fiscal year 2021 in Company CEO
and leadership assessment, succession, transition, and development.
Remuneration
For a detailed discussion of the Company’s remuneration policies for directors and executives, and the
link between remuneration and overall corporate performance, see “Section 1 – Remuneration” of this
Annual Report.
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Board Accumulation Guidelines
Non-executive directors are encouraged to accumulate up to 1.5 times (and 2 times for the Chair of the
Board) the base Board member fee in the Company’s shares (either personally, in the name of their
spouse, or through a personal superannuation or pension plan) over a reasonable time following their
appointment. The Remuneration Committee reviews the guidelines and non-executive directors’
shareholdings on a periodic basis.
Independent Advice and Access to Information
In addition to their access to the Company Secretary and senior management, the Board, the Board
committees and individual directors may all seek independent professional advice at the Company’s
expense for the proper performance of their duties.
Indemnification
The Company’s Constitution provides for indemnification of any person who is (or who was) a director,
the Company Secretary, or an employee or any other person deemed by the Board to be an agent of the
Company, who suffers any loss as a result of any action in discharge of their duties, in the absence of a
willful act or default and subject to the provisions of the Irish Companies Acts.
The Company and certain of its subsidiaries have provided Deeds of Access, Insurance and Indemnity to
directors and executives who are directors or officers of the Company or its subsidiaries.
Principle 3: Instill a culture of acting lawfully, ethically and responsibly
The Company’s values and leadership behaviors are integral to our business and express the standards
and behaviors expected of directors, senior executives and employees:
Thrive on Competition – we will execute our business strategy by never accepting the status quo and
continuously striving to be better than we were yesterday;
Build on Organizational Advantage – we will win by recruiting, engaging and developing the right
people through a culture that promotes innovation, high performance and growth;
Embrace Step Change – we will seek and support opportunities that drive toward the Company Mission
by deviating from established practices;
Operate with Respect – we will behave with professionalism and regard toward our internal and external
stakeholders, fostering a diverse environment of candid communication and ideas.
Global Code of Business Conduct
The Company seeks to maintain high standards of integrity and is committed to ensuring that the
Company conducts its business in accordance with high standards of ethical behavior. The Company
requires its employees to comply with both the spirit and the letter of all laws and other statutory
requirements governing the conduct of the Company’s activities in each country in which the Company
operates. The Company has adopted a Global Code of Business Conduct (the “Code of Conduct”) which
applies to all of the Company’s employees and directors. The Code of Conduct covers many aspects of
corporate policy and addresses compliance with legal and other responsibilities to stakeholders. All
directors and employees of the Company worldwide are required to review the Code of Conduct on an
annual basis. As part of its oversight functions, the Audit Committee oversees the Code of Conduct and
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reviews the policy on an annual basis. A copy of the Code of Conduct is available in the Corporate
Governance section of the Company’s investor relations website (www.ir.jameshardie.com.au).
The Company did not grant any waivers from the provisions of the Code of Conduct during fiscal year
2021.
Complaints/Ethics Hotline
The Code of Conduct provides employees with advice about who they should contact if they have
information or questions regarding potential violations of the policy. Globally, the Company maintains an
ethics hotline operated telephonically (except in France) by an independent external provider which
allows employees to report anonymously any concerns. All Company employees worldwide are reminded
annually of the existence of the ethics hotline.
All complaints, whether to the ethics hotline or otherwise, are initially reported directly to the General
Counsel and Chief Compliance Officer, Employment Counsel, Chief Human Resources Officer and the
Director of Internal Audit (except in cases where the complaint refers to one of them). The material
complaints are referred immediately to the Chair of the Board and the Audit Committee. Less serious
complaints are reported to the Audit Committee on a quarterly basis.
Interested parties who have a concern about the Company’s conduct, including accounting, internal
accounting controls or audit matters, may communicate directly with the Company’s Chair of the Board,
directors as a group, the Chair of the Audit Committee or Audit Committee members. These
communications may be confidential or anonymous, and may be submitted in writing to the Company
Secretary at the Company’s corporate headquarters or submitted by phone on +1 312 705 6164. All
concerns will be forwarded to the appropriate directors for their review and will be simultaneously
reviewed and addressed by the Company’s General Counsel, Chief Compliance Officer and Company
Secretary in the same way that other concerns are addressed. The Company’s Code of Conduct, which
is described above, prohibits any employee from retaliating or taking any adverse action against anyone
for raising or helping to resolve a concern about integrity.
Insider Trading
All directors and employees of the Company are subject to the Company’s Insider Trading Policy. Under
the Insider Trading Policy, employees and directors may generally conduct transactions in the Company’s
securities during a four week period beginning two days after the announcement of quarterly or full year
results, or such other periods as may be designated by the Board provided that such persons are not in
possession of material, non-public information. The Insider Trading Policy also contains preclearance
requirements for certain designated senior employees and directors, as well as general prohibitions on
hedging activities or selling any shares for short-swing profit. There is a general prohibition on hedging
unvested shares, options or RSUs.
The Board recognizes that it is the individual responsibility of each director and employee to ensure he or
she complies with the Insider Trading Policy and applicable insider trading laws.
A copy of the Insider Trading Policy is available in the Corporate Governance section of the Company’s
investor relations website (www.ir.jameshardie.com.au).
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Anti-Bribery and Corruption
James Hardie is committed to ensuring a workplace free from bribery and corruption. This zero tolerance
is endorsed and supported by senior management and the Board. All employees must comply with the
Company's Anti-Bribery and Corruption Policy.
All complaints, are initially reported directly to the General Counsel and Chief Compliance Officer,
Employment Counsel, Chief Human Resources Officer and the Director of Internal Audit (except in cases
where the complaint refers to one of them). The material complaints are referred immediately to the Chair
of the Board and the Audit Committee. Less serious complaints are reported to the Audit Committee on a
quarterly basis.
A copy of the Anti-Bribery and Corruption Policy is available in the Corporate Governance section of the
Company’s investor relations website (www.ir.jameshardie.com.au).
Principle 4: Safeguard Integrity in Corporate Reporting
Audit Committee
Director
Anne Lloyd – Committee
Chair
Committee tenure
4 November 2018 - 26 August
2019, 1 June 2020;
Chair since 7 August 2020
Independence
Independent non-executive director
David Harrison
18 August 2008
Independent non-executive director
Andrea Gisle Joosen
20 March 2015
Independent non-executive director
Nigel Stein
1 June 2020
Independent non-executive director
Suzanne B. Rowland
6 November 2020
Independent non-executive director
Dean Seavers
6 November 2020
Independent non-executive director
The Board has established the Audit Committee to oversee the adequacy and effectiveness of the
Company’s accounting and financial policies and controls. The Audit Committee provides advice and
assistance to the Board in fulfilling its responsibilities and, amongst other matters:
•
•
•
•
•
•
•
overseeing the Company’s financial reporting process and reports on the results of its activities to
the Board;
reviewing with management and the external auditor the Company’s annual and quarterly financial
statements and reports to shareholders; discussing earnings releases as well as information and
earnings guidance provided to analysts;
reviewing and assessing the Company’s risk management strategy, policies and procedures and
the adequacy of the Company’s policies, processes and frameworks for managing risk;
exercising general oversight of the appointment and provision of all external audit services to the
Company, the remuneration paid to the external auditor, and the performance of the Company’s
internal audit function;
reviewing the adequacy and effectiveness of the Company’s internal compliance and control
procedures;
reviewing the Company’s compliance with legal and regulatory requirements; and
establishing procedures for complaints regarding accounting, internal accounting controls and
auditing matters, including any complaints from whistle-blowers.
A more complete description of these and other Audit Committee functions is contained in the Audit
Committee’s Charter, a copy of which is available in the Corporate Governance section of the Company’s
investor relations website (www.ir.jameshardie.com.au).
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The Audit Committee meets at least quarterly in a separate executive session with the external auditor
and internal auditor, respectively. The Chair of the Audit Committee reports to the full Board following
each Audit Committee meeting. As part of such report, the Chair of the Audit Committee will inform the
Board of any general issues that arise with respect to the quality or integrity of the Company’s financial
statements, the Company’s compliance with legal or regulatory requirements, the Company’s risk
management framework, the performance and independence of the external auditor, or the performance
of the internal audit function.
All members of the Audit Committee are financially literate and have sufficient business, industry and
financial expertise to act effectively as members of the Audit Committee. In addition, in accordance with
the SEC rules, the Nominating and Governance Committee and the Board have determined that Mr
Harrison, Ms Lloyd and Mr Stein qualify as “audit committee financial experts". Ms Lloyd transitioned into
the role of Chair of the Audit Committee, in August 2020 prior to Mr Anderson’s retirement from the Board
at the conclusion of the 2020 Annual General meeting in November. The skills, qualifications, experience
and relevant expertise for each member are summarized in the Board biography section of this Annual
Report.
Internal Audit
The Vice President of Internal Audit heads the internal audit department. It is the role of the internal audit
department to provide assurance, independent of management, that the Company’s internal processes,
controls and procedures are operating to provide an effective financial reporting and risk management
framework. The Internal Audit Charter sets out the independence of the internal audit department, its
scope of work, responsibilities and audit plan. The internal audit department’s work plan is approved
annually by the Audit Committee. The Vice President of Internal Audit reports to the Chair of the Audit
Committee and meets quarterly with the Audit Committee in executive sessions.
External Audit
Ernst & Young LLP has served as the Company’s external auditor since fiscal year 2009. The external
auditor reviews each quarterly and half-year consolidated financial statements and audits the full year
consolidated financial statements. The external auditor attends each meeting of the Audit Committee,
including an executive session where members of the Audit Committee are present. The Audit Committee
has approved policies to ensure that all non-audit services performed by the external auditor, including
the amount of fees payable for those services, receive prior approval. The Audit Committee also reviews
the remuneration paid to the external auditor and makes recommendations to the Board regarding the
maximum compensation to be paid to the external auditor and concerning their reappointment as external
auditor. The lead audit engagement partner is required to rotate every five years.
The Audit Committee reviews and approves management representations made to the external auditor
as part of the audit of the full year results.
Representatives of Ernst & Young LLP are present at each AGM to make a statement if they desire to do
so and are available to respond to appropriate questions from shareholders.
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Management Representations
Consistent with applicable SEC rules, the CEO and CFO of the Company have provided the certifications
required by Section 302 and 906 of the Sarbanes Oxley Act 2002, which, among other things, certify that
to the best of each individual’s knowledge:
•
•
the financial statements, and other financial information included in this Annual Report, fairly
present in all material respects the financial condition, results of operations and cash flows of the
Company as of, and for, the periods presented in this Annual Report; and
this Annual Report does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period covered by this Annual
Report.
Principle 5: Make Timely and Balanced Disclosure
Continuous Disclosure and Market Communication
The Company strives to comply with all relevant disclosure laws and listing rules in Australia (ASIC and
ASX) and the United States (SEC and NYSE).
The Company’s Continuous Disclosure and Market Communication Policy aims to ensure timely
communications so that investors can readily:
•
•
•
understand the Company’s strategy and assess the quality of its management;
examine the Company’s financial position and the strength of its growth prospects; and
receive any news or information that might reasonably be expected to materially affect the price or
market for the Company securities.
Furthermore, the Company releases any new and substantive investor or analyst presentation on the
ASX Market Announcements Platform ahead of the presentation.
The CEO is responsible for ensuring the Company complies with its continuous disclosure obligations. A
Disclosure Committee comprised of senior management (CEO, CFO, General Counsel and the Vice
President – Investor and Media Relations) is responsible for all decisions regarding market disclosure
obligations outside of the Company’s normal financial reporting calendar. The Nominating and
Governance Committee reviewed the Continuous Disclosure and Market Communication policy and the
Audit Committee reviewed the Company’s disclosure practices under the Continuous Disclosure and
Market Communication policy during fiscal year 2021. A copy of the Continuous Disclosure and Market
Communication policy is available in the Corporate Governance section of the Company’s investor
relations website (www.ir.jameshardie.com.au).
Principle 6: Respect the Rights of Security Holders
Communication
The Company is committed to communicating effectively with the Company’s shareholders and engaging
them through its dedicated investor relations program that includes:
• making management briefings and presentations accessible via a
live webcast and/or
teleconference following the release of quarterly and annual results;
audio webcasts of other management briefings and the annual shareholder meeting;
a comprehensive investor relations website that displays all announcements and notices (promptly
after they have been cleared by the ASX), major management and investor road show
presentations;
site visits and briefings on strategy for investment analysts;
•
•
•
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•
•
•
regular engagement with institutional shareholders to discuss a wide range of governance issues;
an email alert service to advise shareholders and other interested parties of announcements and
other events; and
equality of access for shareholders and investment analysts to briefings, presentations and
meetings and equality of media access to the Company, on a reasonable basis.
Shareholders can also elect to receive communications from the Company and its share registry, by
electronic means. In addition, shareholders can communicate directly with the Company and its registry
via the Company’s investor relations website (www.ir.jameshardie.com.au).
Annual General Meeting
The 2020 AGM was held in Ireland and shareholders were able to participate in the AGM via
teleconference of proceedings. The 2021 AGM will also be held in Ireland, and shareholders not present
in Ireland who wish to participate in the meeting, including asking questions about the management of the
Company, can do so via teleconference. In addition, shareholders have the opportunity to submit
questions to the Company online or by returning the question form enclosed with the Notice of Meeting in
advance of the meeting. Questions received from shareholders will be collated and the Chair of the Board
will address as many questions as possible at the meeting. Shareholders also have the opportunity to ask
questions of the external auditor at the AGM about the conduct of the audit and the preparation of the
auditor’s report.
Notices of Meeting are accompanied by explanatory notes which provide clear and concise information
regarding the business to be transacted at the meeting.
Further details regarding the 2021 AGM will be set out in the 2021 AGM Notice of Meeting. This will be
available electronically to all shareholders and made available on the Company’s website.
Each shareholder (other than an ADS holder) has the right to:
attend the AGM virtually, in person or by proxy;
speak at the AGM; and
exercise voting rights, including at the AGM, subject to their instructions on the Voting Instruction
Form.
•
•
•
While ADS holders cannot vote directly, ADS holders can direct the voting of their underlying shares
through the ADS depositary.
At any general meeting, and as provided in the Company’s constitution, a resolution put to the vote of the
meeting shall be decided on a poll.
Principle 7: Recognize and Manage Risk
Risk Management Objectives
The Company believes that sound risk management policies, procedures and controls produce a system
of risk oversight, risk management and internal control that is fundamental to good corporate governance
and compliance and creation of shareholder value. The objective of the Company’s risk management
policies, procedures and controls is to ensure that:
•
•
•
•
the Company’s principal strategic, operational and financial risks are identified and assessed;
the Company’s risk appetite for each risk is considered;
effective systems are in place to monitor and manage risks; and
reporting systems, internal controls and arrangements for monitoring compliance with laws and
regulations are adequate.
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Risk management does not involve avoiding all risks. The Company’s risk management policies seek to
strike a balance between ensuring that the Company continues to generate financial returns while
simultaneously managing risks appropriately by setting appropriate strategies, objectives, controls and
tolerance levels.
The Company’s business, operations and financial condition are subject to various risks and
uncertainties, including risks related to economic and regulatory concerns. For additional information, see
“Section 3 – Risk Factors” of this Annual Report which outlines the significant factors that may adversely
affect the Company’s business, operations, financial performance and condition or industry, and
information as to how the Company manages a number of these risks.
Risk Management Framework
The Board and its standing Board committees oversee the Company’s overall strategic direction,
including setting risk management strategy, processes, tolerance and parameters. Generally, the Audit
Committee is responsible for oversight of the Company’s risk management strategy, policies, procedures
and controls. As there is currently no separate Risk Committee at Board level, the Audit Committee
reviews, monitors and discusses these matters with the CEO, CFO, General Counsel, Vice President of
Internal Audit and other senior business leaders. The Audit Committee, CEO, CFO and General Counsel
report periodically to the Board on the Company’s risk management policies, processes and controls. The
Audit Committee and the Board review and evaluate the Company’s risk management strategies and
processes on an on-going basis throughout the course of each fiscal year.
The Audit Committee is supported in its oversight role by the policies put in place by management to
oversee and manage material business risks, as well as the roles played by internal risk management
committees, as described below, and internal and external audit functions. The internal and external audit
functions are separate from and independent of each other and each has a direct reporting line to the
Audit Committee. The CEO and the CEO’s direct reports are the primary management forum for risk
assessment and management within the Company.
Consistent with its oversight functions, the Audit Committee reviewed the Company’s risk management
framework and internal controls during fiscal year 2021. As part of the review, information was reported
by management to the Audit Committee to enable it to assess the effectiveness of the Company’s risk
management and internal control systems. In addition, consistent with the requirements of Section 404 of
the Sarbanes-Oxley Act of 2002, during fiscal year 2021, management assessed the effectiveness of the
Company’s internal controls over financial reporting and the effectiveness of the Company’s internal
control over financial reporting has been audited by Ernst & Young LLP. Based on its assessment,
management concluded that the Company’s internal controls over financial reporting were effective as of
31 March 2021. For additional information, see “Section 3 – Controls and Procedures” of this Annual
Report.
Risk Management Committee
in which
The Company maintains management level risk committees that focus on operation-related risks in the
regions
the Company operates and corporate-related risks (the “Risk Management
Committees”). The Risk Management Committees comprise a cross-functional group of employees who
review and monitor the risks facing the Company from the perspective of their particular business region
and area of responsibility. The Risk Management Committee is coordinated by the General Counsel. The
Vice President of Internal Audit and the General Counsel also provide quarterly reports to the Audit
Committee on key risks and the procedures in place for mitigating them.
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Financial Statements Disclosure Committee
The Financial Statements Disclosure Committee is a management committee comprised of senior
finance, accounting, compliance, legal, tax, treasury and investor relations executives in the Company,
which meets with the CEO, CFO and General Counsel prior to the Board’s consideration of any quarterly
or annual results. The Financial Statements Disclosure Committee is a forum for the CEO, CFO and
General Counsel to discuss, and, on the basis of those discussions, report to the Audit Committee, about
a range of risk management procedures, policies and controls, covering the draft results materials,
business unit financial performance and the current status of legal, tax, treasury, accounting, compliance,
internal audit, complaints and disclosure control matters.
Policies for Management of Material Business Risks
•
•
•
Management has put in place a number of key policies, processes and independent controls to provide
assurance as to the integrity of the Company’s systems of internal control and risk management. In
addition to the measures described elsewhere in this Annual Report, the more significant policies,
processes or controls adopted by the Company for oversight and management of material business risks
are:
•
engagement with members of the Risk Management Committee, at least quarterly, to assess the
key strategic, operations, reporting and compliance risks facing the Company, the level of risk and
the processes implemented to manage each of these key risks over the upcoming twelve months;
quarterly reporting to executive management, the Audit Committee, and annual reporting to the
Board, of the Risk Management Committee’s assessment regarding the key strategic, operations,
reporting and compliance risks facing the Company;
a program for the Audit Committee to review in detail each year the Company’s general risk
tolerance and all items identified by the Risk Management Committee as high focus risks;
quarterly meetings of the Financial Statements Disclosure Committee to review all quarterly and
annual financial statements and results;
an internal audit department with a direct reporting line to the Chair of the Audit Committee;
regular monitoring of the liquidity and status of the Company’s finance facilities;
•
•
• maintaining an appropriate global insurance program;
• maintaining policies and procedures in relation to treasury operations, including the use of financial
derivatives and issuing procedures requiring significant capital and recurring expenditure
approvals; and
implementing and maintaining training programs in relation to legal and regulatory compliance
issues such as trade practices/antitrust, insider trading, foreign corrupt practices and anti-bribery,
employment law matters, trade secrecy and intellectual property protection.
•
The Company has a steering committee in place to address matters relating to Environmental, Social and
Governance ("ESG"). In 2020 and 2021, in line with the Company's ESG roadmap objectives, targets and
initiatives were set, a review of the Company's systems and processes took place and the Company
published a Sustainability Overview as part of our Annual Review in August 2020.
Limitations of Control Systems
Due to the inherent limitations in all control systems and the fact that there are resource constraints in the
design of any control system, management does not expect that the Company’s internal risk
management and control systems will prevent or detect all error and all fraud. No matter how well it is
designed and operated, no evaluation of controls can provide absolute assurance that misstatements due
to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company
have been detected.
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The inherent limitations in all control systems include the realities that judgments in decision making can
be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be
circumvented by the individual acts of some persons, by collusion of two or more people, or by
management override of the controls. The design of any system of controls is based in part on certain
assumptions about the likelihood of future events, and there can be no assurance that any design will
succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of
controls’ effectiveness to future periods are subject to risks. Over time, controls may become inadequate
because of changes in conditions or deterioration in the degree of compliance with policies or
procedures.
Principle 8: Remunerate Fairly and Responsibly
Remuneration Committee
Director
David Harrison –
Committee Chair
Committee tenure
Independence
26 October 2020;
Chair since 26 October 2020
Independent non-executive director
Michael Hammes
16 November 2009
Independent non-executive Chair
Persio Lisboa
Harold Wiens
Anne Lloyd
9 August 2018
1 June 2020
26 October 2020
Independent non-executive director
Independent non-executive director
Independent non-executive director
The Remuneration Committee oversees the Company’s overall remuneration structure, policies and
programs, assesses whether the Company’s remuneration structure establishes appropriate incentives
for management and employees, and approves any significant changes in the Company’s remuneration
structure, policies and programs. Amongst other things, the Remuneration Committee:
•
administers and makes recommendations on the Company’s incentive compensation and equity-
based remuneration plans for senior management;
reviews the remuneration framework for the Company; and
•
• makes recommendations to the Board on the Company’s recruitment, retention and termination
policies and procedures for senior management.
A more complete description of these and other Remuneration Committee functions is contained in the
Remuneration Committee’s Charter, a copy of which is available in the Corporate Governance section of
the Company’s
in “Section 1 –
Remuneration Report” of this Annual Report. In addition, details of the Company’s remuneration
philosophy, policies, plans and procedures during fiscal year 2021 are disclosed in "Section 1 –
Remuneration Report" of this Annual Report.
investor relations website (www.ir.jameshardie.com.au), and
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SECTION 2
READING THIS REPORT
Forward-Looking Statements
This Annual Report contains forward-looking statements. 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 the effect and consequences of the COVID-19 public health crisis;
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 or housing market conditions in the regions in which we operate,
including but not limited to, 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.
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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 this Annual Report,
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 funding and the effect of currency exchange rate movements on the amount recorded in
the Company’s financial statements as an asbestos liability; 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; 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; dependence on residential and commercial construction markets; the effect of adverse changes in
climate or weather patterns; use of accounting estimates; risk and uncertainties arising out of the
COVID-19 public health crisis, including the impact of COVID-19 on our business, sales, results of
operations and financial condition 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 DISCUSSION AND ANALYSIS
The following discussion of our financial condition and results of operations should be read in conjunction
with our consolidated financial statements and the related notes, including the accounting policies
affecting our financial condition and results of operations, which are fully described in Note 1 to our
consolidated financial statements, presented later in this Annual Report.
In the following discussion and analysis, we intend to provide management’s explanation of the factors
that have affected our financial condition and results of operations for the fiscal years covered by the
financial statements included in this Annual Report, as well as management’s assessment of the factors
and trends which are anticipated to have a material effect on our financial condition and results of
operations in future periods.
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Our Management's Discussion and Analysis is presented in the following sections and should be read in
conjunction with our consolidated financial statements and the related notes, presented later in this
Annual Report:
• Critical Accounting Estimates
• Operating Results
•
Liquidity and Capital Allocation
• Outlook and Trend Information
Critical Accounting Estimates
As stated in Note 1 to our consolidated financial statements, the preparation of our financial statements
requires management to make estimates and judgments that affect the reported amounts of assets and
liabilities, the disclosure of contingent liabilities at the date of the financial statements and the reported
revenue and expenses during the periods presented therein.
We have identified the following most critical accounting policies under which significant judgments,
estimates and assumptions are made and where actual results may differ from these estimates under
different assumptions and conditions and may materially affect financial results or the financial position
reported in future periods:
Accounting for the AFFA
The amount of the asbestos liability has been recognized by reference to (but not exclusively based
upon) the most recent actuarial estimate of projected future cash flows as calculated by KPMG Actuarial
(“KPMGA”). Based on their assumptions, KPMGA arrived at a range of possible total future cash flows
and calculated a central estimate, which is intended to reflect a probability-weighted expected outcome of
those actuarially estimated future cash flows projected by the actuary to occur through 2073.
We recognize the asbestos liability in the consolidated financial statements on an undiscounted and
uninflated basis. We considered discounting when determining the best estimate under US GAAP. We
have recognized the asbestos liability by reference to (but not exclusively based upon) the central
estimate as undiscounted on the basis that it is our view that the timing and amounts of such cash flows
are not fixed or readily determinable. We considered inflation when determining the best estimate under
US GAAP. It is our view that there are material uncertainties in estimating an appropriate rate of inflation
over the extended period of the AFFA. We view the undiscounted and uninflated central estimate as the
best estimate under US GAAP.
Adjustments in the asbestos liability due to changes in the actuarial estimate of projected future cash
flows and changes in the estimate of future operating costs of AICF are reflected in the consolidated
statements of operations and comprehensive income during the period in which they occur. Claims paid
by AICF and claims-handling costs incurred by AICF are treated as reductions in the asbestos liability
balances.
In estimating the potential financial exposure, KPMGA has made a number of assumptions, including, but
not limited to, assumptions related to the peak period of claims, total number of claims that are
reasonably estimated to be asserted through 2073, the typical cost of settlement (which is sensitive to,
among other factors, the industry in which a plaintiff claims exposure, the alleged disease type, the age of
the claimant and the jurisdiction in which the action is brought), the legal costs incurred in the litigation of
such claims, the rate of receipt of claims, the settlement strategy in dealing with outstanding claims and
the timing of settlements. Changes to the assumptions may be necessary in future periods should
mesothelioma claims reporting escalate or decline.
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An updated actuarial assessment is performed as of 31 March each year. Any changes in the estimate
will be reflected as a charge or credit to the consolidated statements of operations for the year then
ended.
Inventory
Inventories are recorded at the lower of cost or net realizable value. In order to determine net realizable
value, management regularly reviews inventory quantities on hand and evaluates significant items to
determine whether they are excess, slow-moving or obsolete. The estimated value of excess, slow-
moving and obsolete inventory is recorded as a reduction to inventory and an expense in cost of sales in
the period in which it is identified. This estimate requires management to make judgments about the
future demand for inventory and is therefore at risk to change from period to period. If our estimate for the
future demand for inventory is greater than actual demand and we fail to reduce manufacturing output
accordingly, we could be required to record additional inventory reserves, which would have a negative
impact on our gross profit.
Accrued Warranty Reserve
We have offered, and continue to offer, various warranties on our products. Because our fiber cement
products have only been used in North America since the early 1990s, there is a risk that these products
will not perform in accordance with our expectations over an extended period of time. A typical warranty
program requires that we replace defective products within a specified time period from the date of sale.
We record an estimate for future warranty-related costs based on an analysis by us, which includes the
historical relationship of warranty costs to installed product at an estimated remediation cost per standard
foot. Based on this analysis and other factors, we adjust the amount of our warranty provisions as
necessary. Although our warranty costs have historically been within calculated estimates, if our
experience is significantly different from our estimates, it could result in the need for additional reserves.
Accounting for Income Tax
We recognize deferred tax assets and deferred tax liabilities for the expected tax consequences of
temporary differences between the tax bases of assets and liabilities and their reported amounts using
enacted tax rates in effect for the year in which we expect the differences to reverse. We record a
valuation allowance to reduce the deferred tax assets to the amount that we are more likely than not to
realize. We must assess whether, and to what extent, we can recover our deferred tax assets. If we
cannot satisfy a more-likely-than-not threshold for full or partial recovery, we must increase our income
tax expense by recording a valuation allowance against the portion of deferred tax assets that we cannot
recover. If facts later indicate that we will be unable to recover all or a portion of our net deferred tax
assets, our income tax expense would increase in the period in which we determine that recovery does
not meet the more-likely-than-not threshold.
We evaluate our uncertain tax positions in accordance with the guidance for accounting for uncertainty in
income taxes. Positions taken by an entity in its income tax returns must satisfy a more-likely-than-not
recognition threshold, assuming that the positions will be examined by taxing authorities with full
knowledge of all relevant information, in order for the positions to be recognized in the consolidated
financial statements. Each quarter we evaluate the income tax positions taken, or expected to be taken,
to determine whether these positions meet the more-likely-than-not threshold. We are required to make
subjective judgments and assumptions regarding our income tax positions and must consider a variety of
factors, including the current tax statutes and the current status of audits performed by tax authorities in
each tax jurisdiction. To the extent an uncertain tax position is resolved for an amount that varies from the
recorded estimated liability, our income tax expense in a given financial statement period could be
materially affected.
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Goodwill and Other Intangible Assets
Goodwill is the excess of purchase price over the fair value of tangible and identifiable intangible net
assets acquired in various business combinations. Goodwill is not amortized but is tested at the reporting
unit level for impairment annually, or more often if indicators of impairment exist. Factors that could cause
an impairment in the future could include, but are not limited to, adverse macroeconomic conditions,
deterioration in industry or market conditions, decline in revenue and cash flows or increases in costs and
capital expenditures compared to projected results. A goodwill impairment charge is recorded for the
amount by which the carrying value of the reporting unit exceeds the fair value of the reporting unit.
Intangible assets from acquired businesses are recognized at their estimated fair values at the date of
acquisition and consist of trademarks, customer relationships and other intangible assets. Finite-lived
intangibles are amortized to expense over the applicable useful lives, ranging from 2 to 13 years, based
on the nature of the asset and the underlying pattern of economic benefit as reflected by future net cash
inflows. We perform an impairment test of intangibles annually, or whenever events or changes in
circumstances indicate their carrying value may be impaired.
Impairment of Long-Lived Assets
Long-lived assets, such as property, plant and equipment, are evaluated each quarter for events or
changes in circumstances that indicate that an asset might be impaired because the carrying amount of
the asset may not be recoverable. These include, without limitation, a significant adverse change in the
extent or manner in which a long-lived asset or asset group is being used, a current period operating or
cash flow loss combined with a history of operating or cash flow losses, a projection or forecast that
demonstrates continuing losses associated with the use of a long-lived asset or asset group and/or a
current expectation that it is more likely than not that a long-lived asset or asset group will be sold or
otherwise disposed of significantly before the end of its previously estimated useful life. Identifying these
events and changes in circumstances, and assessing their impact on the appropriate valuation of the
affected assets requires us to make judgments, assumptions and estimates.
When such indicators of potential impairment are identified, recoverability is tested by grouping long-lived
assets that are used together and represent the lowest level for which cash flows are identifiable and
distinct from the cash flows of other long-lived assets, which is typically at the production line or plant
facility level, depending on the type of long-lived asset subject to an impairment review.
Recoverability is measured by a comparison of the carrying amount of the asset group to the estimated
undiscounted future cash flows expected to be generated by the asset group. If the carrying amount
exceeds the estimated undiscounted future cash flows, an impairment charge is recognized at the
amount by which the carrying amount exceeds the estimated fair value of the asset group.
The methodology used to estimate the fair value of the asset group is typically based on a discounted
cash flow analysis or a relative, market-based approach based on purchase offers or appraisals received
from third parties, that considers the asset group’s highest and best use that would maximize the value of
the asset group. In addition, the estimated fair value of an asset group also considers, to the extent
practicable, a market participant’s expectations and assumptions in estimating the fair value of the asset
group. If the estimated fair value of the asset group is less than the carrying value, an impairment loss is
recognized at an amount equal to the excess of the carrying value over the estimated fair value of the
asset group.
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In estimating the fair value of the asset group, we are required to make certain estimates and
assumptions that include forecasting the useful lives of the assets, selecting an appropriate discount rate
that reflects the risk inherent in future cash flows, forecasting market demand for our products and
recommissioning idle assets to meet anticipated capacity constraints in the future. We have not made any
material changes in the accounting methodology we use to assess impairment loss during the past three
fiscal years. However, if actual results are not consistent with our estimates and assumptions used in
estimating future cash flows and asset fair values, we may be exposed to material impairment losses in
future periods.
96
8
12
(11)
13
6
(5)
87
38
12
43
9
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James Hardie 2021 Annual Report on Form 20-F
Operating Results
Year ended 31 March 2021 compared to year ended 31 March 2020
US$ Millions (except volume and per share data)
Volume (mmsf)
Net sales
Cost of goods sold
Gross profit
Selling, general and administrative expenses
Research and development expenses
Restructuring expenses
Asbestos adjustments
Operating income
Interest, net
Loss on early debt extinguishment
Other income (expense)
Income before income taxes
Income tax expense
Net income
Earnings per share - basic
Earnings per share - diluted
$
$
$
$
Net sales increased 12% to US$2,908.7 million,
driven by higher volumes and average net sales
price in all of our operating segments.
Gross profit of US$1,051.7 million increased
13%, in line with the 12% increase in our
consolidated net sales.
Selling, general and administrative ("SG&A")
expenses decreased 6% primarily driven by
global cost containment actions, partially offset
by higher legal fees and stock compensation
expenses.
R&D expenses increased 5%, due to our
continued strategic focus on innovation.
Restructuring expenses for fiscal year 2021
consist solely of severance costs incurred in the
first quarter related to a reduction in headcount
across all regions. Fiscal year 2020 costs
primarily relate to impairments of our Penrose,
New Zealand and Summerville, USA plants, as
FY21
FY20
Change %
4,131.4
3,841.7
2,908.7 $
(1,857.0)
1,051.7
2,606.8
(1,673.1)
933.7
(389.6)
(34.3)
(11.1)
(143.9)
472.8
(47.8)
(13.1)
0.1
412.0
(149.2)
262.8 $
0.59 $
0.59 $
(415.8)
(32.8)
(84.4)
(58.2)
342.5
(54.4)
—
(0.1)
288.0
(46.5)
241.5
0.55
0.54
well as impairment expenses for other non-core
assets.
Asbestos adjustments primarily reflect
the
foreign exchange on
unfavorable effect of
Asbestos net liabilities of US$123.0 million, and
the unfavorable movement
the actuarial
adjustment.
in
Interest, net decreased due to the repayment of
our revolving credit facility in the first quarter, as
well as the voluntary redemption of our 2025
senior unsecured notes in January 2021.
Loss on early debt extinguishment consists
solely of costs associated with the voluntary
redemption of our 2025 senior unsecured notes,
specifically US$9.5 million of call redemption
premiums and US$3.6 million related to the
acceleration of unamortized financing costs.
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North America Fiber Cement Segment
Operating results for the North America Fiber Cement segment were as follows:
US$ Millions unless otherwise noted
Volume (mmsf)
Average net sales price per unit (per msf)
Fiber cement net sales
Gross profit
Gross margin (%)
Operating income
Operating income margin (%)
Restructuring expenses
Operating income excluding restructuring expenses
Operating income margin (%) excluding restructuring
expenses
FY21 vs FY20
FY21
FY20
Change
2,713.4
US$745
2,481.6
US$725
2,040.2
1,816.4
585.5
28.7
2.5
588.0
28.8
429.3
23.6
41.2
470.5
25.9
9%
3%
12%
12%
(0.1 pts)
36%
5.1 pts
94%
25%
2.9 pts
Net sales increased 12%, primarily driven by strong exteriors volume growth of 11%. The 3% increase in
average net sales price was primarily driven by favorable product mix and strategic pricing increases
during the year.
The slight decrease in gross margin is comprised of the following components:
Higher production and distribution costs
Higher average net sales price
Total percentage point change in gross margin
(1.9 pts)
1.8 pts
(0.1 pts)
Higher production and distribution costs primarily resulted from unfavorable freight costs and start-up
costs related to the greenfield expansion in Prattville, Alabama, partially offset by lower pulp costs and
lean manufacturing savings.
SG&A expenses decreased, driven by cost containment actions, including lower headcount and reduced
travel and marketing spend. As a percentage of sales, SG&A expenses decreased 3.0 percentage points.
Restructuring expenses of US$2.5 million consist solely of severance costs recorded in the first quarter
related to a reduction in headcount across the region in order to strategically realign our resources. In the
prior year, restructuring expenses of US$41.2 million includes an impairment of US$12.0 million
associated with our Summerville plant, as well as US$29.2 million related to a variety of non-core assets.
Operating income margin increased 5.1 percentage points to 28.7%, driven by lower SG&A expenses as
a percentage of sales and lower restructuring expenses.
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Asia Pacific Fiber Cement Segment
The Asia Pacific Fiber Cement segment is comprised of the following regions: (i) Australia; (ii) New
Zealand; and (iii) the Philippines.
Operating results for the Asia Pacific Fiber Cement segment in US dollars were as follows:
US$ Millions unless otherwise noted
Volume (mmsf)
Average net sales price per unit (per msf)
Fiber cement net sales
Gross profit
Gross margin (%)
Operating income
Operating income margin (%)
Restructuring expenses
Operating income excluding restructuring expenses
Operating income margin (%) excluding restructuring
expenses
FY21
FY20
Change
542.0
US$762
532.6
US$700
458.2
418.4
124.8
27.2
3.4
128.2
28.0
58.5
14.0
36.3
94.8
22.7
2%
9%
10%
18%
2.7 pts
13.2 pts
91%
35%
5.3 pts
Operating results for the Asia Pacific Fiber Cement segment in Australian dollars were as follows:
A$ Millions unless otherwise noted
Volume (mmsf)
Average net sales price per unit (per msf)
Fiber cement net sales
Gross profit
Gross margin (%)
Operating income
Operating income margin (%)
Restructuring expenses
Operating income excluding restructuring expenses
Operating income margin (%) excluding restructuring
expenses
FY21 vs FY20 (A$)
FY21
FY20
Change
542.0
A$1,056
532.6
A$1,027
635.2
614.1
172.4
27.2
4.9
177.3
28.0
80.8
14.0
58.3
139.1
22.7
2%
3%
3%
11%
2.7 pts
13.2 pts
92%
27%
5.3 pts
Net sales increased 3%, as strong results in the last nine months of the fiscal year more than offset the
lower volumes in the first quarter due to the COVID-19 government enforced lockdowns in the Philippines
and New Zealand. The 3% increase in the average net sales price was driven by product and geographic
mix, as well as our strategic price increases in Australia and New Zealand during the first quarter.
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The increase in gross margin can be attributed to the following components:
Higher average net sales price
Lower production and distribution costs
Total percentage point change in gross margin
1.6 pts
1.1 pts
2.7 pts
Lower production and distribution costs were driven by favorable plant performance, partially offset by the
unfavorable absorption of manufacturing costs on lower production volumes due to the idled facilities in
the Philippines and New Zealand in the first quarter.
SG&A expenses decreased, primarily driven by cost containment actions, including lower headcount and
reduced travel and marketing spend. As a percentage of sales, SG&A expenses decreased 2.5
percentage points.
Restructuring expenses of A$4.9 million consist solely of severance costs, primarily associated with our
strategic decision to consolidate Australia and New Zealand regional production to our two Australia
based plants, and a reduction in headcount across the region to realign our resources. In the prior year,
restructuring expenses of A$58.3 million primarily relates to our decision to close our Penrose, New
Zealand plant, as well as our James Hardie Systems business.
Operating income margin of 27.2% represents an increase of 13.2 percentage points, primarily driven by
lower restructuring expenses, as well as a higher gross margin and lower SG&A expenses as a
percentage of sales.
Europe Building Products Segment
The Europe Building Products segment is comprised of: (i) Europe Fiber Cement and (ii) Europe Fiber
Gypsum.
Operating results for the Europe Building Products segment in US dollars were as follows:
US$ Millions unless otherwise noted
Volume (mmsf)
Average net sales price per unit (per msf)
Fiber cement net sales
Fiber gypsum net sales1
Net sales
Gross profit
Gross margin (%)
Operating income
Operating income margin (%)
Restructuring expenses
Operating income excluding restructuring expenses
Operating income margin (%) excluding restructuring
expenses
____________
1
Also includes cement bonded board net sales.
FY21
FY20
Change
876.0
US$365
55.3
355.0
410.3
37.6
9.2
5.1
42.7
10.4
827.5
US$345
48.0
323.4
371.4
11.2
3.0
5.5
16.7
4.5
6%
6%
15%
10%
10%
9%
(0.3 pts)
6.2 pts
7%
5.9 pts
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Operating results for the Europe Building Products segment in Euros were as follows:
€ Millions unless otherwise noted
Volume (mmsf)
Average net sales price per unit (per msf)
Fiber cement net sales
Fiber gypsum net sales1
Net sales
Gross profit
Gross margin (%)
Operating income
Operating income margin (%)
Restructuring expenses
Operating income excluding restructuring expenses
Operating income margin (%) excluding restructuring
expenses
____________
1
Also includes cement bonded board net sales.
FY21 vs FY20 (€)
FY21
FY20
Change
876.0
€312
47.2
303.4
350.6
31.4
9.2
4.5
35.9
10.4
827.5
€311
43.3
290.9
334.2
10.0
3.0
4.9
14.9
4.5
6%
—%
9%
4%
5%
3%
(0.3 pts)
6.2 pts
8%
5.9 pts
Net sales increased 5%, driven by increases in fiber cement and fiber gypsum net sales of 9% and 4%,
respectively. These increases were primarily driven by our continued execution of our shift to a customer
integrated approach in the last nine months, partially offset by the 12% decrease in the first quarter
resulting from the COVID-19 government enforced lockdowns.
The decrease in gross margin is attributed to the following components:
Higher production and distribution costs
Higher average net sales price
Total percentage point change in gross margin
(0.6 pts)
0.3 pts
(0.3 pts)
Higher production and distribution costs resulted primarily from the unfavorable absorption of
manufacturing costs on lower production volumes in the first quarter, including the impact of the
COVID-19 related closures of our manufacturing plants in Orejo, Spain and Siglingen, Germany, partially
offset by lean manufacturing savings.
SG&A expenses decreased due to lower headcount and reduced travel and marketing spend. As a
percentage of sales, SG&A expenses decreased 6.3 percentage points.
Restructuring expenses of €4.5 million consist solely of severance costs, primarily associated with the
reduction of headcount across the region to strategically realign our resources. In the prior year,
restructuring expenses primarily relate to the impairment of non-core assets.
Operating income margin of 9.2% increased 6.2 percentage points, driven by lower SG&A expenses as a
percentage of sales.
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General Corporate
Results for General Corporate were as follows:
US$ Millions
General Corporate SG&A expenses
Asbestos:
Asbestos adjustments
AICF SG&A expenses
Restructuring expenses
General Corporate operating loss
FY21
FY20
Change %
$
(101.1) $
(68.2)
(143.9)
(1.2)
—
(246.2) $
(58.2)
(1.7)
(1.4)
(129.5)
$
(48)
29
(90)
General Corporate SG&A expenses increased US$32.9 million, driven by higher stock compensation
expenses due to the increase in our stock price, as well as higher legal fees.
Asbestos adjustments primarily reflect the non-cash foreign exchange re-measurement impact on
asbestos related balance sheet items, driven by the change in the AUD/USD spot exchange rate from the
beginning balance sheet date to the ending balance sheet date, as well as the annual actuarial
adjustment recorded in line with KPMGA's actuarial report.
The AUD/USD spot exchange rates are shown in the table below:
FY21
FY20
31 March 2020
31 March 2021
Change ($)
Change (%)
0.6177 31 March 2019
0.7601 31 March 2020
0.1424 Change ($)
23 Change (%)
0.7096
0.6177
(0.0919)
(13)
Asbestos adjustments recorded by the Company were made up of the following components:
US$ Millions
Increase in actuarial estimate
Effect of foreign exchange rate movements
Gain on foreign currency forward contracts
Other
Asbestos adjustments
FY21
FY20
$
$
(32.5) $
(123.0)
11.7
(0.1)
(143.9) $
(128.0)
69.0
0.8
—
(58.2)
The increase in the actuarial adjustment for fiscal year 2021 is due to the annual inflation adjustment,
partially offset by favorable claims reporting and lower claims sizes.
During fiscal year 2021, mesothelioma claims reporting activity was favorable compared to actuarial
expectations and the prior year, primarily driven by lower direct claims which typically cost significantly
more than cross claims. In addition, as claimants' ages continue to increase, this has had a favorable
effect on average claim size. As a result of these lower mesothelioma claims and lower average claims
size, Asbestos gross cash outflows of A$153.7 million for fiscal year 2021 were 10% below the actuarial
expectation. Changes to the assumptions may be necessary in future periods should mesothelioma
claims reporting escalate or decline.
Potential variation in the estimated peak period of claims has an impact much greater than the other
assumptions used to derive the discounted central estimate. In performing the sensitivity assessment of
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102
the estimated incidence pattern reporting for mesothelioma, if the pattern of incidence was shifted by two
years, the central estimate could increase by approximately 21% on a discounted basis.
Readers are referred to Note 12 to our consolidated financial statements for further information on
asbestos.
The following is an analysis of claims data for the fiscal years ended 31 March:
Claims received
Direct claims
Cross claims
Actuarial estimate for the period
Difference in claims received to actuarial estimate
Average claim settlement (A$)
Actuarial estimate for the period (A$)
Difference in claims paid to actuarial estimate
FY21
FY20
Change %
545
392
153
624
79
248,000
296,000
48,000
657
449
208
564
(93)
277,000
306,000
29,000
17
13
26
(11)
10
3
For the fiscal year ended 31 March 2021, we noted the following related to asbestos-related claims:
•
•
•
•
•
•
•
Net cash outflow was 13% below actuarial expectations;
Gross cash outflow was 10% below actuarial expectations;
Total claims received were 13% below actuarial expectations and 17% below fiscal year 2020;
Mesothelioma claims reported were 9% below actuarial expectations and 13% below fiscal
year 2020;
Number of claims settled were 8% below actuarial expectations and 3% below fiscal year
2020;
Average claim settlement was 16% below actuarial expectations and 10% below fiscal year
2020; and
Average claim settlement sizes were lower than actuarial expectations for all mesothelioma
age groups.
Interest, net
US$ Millions
Gross interest expense
Capitalized interest
Interest income
Net AICF interest income
Interest, net
FY21
FY20
Change %
$
$
(58.0) $
9.5
0.2
0.5
(47.8) $
(66.9)
9.5
1.6
1.4
(54.4)
13
—
(88)
(64)
12
Gross interest expense decreased US$8.9 million, primarily due to the repayment of our revolving credit facility
in the first quarter and the redemption of our 2025 senior unsecured notes in the fourth quarter.
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Income Tax Expense
Income tax expense (US$ Millions)
Effective tax rate (%)
FY21
(149.2)
36.2 %
FY20
(46.5)
16.1
The effective tax rate increased 20.1 percentage points, primarily due to Asbestos and tax adjustments and a
change in geographic mix.
Year ended 31 March 2020 compared to year ended 31 March 2019
Readers are referred to the "Management's Discussion and Analysis" in Section 2 our fiscal year 2020
Form 20-F filed with the SEC on 19 May 2020 for comparative analysis relating to fiscal years 2020 and
2019.
Liquidity and Capital Allocation
Overview
Our treasury policy regarding liquidity management, foreign exchange risk management, interest rate risk
management and cash management is administered by our treasury department which is centralized in
Ireland. The policy is reviewed annually and is designed to ensure that we have sufficient liquidity to
support our business activities and meet future business requirements in the countries in which we
operate. We aim to mitigate certain risks associated with fluctuations in interest rates and foreign
currency. Our strategies to reduce such risks may result in us entering into non-speculative interest rate
swaps and foreign currency forward contracts. For a more detailed discussion on our financial
instruments, see Note 13 to our consolidated financial statements. For a more detailed discussion on
foreign currency exchange rate and interest rate risks, see ‘Quantitative and Qualitative Disclosures
About Market Risk’ in Section 3 of this document.
Our cash position increased by US$64.1 million, from US$144.4 million at 31 March 2020 to US$208.5
million at 31 March 2021.
Our gross debt balance reduced from US$1,370.7 million at 31 March 2020, to US$868.3 million as of 31
March 2021, primarily a result of our voluntary redemption of our US$400.0 million 2025 senior
unsecured notes. In addition, at 31 March 2021, we had no amounts drawn from our US$500.0 million
unsecured revolving facility, compared to US$130.0 million at 31 March 2020. Subsequent to 31 March
2021, we drew US$110.0 million under our revolving credit facility to partially fund the payment of the
fiscal year 2021 special dividend.
Sources of Liquidity
During fiscal year 2021, we met our liquidity and capital requirements through a mix of external debt
facilities, cash reserves and cash flows from operations. These internal and external sources of liquidity
were primarily used during fiscal year 2021 to reduce our debt, fund expansion, renovation and
maintenance of production capacity, fund our annual contribution to AICF in accordance with the terms of
the AFFA, and fund our working capital requirements, consisting primarily of inventory, accounts
receivable and accounts payable. While our working capital requirements fluctuate seasonally during
months of the year when overall construction and renovation volumes increase, such fluctuations,
generally, have not had a significant impact on our short-term or long-term liquidity.
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There are certain restrictions that are either imposed upon us as an Irish plc operating under Irish law, or
imposed upon us as a party to the AFFA, which may restrict the ability of subsidiaries to transfer funds to
us in the form of cash dividends, loans or advances. For more detailed discussion on these restrictions,
see “Section 3 – Risk Factors.” Even with these restrictions, based on our existing cash balances,
together with anticipated operating cash flows and unutilized credit facilities, we anticipate we will have
sufficient funds to meet our planned working capital and other expected cash requirements for the next
twelve months.
Cash Flow
Net cash provided by operating activities
$
786.9 $
451.2 $
Net cash used in investing activities
Net cash used in financing activities
(120.4)
(540.2)
(203.8)
(179.0)
335.7
83.4
(361.2)
74
41
FY21
FY20
Change
Change %
Significant sources and uses of cash during fiscal year 2021 included:
• Cash provided by operating activities:
◦ Higher net sales and profitability in each of our regions led to net income, adjusted for non-
cash items, of US$692.4 million;
◦ Working capital improvements: US$98.7 million related to a reduction in inventory as we
continue to execute our strategy to integrate our supply chain with our customers, and
US$6.6 million due to improvements in accounts receivable and accounts payable
balances;
◦ US Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") tax refund of
US$64.8 million; and
Asbestos claims paid of US$105.3 million.
◦
• Cash used in investing activities:
◦ Capital expenditures of US$110.7 million, primarily related to capacity expansion in
Prattville, Alabama and Carole Park, Australia, as well as other maintenance projects.
• Cash used in financing activities:
◦ Repayment of entire US$130.0 million balance on our revolving credit facility;
◦ Redemption of US$400.0 million 2025 senior unsecured notes; and
◦ Payment of US$9.5 million call premium to note holders.
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105
Borrowings
At 31 March 2021 and 2020, our borrowings were US$858.6 million US$1,354.6 million, respectively. See
the following table for a summary of our borrowings:
(Millions of US dollars)
Senior unsecured notes:
31 March
2021
31 March
2020
Principal amount 4.750% notes due 2025
$
—
$
Principal amount 3.625% notes due 2026 (€400.0 million)
Principal amount 5.000% notes due 2028
Total
468.3
400.0
868.3
400.0
440.7
400.0
1,240.7
Unsecured revolving credit facility
—
130.0
Unamortized debt issuance costs
Total Long-term debt
(9.7)
(16.1)
$
858.6
$
1,354.6
Weighted average interest rate of Long-term debt
4.3 %
4.3 %
Interest on our 3.625% notes due 2026 is payable semi-annually in arrears on 1 October and 1 April of
each year. Interest on our 5.000% notes due 2028 is payable semi-annually in arrears on 15 January and
15 July of each year.
As of 31 March 2021, we had a US$500.0 million unsecured revolving credit facility (the “Revolving Credit
Facility”) which can be drawn in US dollars with variable interest rates based on London Interbank
Offered Rate (“LIBOR”) plus margin. The Revolving Credit Facility's amended expiration date is
December 2022 and the size of the facility may be increased by up to US$250.0 million. At 31 March
2021, the Company had outstanding borrowings of nil, and US$4.7 million of issued but undrawn letters
of credit and bank guarantees. These letters of credit and bank guarantees relate to various operational
matters including insurance, performance bonds and other items, leaving the Company with US$495.3
million of available borrowing capacity under the Revolving Credit Facility.
Readers are referred to Note 10 of our 31 March 2021 consolidated financial statements for further
information on our borrowings.
Capital Expenditures and Lease Obligations
Our total capital expenditures for fiscal years 2021 and 2020 were US$110.7 million and US$193.8
million, respectively. We expect our capital expenditures to be approximately US$250.0 million annually
for the next three fiscal years.
Refer to “Section 1 – Property, Plants and Equipment – Capital Expenditures” for further discussion and a
listing of our significant capital expenditures in fiscal years 2021 and 2020.
Refer to Note 8 of our 31 March 2021 consolidated financial statements for our future lease payments for
non-cancellable leases at 31 March 2021.
Table of Contents
James Hardie 2021 Annual Report on Form 20-F
106
Capital Management
We periodically review our capital structure and capital allocation objectives and expect the following
capital management focus in the short term:
Invest in capacity expansion and market led innovation to support organic growth;
• Preserve strong liquidity position and financial flexibility;
•
• Maintain leverage ratio of 1-2x; and
• Return capital to shareholders
◦ Returned over US$300 million through special dividend in April 2021
◦ Reinstating ordinary dividends in fiscal year 2022, beginning with a half-year dividend to be
declared in November 2021.
AICF funding
We funded US$153.3 million to AICF during fiscal year 2021, as provided under the AFFA. From the time
AICF was established in February 2007 through the date of this Annual Report, we have contributed
approximately A$1,571.0 million to the fund.
We anticipate that we will make contributions totaling approximately US$252.6 million to AICF during
fiscal year 2022. This amount represents 35% of our free cash flow of US$721.6 million. Our free cash
flow, as defined by the AFFA, is our operating cash flow per US GAAP in effect in December 2004. To
reconcile our current year operating cash flow of US$786.9 million to 2004 US GAAP, a US$65.3 million
adjustment is required.
Readers are referred to Notes 1 and 12 to our consolidated financial statements for further information on
asbestos.
Outlook and Trend Information
James Hardie continues to assess the impacts and the uncertainties of the COVID-19 pandemic on the
geographic locations in which we operate, and the continuing impact of the pandemic on James Hardie’s
business and future financial performance still remains uncertain.
We expect growth in US residential end markets to continue into fiscal year 2022. A number of external
factors will contribute to demand for our products, including improvement in United States’ GDP, lower
unemployment level, improvement in consumer confidence levels, sustainable household debt levels,
historically low interest rates, stability in home prices and new household formation. Our expanded focus
for fiscal year 2022 and beyond is to execute on the three strategic initiatives that we introduced in
February 2021. This includes commercializing global product innovation, further penetrating into existing
and new market opportunities, and extending the James Hardie brand from a premium professional
brand into a market-leading consumer brand. We are on or ahead of plan for each of these initiatives.
We are the largest fiber cement producer in North America with ten plants. The scale of our operations
and manufacturing capabilities improves our position with distributors who continue to experience
increased demand for fiber cement products and seek a partner whom can manufacture and deliver the
volume required on a timely basis. The plants are positioned near attractive markets in the United States
to help minimize transportation costs for product distribution and raw material sourcing. Input costs
including raw materials, labor and freight costs have fluctuated year over year and we are actively
engaged in mitigating actions to moderate any future increases.
In Australia, it is anticipated that our addressable underlying market will increase in fiscal year 2022
compared to fiscal year 2021. Net sales from our Australian business are expected to trend above the
Table of Contents
James Hardie 2021 Annual Report on Form 20-F
107
average growth of the domestic repair and remodel and single family detached housing markets in the
eastern states of Australia.
We expect our Europe Building Product segment to achieve year on year net sales and operating income
margin growth.
Table of Contents
James Hardie Industries plc - Consolidated Financial Statements
INDEX
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of 31 March 2021 and 2020
Consolidated Statements of Operations and Comprehensive Income for the Fiscal Years
Ended 31 March 2021, 2020 and 2019
Consolidated Statements of Cash Flows for the Fiscal Years Ended 31 March 2021, 2020 and
2019
Consolidated Statements of Changes in Shareholders’ Equity (Deficit) for the Fiscal Years
Ended 31 March 2021, 2020 and 2019
Notes to Consolidated Financial Statements
108
Page
109
111
112
113
114
115
Table of Contents
Report of Independent Registered Public Accounting Firm
109
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of James Hardie Industries plc
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of James Hardie Industries plc (the Company) as
of 31 March 2021 and 2020, the related consolidated statements of operations and comprehensive income,
changes in shareholders' equity (deficit) and cash flows for each of the three years in the period ended 31 March
2021, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the
consolidated financial statements present fairly, in all material respects, the financial position of the Company at 31
March 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period
ended 31 March 2021, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the Company's internal control over financial reporting as of 31 March 2021, based on criteria
established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (2013 framework) and our report dated 18 May 2021 expressed an unqualified opinion
thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an
opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with
the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of
material misstatement of the financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements. Our audits also included evaluating the accounting principles used and
significant estimates made by management, as well as evaluating the overall presentation of the financial
statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial
statements that was communicated or required to be communicated to the audit committee and that: (1) relates to
accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,
subjective or complex judgments. The communication of the critical audit matter does not alter in any way our
opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical
audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to
which it relates.
Table of Contents
Report of Independent Registered Public Accounting Firm
110
Description of
the Matter
Asbestos Liability Valuation
At 31 March 2021, the aggregate asbestos liability was US$1,135.8 million. As disclosed in
Note 12 to the consolidated financial statements, the liability relates to an agreement to
provide long-term funding to the Asbestos Injuries Compensation Fund (“AICF”), a special
purpose fund established to provide compensation of proven Australian-related personal
injuries.
How We
Addressed the
Matter in Our
Audit
Auditing management’s estimate of the asbestos liability is challenging because the
estimation process is based on actuarial estimates of projected future cash flows which are
inherently uncertain. The projected cash flows are complex and use subjective
assumptions including the projected number of claims, estimated cost of settlement per
claim, inflation rates, legal costs, and timing of receipt of claims and settlements.
We obtained an understanding, evaluated the design and tested the operating effectiveness
of the Company's internal controls over the identification of claims, review of calculations
performed by the Company’s third-party actuary and management’s review of the use of
historical claim data and actuarial assumptions mentioned above to project the future
liability.
To evaluate the estimate of the asbestos liability, our audit procedures included, among
others, testing the underlying claims data used in the calculation to internal and external
data on a sample basis. We involved our actuarial specialists to assist in evaluating the
methodologies and key assumptions mentioned above to independently develop a range
for the asbestos liability and compare that range to management’s recorded liability. We
also assessed the adequacy of the related disclosures in the Company’s consolidated
financial statements.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2008.
Irvine, California
18 May 2021
Table of Contents
James Hardie Industries plc - Consolidated Balance Sheets
(Millions of US dollars)
Assets
Current assets:
Cash and cash equivalents
Restricted cash and cash equivalents
Restricted cash and cash equivalents - Asbestos
Restricted short-term investments - Asbestos
Accounts and other receivables, net
Inventories
Prepaid expenses and other current assets
Insurance receivable - Asbestos
Workers’ compensation - Asbestos
Total current assets
Property, plant and equipment, net
Operating lease right-of-use-assets
Finance lease right-of-use-assets
Goodwill
Intangible assets, net
Insurance receivable - Asbestos
Workers’ compensation - Asbestos
Deferred income taxes
Deferred income taxes - Asbestos
Other assets
Total assets
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities
Accrued payroll and employee benefits
Operating lease liabilities
Finance lease liabilities
Accrued product warranties
Income taxes payable
Asbestos liability
Workers’ compensation - Asbestos
Dividends payable
Other liabilities
Total current liabilities
Long-term debt
Deferred income taxes
Operating lease liabilities
Finance lease liabilities
Accrued product warranties
Income taxes payable
Asbestos liability
Workers’ compensation - Asbestos
Other liabilities
Total liabilities
Commitments and contingencies (Note 14)
Shareholders’ equity:
Common stock, Euro 0.59 par value, 2.0 billion shares authorized; 444,288,874 shares issued and
outstanding at 31 March 2021 and 443,144,740 shares issued and outstanding at 31 March 2020
Additional paid-in capital
Retained earnings
Accumulated other comprehensive loss
Total shareholders’ equity
Total liabilities and shareholders’ equity
31 March
2021
31 March
2020
$
208.5 $
5.0
104.9
26.6
333.2
218.3
38.9
6.6
1.6
943.6
1,372.3
46.4
2.7
209.3
173.9
42.9
20.3
906.8
367.4
3.4
111
144.4
5.0
36.4
21.6
363.3
305.1
26.1
5.0
1.5
908.4
1,341.7
40.5
1.7
196.9
166.7
38.5
20.7
989.4
319.1
4.7
$
$
$
4,089.0 $
4,028.3
307.0 $
112.5
7.8
1.0
6.0
6.6
122.2
1.6
303.7
32.7
901.1
858.6
86.3
53.3
1.9
33.6
4.7
1,013.6
20.3
54.8
3,028.2
231.4
224.6
611.4
(6.6)
1,060.8
4,089.0 $
274.7
87.1
14.3
0.5
7.0
8.9
103.9
1.5
—
12.1
510.0
1,354.6
81.9
41.4
1.5
35.4
21.3
882.5
20.7
43.7
2,993.0
230.6
207.3
659.5
(62.1)
1,035.3
4,028.3
The accompanying notes are an integral part of these consolidated financial statements.
Table of Contents
James Hardie Industries plc - Consolidated Statements of Operations and Comprehensive Income
112
(Millions of US dollars, except per share data)
Net sales
Cost of goods sold
Gross profit
Selling, general and administrative expenses
Research and development expenses
Restructuring expenses
Asbestos adjustments
Operating income
Interest, net
Loss on early debt extinguishment
Other income (expense)
Income before income taxes
Income tax expense
Net income
Income per share:
Basic
Diluted
Weighted average common shares outstanding (Millions):
Basic
Diluted
Comprehensive income, net of tax:
Net income
Cash flow hedges
Pension adjustments
Currency translation adjustments
Comprehensive income
Years Ended 31 March
2021
2020
2019
$
2,908.7 $
2,606.8 $
(1,857.0)
1,051.7
(389.6)
(34.3)
(11.1)
(143.9)
472.8
(47.8)
(13.1)
0.1
412.0
(149.2)
(1,673.1)
933.7
(415.8)
(32.8)
(84.4)
(58.2)
342.5
(54.4)
—
(0.1)
288.0
(46.5)
262.8 $
241.5 $
0.59 $
0.59 $
443.7
445.4
0.55 $
0.54 $
442.6
444.1
262.8 $
241.5 $
—
(0.4)
55.9
318.3 $
—
0.8
(32.6)
209.7 $
$
$
$
$
$
2,506.6
(1,675.6)
831.0
(403.6)
(37.9)
(15.9)
(22.0)
351.6
(50.1)
(1.0)
0.1
300.6
(71.8)
228.8
0.52
0.52
441.9
443.0
228.8
(0.1)
—
(28.9)
199.8
The accompanying notes are an integral part of these consolidated financial statements.
Table of Contents
James Hardie Industries plc – Consolidated Statements of Cash Flows
113
(Millions of US dollars)
Cash Flows From Operating Activities
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Years Ended 31 March
2021
2020
2019
$
262.8
$
241.5
$
228.8
131.5
119.4
Depreciation and amortization
Lease expense
Deferred income taxes
Stock-based compensation
Asbestos adjustments
Excess tax benefits from share-based awards
Restructuring expenses
Loss on early debt extinguishment
Other, net
Changes in operating assets and liabilities:
Accounts and other receivables
Inventories
Lease assets and liabilities, net
Prepaid expenses and other assets
Insurance receivable - Asbestos
Accounts payable and accrued liabilities
Claims and handling costs paid - Asbestos
Income taxes payable
Other accrued liabilities
Net cash provided by operating activities
Cash Flows From Investing Activities
Purchases of property, plant and equipment
Proceeds from sale of property, plant and equipment
Capitalized interest
Acquisition of business, net of cash acquired
Purchase of restricted short-term investments - Asbestos
Proceeds from restricted short-term investments - Asbestos
Net cash used in investing activities
Cash Flows From Financing Activities
Proceeds from credit facilities
Repayments of credit facilities
Proceeds from 364-day term loan facility
Repayments of 364-day term loan facility
Proceeds from senior unsecured notes
Debt issuance costs
Repayment of senior unsecured notes
Call redemption premium paid to note holders
Proceeds from issuance of shares
Repayment of finance lease obligations and borrowings
Dividends paid
Net cash (used in) provided by financing activities
Effects of exchange rate changes on cash and cash equivalents, restricted cash and restricted cash - Asbestos
Net increase (decrease) in cash and cash equivalents, restricted cash and restricted cash - Asbestos
Cash and cash equivalents, restricted cash and restricted cash - Asbestos at beginning of period
Cash and cash equivalents, restricted cash and restricted cash - Asbestos at end of period
Non-Cash Investing and Financing Activities
Capital expenditures incurred but not yet paid
Supplemental Disclosure of Cash Flow Activities
Cash paid during the year for interest
Cash (refund) payment during the year for income taxes, net
Cash paid to AICF
$
$
$
$
$
$
$
$
$
$
$
135.0
17.0
85.8
18.0
143.9
(3.5)
—
13.1
20.3
46.4
98.7
(19.1)
(14.2)
5.8
25.0
(106.4)
(14.7)
73.0
18.1
64.0
10.3
58.2
(0.4)
77.4
—
17.2
(118.6)
3.2
(15.6)
(2.6)
7.6
45.1
(105.6)
(11.0)
30.9
—
12.7
12.5
22.0
—
15.9
1.0
16.3
(18.1)
(28.6)
—
(1.7)
4.8
3.5
(108.8)
8.8
15.5
304.0
786.9
$
451.2
$
(110.7) $
(193.8) $
(317.5)
1.6
(9.5)
—
(25.0)
23.2
8.0
(9.5)
—
(75.5)
67.0
(120.4) $
(203.8) $
—
$
330.0
$
(130.0)
(350.0)
—
—
—
—
(400.0)
(9.5)
0.1
(0.8)
—
—
—
—
—
—
—
—
(0.4)
(158.6)
(540.2) $
(179.0) $
6.3
$
(6.2) $
132.6
185.8
62.2
123.6
318.4
$
185.8
$
—
(5.4)
(558.7)
(89.1)
106.3
(864.4)
230.0
(180.0)
492.4
(458.8)
458.8
(6.1)
—
—
—
—
(172.1)
364.2
6.6
(189.6)
313.2
123.6
18.0
$
8.3
$
25.9
56.4
$
(3.7) $
153.3
$
61.5
52.5
108.9
$
$
$
57.0
26.3
103.0
The accompanying notes are an integral part of these consolidated financial statements.
Table of Contents
James Hardie Industries plc – Consolidated Statements of Changes in Shareholders’ Equity (Deficit)
114
(Millions of US dollars)
Common
Stock
Additional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
Total
Balances as of 31 March 2018
$
229.5 $
185.6 $
(635.3) $
(1.3) $
Net income
Other comprehensive loss
Stock-based compensation
Adoption of ASU 2016-16
Dividends declared
—
—
0.5
—
—
—
—
12.0
—
—
228.8
—
—
1,160.3
(176.7)
—
(29.0)
—
—
—
Balances as of 31 March 2019
$
230.0 $
197.6 $
577.1 $
(30.3) $
Net income
Other comprehensive loss
Stock-based compensation
Adoption of ASU 2016-02
Dividends declared
—
—
0.6
—
—
—
—
9.7
—
—
241.5
—
—
0.2
(159.3)
—
(31.8)
—
—
—
Balances as of 31 March 2020
$
230.6 $
207.3 $
659.5 $
(62.1) $
Net income
Other comprehensive gain
Stock-based compensation
Issuance of ordinary shares
Dividends declared
—
—
0.8
—
—
—
—
17.2
0.1
—
262.8
—
—
—
(310.9)
—
55.5
—
—
—
Balances as of 31 March 2021
$
231.4 $
224.6 $
611.4 $
(6.6) $
(221.5)
228.8
(29.0)
12.5
1,160.3
(176.7)
974.4
241.5
(31.8)
10.3
0.2
(159.3)
1,035.3
262.8
55.5
18.0
0.1
(310.9)
1,060.8
The accompanying notes are an integral part of these consolidated financial statements.
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements
115
1. Organization and Significant Accounting Policies
Nature of Operations
James Hardie Industries plc ("JHI plc") manufactures and sells fiber cement, fiber gypsum and cement-
bonded building products for interior and exterior building construction applications, primarily in the
United States, Australia, Europe, New Zealand, the Philippines and Canada.
Basis of Presentation
The consolidated financial statements represent the financial position, results of operations and cash
flows of JHI plc and its wholly-owned subsidiaries and variable interest entity (“VIE”). Unless the context
indicates otherwise, JHI plc and its direct and indirect wholly-owned subsidiaries and VIE (as of the time
relevant to the applicable reference) are collectively referred to as “James Hardie”, the “James Hardie
Group” or the “Company”. The consolidated financial statements are prepared in accordance with
accounting principles generally accepted in the United States of America (“US GAAP”). All intercompany
balances and transactions have been eliminated in consolidation.
Certain prior period amounts have been reclassified to conform to the current period presentation.
Summary of Significant Accounting Policies
Variable Interest Entities
A VIE is an entity that is evaluated for consolidation using more than a simple analysis of voting control.
The analysis is based on: (i) what party has the power to direct the most significant activities of the VIE
that impact its economic performance; and (ii) what party has rights to receive benefits or is obligated to
absorb losses that are significant to the VIE. The analysis of the party that consolidates a VIE is a
continual assessment.
In February 2007, the Company’s shareholders approved the Amended and Restated Final Funding
Agreement (the “AFFA”), an agreement pursuant to which the Company provides long-term funding to
Asbestos Injuries Compensation Fund (“AICF”), a special purpose fund that provides compensation for
the Australian-related personal injuries for which certain former subsidiary companies of James Hardie in
Australia (being Amaca Pty Ltd (“Amaca”), Amaba Pty Ltd (“Amaba”) and ABN 60 Pty Limited (“ABN 60”)
(collectively, the “Former James Hardie Companies”)) are found liable. JHI plc owns 100% of James
Hardie 117 Pty Ltd (the “Performing Subsidiary”), which, under the terms of the AFFA, has an obligation
to make payments to AICF on an annual basis subject to the provisions of the AFFA. JHI plc guarantees
the Performing Subsidiary’s obligation. Additionally, the Company appoints three AICF directors and the
New South Wales (“NSW”) Government appoints two AICF directors.
Although the Company has no ownership interest in AICF, for financial reporting purposes, the Company
consolidates AICF, which is a VIE as defined under US GAAP, due to its pecuniary and contractual
interests in AICF as a result of the funding arrangements outlined in the AFFA. The Company’s
consolidation of AICF results in AICF’s assets and liabilities being recorded on its consolidated balance
sheets and AICF’s income and expense transactions being recorded in the consolidated statements of
operations and comprehensive income. These items are Australian dollar-denominated and are subject to
remeasurement into US dollars at each reporting date.
For the fiscal years ended 31 March 2021, 2020 and 2019, the Company did not provide financial or
other support to AICF that it was not previously contractually required to provide.
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
116
Use of Estimates
The preparation of financial statements in conformity with US GAAP requires management to make
estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and
the reported amounts of revenues and expenses during the reporting period. Actual results could differ
from these estimates.
Foreign Currency Translation/Remeasurement
All assets and liabilities are translated or remeasured into US dollars at current exchange rates while
revenues and expenses are translated or remeasured at average exchange rates in effect for the period.
The effects of foreign currency translation adjustments are included directly in other comprehensive
income in shareholders’ equity (deficit). Gains and losses arising from foreign currency transactions are
recognized in income.
The Company has recorded on its balance sheet certain foreign assets and liabilities, including asbestos-
related assets and liabilities under the terms of the AFFA, that are denominated in foreign currencies and
subject to translation (foreign entities) or remeasurement (AICF entity and Euro denominated debt) into
US dollars at each reporting date. Unless otherwise noted, the Company converts foreign currency
denominated assets and liabilities into US dollars at the spot rate at the end of the reporting period; while
revenues and expenses are converted using an average exchange rate for the period. The Company
records gains and losses on its Euro denominated debt which are economically offset by foreign
exchange gains and losses on loans between subsidiaries, resulting in a net immaterial translation gain
or loss which is recorded in the Selling, general and administrative expenses in the consolidated
statements of operations and comprehensive income.
Restricted Cash and Cash Equivalents
Restricted cash and cash equivalents, other than those amounts directly related to the AICF, generally
relate to amounts subject to letters of credit with insurance companies, which restrict the cash from use
for general corporate purposes.
Accounts Receivable
The Company evaluates the collectability of accounts receivable on an ongoing basis based on historical
bad debts, customer credit-worthiness, current economic trends and changes in the Company's customer
payment activity. An allowance for doubtful accounts is provided for known and estimated bad debts.
Although credit losses have historically been within expectations, the Company cannot guarantee that it
will continue to experience the same credit loss rates that it has had in the past.
Inventories
Inventories are valued at the lower of cost or net realizable value. Cost is generally determined under the
first-in, first-out method, except that the cost of raw materials and supplies is determined using actual or
average costs. Cost includes the costs of materials, labor and applied factory overhead. On a regular
basis, the Company evaluates its inventory balances for excess quantities and obsolescence by
analyzing demand, inventory on hand, sales levels and other information. Based on these evaluations,
inventory costs are adjusted to net realizable value, if necessary.
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
117
Property, Plant and Equipment
Property, plant and equipment are stated at cost. Property, plant and equipment of businesses acquired
are recorded at their estimated fair value at the date of acquisition. Depreciation of property, plant and
equipment is computed using the straight-line method over the following estimated useful lives:
Buildings
Buildings Improvements
Leasehold Improvements
Machinery and Equipment
Leases
Years
5 to 50
1 to 40
1 to 40
1 to 30
At lease commencement, which is generally when the Company takes possession of the asset, the
Company records a lease liability and a corresponding right-of-use ("ROU") asset. Lease liabilities
represent the present value of minimum lease payments over the expected lease term, which includes
options to extend the lease when it is reasonably certain those options will be exercised. Determining the
lease term and amount of lease payments to include in the calculation of the ROU asset and lease
liability for leases containing options requires the use of judgment to determine whether the exercise of
an option is reasonably certain, and if the option period and payments should be included in the
calculation of the associated ROU asset and liability. In making this determination, the Company
considers all relevant economic factors that would compel the Company to exercise an option. The
Company’s leases generally do not provide a readily determinable implicit borrowing rate. As such, the
discount rate used to calculate present value is the lessee’s incremental borrowing rate, which is primarily
based upon the periodic risk-adjusted interest margin and the term of the lease.
Minimum lease payments include base rent as well as fixed escalation of rental payments. In determining
minimum lease payments, the Company separates non-lease components such as common area
maintenance or other miscellaneous expenses that are updated based on landlord estimates for real
estate leases. Additionally, many of the Company’s transportation and equipment leases require
additional payments based on the underlying usage of the assets such as mileage and maintenance
costs. Due to the variable nature of these costs, the cash flows associated with these costs are expensed
as incurred and not included in the lease payments used to determine the ROU asset and associated
lease liability.
ROU assets represent the right to control the use of the leased asset during the lease term and are
initially recognized as an amount equal to the lease liability. In addition, prepaid rent, initial direct costs,
and adjustments for lease incentives are components of the ROU asset. Over the lease term, the lease
expense is amortized on a straight-line basis beginning on the lease commencement date. ROU assets
are assessed for impairment as part of the impairment of long-lived assets, which is performed whenever
events or changes in circumstances indicate that the carrying amount of an asset or asset group may not
be recoverable.
A ROU asset and lease liability are not recognized for leases with an initial term of 12 months or less, and
the lease expense is recognized on a straight-line basis over the lease term.
Depreciation and Amortization
The Company records depreciation and amortization under both Cost of goods sold and Selling, general
and administrative expenses, depending on the asset’s business use. All depreciation and amortization
related to plant building, machinery and equipment is recorded in Cost of goods sold.
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
118
Goodwill and Other Intangible Assets
Goodwill is the excess of purchase price over the fair value of tangible and identifiable intangible net
assets acquired in various business combinations. Goodwill is not amortized but is tested at the reporting
unit level for impairment annually, or more often if indicators of impairment exist. Factors that could cause
an impairment in the future could include, but are not limited to, adverse macroeconomic conditions,
deterioration in industry or market conditions, decline in revenue and cash flows or increases in costs and
capital expenditures compared to projected results. A goodwill impairment charge is recorded for the
amount by which the carrying value of the reporting unit exceeds the fair value of the reporting unit.
Intangible assets from acquired businesses are recognized at their estimated fair values at the date of
acquisition and consist of trademarks, customer relationships and other intangible assets. Finite-lived
intangibles are amortized to expense over the applicable useful lives, ranging from 2 to 13 years, based
on the nature of the asset and the underlying pattern of economic benefit as reflected by future net cash
inflows. The Company performs an impairment test of intangibles annually, or whenever events or
changes in circumstances indicate their carrying value may be impaired.
Impairment of Long-Lived Assets
Long-lived assets, such as property, plant and equipment, are evaluated each quarter for events or
changes in circumstances that indicate that an asset might be impaired because the carrying amount of
the asset may not be recoverable. These include, without limitation, a significant adverse change in the
extent or manner in which a long-lived asset or asset group is being used, a current period operating or
cash flow loss combined with a history of operating or cash flow losses, a projection or forecast that
demonstrates continuing losses associated with the use of a long-lived asset or asset group and/or a
current expectation that it is more likely than not that a long lived asset or asset group will be sold or
otherwise disposed of significantly before the end of its previously estimated useful life.
When such indicators of potential impairment are identified, recoverability is tested by grouping long-lived
assets that are used together and represent the lowest level for which cash flows are identifiable and
distinct from the cash flows of other long-lived assets, which is typically at the production line or plant
facility level, depending on the type of long-lived asset subject to an impairment review.
Recoverability is measured by a comparison of the carrying amount of the asset group to the estimated
undiscounted future cash flows expected to be generated by the asset group. If the carrying amount
exceeds the estimated undiscounted future cash flows, an impairment charge is recognized at the
amount by which the carrying amount exceeds the estimated fair value of the asset group.
The methodology used to estimate the fair value of the asset group is based on a discounted cash flow
analysis or a relative, market-based approach based on purchase offers or appraisals received from third
parties, that considers the asset group’s highest and best use that would maximize the value of the asset
group. In addition, the estimated fair value of an asset group also considers, to the extent practicable, a
market participant’s expectations and assumptions in estimating the fair value of the asset group. If the
estimated fair value of the asset group is less than the carrying value, an impairment loss is recognized at
an amount equal to the excess of the carrying value over the estimated fair value of the asset group.
Accrued Product Warranties
An accrual for estimated future warranty costs is recorded based on an analysis by the Company, which
includes the historical relationship of warranty costs to installed product at an estimated remediation cost
per standard foot. Based on this analysis and other factors, the adequacy of the Company’s warranty
provision is adjusted as necessary.
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James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
119
Debt
The Company’s debt consists of an unsecured revolving credit facility and senior unsecured notes. Each
of the Company's debt instruments is recorded at cost, net of any original issue discount or premium,
where applicable. The related original issue discount, premium and debt issuance costs are amortized
over the term of each respective borrowing using the effective interest method. Debt is presented as
current if the liability is due to be settled within 12 months after the balance sheet date, unless the
Company has the ability and intention to refinance on a long-term basis in accordance with US GAAP.
See Fair Value Measurements below and Note 13 for the Company’s fair value considerations.
In addition, the Company consolidates AICF which has a loan facility, which is included in Asbestos-
related Accounting Policies below.
Revenue Recognition
The Company recognizes revenues when the requisite performance obligation has been met, that is,
when the Company transfers control of its products to customers, which depending on the terms of the
underlying contract, is generally upon delivery. The Company records estimated reductions in sales for
customer rebates and discounts including volume, promotional, cash and other discounts. Rebates and
discounts are recorded based on management’s best estimate when products are sold. The estimates
are based on historical experience for similar programs and products. Management reviews these
rebates and discounts on an ongoing basis and the related accruals are adjusted, if necessary, as
additional information becomes available.
A portion of the Company’s revenue is made through distributors under a vendor managed inventory
agreement whereby revenue is recognized upon the transfer of title and risk of loss to the distributors.
Income Taxes
The Company accounts for income taxes under the asset and liability method. Under this method,
deferred income taxes are recognized by applying enacted statutory rates applicable to future years to
differences between the tax bases and financial reporting amounts of existing assets and liabilities. The
effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the
enactment date. The realization of the US deferred tax assets is affected primarily by the continued
profitability of the US business. A valuation allowance is provided when it is more likely than not that all or
some portion of deferred tax assets will not be realized.
Income taxes payable represents taxes currently payable which are computed at statutory income tax
rates applicable to taxable income derived in each jurisdiction in which the Company conducts business.
Interest and penalties related to uncertain tax positions are recognized in Income tax expense on the
consolidated statements of operations and comprehensive income.
The Company accrues for tax contingencies based upon its best estimate of the taxes ultimately
expected to be paid, which it updates over time as more information becomes available. Such amounts
are included in taxes payable or other non-current liabilities, as appropriate. If the Company ultimately
determines that payment of these amounts is unnecessary, the Company reverses the liability and
recognizes a tax benefit during the period in which the Company determines that the liability is no longer
necessary. The Company records additional tax expense in the period in which it determines that the
recorded tax liability is less than the ultimate assessment it expects.
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James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
120
Taxing authorities from various jurisdictions in which the Company operates are in the process of
reviewing and auditing the Company’s respective jurisdictional tax returns for various ranges of years.
The Company accrues tax liabilities in connection with ongoing audits and reviews based on knowledge
of all relevant facts and circumstances, taking into account existing tax laws, its experience with previous
audits and settlements, the status of current tax examinations and how the tax authorities view certain
issues.
Financial Instruments
The Company calculates the fair value of financial instruments and includes this additional information in
the notes to the consolidated financial statements. The estimated fair value amounts have been
determined by the Company using available market information and appropriate valuation methodologies.
However, considerable judgment is required in interpreting market data to develop the estimates of fair
value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that the
Company could realize in a current market exchange. The use of different market assumptions and/or
estimation methodologies may have a material effect on the estimated fair value amounts.
Periodically, interest rate swaps, commodity swaps and forward exchange contracts are used to manage
market risks and reduce exposure resulting from fluctuations in interest rates, commodity prices and
foreign currency exchange rates. Changes in the fair value of financial instruments that are not
designated as hedges are recorded in earnings within Asbestos adjustments, Other income (expense)
and Selling, general and administrative expenses at each measurement date. The Company does not
use derivatives for trading purposes.
Fair Value Measurements
Assets and liabilities of the Company that are carried or disclosed at fair value are classified in one of the
following three categories:
Level 1 Quoted market prices in active markets for identical assets and liabilities that the Company has
the ability to access at the measurement date;
Level 2 Observable market-based inputs or unobservable inputs that are corroborated by market data
for the asset or liability at the measurement date;
Level 3 Unobservable inputs that are not corroborated by market data used when there is minimal
market activity for the asset or liability at the measurement date.
Fair value measurements of assets and liabilities are assigned a level within the fair value hierarchy
based on the lowest level of any input that is significant to the fair value measurement in its entirety.
The carrying amounts of Cash and Cash Equivalents, Restricted cash and cash equivalents, Trade
receivables, Trade payables and the Revolving Credit Facility approximates their respective fair values
due to the short-term nature of these instruments.
Stock-based Compensation
Stock-based compensation expense represents the estimated fair value of equity-based and liability-
classified awards granted to employees and is recognized as an expense over the vesting period.
Forfeitures of stock-based awards are accounted for as they occur. Stock-based compensation expense
is included in the line item Selling, general and administrative expenses on the consolidated statements
of operations and comprehensive income.
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James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
121
Equity awards with vesting based solely on a service condition are typically subject to graded vesting, in
that the awards outstanding generally vest as follows: 25% at the first anniversary date of the grant; 25%
at the second anniversary date of the grant; and 50% at the third anniversary date of the grant. For equity
awards subject to graded vesting, the Company has elected to use the accelerated recognition method.
Accordingly, each vesting tranche is valued separately, and the recognition of stock-based compensation
expense is more heavily weighted earlier in the vesting period. Stock-based compensation expense for
equity awards that are subject to performance or market vesting conditions are based upon an estimate
of the number of awards that are expected to vest and typically recognized ratably over the vesting
period. The Company issues new shares to award recipients when the vesting condition for restricted
stock units (“RSUs”) has been satisfied.
For RSUs subject to a service vesting condition, the fair value is equal to the market value of the
Company’s common stock on the date of grant, adjusted for the fair value of estimated dividends as the
restricted stock holder is not entitled to dividends over the vesting period.
For RSUs subject to a performance vesting condition, the vesting of these units is subject to a return on
capital employed (“ROCE”) performance hurdle being met and is subject to negative discretion by the
Board. The Board’s discretion will reflect the Board’s judgment of the quality of the returns balanced
against management’s delivery of market share growth and a scorecard of key qualitative and
quantitative performance objectives.
For RSUs subject to a market vesting condition, the vesting of these units is based on James Hardie’s
performance against its Peer Group for the 20 trading days preceding the test date. The fair value of each
of these units is estimated using a binomial lattice model that incorporates a Monte Carlo simulation (the
“Monte Carlo” method).
For cash settled units ("CSUs"), compensation expense is recognized based upon an estimate of the
number of awards that are expected to vest and the fair market value of JHI plc’s common stock on the
date of the grant. The expense is recognized ratably over the vesting period and the liability is adjusted
for subsequent changes in JHI plc’s common stock price at each balance sheet date adjusted for the fair
value of estimated dividends as the restricted stock unit holder is not entitled to dividends over the
vesting period.
Loss Contingencies
The Company recognizes a liability for asserted and unasserted claims in the period in which a loss
becomes probable and estimable. The amount of a reasonably probable loss is dependent on a number
of factors including, without limitation, the specific facts and circumstances unique to each claim, the
existence of any co-defendants involved in defending the claim, the solvency of such co-defendants
(including the ability of such co-defendants to remain solvent until the related claim is ultimately resolved),
and the availability of claimant compensation under a government compensation scheme.
To the extent that it is probable and estimable, the estimated loss for these matters, incorporates
assumptions that are subject to the foregoing uncertainties and are principally derived from, but not
exclusively based on, historical claims experience together with facts and circumstances unique to each
claim. If the nature and extent of claims in future periods differ from historical claims experience, the
Company's assessment of probable and estimable liability with respect to current asserted claims
changes and/or actual liability is different to the estimates, then the actual amount of loss may be
materially higher or lower than estimated losses accrued.
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James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
122
Asbestos-related Accounting Policies
Asbestos Liability
The amount of the asbestos liability has been recognized by reference to (but not exclusively based
upon) the most recent actuarial estimate of projected future cash flows as calculated by KPMG Actuarial
(“KPMGA”), who are engaged and appointed by AICF under the terms of the AFFA. Based on their
assumptions, KPMGA arrived at a range of possible total future cash flows and calculated a central
estimate, which is intended to reflect a probability-weighted expected outcome of those actuarially
estimated future cash flows projected by KPMGA to occur through 2073.
The Company recognizes the asbestos liability in the consolidated financial statements by reference to
(but not exclusively based upon) the undiscounted and uninflated central estimate. The Company
considered discounting when determining the best estimate under US GAAP. The Company has
recognized the asbestos liability by reference to (but not exclusively based upon) the central estimate as
undiscounted on the basis that the timing and amounts of such cash flows are not fixed or readily
determinable. The Company considered inflation when determining the best estimate under US GAAP. It
is the Company’s view that there are material uncertainties in estimating an appropriate rate of inflation
over the extended period of the AFFA. The Company views the undiscounted and uninflated central
estimate as the best estimate under US GAAP.
Adjustments in the asbestos liability due to changes in the actuarial estimate of projected future cash
flows and changes in the estimate of future operating costs of AICF are reflected in the consolidated
statements of operations and comprehensive income during the period in which they occur. Claims paid
by AICF and claims-handling costs incurred by AICF are treated as reductions in the Asbestos liability
balances.
Insurance Receivable
The insurance receivable recorded by the Company has been recognized by reference to (but not
exclusively based upon) the most recent actuarial estimate of recoveries expected from insurance
policies and insurance companies with exposure to the asbestos claims, as calculated by KPMGA. The
assessment of recoveries is based on the expected pattern of claims against such policies less an
allowance for credit risk based on credit agency ratings. The insurance receivable generally includes
these cash flows as undiscounted and uninflated, however, where the timing of recoveries has been
agreed with the insurer, the receivables are recorded on a discounted basis. The Company records
insurance receivables that are deemed probable of being realized.
Adjustments in the insurance receivable due to changes in the actuarial estimate, or changes in the
Company’s assessment of recoverability are reflected in the consolidated statements of operations and
comprehensive income during the period in which they occur. Insurance recoveries are treated as a
reduction in the insurance receivable balance.
Workers’ Compensation
An estimate of the liability related to workers’ compensation claims is prepared by KPMGA as part of the
annual actuarial assessment. This estimate contains two components - amounts that will be met by a
workers’ compensation scheme or policy and amounts that will be met by the Former James Hardie
Companies.
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James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
123
The estimated liability is included as part of the asbestos liability and adjustments to the estimate are
reflected in the consolidated statements of operations and comprehensive income during the period in
which they occur. Amounts that are expected to be paid by the workers’ compensation schemes or
policies are recorded as workers’ compensation receivable. Adjustments to the workers’ compensation
liability result in an equal adjustment in the workers’ compensation receivable recorded by the Company
and have no effect on the consolidated statements of operations and comprehensive income.
Restricted Cash and Cash Equivalents
Cash and cash equivalents of AICF are reflected as restricted assets, as the use of these assets is
restricted to the settlement of asbestos claims and payment of the operating costs of AICF. Since cash
and cash equivalents are highly liquid, the Company classifies these amounts as a current asset on the
consolidated balance sheets.
Restricted Short-Term Investments
Restricted short-term investments of AICF consist of highly liquid investments held in the custody of
major financial institutions and are classified as available for sale. These restricted short-term
investments are recorded in the financial statements at fair value based on quoted market prices using
the specific identification method. Unrealized gains and losses on the fair value of these investments are
included as a separate component of Accumulated other comprehensive loss. Realized gains and losses
on these investments are recognized in Asbestos adjustments on the consolidated statements of
operations and comprehensive income.
Short-Term Debt
AICF has access to a secured loan facility (the “AICF Loan Facility”) made available by the NSW
Government, which can be used by AICF to fund the payment of asbestos claims and certain operating
and legal costs of AICF and Former James Hardie Companies (together, the “Obligors”).
Interest accrues daily on amounts outstanding, is calculated based on a 365-day year and is payable
monthly. AICF may, at its discretion, elect to accrue interest payable on amounts outstanding under the
AICF Loan Facility on the date interest becomes due and payable.
Deferred Income Taxes
The Performing Subsidiary can claim a tax deduction for its contributions to AICF over a five-year period
commencing in the year the contribution is incurred. Consequently, a deferred tax asset has been
recognized equivalent to the anticipated tax benefit over the life of the AFFA.
Adjustments are made to the deferred income tax asset as adjustments to the asbestos-related assets
and liabilities are recorded.
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
124
Asbestos Adjustments
The Asbestos adjustments reflected in the consolidated statements of operations and comprehensive
income reflect the net change in the actuarial estimate of the asbestos liability and insurance receivables,
and the change in the estimate of AICF claims handling costs. Additionally, as the asbestos-related
assets and liabilities are denominated in Australian dollars, the reported values of these asbestos-related
assets and liabilities in the Company’s consolidated balance sheets in US dollars are subject to
adjustment depending on the closing exchange rate between the two currencies at the balance sheet
dates, the effect of which is also included in Asbestos adjustments in the consolidated statements of
operations and comprehensive income. Further, changes in the fair value of forward exchange contracts
entered into to reduce exposure to the change in foreign currency exchange rates associated with AICF
payments are recorded in Asbestos adjustments.
Business combinations
The Company accounts for acquired businesses using the acquisition method of accounting. This method
requires that the purchase price be allocated to the identifiable assets acquired and liabilities assumed at
their estimated fair values at the date of acquisition. The excess of the purchase price over the
identifiable assets acquired and liabilities assumed is recorded as goodwill.
The fair values are determined by management, taking into consideration information supplied by
management of the acquired entities, and other relevant information. Such information typically includes
valuations obtained from independent appraisal experts, which management reviews and considers in its
estimates of fair values. The valuations are generally based upon future cash flow projections for the
acquired assets, discounted to present value. The determination of fair values requires significant
judgment by management, particularly with respect to the value of identifiable intangible assets. This
judgment could result in either a higher or lower value assigned to amortizable or depreciable assets. The
impact could result in either higher or lower amortization and/or depreciation expense. Management’s
estimates of fair value are based upon assumptions believed to be reasonable, but due to the inherent
uncertainty during the measurement period, which may be up to one year from the acquisition date, the
Company records adjustments to the assets acquired and liabilities assumed, with the corresponding
offset to goodwill.
Accounting Pronouncements
Adopted in Fiscal Year 2021
In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update
("ASU") No. 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial
Instruments, which amends the impairment model by requiring entities to use a forward-looking approach
based on expected losses to estimate credit losses on certain types of financial instruments, including
trade receivables. As required, the Company adopted the standard starting with the fiscal year beginning
1 April 2020 using a modified retrospective approach noting no material differences to the consolidated
financial statements for the fiscal year ended 31 March 2021. The Company estimates its allowance for
credit losses on the trade receivables as described in the Accounts Receivables policy above.
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
125
Recently Issued
In December 2019, the FASB issued ASU No. 2019-12, Income taxes (Topic 740). The amendments in
the standard are being issued to simplify the accounting for income taxes and are effective for fiscal years
and interim periods within those fiscal years, beginning after 15 December 2020 with early adoption
permitted. The Company will adopt ASU No. 2019-12 starting with the fiscal year beginning 1 April 2021
and does not expect the adoption of this standard to have a material impact on its consolidated financial
statements.
Earnings Per Share
Basic earnings per share ("EPS") is calculated using net income divided by the weighted average number
of common shares outstanding during the period. Diluted EPS is similar to basic EPS except that the
weighted average number of common shares outstanding is increased to include the number of
additional common shares calculated using the treasury method that would have been outstanding if the
dilutive potential common shares, such as stock options and RSUs, had been issued.
Basic and dilutive common shares outstanding used in determining net income per share are as follows:
(Millions of shares)
Basic common shares outstanding
Dilutive effect of stock awards
Diluted common shares outstanding
Years Ended 31 March
2021
2020
2019
443.7
1.7
445.4
442.6
1.5
444.1
441.9
1.1
443.0
There were no potential common shares which would be considered anti-dilutive for the fiscal years
ended 31 March 2021, 2020 and 2019.
Unless they are anti-dilutive, RSUs which vest solely based on continued employment are considered to
be outstanding as of their issuance date for purposes of computing diluted EPS and are included in the
calculation of diluted EPS using the Treasury Method. Once these RSUs vest, they are included in the
basic EPS calculation on a weighted-average basis.
RSUs which vest based on performance or market conditions are considered contingent shares. At each
reporting date prior to the end of the contingency period, the Company determines the number of
contingently issuable shares to include in the diluted EPS calculation, as the number of shares that would
be issuable under the terms of the RSU arrangement, if the end of the reporting period were the end of
the contingency period. Once these RSUs vest, they are included in the basic EPS calculation on a
weighted-average basis.
Potential common shares of 0.9 million, 1.5 million and 2.2 million for the fiscal years ended 31 March
2021, 2020 and 2019, respectively, have been excluded from the calculation of diluted common shares
outstanding as they are considered contingent shares which are not expected to vest.
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
126
2. Revenues
The following represents the Company's disaggregated revenues for the fiscal years ended 31 March
2021, 2020 and 2019:
(Millions of US dollars)
Fiber cement revenues
Fiber gypsum revenues
Total revenues
(Millions of US dollars)
Fiber cement revenues
Fiber gypsum revenues
Other revenues
Total revenues
(Millions of US dollars)
Fiber cement revenues
Fiber gypsum revenues
Other revenues
Total revenues
Year Ended 31 March 2021
North America
Fiber Cement
Asia Pacific
Fiber Cement
Europe Building
Products
Consolidated
$
$
2,040.2 $
458.2 $
55.3 $
2,553.7
—
—
355.0
355.0
2,040.2 $
458.2 $
410.3 $
2,908.7
Year Ended 31 March 2020
North America
Fiber Cement
Asia Pacific
Fiber Cement
Europe Building
Products
Other
Businesses
Consolidated
$
1,816.4 $
418.4 $
48.0 $
— $
2,282.8
—
—
—
—
323.4
—
—
0.6
323.4
0.6
$
1,816.4 $
418.4 $
371.4 $
0.6 $
2,606.8
Year Ended 31 March 2019
North America
Fiber Cement
Asia Pacific
Fiber Cement
Europe Building
Products
Other
Businesses
Consolidated
$
1,676.9 $
446.8 $
35.8 $
— $
2,159.5
—
—
—
—
332.5
—
—
14.6
332.5
14.6
$
1,676.9 $
446.8 $
368.3 $
14.6 $
2,506.6
The process by which the Company recognizes revenues is similar across each of the Company's
reportable segments. Fiber cement and fiber gypsum revenues are primarily generated from the sale of
siding and various boards used in external and internal applications, as well as accessories. Fiber
gypsum revenues also includes the sale of cement-bonded boards in the Europe Building Products
segment. Other revenues were generated from the sale of fiberglass products and windows in the Other
Businesses segment, which no longer qualified as a reportable operating segment as of 31 March 2020.
The Company recognizes revenues when the requisite performance obligation has been met, that is,
when the Company transfers control of its products to customers, which depending on the terms of the
underlying contract, is generally upon delivery. The Company considers shipping and handling activities
that it performs as activities to fulfill the sales of its products, with amounts billed for such costs included
in net sales and the associated costs incurred for such services recorded in cost of sales, in accordance
with the practical expedient provided by Accounting Standards Codification ("ASC") 606.
Certain of the Company's customers receive discounts and rebates as sales incentives, amounts which
are recorded as a reduction to revenue at the time the revenue is recognized. These amounts are an
estimate recorded by the Company based on historical experience and contractual obligations, the
underlying assumptions of which are periodically reviewed and adjusted by the Company, as necessary.
The Company’s contracts are generally short-term in nature, generally not exceeding twelve months, with
payment terms varying by the type and location of products or services offered; however, the period
between invoicing and when payment is due is not significant.
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James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
127
3. Cash and Cash Equivalents, Restricted Cash and Restricted Cash - Asbestos
The following table provides a reconciliation of Cash and cash equivalents, Restricted cash and
Restricted cash - Asbestos reported within the consolidated balance sheets that sum to the total of the
same such amounts shown in the consolidated statements of cash flows:
(Millions of US dollars)
Cash and cash equivalents
Restricted cash
Restricted cash - Asbestos
31 March
2021
2020
$
208.5 $
5.0
104.9
144.4
5.0
36.4
Total cash and cash equivalents, restricted cash and restricted cash - Asbestos $
318.4 $
185.8
4. Accounts and Other Receivables
Accounts and other receivables consist of the following components:
(Millions of US dollars)
Trade receivables
Income taxes receivable
Other receivables and advances
Provision for doubtful trade receivables
Total accounts and other receivables
31 March
2021
2020
$
296.7 $
268.4
25.4
17.2
(6.1)
84.7
14.6
(4.4)
$
333.2 $
363.3
The following are changes in the provision for doubtful trade receivables:
(Millions of US dollars)
Balance at beginning of period
Adjustment to provision
Write-offs, net of recoveries
Balance at end of period
2021
31 March
2020
2019
$
$
4.4 $
3.1
(1.4)
6.1 $
2.9 $
1.7
(0.2)
4.4 $
1.3
2.8
(1.2)
2.9
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
128
5. Inventories
Inventories consist of the following components:
(Millions of US dollars)
Finished goods
Work-in-process
Raw materials and supplies
Provision for obsolete finished goods and raw materials
Total inventories
31 March
2021
2020
$
149.9 $
17.9
60.4
(9.9)
$
218.3 $
224.4
25.2
69.9
(14.4)
305.1
The Company identified an immaterial classification error in its 31 March 2020 Inventories footnote which
included an understatement in Work-in-process and an overstatement in the Raw materials and supplies
balance of US$17.1 million. As such, the prior year amounts above have been reclassified to conform
with the current year presentation.
6. Goodwill and Other Intangible Assets
All long-lived intangible assets are reviewed for impairment at least annually, or more frequently if an
event occurs indicating the potential for impairment. The Company performed the annual assessment for
impairment in the third quarter of fiscal year 2021, noting no impairment.
Goodwill
The following are the changes in the carrying value of goodwill for the fiscal years ended 31 March 2021
and 2020:
(Millions of US dollars)
Balance - 31 March 2019
Impairment
Foreign exchange impact
Balance - 31 March 2020
Foreign exchange impact
Balance - 31 March 2021
Intangible Assets
Europe
Building
Products
Asia Pacific
Fiber Cement
Total
200.8 $
0.3 $
201.1
—
(3.9)
196.9 $
12.4
209.3 $
(0.2)
(0.1)
— $
—
— $
(0.2)
(4.0)
196.9
12.4
209.3
$
$
$
The following are the net carrying amount of indefinite lived intangible assets other than goodwill for the
fiscal years ended 31 March 2021 and 2020:
(Millions of US dollars)
Tradenames
Other
Total
31 March
2021
2020
$
$
120.6 $
7.4
128.0 $
113.5
7.4
120.9
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
129
The following are the net carrying amount of amortizable intangible assets for the fiscal years ended 31
March 2021 and 2020:
(Millions of US dollars)
Customer Relationships
Other
Total
(Millions of US dollars)
Customer Relationships
Other
Total
Gross Carrying
Amount
Year Ended 31 March 2021
Accumulated
Amortization
Net Carrying Amount
55.2 $
10.9
66.1 $
(9.3) $
(10.9)
(20.2) $
45.9
—
45.9
Gross Carrying
Amount
Year Ended 31 March 2020
Accumulated
Amortization
Net Carrying Amount
51.4 $
11.6
63.0 $
(6.4) $
(10.8)
(17.2) $
45.0
0.8
45.8
$
$
$
$
The amortization of intangible assets was US$2.6 million, US$3.1 million and US$6.1 million for the fiscal
years ended 31 March 2021, 2020 and 2019, respectively.
At 31 March 2021, the estimated future amortization of intangible assets is as follows:
Years ended 31 March (Millions of US dollars):
2022
2023
2024
2025
2026
$
3.5
4.3
4.7
4.8
5.0
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 progress
Property, plant and equipment, at cost
Less accumulated depreciation
Property, plant and equipment, Net
31 March
2021
2020
$
85.2 $
512.8
1,775.5
91.8
2,465.3
$
(1,093.0)
1,372.3 $
79.0
432.5
1,511.4
267.6
2,290.5
(948.8)
1,341.7
Depreciation expense for the fiscal years ended 31 March 2021, 2020 and 2019 was US$129.6 million,
US$125.4 million and US$109.6 million, respectively.
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
130
Impairment of Property, Plant & Equipment
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. The following
table summarizes the impairment charges:
(Millions of US dollars)
North America Fiber Cement
Asia Pacific Fiber Cement
Europe Building Products
Other Businesses
Charges recorded to Restructuring expenses
North America Fiber Cement segment
Years Ended 31 March
2020
2021
2019
$
$
2.0 $
—
—
—
2.0 $
44.0 $
15.0
5.5
—
64.5 $
3.0
—
—
6.1
9.1
For the fiscal year ended 31 March 2020, impairment charges of US$41.2 million were recorded in the
North America Fiber Cement segment. Included in this total is US$12.0 million related to the Company's
decision to shut down its Summerville, South Carolina facility. This decision resulted from the potential
impact of COVID-19 on future fiber cement sales volume. Assets are grouped and evaluated for
impairment at the level for which there are identifiable cash flows, which in the case of the Summerville
plant included the manufacturing equipment, land, building and right of use assets. In accordance with
the applicable accounting guidance, the Company recorded an impairment charge for the difference
between the carrying value of the asset group of US$22.1 million and the fair value, based on a third
party appraisal of land and buildings, less costs to sell of US$10.1 million.
The remaining impairment charges of US$29.2 million is related to a variety of non-core assets located at
four plants across the network which will no longer be used and will be disposed. Due to the unique
nature of the non-core fixed assets and the lack of history of selling manufacturing assets, management
believes that there will be no future cash flows nor salvage value related to these assets and fully
impaired them as of 31 March 2020.
For the fiscal year ended 31 March 2019, the Company recorded impairment charges of US$2.6 million in
the North America Fiber Cement segment related to the discontinuance of its MCT product line.
Asia Pacific Fiber Cement segment
For the fiscal year ended 31 March 2020, the Company recorded impairment charges of US$14.0 million
in the Asia Pacific Fiber Cement segment due to the decision to shift to an import sales model rather than
continue manufacturing in New Zealand, and US$1.0 million due to its decision to exit the James Hardie
Systems business on the determination that it no longer fits within the Company's core business. The
US$14.0 million charge relates to the full write-down of most of the machinery and equipment at the
Penrose plant and the related excess spare parts which will not be utilized prior to shutdown. All the
equipment and spare parts are unique to the Company and have immaterial resale or salvage values.
The remaining net book value of the Penrose plant’s assets at 31 March 2020 is US$2.6 million.
Europe Building Products segment
For the fiscal year ended 31 March 2020, impairment charges of US$5.5 million were recorded in the
Europe Building Products segment relating to a variety of non-core assets which no longer provide
economic benefit to the Company.
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
131
Other Businesses segment
For the fiscal year ended 31 March 2019, the Company recorded impairment charges of US$6.1 million in
the Other Businesses segment to due to the Company's decision to cease production of its fiberglass
windows business.
Charges recorded to Cost of goods sold
Other impairment charges in the North America Fiber Cement segment related to individual assets
totaled US$2.0 million, US$2.8 million and US$0.4 million during fiscal years ended 31 March 2021, 2020
and 2019, respectively.
8. Leases
The Company's lease portfolio consists primarily of real estate, forklifts at its manufacturing facilities and
a fleet of vehicles primarily for sales representatives. The lease term for all of its leases includes the non-
cancellable period of the lease plus any additional periods covered by either an option to extend (or not to
terminate) the lease that the Company is reasonably certain to exercise, or an option to extend (or not to
terminate) the lease controlled by the lessor. ASC 842 requires a lessee to discount its unpaid lease
payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its
incremental borrowing rate.
The following table represents the Company's ROU assets and lease liabilities:
(Millions of US dollars)
Assets:
Operating leases, net
Finance leases, net
Total right-of-use assets
Liabilities:
Operating leases:
Current
Non-Current
Total operating lease liabilities
Finance leases:
Current
Non-Current
Total finance lease liabilities
Total lease liabilities
31 March
2021
2020
46.4 $
2.7
49.1 $
7.8 $
53.3
61.1 $
1.0 $
1.9
2.9 $
40.5
1.7
42.2
14.3
41.4
55.7
0.5
1.5
2.0
64.0 $
57.7
$
$
$
$
$
$
$
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
132
The following table represents the Company's lease expense:
(Millions of US dollars)
Operating leases
Short-term leases
Variable leases
Finance leases
Interest on lease liabilities
Total lease expense
Years Ended 31 March
2020
2021
$
17.0 $
18.4
2.1
—
0.9
0.1
1.0
0.1
0.3
0.1
$
20.1 $
19.9
The weighted-average remaining lease term of the Company's leases is as follows:
(In Years)
Operating leases
Finance leases
The weighted-average discount rate of the Company's leases is as follows:
Operating leases
Finance leases
31 March
2021
2020
7.8
3.5
5.4
4.4
31 March
2021
2020
4.6 %
4.5 %
4.4 %
4.4 %
The following are future lease payments for non-cancellable leases at 31 March 2021:
Years ended 31 March (Millions of US dollars):
2022
2023
2024
2025
2026
Thereafter
Total
Less: imputed interest
Total lease liabilities
Operating
Leases
Finance
Leases
Total
$
9.6 $
1.0 $
14.3
10.5
7.2
6.1
30.9
78.6 $
$
1.0
0.5
0.3
0.2
—
3.0 $
$
10.6
15.3
11.0
7.5
6.3
30.9
81.6
17.6
64.0
Supplemental cash flow and other information related to leases were as follows:
(Millions of US dollars)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used for operating leases
Operating cash flows used for finance leases
Financing cash flows used for finance leases
Non-cash ROU assets obtained in exchange for new lease liabilities
Non-cash remeasurements reducing ROU assets and lease liabilities
Years Ended 31 March
2021
2020
$
19.2 $
0.1
0.8
26.0
(5.1)
18.0
0.1
0.4
12.9
(19.4)
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
133
9. Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities consist of the following components:
(Millions of US dollars)
Trade creditors
Accrued interest
Accrued customer rebates
Other creditors and accruals
Total accounts payable and accrued liabilities
10. Long-Term Debt
(Millions of US dollars)
Senior unsecured notes:
31 March
2021
2020
$
$
174.0 $
4.5
80.0
48.5
307.0 $
151.3
8.6
65.5
49.3
274.7
31 March
2021
31 March
2020
Principal amount 4.750% notes due 2025
$
—
$
Principal amount 3.625% notes due 2026 (€400.0 million)
Principal amount 5.000% notes due 2028
Total
468.3
400.0
868.3
400.0
440.7
400.0
1,240.7
Unsecured revolving credit facility
—
130.0
Unamortized debt issuance costs:
Principal amount 4.750% notes due 2025
Principal amount 3.625% notes due 2026 (€400.0 million)
Principal amount 5.000% notes due 2028
Unsecured revolving credit facility
Total Long-term debt
—
(4.2)
(4.3)
(1.2)
(4.3)
(5.0)
(4.9)
(1.9)
$
858.6
$
1,354.6
Weighted average interest rate of Long-term debt
Weighted average term of available Long-term debt
4.3 %
4.5 years
4.3 %
5.3 years
Fair value of Senior unsecured notes (Level 1)
$
904.7
$
1,147.7
Senior Unsecured Notes
2025 Senior Unsecured Notes
On 15 January 2021, the Company redeemed US$400.0 million aggregate principal amount of its 4.750%
senior notes due 2025 (the “2025 Notes”) and recorded a loss on early debt extinguishment of
US$13.1 million, which included US$9.5 million of call redemption premiums and US$3.6 million of
unamortized financing costs associated with these notes.
On 18 January 2021, the 2025 Notes were delisted from the Global Exchange Market which is operated
by Euronext Dublin.
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
134
2026 Senior Unsecured Notes
In October 2018, JHIF completed the sale of €400.0 million aggregate principal amount of 3.625% senior
notes at par due 1 October 2026 (the “2026 Notes”) with interest payable semi-annually in arrears on 1
October and 1 April of each year. The proceeds from the offering were used to repay €400.0 million
outstanding borrowings under a 364-day term loan facility (the "Term Loan Facility") which was used to
complete the Fermacell acquisition. On 3 October 2018, JHIF repaid all €400.0 million aggregate principal
amount and accrued interest of its Term Loan Facility following the completion of the sale of
€400.0 million 2026 Notes (US$458.8 million, based on the exchange rate at 3 October 2018). In
connection with this repayment, the Company recorded a loss on early debt extinguishment of
US$1.0 million during the fiscal year ended 31 March 2019 associated with the unamortized portion of the
deferred financing fees.
2028 Senior Unsecured Notes
In December 2017, JHIF completed the sale of US$400.0 million aggregate principal amount of 5.000%
senior notes at par due 15 January 2028 (the “2028 Notes”) with interest payable semi-annually in
arrears on 15 January and 15 July of each year.
Unsecured Revolving Credit Facility
In December 2015, James Hardie International Finance Designated Activity Company (“JHIF”) and
James Hardie Building Products Inc. (“JHBP”), each a wholly-owned subsidiary of JHI plc, entered into a
US$500.0 million unsecured revolving credit facility (the “Revolving Credit Facility”) with certain
commercial banks and HSBC Bank USA, National Association, as administrative agent. In December
2017, the Revolving Credit Facility was amended to, among other things, extend the maturity date to
December 2022. Debt issuance costs in connection with the Revolving Credit Facility are being amortized
as interest expense over the stated term of five years.
Borrowings under the Revolving Credit Facility bear interest at per annum rates equal to, at the
borrower’s option, either: (i) the London Interbank Offered Rate (“LIBOR”) plus an applicable margin for
LIBOR loans; or (ii) a base rate plus an applicable margin for base rate loans. For LIBOR Loans, the
applicable margin ranges from 1.25% to 2.00%, and for base rate loans it ranges from 0.25% to 1.00%.
The Company also pays a commitment fee of between 0.20% and 0.35% on the actual daily amount of
the unutilized revolving loans.
Guarantees and Compliance
The indenture governing the senior unsecured notes contain covenants that, among other things, limit the
ability of the guarantors and their restricted subsidiaries to incur liens on assets, make certain restricted
payments, engage in certain sale and leaseback transactions and merge or consolidate with or into other
companies. These covenants are subject to certain exceptions and qualifications as described in the
indenture. At 31 March 2021, the Company was in compliance with all of its requirements under the
indenture related to the senior unsecured notes.
The senior unsecured notes are guaranteed by JHIGL, JHBP and JHTL, each of which are wholly-owned
subsidiaries of JHI plc.
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
135
The Revolving Credit Facility agreement contains certain covenants that, among other things, restrict
JHIGL and its restricted subsidiaries’ ability to incur indebtedness and grant liens other than certain types
of permitted indebtedness and permitted liens, make certain restricted payments, and undertake certain
types of mergers or consolidations actions. At 31 March 2021, the Company was in compliance with all
covenants contained in the Revolving Credit Facility agreement.
The Revolving Credit Facility is guaranteed by each of JHIGL and James Hardie Technology Limited
("JHTL"), each of which are wholly-owned subsidiaries of JHI plc.
Off Balance Sheet Arrangements
As of 31 March 2021, the Company had a total borrowing base capacity under the Revolving Credit
Facility of US$500.0 million with outstanding borrowings of nil, and US$4.7 million of issued but undrawn
letters of credit and bank guarantees. These letters of credit and bank guarantees relate to various
operational matters including insurance, performance bonds and other items, leaving the Company with
US$495.3 million of available borrowing capacity under the Revolving Credit Facility.
Subsequent Event
As of 18 May 2021, the Company had US$110.0 million drawn under its revolving credit facility, which
was used to partially fund the payment of the fiscal year 2021 special dividend.
11. Product Warranties
The Company offers various warranties on its products, including a 30-year limited warranty on certain
fiber cement siding products in the United States. A typical warranty program requires the Company to
replace defective products within a specified time period from the date of sale. It is possible that future
warranty costs could differ from those estimates.
The following are the changes in the product warranty provision:
(Millions of US dollars)
Balance at beginning of period
Increase (Decrease) in accrual
Acquired during the period
Settlements made in cash or in kind
Balance at end of period
2021
31 March
2020
2019
$
$
42.4 $
2.4
—
(5.2)
39.6 $
46.6 $
0.8
—
(5.0)
42.4 $
52.8
(0.8)
0.5
(5.9)
46.6
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
136
12. Asbestos
The AFFA was approved by shareholders in February 2007 to provide long-term funding to AICF. For a
discussion of the AFFA and the accounting policies utilized by the Company related to the AFFA and
AICF, see Note 1.
Asbestos Adjustments
The Asbestos adjustments included in the consolidated statements of operations and comprehensive
income comprise the following:
(Millions of US dollars)
Change in estimates:
Change in actuarial estimate - asbestos liability
Change in actuarial estimate - insurance receivable
Change in estimate - AICF claims-handling costs
Subtotal - Change in estimates
Effect of foreign exchange on Asbestos net liabilities
Gain (loss) on foreign currency forward contracts
Adjustments in insurance receivable
Other
Total Asbestos Adjustments
Actuarial Study; Claims Estimate
Years Ended 31 March
2021
2020
2019
$
(33.0) $
(133.8) $
(73.8)
2.0
(1.5)
(32.5)
(123.0)
11.7
—
(0.1)
5.7
0.1
(128.0)
69.0
0.8
—
—
—
1.1
(72.7)
49.5
(0.8)
2.0
—
$
(143.9) $
(58.2) $
(22.0)
AICF commissioned an updated actuarial study of potential asbestos-related liabilities as of 31 March
2021. Based on KPMGA’s assumptions, KPMGA arrived at a range of possible total cash flows and
calculated a central estimate, which is intended to reflect a probability-weighted expected outcome of
those actuarially estimated future cash flows.
The following table sets forth the central estimates, net of insurance recoveries, calculated by KPMGA as
of 31 March 2021:
(Millions of US and Australian dollars, respectively)
Central Estimate – Discounted and Inflated
Central Estimate – Undiscounted but Inflated
Central Estimate – Undiscounted and Uninflated
Year Ended 31 March 2021
US$
A$
1,339.8
1,545.8
1,027.6
1,762.6
2,033.7
1,351.9
The asbestos liability has been revised to reflect the most recent undiscounted and uninflated actuarial
estimate prepared by KPMGA as of 31 March 2021.
In estimating the potential financial exposure, KPMGA has made a number of assumptions, including, but
not limited to, assumptions related to the peak period of claims, total number of claims that are
reasonably estimated to be asserted through 2073, the typical cost of settlement (which is sensitive to,
among other factors, the industry in which a plaintiff claims exposure, the alleged disease type, the age of
the claimant and the jurisdiction in which the action is brought), the legal costs incurred in the litigation of
such claims, the rate of receipt of claims, the settlement strategy in dealing with outstanding claims and
the timing of settlements. Changes to the assumptions may be necessary in future periods should
mesothelioma claims reporting escalate or decline.
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
137
Due to inherent uncertainties in the legal and medical environment, the number and timing of future claim
notifications and settlements, the recoverability of claims against insurance contracts, and estimates of
future trends in average claim awards, as well as the extent to which the above named entities will
contribute to the overall settlements, the actual liability could differ materially from that which is currently
recorded.
The potential range of costs as estimated by KPMGA is affected by a number of variables such as nil
settlement rates, peak year of claims, past history of claims numbers, average settlement rates, past
history of Australian asbestos-related medical injuries, current number of claims, average defense and
plaintiff legal costs, base wage inflation and superimposed inflation. The potential range of losses
disclosed includes both asserted and unasserted claims.
A sensitivity analysis was performed by KPMGA to determine how the actuarial estimates would change if
certain assumptions (i.e., the rate of inflation and superimposed inflation, the average costs of claims and
legal fees, and the projected numbers of claims) were different from the assumptions used to determine
the central estimates. The sensitivity analysis performed in the actuarial report is directly related to the
discounted but inflated central estimate and the undiscounted but inflated central estimate. The actual
cost of the liabilities could be outside of that range depending on the results of actual experience relative
to the assumptions made.
The following table summarizes the results of the analysis:
(Millions of US and Australian dollars, respectively)
Discounted (but inflated) - Low
Discounted (but inflated) - High
Undiscounted (but inflated) - Low
Undiscounted (but inflated) - High
As of 31 March 2021
US$
A$
990.7
2,229.6
1,119.4
2,694.4
1,303.4
2,933.2
1,472.7
3,544.8
Potential variation in the estimated peak period of claims has an impact much greater than the other
assumptions used to derive the discounted central estimate. In performing the sensitivity assessment of
the estimated incidence pattern reporting for mesothelioma, if the pattern of incidence was shifted by two
years, the central estimate could increase by approximately 21% on a discounted basis.
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
138
Claims Data
The following table shows the activity related to the numbers of open claims, new claims and closed
claims during each of the past five years and the average settlement per settled claim and case closed:
Number of open claims at beginning of period
Number of new claims
Direct claims
Cross claims
Number of closed claims
Number of open claims at end of period
Average settlement amount per settled claim
Average settlement amount per case closed
2021
393
392
153
578
360
For the Years Ended 31 March
2020
332
449
208
596
393
2019
336
430
138
572
332
2018
352
422
140
578
336
2017
426
402
155
631
352
A$248,000
A$277,000
A$262,000
A$253,000
A$224,000
A$225,000
A$245,000
A$234,000
A$217,000
A$168,000
Average settlement amount per settled claim
Average settlement amount per case closed
US$178,000
US$189,000
US$191,000
US$196,000
US$168,000
US$162,000
US$167,000
US$171,000
US$168,000
US$126,000
During fiscal year 2021, mesothelioma claims reporting activity was favorable compared to actuarial
expectations and the prior corresponding period, primarily driven by lower direct claims which typically
cost significantly more than the cross claims. Consistent with prior years, the claimants ages are
increasing which also has had a favorable effect on average claim size.
Under the terms of the AFFA, the Company has rights of access to actuarial information produced for
AICF by the actuary appointed by AICF, which is currently KPMGA. The Company’s disclosures with
respect to claims statistics are subject to it obtaining such information, however, the AFFA does not
provide the Company an express right to audit or otherwise require independent verification of such
information or the methodologies to be adopted by the approved actuary. As such, the Company relies on
the accuracy and completeness of the information provided by AICF to the approved actuary and the
resulting information and analysis of the approved actuary when making disclosures with respect to
claims statistics.
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
139
The following is a detailed rollforward of the Net Unfunded AFFA liability, net of tax, for the fiscal year
ended 31 March 2021:
(Millions of US dollars)
Asbestos
Liability
Insurance
Receivables
Restricted
Cash and
Investments
Other
Assets
and
Liabilities
Net
Unfunded
AFFA
Liability
Deferred
Tax
Assets
Income
Tax
Payable
Net
Unfunded
AFFA
Liability,
net of tax
Opening Balance - 31 March 2020
$
(986.4) $
43.5 $
58.0 $
(2.0) $
(886.9) $ 319.1 $
23.4 $
(544.4)
Asbestos claims paid1
Payment received in accordance with AFFA2
AICF claims-handling costs incurred (paid)
AICF operating costs paid - non claims-handling
Change in actuarial estimate
Change in claims handling cost estimate
Impact on deferred income tax due to change in
actuarial estimate
Insurance recoveries
Movement in income tax payable
Other movements
105.3
—
1.1
—
(33.0)
(1.5)
—
—
—
—
Effect of foreign exchange
(221.3)
—
—
—
—
2.0
—
—
(5.8)
—
—
9.8
(105.3)
153.3
(1.1)
(1.2)
—
—
—
5.8
—
9.5
—
—
—
—
—
—
—
—
—
—
153.3
—
(1.2)
(31.0)
(1.5)
—
—
—
—
—
—
—
—
—
9.7
—
(33.5)
0.4
9.9
0.2
12.5
(0.3)
(199.3)
71.9
—
—
—
—
—
—
—
—
7.4
—
4.4
—
153.3
—
(1.2)
(31.0)
(1.5)
9.7
—
(26.1)
10.1
(123.0)
Closing Balance - 31 March 2021
$ (1,135.8) $
49.5 $
131.5 $
(1.9) $
(956.7) $ 367.4 $
35.2 $
(554.1)
____________
1
Claims paid of US$105.3 million reflects A$146.5 million converted at the average exchange rate for the period based on the
assumption that these transactions occurred evenly throughout the period.
AICF Funding
During the fiscal year ending 31 March 2022, the Company anticipates that it will contribute
approximately US$252.6 million to AICF. This amount represents 35% of the Company's fiscal year 2021
free cash flow which is equivalent to operating cash flows of US$786.9 million less an adjustment of
US$65.3 million, resulting in free cash flow of US$721.6 million for fiscal year 2021, as defined by the
AFFA.
During the fiscal years ended 31 March 2021, 2020 and 2019, the Company contributed US$153.3
million (A$220.9 million), US$108.9 million (A$156.7 million) and US$103.0 million (A$138.4 million),
respectively, to AICF.
Restricted Short-Term Investments
AICF invests its excess cash in time deposits, which are classified as available-for-sale investments until
maturity. The following table represents the investments entered into or maturing during the fiscal year
ended 31 March 2021:
Date Invested
October 2020
July 2019
July 2019
Maturity Date
2 July 2021
30 April 2020
1 June 2020
Interest Rate
A$ Millions
0.59%
1.70%
1.70%
35.0
20.0
15.0
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
140
At 31 March 2021, AICF’s short-term investments were revalued resulting in a mark-to-market fair value
adjustment of nil.
AICF – NSW Government Secured Loan Facility
AICF may borrow, subject to certain conditions, up to an aggregate amount of A$320.0 million (US$243.2
million, based on the exchange rate at 31 March 2021). The AICF Loan Facility is guaranteed by the
Former James Hardie Companies and is available to be drawn for the payment of claims through
1 November 2030, at which point, all outstanding borrowings must be repaid. Borrowings made under the
AICF Loan Facility are classified as current, as AICF intends to repay the debt within one year. At
31 March 2021 and 2020, AICF had no amounts outstanding under the AICF Loan Facility.
13. Derivative Instruments
Foreign Currency Forward Contracts
The Company’s foreign currency forward contracts are valued using models that maximize the use of
market observable inputs including interest rate curves and both forward and spot prices for currencies
and are categorized as Level 2 within the fair value hierarchy.
Interest Rate Swaps
The fair value of interest rate swap contracts is calculated based on the fixed rate, notional principal,
settlement date and present value of the future cash inflows and outflows based on the terms of the
agreement and the future floating interest rates as determined by a future interest rate yield curve. The
model used to value the interest rate swap contracts is based upon well recognized financial principles,
and interest rate yield curves can be validated through readily observable data by external sources.
Although readily observable data is used in the valuations, different valuation methodologies could impact
the estimated fair value. Accordingly, the interest rate swap contracts are categorized as Level 2 within
the fair value hierarchy. Gain and loss on interest rate swap contracts are immaterial and included in
Other income (expense).
Derivative Balances
The following table sets forth the total outstanding notional amount and the fair value of the Company’s
derivative instruments held at 31 March 2021 and 2020:
(Millions of US dollars)
Derivatives not accounted for
as hedges
Foreign currency forward
contracts
Notional Amount
31 March 2021
31 March 2020
Fair Value as of
31 March 2021 31 March 2020
Assets
Liabilities
Assets
Liabilities
$
456.1 $
— $
5.5 $
8.3 $
— $
Interest rate swap contracts
—
25.0
—
—
—
Total
$
456.1 $
25.0 $
5.5 $
8.3 $
— $
—
0.1
0.1
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
141
The following table sets forth the gain and loss on the Company’s foreign currency forward contracts
recorded in the Company's consolidated statements of operations and comprehensive income as follows:
(Millions of US dollars)
Asbestos adjustments (gain) loss
Selling, general and administrative expenses
Total
14. Commitments and Contingencies
Legal Matters
2021
31 March
2020
2019
$
$
(11.7) $
7.2
(4.5) $
(0.8) $
1.3
0.5 $
0.8
3.9
4.7
The Company is involved from time to time in various legal proceedings and administrative actions
related to the normal conduct of its business, including general liability claims, putative class action
lawsuits and litigation concerning its products.
Although it is impossible to predict the outcome of any pending legal proceeding, management believes
that such proceedings and actions should not, individually or in the aggregate, have a material adverse
effect on the Company’s consolidated financial position, results of operations or cash flows, except as
they relate to asbestos and New Zealand product liability claims as described in these consolidated
financial statements.
New Zealand Weathertightness Claims
Since fiscal year 2002, the Company’s New Zealand subsidiaries have been joined in a number of
weathertightness claims in New Zealand that relate to residential buildings (single dwellings and
apartment complexes) and a small number of non-residential buildings, primarily constructed from 1998
to 2004. The claims often involve multiple parties and allege that losses were incurred due to excessive
moisture penetration of the buildings’ structures. The claims typically include allegations of poor building
design, inadequate certification of plans, inadequate construction review and compliance certification and
deficient work by sub-contractors.
Historically, the Company’s New Zealand subsidiaries have been joined to these claims as one of several
co-defendants, including local government entities responsible for enforcing building codes and practices,
resulting in the Company’s New Zealand subsidiaries becoming liable for only a portion of each claim. In
addition, the Company’s New Zealand subsidiaries have had access to third-party recoveries to defray a
portion of the costs incurred in resolving such claims.
In 2015, the Company and/or its subsidiaries were named as the sole defendants in four claims on behalf
of multiple defendants, three of which are still pending and each of which allege that the New Zealand
subsidiaries’ products were inherently defective. The Company believes it has substantial factual and
legal defenses to these claims and is defending the claims vigorously.
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
142
Cridge, et al. (Case Nos. CIV-2015-485-594 and CIV-2015-485-773), In the High Court of New Zealand,
Wellington Registry (hereinafter the “Cridge litigation”). In August 2020, trial of phase one of the Cridge
litigation commenced in Wellington, New Zealand solely to determine whether the Company’s New
Zealand subsidiaries had a duty to the plaintiffs and breached that duty. This phase of the trial concluded
in December 2020, and a decision by the Wellington High Court is expected to be announced late in the
first quarter of FY 2022. We believe we have substantial factual and legal defenses to the claims in the
Cridge litigation. While an unfavorable outcome in this phase is possible as litigation is inherently
unpredictable, management does not believe that the outcome of this phase of the litigation will have a
material adverse effect on the Company’s financial position. As of 31 March 2021, the Company has not
recorded a reserve related to the Cridge litigation as the chance of loss is not probable and the amount of
loss, if any, cannot be reasonably estimated. If an adverse decision is reached by the Wellington High
Court, certain factors anticipated to be included in the decision may allow the Company to estimate a
reasonable range of liability in the Cridge litigation.
White, et al. (Case No. CIV-2015-404-2981 [2021] NZHC 930), In the High Court of New Zealand,
Auckland Registry (hereinafter the “White litigation”). The trial of phase one of the White litigation is
scheduled to commence on 17 May 2021 in Auckland, New Zealand solely to determine whether the
Company’s New Zealand subsidiaries, along with three non-New Zealand Group entities, had a duty to
the plaintiffs and breached that duty. As of 31 March 2021, the Company has not recorded a reserve
related to the White litigation as the chance of loss is not probable and the amount of loss, if any, cannot
be reasonably estimated.
Waitakere, et al. (Case No. CIV-2015-404-3080), In the High Court of New Zealand, Auckland Registry
(hereinafter the “Waitakere litigation”). The trial in the Waitakere litigation is currently not scheduled to
begin until May 2023 in Auckland, New Zealand. As of 31 March 2021, the Company has not recorded a
reserve related to the Waitakere litigation as the chance of loss is not probable and the amount of loss, if
any, cannot be reasonably estimated.
A court’s decision in one or more of the litigation matters has the potential to impact the accounting
treatment regarding the probability of a potential loss and the Company’s ability to reasonably estimate a
reserve with regards to the other litigation matters discussed above. Furthermore, an adverse judgement
in one or more of these litigation matters could have a material adverse impact on our consolidated
financial position, results of operations or cash flows.
Readers are referred to Note 1 for further information related to our policies related to asserted and
unasserted claims.
Environmental and Legal
The operations of the Company, like those of other companies engaged in similar businesses, are subject
to several laws and regulations on air and water quality, waste handling and disposal. The Company’s
policy is to accrue for environmental costs when it is determined that it is probable that an obligation
exists and the amount can be reasonably estimated.
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
143
15. Income Taxes
Income tax expense includes income taxes currently payable and those deferred because of temporary
differences between the financial statement and tax bases of assets and liabilities. Income tax expense
consists of the following components:
(Millions of US dollars)
Income before income taxes:
Domestic
Foreign
Income before income taxes:
Income tax expense:
Current:
Domestic
Foreign
Current income tax (expense) benefit
Deferred:
Domestic
Foreign
Deferred income tax expense
Total income tax expense
Years Ended 31 March
2021
2020
2019
$
$
$
$
241.9 $
170.1
412.0 $
(38.5) $
8.6
(29.9)
(1.4)
(117.9)
(119.3)
(149.2) $
209.6 $
78.4
288.0 $
(31.1) $
39.8
8.7
(4.5)
(50.7)
(55.2)
(46.5) $
196.4
104.2
300.6
(26.6)
(6.5)
(33.1)
(1.3)
(37.4)
(38.7)
(71.8)
Income tax expense computed at the statutory rates represents taxes on income applicable to all
jurisdictions in which the Company conducts business, calculated at the statutory income tax rate in each
jurisdiction multiplied by the pre-tax income attributable to that jurisdiction.
Income tax expense is reconciled to the tax at the statutory rates as follows:
(Millions of US dollars)
Income tax expense computed at the statutory tax rates
2021
2020
2019
$
(58.1)
$
(38.7)
$
(48.9)
Years Ended 31 March
US state income taxes, net of the federal benefit
Asbestos - effect of foreign exchange
Expenses not deductible
Stock and executive compensation
Foreign taxes on domestic income
Prior year tax adjustments
Taxes on foreign income
US net operating loss carryback
Other items
Total income tax expense
Effective tax rate
(8.0)
(36.8)
(2.0)
(5.5)
(49.8)
5.9
(1.6)
4.9
1.8
(5.7)
20.9
(5.5)
(1.7)
(43.5)
(0.4)
2.7
25.5
(0.1)
(3.1)
14.9
(4.0)
(1.3)
(34.5)
(0.3)
4.5
—
0.9
$
(149.2)
$
(46.5)
$
(71.8)
36.2 %
16.1 %
23.9 %
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
144
Deferred tax balances consist of the following components:
(Millions of US dollars)
Deferred tax assets:
Intangible assets
Asbestos liability
Other provisions and accruals
Net operating loss carryforwards
Foreign and research tax credit carryforwards
Total deferred tax assets
Valuation allowance
Total deferred tax assets net of valuation allowance
Deferred tax liabilities:
Depreciable and amortizable assets
Other
Total deferred tax liabilities
Total deferred taxes, net
31 March
2021
2020
$
1,038.7 $
367.4
62.2
61.0
122.1
1,651.4
(262.7)
1,388.7
(151.7)
(49.1)
(200.8)
1,126.4
319.1
54.1
41.3
114.2
1,655.1
(262.9)
1,392.2
(117.5)
(48.1)
(165.6)
$
1,187.9 $
1,226.6
Deferred income taxes include net operating loss carry-forwards. At 31 March 2021, the Company had
tax loss carry-forwards in Australia, New Zealand, Europe and the US of approximately US$61.0 million,
that are available to offset future taxable income in the respective jurisdiction.
The Australian net operating loss carry-forwards primarily result from current and prior year tax
deductions for contributions to AICF. James Hardie 117 Pty Limited, the performing subsidiary under the
AFFA, is able to claim a tax deduction for its contributions to AICF over a five-year period commencing in
the year the contribution is incurred. At 31 March 2021, the Company recognized a tax deduction of
US$110.9 million (A$154.3 million) for the current year relating to total contributions to AICF of US$558.5
million (A$771.7 million) incurred in tax years 2017 through 2021.
The Company establishes a valuation allowance against a deferred tax asset if it is more likely than not
that some portion or all of the deferred tax asset will not be realized.
At 31 March 2021, the Company had foreign tax credit carry-forwards of US$119.5 million and research
credits of US$2.6 million that are available to offset future taxes payable. At 31 March 2021, the Company
had a 100% valuation allowance against the foreign tax credit carry-forwards.
In determining the need for and the amount of a valuation allowance in respect of the Company’s
asbestos related deferred tax asset, management reviewed the relevant empirical evidence, including the
current and past core earnings of the Australian business and forecast earnings of the Australian
business considering current trends. Although realization of the deferred tax asset will occur over the life
of the AFFA, which extends beyond the forecast period for the Australian business, Australia provides an
unlimited carry-forward period for tax losses. Based upon managements’ review, the Company believes
that it is more likely than not that the Company will realize its asbestos related deferred tax asset and that
no valuation allowance is necessary as of 31 March 2021. In the future, based on review of the empirical
evidence by management at that time, if management determines that realization of its asbestos related
deferred tax asset is not more likely than not, the Company may need to provide a valuation allowance to
reduce the carrying value of the asbestos related deferred tax asset to its realizable value.
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
145
At 31 March 2021, the Company had prepaid and refundable income taxes of US$30.5 million. During the
fiscal year ended 31 March 2021, total income tax refunds received, net of withholding tax paid was
US$3.7 million.
The US Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") was enacted in March 2020
providing wide ranging economic relief for individuals and businesses. One component of the CARES Act
provides the Company with an opportunity to carryback US net operating losses (“NOLs”) arising during
the years ended 31 March 2021 and 2020 to the prior five tax years. The Company has previously valued
its NOLs at the US federal corporate income tax rate of 21%. However, the provisions of the CARES Act
provide for NOL carryback claims to be calculated based on a rate of 35%, which was the US federal
corporate tax rate in effect in the carryback years. The Company intends to utilize these carryback
provisions to obtain an estimated refund of US$42.3 million. At 31 March 2021 the Company recorded
current taxes receivable of US$25.3 million, a reduction of US$17.0 million in non-current taxes payable
associated with the deferred deemed repatriation tax and an income tax benefit of US$4.9 million
resulting from tax losses being utilized at the higher US federal corporate tax rate applying in the
carryback years.
The Company or its subsidiaries files income tax returns in various jurisdictions including Ireland, the
United States, Australia and various jurisdictions in Europe and Asia Pacific. Due to the size and nature of
its business, the Company is subject to ongoing audits and reviews by taxing jurisdictions on various tax
matters. The Company is no longer subject to general tax examinations in Ireland for the tax years prior
to tax year 2017, Australia for tax years prior to tax year 2016 and in the US for tax years prior to tax year
2014.
Unrecognized Tax Benefits
For the fiscal years ended 31 March 2021, 2020, and 2019, the total amount of penalties and interest
recorded in Income tax expense related to unrecognized tax benefits were immaterial. The liabilities
associated with uncertain tax benefits are included in Other liabilities on the Company’s consolidated
balance sheets. At 31 March 2021, the total amount of unrecognized tax benefits and the total amount of
interest and penalties accrued by the Company that, if recognized, would affect the effective tax rate were
US$0.5 million.
16. Stock-Based Compensation
Total stock-based compensation expense consists of the following:
(Millions of US dollars)
Liability Awards
Equity Awards
Total stock-based compensation expense
Years Ended 31 March
2021
2020
2019
$
$
21.7 $
18.0
39.7 $
2.8 $
10.3
13.1 $
(0.6)
12.5
11.9
As of 31 March 2021, the unrecorded future stock-based compensation expense related to outstanding
equity awards was US$17.1 million and will be recognized over an estimated weighted average
amortization period of 1.8 years.
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
146
2001 Equity Incentive Plan
Under the Company’s 2001 Equity Incentive Plan (the “2001 Plan”), which was reapproved to continue
until September 2021, the Company can grant equity awards in the form of nonqualified stock options,
performance awards, restricted stock grants, stock appreciation rights, dividend equivalent rights,
phantom stock or other stock-based benefits such as restricted stock units.
Long-Term Incentive Plan 2006
The Company’s shareholders approved the establishment of a Long-Term Incentive Plan in 2006 (the
“LTIP”) to provide incentives to certain members of senior management (“Executives”). The Company
determines the conditions or restrictions of any awards, which may include requirements of continued
employment, individual performance or the Company’s financial performance or other criteria. Currently,
the plan only allows for RSUs to be granted under the LTIP.
The following table summarizes the Company’s shares available for grant as options, RSUs or other
equity instruments under the LTIP and 2001 Plan:
Balance at 31 March 2019
Granted
Balance at 31 March 2020
Granted
Balance at 31 March 2021
RSUs
Shares
Available for
Grant
23,744,816
(800,437)
22,944,379
(856,756)
22,087,623
The Company estimates the fair value of RSUs on the date of grant and recognizes this estimated fair
value as compensation expense over the periods in which the RSU vests.
The following table summarizes the Company’s RSU activity:
(Units)
Service
Vesting
(2001 Plan)
Performance
Vesting
(LTIP)
Market
Conditions
(LTIP)
Total
Weighted
Average Fair
Value at Grant
Date (A$)
Outstanding at 31 March 2019
Granted
910,386
1,148,022
2,203,100
4,261,508
24,006
273,258
503,173
800,437
Vested
Forfeited
(304,591)
(207,271)
(362,973)
(874,835)
(109,169)
(349,844)
(565,660)
(1,024,673)
Outstanding at 31 March 2020
Granted
520,632
371,806
864,165
190,376
1,777,640
3,162,437
294,574
856,756
Vested
Forfeited
(245,385)
(174,356)
(722,156)
(1,141,897)
(53,567)
(153,897)
(63,136)
(270,600)
Outstanding at 31 March 2021
593,486
726,288
1,286,922
2,606,696
14.47
18.08
16.21
15.21
14.64
26.56
13.03
17.05
19.01
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
147
The following table includes the assumptions used for RSU grants (market condition) valued:
Vesting Condition:
Date of grant1
Dividend yield (per annum)
Expected volatility
Risk free interest rate
Expected life in years
JHX stock price at grant date (A$)
Number of restricted stock units
Scorecard LTI – CSUs
Market
FY21
Market
FY21
Market
FY20
Market
FY20
Market
FY20
15 Sep 2020
5 Nov 2020
25 Feb 2020
20 Sep 2019
9 Aug 2019
— %
39.2 %
0.2 %
2.9
30.33
1.3 %
40.1 %
0.2 %
2.8
37.24
167,491
127,083
2.9 %
26.6 %
1.2 %
2.5
29.54
6,676
3.1 %
26.6 %
1.6 %
2.9
24.69
477,979
3.1 %
27.8 %
1.6 %
2.0
21.68
18,518
Under the terms of the LTIP, the Company grants scorecard LTI CSUs to executives and the vesting of
awards is based on the individual's performance measured over a three year period against certain
performance targets. These awards provide recipients a cash incentive based on an average 20 trading-
day closing price of JHI plc’s common stock price and each executive’s scorecard rating.
The following represents the activity related to the CSUs:
Granted
Vested
Cancelled
FY21
FY20
571,132
377,506
607,253
791,217
129,549
328,935
For the fiscal years ending 31 March 2021, 2020 and 2019, US$8.2 million, US$2.0 million and US$2.4
million, respectively, was paid in cash upon vesting of CSU units.
17. Dividends
The following table summarizes the dividends declared or paid during the fiscal years 2021, 2020 and
2019:
(Millions of US dollars)
FY 2021 special dividend
FY 2020 first half dividend 1
FY 2019 second half dividend
FY 2019 first half dividend
FY 2018 second half dividend
US
Cents/Security
US$ Millions
Total Amount
0.70
0.10
0.26
0.10
0.30
309.6
44.7
113.9
43.6
128.5
Announcement Date
Record Date
Payment Date
10 February 2021
19 February 2021
30 April 2021
7 November 2019
18 November 2019
20 December 2019
21 May 2019
6 June 2019
2 August 2019
8 November 2018
12 December 2018
22 February 2019
22 May 2018
7 June 2018
3 August 2018
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
148
18. Operating Segment Information and Concentrations of Risk
The Company reports its operating segment information in the format that the operating segment
information is available to and evaluated by the Chief Operating Decision Maker. The North America Fiber
Cement segment manufactures fiber cement interior linings, exterior siding products and related
accessories in the United States; these products are sold in the United States and Canada. The Asia
Pacific Fiber Cement segment includes all fiber cement products manufactured in Australia and the
Philippines, and sold in Australia, New Zealand, Asia, the Middle East and various Pacific Islands. The
Europe Building Products segment includes the Fermacell business and fiber cement product
manufactured in the United States that is sold in Europe. The Other Businesses segment ceased to be an
operating and reportable segment effective 31 March 2020 due to the Company's completion of its exit of
its non-fiber cement manufacturing and sales activities in North America, including fiberglass windows.
The Research and Development segment represents the cost incurred by the research and development
centers. General Corporate primarily consist of Asbestos adjustments, officer and employee
compensation and related benefits, professional and legal fees, administrative costs and rental expense,
net of rental income, on the Company’s corporate offices. The Company does not report net interest
expense for each segment as the segments are not held directly accountable for interest expense.
Operating Segments
The following is the Company’s operating segment information:
(Millions of US dollars)
North America Fiber Cement
Asia Pacific Fiber Cement
Europe Building Products
Other Businesses
Worldwide total
(Millions of US dollars)
North America Fiber Cement
Asia Pacific Fiber Cement
Europe Building Products
Other Businesses
Research and Development
Segments total
General Corporate
Total operating income
Net Sales
Years Ended 31 March
2021
2020
2019
$
2,040.2 $
1,816.4 $
1,676.9
458.2
410.3
—
418.4
371.4
0.6
446.8
368.3
14.6
$
2,908.7 $
2,606.8 $
2,506.6
Income Before Income Taxes
Years Ended 31 March
2021
2020
2019
$
585.5 $
429.3 $
124.8
37.6
—
(28.9)
719.0
(246.2)
472.8
58.5
11.2
—
(27.0)
472.0
(129.5)
342.5
382.5
99.8
10.0
(30.9)
(29.0)
432.4
(80.8)
351.6
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
149
(Millions of US dollars)
North America Fiber Cement
Asia Pacific Fiber Cement
Europe Building Products
Other Businesses
General Corporate
Research and Development
Total
(Millions of US dollars)
North America Fiber Cement
Asia Pacific Fiber Cement
Europe Building Products
Research and Development
Segments total
General Corporate 1
Worldwide total
Depreciation and Amortization
Years ended 31 March
2021
2020
2019
$
89.1 $
88.7 $
13.9
28.0
—
2.8
1.2
12.7
25.6
0.2
3.2
1.1
80.2
12.8
18.7
2.3
4.3
1.1
$
135.0 $
131.5 $
119.4
Total Identifiable Assets
31 March
2021
2020
$
1,273.9 $
371.0
762.1
10.3
2,417.3
1,671.7
$
4,089.0 $
1,320.0
314.3
748.5
8.6
2,391.4
1,636.9
4,028.3
The following is the Company’s geographical information:
(Millions of US dollars)
North America 2
Australia
Germany
New Zealand
Other Countries 3
Worldwide total
(Millions of US dollars)
North America 2
Australia
Germany
New Zealand
Other Countries 3
Segments total
General Corporate 1
Worldwide total
Net Sales
Years Ended 31 March
2021
2020
2019
$
2,040.2 $
1,817.0 $
1,691.5
321.9
143.0
81.9
321.7
290.4
135.7
72.2
291.5
315.1
137.1
79.1
283.8
$
2,908.7 $
2,606.8 $
2,506.6
Total Identifiable Assets
31 March
2021
2020
$
1,279.4 $
1,324.8
256.7
527.6
46.3
307.3
2,417.3
1,671.7
$
4,089.0 $
220.0
519.3
32.4
294.9
2,391.4
1,636.9
4,028.3
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
150
____________
1.
2.
3.
Included in General Corporate are deferred tax assets for each operating segment that are not held directly accountable for
deferred income taxes and Asbestos-related assets.
The amounts disclosed for North America are substantially all related to the USA.
Included are all other countries that account for less than 5% of net sales and total identifiable assets individually, primarily in the
Philippines, Switzerland and other European countries.
Research and development expenditures are expensed as incurred and are summarized by segment in
the following table. Research and development segment operating income also includes Selling, general
and administrative expenses of US$2.9 million, US$3.0 million and US$2.3 million in fiscal years 2021,
2020 and 2019, respectively.
(Millions of US dollars)
North America Fiber Cement
Asia Pacific Fiber Cement
Europe Building Products
Research and Development
Years Ended 31 March
2021
2020
2019
5.6 $
5.3 $
1.1
1.6
26.0
1.8
1.7
24.0
34.3 $
32.8 $
6.5
2.1
2.6
26.7
37.9
$
$
The following represents the Asset impairments by segment for the fiscal year ended 31 March 2020:
(Millions of US dollars)
Property, plant and equipment 1
Right-of-use assets 2
Intangible assets
Inventories 3
Goodwill
Asset Retirement Obligations 4
Other
North America
Fiber Cement
Asia Pacific
Fiber Cement
$
41.2 $
—
—
—
—
—
—
15.0 $
11.2
—
2.9
0.2
5.8
1.2
Europe
Building
Products
General
Corporate
Total
5.5 $
— $
—
—
—
—
—
—
—
1.4
—
—
—
—
61.7
11.2
1.4
2.9
0.2
5.8
1.2
$
41.2 $
36.3 $
5.5 $
1.4 $
84.4
1 Excludes US$2.8 million of impairment charges in North America Fiber Cement segment on individual assets that were included in Cost of
goods sold. Refer to Note 7 for further details.
2 Relates to the closure of the Penrose, New Zealand plant
3 The US$2.9 million charge primarily relates to the estimated costs associated with pallets and raw materials, with the closing of the New
Zealand plant and exit of James Hardie Systems.
4 The total Asset Retirement Obligation balance at 31 March 2020 of US$8.0 million is recorded in the Asia Pacific Fiber Cement segment in
Other liabilities - non-current and relates to the New Zealand plant. This balance is inclusive of the impairment amount above.
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151
Concentrations of Risk
The distribution channels for the Company’s fiber cement products are concentrated. The Company has
one customer who has contributed greater than 10% of net sales in each of the past three fiscal years.
The following is net sales generated by this customer, which is from the North America Fiber Cement
segment:
(Millions of US dollars)
Customer A
2021
347.3
$
12.0 % $
2020
306.0
12.0 % $
2019
260.5
10.4 %
Years Ended 31 March
Approximately 33%, 34% and 36% of the Company’s net sales in fiscal year 2021, 2020 and 2019,
respectively, were from outside the United States. Consequently, changes in the value of foreign
currencies could significantly affect the consolidated financial position, results of operations and cash
flows of the Company’s non-US operations on translation into US dollars.
19. Accumulated Other Comprehensive Loss
Accumulated other comprehensive loss is comprised of the following at 31 March 2021:
(Millions of US dollars)
Balance at 31 March 2020
Other comprehensive (loss) gain
Balance at 31 March 2021
20. Employee Benefit Plan
Cash Flow
Hedges
Pension
Actuarial Gain
Foreign
Currency
Translation
Adjustments
$
$
0.2 $
—
0.2 $
0.8 $
(0.4)
0.4 $
(63.1) $
55.9
(7.2) $
Total
(62.1)
55.5
(6.6)
In the United States, the Company sponsors a defined contribution plan, the James Hardie Retirement
and Profit Sharing Plan (the “401(k) Plan”) which is a tax-qualified retirement and savings plan covering
all US employees, including the Senior Executive Officers, subject to certain eligibility requirements. In
addition, the Company matches employee's contributions dollar for dollar up to a maximum of the first 6%
of an employee’s eligible compensation.
For the fiscal years ended 31 March 2021, 2020 and 2019, the Company made matching contributions of
US$11.1 million, US$11.1 million and US$10.6 million, respectively.
In January 2021, the Company established a deferred compensation plan for its executives whereby the
plan assets are held in a rabbi trust. The deferred compensation is funded to the rabbi trust which holds
investments directed by the participants and are accounted for as held for sale. The Company will match
up to a maximum of the first 6% of an employee's eligible compensation that would not be eligible in the
401(k) Plan due to internal revenue service contribution limits so long as the participant defers eligible
compensation to the deferred compensation plan. As of 31 March 2021, the assets held in trust and
related deferred compensation liability recorded in the accompanying consolidated balance sheets are
immaterial.
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REMUNERATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
(UNAUDITED, NOT FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS)
Fees billed for each of the last three fiscal years for professional services provided by our independent
registered public accounting were as follows:
Description of Service
Audit fees1
Audit-related fees2
Tax fees
All other fees
____________
FY21
US$ Millions
FY20
FY19
$
$
5.6 $
—
—
— $
5.7 $
—
—
— $
5.7
—
—
—
1
2
Audit Fees include the aggregate fees for professional services rendered by our independent registered public accounting firm.
Professional services include the audit of our annual financial statements and services that are normally provided in connection
with statutory and regulatory filings.
Audit-Related Fees include the aggregate fees billed for assurance and related services rendered by our independent registered
public accounting firm. Our independent registered public accounting firm did not engage any temporary employees to conduct
any portion of the audit of our consolidated financial statements for the fiscal years ended 31 March 2021, 2020 and 2019.
Audit Committee Pre-Approval Policies and Procedures
In accordance with our Audit Committee’s policy and the requirements of the law, all services provided by
our independent registered public accounting firm are pre-approved from time to time by the Audit
Committee. Pre-approval includes a list of specific audit and non-audit services in the following
categories: audit services, audit-related services, tax services and other services. Any additional services
that we may ask our independent registered public accounting firm to perform will be set forth in a
separate document requesting Audit Committee approval in advance of the service being performed.
All of the services pre-approved by the Audit Committee are permissible under the SEC’s auditor
independence rules. To avoid potential conflicts of interest, the law prohibits a publicly traded company
from obtaining certain non-audit services from its independent registered public accounting firm. We
obtain these services from other service providers as needed.
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SECTION 3
RISK FACTORS
Our business, operations and financial condition are subject to various risks and uncertainties. We have
described below significant factors that may adversely affect our business, operations, financial
performance and condition or industry. Readers should be aware that the occurrence of any of the events
described in these risk factors, elsewhere in or incorporated by reference into this Annual Report, and
other events that we have not predicted or assessed, could have a material adverse effect on our
financial position, liquidity, results of operations and cash flows.
Business and Operational Risks
The outbreak of COVID-19 may adversely impact on our business, sales, results of operations and
financial condition.
Our operations expose us to risks associated with pandemics and other public health emergencies, such
as the continuing COVID-19 pandemic. In March 2020, the World Health Organization ("WHO")
characterized the outbreak of COVID-19 as a global pandemic and recommended containment and
mitigation measures. There have been extraordinary and wide-ranging actions taken by international,
federal, state and local public health and governmental authorities to contain and combat the outbreak
and spread of COVID-19 in regions across the United States and the world, including quarantines, “stay-
at-home” orders and similar mandates. Although some restrictions have eased in some jurisdictions,
regions across the United States and the world continue to impose or are re-imposing closures and other
restrictions.
We operate facilities around the world that are being affected by this pandemic. In the U.S., we are a
company operating in a critical infrastructure industry and we continue to operate across our North
America footprint. In Europe and Asia Pacific, governmental measures to slow and limit the spread of
COVID-19 have previously resulted in the temporary closure of certain of our facilities, however, as of the
date of this Annual Report, all of our facilities remain fully operational. Notwithstanding our level of
continued operations, COVID-19 could negatively impact our future manufacturing operations, including
additional facility closures, as well as adversely affect our supply chain and transportation networks. Our
business is also dependent on the continued health and productivity of our employees throughout this
crisis and we have incurred and will continue to incur additional costs to ensure we abide by all applicable
health and safety regulations at each location that we operate.
In addition, COVID-19 may continue to adversely affect global economic activity. Our business may be
negatively impacted if the disruptions related to COVID-19 decrease new home building and remodeling
activity, precipitate a prolonged economic downturn and/or lead to an extended rise in unemployment,
any of which could lower demand for our products. The inherent uncertainty surrounding COVID-19
makes it more challenging for our management to estimate the future performance of our business and
the economic impact of the COVID-19 pandemic. Accordingly, future developments in the COVID-19
pandemic may materially impact our business and current estimates. The impact of COVID-19 could also
have the effect of heightening certain of the other risks described in the “Risk Factors” section of this
Annual Report. Individually and collectively, the consequences of the COVID-19 outbreak could have a
material adverse effect on our business, sales, results of operations and financial condition.
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Our business is dependent on the residential and commercial construction markets.
Demand for our products depends in large part on the residential construction markets and, to a lesser
extent, on commercial construction markets. The level of activity in residential construction markets
depends on residential remodeling projects and new housing starts, which are a function of many factors
outside our control, including general economic conditions, the availability of financing, regulatory
changes, mortgage and other
income and wage growth,
unemployment, the inventory of unsold homes, the level of foreclosures, home resale rates, housing
affordability, demographic trends, gross domestic product growth and consumer confidence in each of the
countries and regions in which we operate.
inflation, household
interest rates,
Any slowdown in the markets we serve would likely result in decreased demand for our products and
cause us to experience decreased sales and operating income. In addition, deterioration or continued
weaknesses in general economic conditions, such as higher interest rates, high levels of unemployment,
restrictive lending practices, restricted covenants, heightened regulation and increased foreclosures,
could have a material adverse effect on our financial position, liquidity, results of operations and cash
flows.
Substantial and increasing competition in the building products industry would likely materially
adversely affect our business.
Competition in the building products industry is based largely on price, quality, performance and service.
Our products compete with products manufactured from natural and engineered wood, vinyl, stucco,
masonry, brick, gypsum and other materials, as well as fiber cement and fiber gypsum products offered
by other manufacturers. Some of our competitors may have greater product diversity, greater financial
and other resources, and better access to raw materials than we do and, among other factors, may be
less affected by reductions in margins resulting from price competition.
Increased competition in any of the markets in which we compete would likely cause pricing pressures in
those markets. Any of these factors would likely have a material adverse effect on our financial position,
liquidity, results of operations and cash flows.
We may experience unforeseen delays and/or cost overruns in our planned capital expenditures
in future periods, and such delays and/or cost overruns could result in additional expenses and
impairment charges. Unforeseen delays may also
impact our ability to add additional
manufacturing capacity at the appropriate time.
We have incurred significant levels of capital expenditures in the past and we expect to incur significant
capital expenditures in future periods on facility upgrades and expansions, equipment to ensure
regulatory compliance, the implementation of new technologies and to improve efficiency. We may incur
unforeseen delays and/or cost overruns due to a variety of factors, including, but not limited to, a decline
in general economic conditions, a downturn in the principal markets in which we operate, the entrance of
a key competitor, increased costs resulting from tariffs or other international trade disputes or an adverse
change in the regulatory environment impacting our business. Any one or combination of these or other
factors could have a significant adverse effect on the nature, timing, extent and amount of our planned
capital expenditures, and may also result in potential additional expenses and a write-down in the
carrying value of our capital projects and other existing production assets. Such delays, cost overruns
and asset impairment charges could have a material adverse effect on our financial position, results of
operations and liquidity.
As a result of unforeseen delays, we may also fail to achieve the levels of additional manufacturing
capacity we have forecasted for our plants, as described elsewhere in this Annual Report. We cannot
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provide assurances that these additional manufacturing capacities will be achieved or that the related
projects will be completed as anticipated or at all or that such additional capacities will operate at their
expected utilization rate. These projections are based on our current estimates, but they involve risks,
uncertainties, assumptions and other factors that may cause actual results to be materially different from
our estimates. Neither our independent auditors nor any other independent auditors have examined,
compiled or performed any procedures with respect to these projections, nor have they expressed any
opinion or any other form of assurance on such information or their achievability. Although management
believes these estimates and the assumptions underlying them to be reasonable, they could be
inaccurate, and investors should not place undue reliance upon them.
We may experience adverse fluctuations in the supply and cost of raw materials and energy
supply necessary to our business, which could have a material adverse effect on our business.
Cellulose fiber (wood-based pulp), silica, cement and water are the principal raw materials used in the
production of fiber cement, and the availability and cost of such raw materials are critical to our
operations. Our fiber cement business periodically experiences fluctuations in the supply and costs of raw
materials, and some of our supply markets are concentrated.
Gypsum, paper, water and cement are the principal raw materials used in the production of fiber gypsum,
and the availability and cost of such raw materials are critical to our operations. Our fiber gypsum
business periodically experiences fluctuations in the supply and costs of raw materials, and some of our
supply markets are concentrated.
Price fluctuations or material delays may occur in the future due to lack of raw materials, suppliers, or
supply chain disruptions. The loss or deterioration of our relationship with a major supplier, an increase in
demand by third parties for a particular supplier’s products or materials, delays in obtaining materials, or
significant increases in fuel and energy costs could have a material adverse effect on our financial
position, liquidity, results of operations and cash flows.
Our reliance on third-party distribution channels could impact our business.
We offer our products directly and through a variety of third-party distributors and dealers. Changes in the
financial or business condition of these distributors and dealers could subject us to losses and affect our
ability to bring our products to market and could have a material adverse effect on our business, financial
position, liquidity, results of operations and cash flows. Further, our ability to effectively manage inventory
levels at distributor locations may be impaired under such arrangements, which could increase expenses
associated with excess and obsolete inventory and negatively impact cash flows.
Severe weather, natural disasters and climate change could have an adverse effect on our overall
business.
Our plants and other facilities are located in places that could be affected by natural disasters, such as
hurricanes, typhoons, cyclones, earthquakes, floods, tornados and others. Natural disasters and
widespread adverse climate changes that directly impact our plants or other facilities could materially
adversely affect our manufacturing or other operations and, thereby, harm our overall financial position,
liquidity, results of operations and cash flows.
In the manufacture of our products, we rely on a continuous and uninterrupted supply of electric power,
water and, in some cases, natural gas, as well as the availability of water, waste and emissions discharge
facilities. Any future shortages or discharge curtailments of a material nature could significantly disrupt
our operations and increase our expenses. We currently do not have backup generators on our sites with
the capability of maintaining all of a site’s full operational power needs and we do not have alternate
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sources of power in the event of a sustained blackout. While our insurance includes coverage for certain
“business interruption” losses (i.e., lost profits) and for certain “service interruption” losses, such as an
accident at our supplier’s facility, any losses in excess of the insurance policy’s coverage limits or any
losses not covered by the terms of the insurance policy could have a material adverse effect on our
financial condition. If blackouts interrupt our power supply, we would be temporarily unable to continue
operations at the affected facilities. Any future material and sustained interruptions in our ability to
continue operations at our facilities could damage our reputation, harm our ability to retain existing
customers or obtain new customers and could result in lost revenue, any of which could have a material
adverse effect on our financial position, liquidity, results of operations and cash flows.
Financial Risks
Warranty claims relating to our products and exceeding our warranty reserves could have a
material adverse effect on our business.
We have offered, and continue to offer, various warranties on our products, including offering a prorated
50-year limited warranty until 2009 after which time we offered a non-prorated 30-year limited warranty
for certain of our fiber cement siding products in the United States. In total, as of 31 March 2021, we have
accrued US$39.6 million for such warranties within “Accrued product warranties” on our consolidated
balance sheet and have disclosed the movements in our consolidated warranty reserves in Note 11 to our
consolidated financial statements in Section 2. Although we maintain reserves for warranty-related claims
and legal proceedings that we believe are adequate, we cannot assure you that warranty expense levels
or the results of any warranty-related legal proceedings will not exceed our reserves. If our warranty
reserves are significantly exceeded, the costs associated with such warranties could have a material
adverse effect on our financial position, liquidity, results of operations and cash flows.
Because we have significant operations outside the United States and report our earnings in US
dollars, unfavorable fluctuations in currency values and exchange rates could have a material
adverse effect on our business.
Because our reporting currency is the US dollar, our non-US operations face the additional risk of
fluctuating currency values and exchange rates. Such operations may also face hard currency shortages
and controls on currency exchange. Approximately 33%, 34% and 36% of our net sales in fiscal years
2021, 2020 and 2019, respectively, were from sales outside the United States. Consequently, changes in
the value of foreign currencies (principally Australian dollars, New Zealand dollars, Philippine pesos,
euros, UK pounds and Canadian dollars) could have a material adverse effect on our business, results of
operations and financial condition. We evaluate and consider foreign exchange risk mitigation by entering
into contracts that require payment in local currency, hedging transactional risk, where appropriate, and
having non-US operations borrow in local currencies. We enter into such financial instruments from time
to time to manage our foreign exchange risks. At 31 March 2021 we had foreign currency forward
contracts with a notional value of US$302.9 million related to the upcoming dividend payments and
US$153.2 million related to the upcoming AICF payments. There can be no assurance that we will be
successful in these mitigation strategies, or that fluctuation in foreign currencies and other foreign
exchange risks will not have a material adverse effect on our financial position, liquidity, results of
operations and cash flows.
Our business is subject to customer concentration risk and the loss of any major customer could
materially adversely affect our businesses.
We have one customer who contributed greater than 10% of our net sales in each of the past three fiscal
years. We generally do not have long-term contracts with our large customers. Accordingly, if we were to
lose one or more of our large customers because our competitors were able to offer customers more
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favorable pricing terms or for any other reason, we may not be able to replace customers in a timely
manner or on reasonable terms. The loss of one or more of our large customers could have a material
adverse effect on our financial position, liquidity, results of operations and cash flows.
Legal and Regulatory Risks
Our ability to sell our products in certain markets is influenced by building codes and ordinances
in effect in the related localities and states and may limit our ability to compete effectively in
certain markets and our ability to increase or maintain our current market share for our products.
Most countries, states and localities in the markets in which we sell our products maintain building codes
and ordinances that determine the requisite qualities of materials that may be used to construct homes
and buildings for which our products are intended. Our products may not qualify under building codes and
ordinances in certain markets, prohibiting our customers from using our products in those markets. This
may limit our ability to sell our products in certain markets. In addition, ordinances and codes may change
over time and any such changes may, from the time they are implemented, prospectively limit or prevent
the use of our products in those markets, causing us to lose market share for our products. Although we
keep up to date on the current and proposed building codes and ordinances of the markets in which we
sell or plan to sell our products and, when appropriate, seek to become involved in the ordinance and
code setting process, our efforts may be ineffective, which could have a material adverse effect on our
financial condition, liquidity, results of operations and cash flows.
Losses and expenses relating to ongoing New Zealand product liability litigation could have a
material adverse effect on our business.
Since 2015, our New Zealand subsidiaries (as well as certain other members of the James Hardie Group)
have been and continue to be involved in a number of construction defect and/or product liability claims in
New Zealand that relate to weathertightness claims in residential buildings (single and multi-family
dwellings) and a number of non-residential buildings, primarily constructed from 1998 to 2004. The claims
allege generic defects in certain fiber cement products and systems supplied by our New Zealand
subsidiaries and 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.
We recognize a liability for both asserted and unasserted New Zealand weathertightness claims in the
period in which a loss becomes probable and estimable. The amount of a reasonably probable loss is
dependent on a number of factors including, without limitation, the specific facts and circumstances
unique to each claim (for which we could be subject to joint and several liability), the availability of
claimant compensation under a government compensation scheme, the extent of any contributory
negligence on the part of the claimants and the extent to which we have access to third-party recoveries
to cover a portion of the costs incurred in defending and resolving such actions.
The provision for New Zealand weathertightness claims and any estimated loss incorporates
assumptions that are subject to the foregoing uncertainties and are principally derived from, but not
exclusively based on, historical claims experience. If our assessment of probable and estimable liability
with respect to current asserted claims changes and/or actual liability varies from our estimates, then the
actual amount of losses incurred may be materially higher or lower than the Company's estimates.
Accordingly, losses incurred in connection with defending and resolving asserted and unasserted New
Zealand product liability claims in the future could have a material adverse effect on our financial position,
liquidity, results of operations and cash flows.
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In addition, the actual or alleged existence of defects in any of our products could subject us to significant
product liability or recall claims, including potential putative class or representative action claims.
Although we do not have insurance coverage for damage to, or defects in, our products, we do have (for
some time periods) product liability insurance coverage for bodily injury or property damage which may
arise from the use of our products. Although we believe this coverage (where available) is generally
adequate and we intend to maintain this coverage in the future, we cannot assure you that this coverage
remains or will be sufficient to cover all future product liability claims based on the date of loss or that this
coverage will be available at reasonable rates in the future. In some jurisdictions, we are subject to joint
and several liability. The successful assertion of one or more claims against us, or a co-defendant, that
exceed our insurance coverage could require us to incur significant expenses to pay these damages.
These additional expenses could have a material adverse effect on our financial position, liquidity, results
of operations and cash flows.
For additional information, see Notes 1 and 14 to our consolidated financial statements in Section 2 and
Legal Proceedings in Section 3.
We may incur significant costs, including capital expenditures, in complying with applicable
environmental and health and safety laws and regulations.
In each jurisdiction in which we operate, we are subject to environmental, health and safety laws and
regulations governing our operations, including, among other matters: (i) the air, soil, and water quality of
our plants; and (ii) the use, handling, storage, disposal and remediation of certain regulated materials
currently or formerly used by us or any of our affiliates. Under these laws and regulations, we may be
held jointly and severally responsible for the remediation of certain regulated materials at our or our
predecessors’ past or present facilities and at third-party waste disposal sites. We may also be held liable
for any claims, penalties or fines arising out of human exposure to certain regulated materials or other
environmental damage, including damage to natural resources, and our failure to comply with air, water,
waste, and other environmental regulations.
In particular, many of our products contain crystalline silica, which can be released in a respirable form in
connection with the manufacturing of our fiber cement products or while cutting our fiber cement products
during installation or demolition. The inhalation of respirable crystalline silica at high and prolonged
exposure levels is identified as a carcinogen by certain governmental entities and is associated with
certain lung diseases, including silicosis, which has been the subject of extensive tort litigation.
Many jurisdictions where we operate, including the United States, Australia and New Zealand, have
recently adopted regulations that significantly reduce the occupational exposure limit to respirable
crystalline silica, as well as imposing additional training, exposure monitoring and recordkeeping
requirements. It is possible that these regulations could have an impact on our business as a result of
increased compliance efforts and associated costs, if any, for our manufacturing operations, as well as
those of our business partners (e.g., suppliers, home builders, distributors, installers, etc.); and, as such,
the rule change may possibly have a material adverse effect on our financial position, liquidity, results of
operations, and cash flows.
The costs of complying with environmental and health and safety laws relating to our operations or the
liabilities arising from past or future releases of, or exposure to, certain regulated materials, greenhouse
gases, or product liability matters, or our failure to comply with air, water, waste, and other then-existing
environmental regulations may result in us making future expenditures that could have a material adverse
effect on our financial position, liquidity, results of operations and cash flows. Such regulations and laws
may increase the cost to procure energy or other products necessary to our operation, thereby increasing
our operating costs. In addition, we cannot make any assurances that the laws currently in place that
directly or indirectly relate to environmental liability will not change. If, for example, applicable laws or
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judicial interpretations related to successor liability or “piercing the corporate veil” were to change, such
changes could have a material adverse effect on our financial position, liquidity, results of operations and
cash flows.
Because our intellectual property and other proprietary information may become publicly
available, we are subject to the risk that competitors could copy our products or processes.
Our success depends, in part, on the proprietary nature of our technology, including non-patentable
intellectual property, such as our process technology. To the extent that a competitor is able to reproduce
or otherwise capitalize on our technology, it may be difficult, expensive or impossible for us to obtain
adequate legal or equitable relief. Also, the laws of some foreign countries may not protect our intellectual
property to the same extent as do the laws of the United States. In addition to patent protection of
intellectual property rights, we consider elements of our product designs and processes to be proprietary
and confidential and/or trade secrets. To safeguard our confidential information, we rely on employee,
consultant and vendor nondisclosure agreements and contractual provisions and a system of internal and
technical safeguards to protect our proprietary information. However, any of our registered or
unregistered intellectual property rights may be subject to challenge or possibly exploited by others in the
industry, which could materially adversely affect our financial position, liquidity, results of operations, cash
flows and competitive position.
Cybersecurity risks related to the technology used in our operations, as well as security breaches
of company, customer, employee, or vendor information, could result in a major disruption or
failure of our information technology systems, which could adversely affect our business and
operations.
We rely on information systems to run most aspects of our business, including manufacturing, sales and
distribution, raw material procurement, accounting and managing data and records for employees and
other parties. Despite the significant investments we have made to maintain our information systems and
careful security and controls design, implementation, updating, and internal and independent third-party
assessments, our systems and facilities, as well as those of third parties with which we do business, may
be vulnerable to security breaches, cyber-attacks, employee theft or misconduct, computer viruses,
misplaced or lost data, programming and/or human errors or other similar events. Network, system, and
data breaches could result in misappropriation of sensitive data or operational disruptions, including
interruption to systems availability and denial of access to and misuse of applications required by our
customers to conduct business with us. In addition, misuse of internal applications, theft of intellectual
property, trade secrets, or other corporate assets, and inappropriate disclosure of confidential information
could stem from such incidents. Theft of personal or other confidential data and sensitive proprietary
information could also occur as a result of a breach in cybersecurity, exposing us to costs and liabilities
associated with privacy and data security laws in the jurisdictions in which we operate. Furthermore, we
face additional cybersecurity risks related to some of our employees continuing to work remotely as a
result of the COVID-19 pandemic.
Although we strive to have appropriate security controls in place, prevention of security breaches cannot
be assured. Any security breach involving the misappropriation, loss or other unauthorized disclosure of
our confidential information, whether by us or by third parties with which we do business, could result in
losses, damage to our reputation, risk of litigation, disrupt our operations and have a material adverse
effect on our business, results of operations and financial condition. We may be required to expend
additional resources to continue to enhance our security measures or to investigate and remediate any
security vulnerabilities.
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Privacy and data security concerns and regulation could result in additional costs and liabilities.
As a global organization, we are subject to various regulations regarding privacy, data protection and data
security, including those set forth in the European Union’s General Data Protection Regulation (“GDPR”)
and the California Consumer Privacy Act ("CCPA"). The GDPR became effective in May 2018 and
provides substantial regulation for the handling, processing and transfer of personal data and imposes
substantial penalties for non-compliance. The CCPA, which took effect on 1 January 2020, gives
California consumers certain rights similar to those provided by the GDPR.
Regulations and initiatives such as the GDPR and CCPA place limitations on how companies can use
customer data and impose obligations on companies in their management of such data, which ultimately
increases compliance complexity and related costs. Our efforts to comply with GDPR, the CCPA and
other privacy and data protection laws may impose significant costs and challenges that are likely to
increase over time, and we could incur costs, penalties or litigation related to violation of existing or future
data privacy laws and regulations.
Asbestos-Related Risks
Our wholly-owned Australian Performing Subsidiary is required to make payments to a special
purpose fund that provides compensation for Australian asbestos-related personal injury and
death claims for which certain Former James Hardie Companies are found liable. These payments
may affect our ability to grow the Company.
On 21 November 2006, JHI plc, AICF, the NSW Government and the Performing Subsidiary entered into
the AFFA to provide long-term funding to AICF, a special purpose fund that provides compensation for
Australian asbestos-related personal injury and death claims for which the Former James Hardie
Companies are found liable.
We have recorded a gross asbestos liability of US$1,135.8 million in our consolidated financial
statements as of 31 March 2021, based on the AFFA governing our anticipated future payments to AICF.
The net unfunded AFFA liability, net of tax, was US$$554.1 million at 31 March 2021. The initial funding
was made to AICF in February 2007 and annual or quarterly payments are to be made each year, subject
to the terms of the AFFA. The amounts of these annual payments are dependent on several factors,
including our free cash flow (as defined in the AFFA), actuarial estimations, actual claims paid, operating
expenses of AICF and the Annual Cash Flow Cap set forth in the AFFA. From the time AICF was
established in February 2007 through the date of this Annual Report, we have contributed A$1,571.0
million to the fund. Our obligation to make future payments to AICF continues to be linked under the
terms of the AFFA to our long-term financial success, especially our ability to generate net operating cash
flow.
As a result of our obligation to make payments under the AFFA, our funds available for capital
expenditures (either with respect to our existing business or new business opportunities), repayments of
debt, payments of dividends or other distributions have been, and will be, reduced by the amounts paid to
AICF, and consequently, our financial position, liquidity and cash flows have been, and will be, reduced or
materially adversely affected. Our obligation to make these payments could also affect or restrict our
ability to access equity or debt capital markets.
Potential escalation in proven claims made against, and associated costs of AICF could require
an extension of the period of time that the Company is obliged to make annual funding payments
of up to 35% of its free cash flow, as defined in the AFFA, beyond the currently anticipated
expiration date of that obligation, which may cause us to have to increase our asbestos liability in
the future.
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The amount of our asbestos liability is based, in part, on actuarially determined, anticipated (estimated)
future annual funding payments to be made to AICF on an undiscounted and uninflated basis. Future
annual payments to AICF are based on updated actuarial assessments that are to be performed as of 31
March of each year to determine expected asbestos-related personal injury and death claims to be
funded under the AFFA for the financial year in which the payment is made and the next two financial
years. Estimates of actuarial liabilities are based on many assumptions, which may not prove to be
correct, and which are subject to considerable uncertainty, since the ultimate number and cost of claims
are subject to the outcome of events that have not yet occurred, including social, legal and medical
developments, as well as future economic conditions.
If future proven claims are more numerous, the liabilities arising from them are larger than that currently
estimated by AICF’s actuary, KPMGA, or if AICF investments decline in value, it is possible that pursuant
to the terms of the AFFA, we will be required to pay to AICF our current annual funding payments of up to
35% of our free cash flow, as defined in the AFFA and on which our asbestos liability is based, for an
extended period of time. If this occurs, we may be required to increase our asbestos liability, which would
be reflected as a charge in our consolidated statements of operations and comprehensive income at that
date. Any such changes to actuarial estimates which require us to increase our asbestos liability could
have a material adverse effect on our financial position, liquidity, results of operations and cash flows.
Even though the AFFA has been implemented, we may be subject to potential additional liabilities
(including claims for compensation or property remediation outside the arrangements reflected in
the AFFA), because certain current and former companies of the James Hardie Group previously
manufactured products that contained asbestos.
Prior to 1987, ABN 60, which is now owned and controlled by AICF, manufactured products in Australia
that contained asbestos. In addition, prior to 1987, two former subsidiaries of ABN 60, Amaca and
Amaba, which are now also owned and controlled by AICF, manufactured products in Australia that
contained asbestos. ABN 60 also held shares in companies that manufactured asbestos-containing
products in Indonesia and Malaysia, and held minority shareholdings in companies that conducted
asbestos-mining operations based in Canada and Southern Africa. Former ABN 60 subsidiaries also
exported asbestos-containing products to various countries. AICF is designed to provide compensation
only for certain claims and to meet certain related expenses and liabilities, and legislation in New South
Wales, Australia in connection with the AFFA seeks to defer all other claims against the Former James
Hardie Companies. The funds contributed to AICF will not be available to meet any asbestos-related
claims made outside Australia, or claims made arising from exposure to asbestos occurring outside
Australia, or any claim for pure property loss or pure economic loss or remediation of property. In these
circumstances, it is possible that persons with such excluded claims may seek to pursue those claims
directly against us. Defending any such litigation could be costly and time consuming, and consequently,
our financial position, liquidity, results of operations and cash flows could be materially adversely affected.
In New Zealand,
that contained asbestos.
Prior to 1988, a New Zealand subsidiary in the James Hardie Group manufactured products in New
Zealand
the majority of asbestos-related disease
compensation claims are managed by the state-run Accident Compensation Corporation (“ACC”). Our
New Zealand subsidiary that manufactured products that contained asbestos contributed financially to the
ACC fund as required by law via payment of an annual levy while it carried on business. All decisions
relating to the amount and allocation of payments to such claimants in New Zealand are made by the
ACC in accordance with New Zealand law. The Injury Prevention, Rehabilitation and Compensation Act
2001 (NZ) bars compensatory damages for claims that are covered by the legislation which may be made
against the ACC fund. However, we may be subject to potential liability if any of these claims are found
not to be covered by the legislation and are later brought against us, and consequently, our financial
position, liquidity, results of operations and cash flows could be materially adversely affected.
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Because our revenues are primarily from sales in US dollars and the actuarially assessed
asbestos liability is denominated in Australian dollars and payments pursuant to the AFFA are
made in Australian dollars, we may experience unpredictable volatility in our reported results due
to changes in the US dollar (and other currencies from which we derive our sales) compared to
the Australian dollar.
Payments pursuant to the AFFA are required to be made to AICF in Australian dollars. In addition, annual
payments to AICF include calculations based on various estimates that are denominated in Australian
dollars. To the extent that our future obligations exceed Australian dollar cash flows from our Australian
operations and we do not hedge this foreign exchange exposure, we will need to convert US dollars or
other foreign currency into Australian dollars in order to meet our obligations pursuant to the AFFA.
In addition, because our results of operations are reported in US dollars and the asbestos liability is
based on estimated payments denominated in Australian dollars, fluctuations in the AUD/USD exchange
rate will cause unpredictable volatility in our reported results. For example, during fiscal years 2021, 2020
and 2019, we recorded an unfavorable adjustment of US$123.0 million, a favorable adjustment of
US$69.0 million, a favorable adjustment of US$49.5 million, respectively, due to fluctuations in the US
dollar compared to the Australian dollar.
The AFFA imposes certain non-monetary obligations.
Under the AFFA, we are also subject to certain non-monetary obligations that could prove onerous or
otherwise materially adversely affect our ability to undertake proposed transactions or pay dividends. For
example, the AFFA contains certain restrictions that generally prohibit us from undertaking transactions
that would have a material adverse effect on the relative priority of AICF as a creditor, or that would
materially impair our legal or financial capacity and that of the Performing Subsidiary, in each case such
that we and the Performing Subsidiary would cease to be likely to be able to meet the funding obligations
that would have arisen under the AFFA had the relevant transaction not occurred. Those restrictions
apply to dividends and other distributions, reorganizations of, or dealings in, share capital which create or
vest rights in such capital in third parties, and non-arm’s length transactions. While the AFFA contains
certain exemptions from such restrictions (including, for example, exemptions for arm’s-length dealings;
transactions in the ordinary course of business; certain issuances of equity securities or bonds; and
certain transactions provided certain financial ratios are met and certain amounts of dividends),
implementing such restrictions could materially adversely affect our ability to enter into transactions that
might otherwise be favorable to us and could materially adversely affect our financial position, liquidity,
results of operations and cash flows.
The AFFA does not eliminate the risk of adverse action being taken against us.
There is a possibility that, despite certain covenants agreed to by the NSW Government in the AFFA,
adverse action could be directed against us by one or more of the NSW Government, the government of
the Commonwealth of Australia, governments of the other states or territories of Australia or any other
governments, unions or union representative groups, or asbestos disease groups, with respect to the
asbestos liabilities of the Former James Hardie Companies or other current and former companies of the
James Hardie Group. Any such adverse action could materially adversely affect our financial position,
liquidity, results of operations and cash flows.
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The complexity and long-term nature of the AFFA and related legislation and agreements may
result in litigation as to their interpretation.
Certain legislation, the AFFA and related agreements, which govern the implementation and performance
of the AFFA, are complex and have been negotiated over the course of extended periods between
various parties. There is a risk that, over the term of the AFFA, as has already occurred, some or all
parties may become involved in disputes as to the interpretation of such legislation, the AFFA or related
agreements or the terms of the AFFA may change. We cannot guarantee that no party will commence
litigation seeking remedies with respect to such a dispute, nor can we guarantee that a court will not
order other remedies not previously anticipated which may materially adversely affect us.
There is no certainty that the AICF Loan Facility will remain in place for its entire term.
Drawings under the AICF Loan Facility are subject to satisfaction of certain specified conditions
precedent and the NSW Government (as lender) has the right to cancel the AICF Loan Facility, require
repayment of money advanced and enforce security granted to support the loan in the various
circumstances prescribed in the facility agreement and related security documentation. There are also
certain positive covenants given by, and restrictions on the activities of, AICF and the Former James
Hardie Companies which apply during the term of the loan. A breach of any of these covenants or
restrictions may also lead to cancellation of the AICF Loan Facility, early repayment of the loan and/or
enforcement of the security. As such, there can be no certainty that the facility will remain in place for its
intended term.
If the AICF Loan Facility does not remain in place for its intended term, AICF may experience a short-term
funding shortfall. A short-term funding shortfall for AICF could subject us to negative publicity. Such
negative publicity could materially adversely affect our financial position, liquidity, results of operations
and cash flows, as well as employee morale and the market prices of our publicly traded securities.
We may have insufficient Australian taxable income to utilize tax deductions.
We may not have sufficient Australian taxable income to utilize the tax deductions resulting from the
funding payments under the AFFA to AICF. Further, if as a result of making such funding payments we
incur tax losses, we may not be able to fully utilize such tax losses in future years of income. Any inability
to utilize such deductions or losses could materially adversely affect our financial position, liquidity, results
of operations and cash flows.
Certain AFFA tax conditions may not be satisfied.
Despite Australian Taxation Office (“ATO”) rulings for the expected life of the AFFA, it is possible that new
(and adverse) tax legislation could be enacted in the future. It is also possible that the facts and
circumstances relevant to operation of the ATO rulings could change over the life of the AFFA. We may
elect to terminate the AFFA if certain tax conditions are not satisfied for more than 12 months. However,
we do not have a right to terminate the AFFA if, among other things, the tax conditions are not satisfied as
a result of the actions of a member of the James Hardie Group.
Under certain circumstances, we may still have an obligation to make annual funding payments on an
adjusted basis if the tax conditions remain unsatisfied for more than 12 months. If the tax conditions are
not satisfied in a manner which does not permit us to terminate the AFFA, our financial position, liquidity,
results of operations and cash flows may be materially adversely affected. The extent of this adverse
effect will be determined by the nature of the tax condition which is not satisfied.
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Risks Related to Ireland
Irish law contains provisions that could delay or prevent a change of control that may otherwise
be beneficial to you.
Irish law contains several provisions that could have the effect of delaying or preventing a change of
control of our ownership. The Irish Takeover Rules would generally (subject to certain very limited
exceptions) require a mandatory cash offer to be made for our entire issued share capital if, because of
an acquisition of a relevant interest (including interests held in the form of shares of our common stock,
CUFS or ADSs) in such shares, the voting rights of the shares in which a person (including persons
acting in concert with that person) holds relevant interests increase: (i) from below 30% to 30% or more;
or (ii) from a starting point that is above 30% and below 50%, by more than 0.05% in a 12-month period.
However, this prohibition is subject to exceptions, including acquisitions that result from acceptances
under a mandatory takeover bid made in compliance with the Irish Takeover Rules. Although the Irish
Takeover Rules may help to ensure that no person acquires voting control of us without making an offer
to all shareholders, they may also have the effect of delaying or preventing a change of control that may
otherwise be beneficial to you. In addition to the operation of the Irish Takeover Rules, we may, from time
to time, put in place appropriate retention arrangements to ensure that we retain our key employees
during periods of corporate change.
Our ability to pay dividends and conduct share buy-backs is dependent on Irish law and may be
limited in the future if we are not able to maintain sufficient levels of distributable profits.
Under Irish law, in order to pay dividends and/or conduct a buy-back of shares, an Irish company requires
sufficient distributable profits which are determined under the Irish Companies Act 2014 and applicable
accounting practices generally accepted in Ireland. We believe that our current corporate structure has
allowed us to maintain sufficient levels of distributable profits to continue paying dividends in accordance
with our publicly disclosed dividend policy, which is updated from time to time, and to conduct share buy-
backs. However, transactions or events could cause a reduction in our distributable profits, resulting in
our inability to pay dividends on our securities or to conduct share buy-backs, which could have a
material adverse effect on the market value of our securities.
Risks Related to Taxation
We are subject to risks related to taxation in multiple jurisdictions.
We operate in multiple jurisdictions and pay tax on our income according to the tax laws of these
jurisdictions. Various factors, some of which are beyond our control, determine our effective tax rate. The
primary drivers of our effective tax rate are the tax rates of the jurisdictions in which we operate, the level
and geographic mix of pre-tax earnings, intra-group royalties, interest rates and the level of debt which
gives rise to interest expense on external debt and intra-group debt, and the value of adjustments for
timing differences and permanent differences, including the non-deductibility of certain expenses, all of
which are subject to change and which could result in a material increase in our effective tax rate. Such
changes to our effective tax rate could materially adversely affect our financial position, liquidity, results of
operations and cash flows.
Tax laws are dynamic and subject to change as new or revised laws and treaties are passed and new
interpretations are issued or applied. Due to the nature of our historic and current operations, we are
exposed to potential tax risks in a number of jurisdictions, including, without limitation, Ireland, the United
States, Australia, New Zealand, the Netherlands and various parts of Europe. For example, many
countries, including Ireland and the Netherlands, have made or are actively considering making changes
to existing tax laws and treaties, which could alter or increase our tax obligations, could materially affect
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our business, financial condition or results of operations and could potentially have a material adverse
impact on holders of our securities.
Exposure to additional tax liabilities due to audits and reviews could materially adversely affect
our business.
Due to our size and the nature of our business, we are subject to ongoing reviews and audits by
authorities in taxing jurisdictions on various tax matters, including challenges to various positions we
assert on our income tax and withholding tax returns. We accrue for tax contingencies based upon our
best estimate of the taxes ultimately expected to be paid, which we update over time as more information
becomes available. Such amounts are included in taxes payable or other non-current liabilities, as
appropriate.
We record additional tax expense in the period in which we determine that the recorded tax liability is less
than the ultimate assessment we expect. The amounts ultimately paid on resolution of reviews by taxing
jurisdictions could be materially different from the amounts included in taxes payable or other non-current
liabilities and result in additional tax expense which could materially adversely affect our financial
position, liquidity, results of operations and cash flows.
Tax benefits are available under the US-Ireland Income Tax Treaty to US and Irish taxpayers that
qualify for those benefits. Our eligibility for benefits under the US-Ireland Income Tax Treaty is
determined on an annual basis and we could be audited by the Internal Revenue Service (“IRS”)
for this issue. If during a subsequent tax audit or related process, the IRS determines that we are
not eligible for benefits under the US-Ireland Income Tax Treaty, we may not qualify for treaty
benefits. As a result, our effective tax rate could significantly increase and we could be subject to
a 30% US withholding tax rate on payments of interest and dividends from our US subsidiaries to
our Irish resident subsidiaries.
We believe that interest and dividends paid by our US subsidiaries to our Irish resident subsidiaries
qualify for treaty benefits in the form of reduced withholding tax under the US-Ireland Income Tax Treaty.
We believe that, under the limitation on benefits (“LOB”) provision of the US-Ireland Treaty, no US
withholding tax applies to interest that our US subsidiaries paid to our Irish resident subsidiaries. The
LOB provision has various conditions of eligibility for reduced US withholding tax rates and other treaty
benefits, all of which we believe are satisfied. If, however, we do not qualify for benefits under the US-
Ireland Income Tax Treaty, those interest payments would be subject to a 30% US withholding tax.
We believe that, under the US-Ireland Income Tax Treaty, a 5% US withholding tax applies to dividends
paid by our US subsidiaries to our Irish resident subsidiaries. The LOB provision of the US-Ireland
Income Tax Treaty has various conditions of eligibility for reduced US withholding tax rates and other
treaty benefits, all of which we believe we have satisfied. If, however, we do not qualify for benefits under
the US-Ireland Treaty, dividend payments by our US subsidiaries would be subject to a 30% US
withholding rate.
Our eligibility for benefits under the US-Ireland Tax Treaty is determined on an annual basis and we could
be audited by the IRS for this issue. If during a subsequent tax audit or related process, the IRS
determines that we are not eligible for benefits under the US-Ireland Income Tax Treaty, we may not
qualify for treaty benefits. As a result, our effective tax rate could significantly increase beginning in the
fiscal year that such determination is made and we could be liable for taxes owing for calendar year 2017
and subsequent periods, which could adversely affect our financial position, liquidity, results of operations
and cash flows.
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LEGAL PROCEEDINGS
The Company is involved from time to time in various legal proceedings and administrative actions
related to the normal conduct of its business, including general liability claims, putative class and
representative action lawsuits and mass plaintiff litigation concerning our products and services. Although
it is impossible to predict the outcome of any pending legal proceeding, management believes that such
proceedings and actions should not, individually or in the aggregate, have a material adverse effect on
the Company’s consolidated financial position, results of operations or cash flows, except as they relate
to asbestos, tax contingencies, New Zealand weathertightness claims and the matters described in the
sections below. For further details, see “Section 3 – Risk Factors” of this Annual Report.
Tax Contingencies
Due to our size and the nature of our business, we are subject to ongoing reviews by taxing jurisdictions
on various tax matters. We accrue for tax contingencies based upon our best estimate of the taxes
ultimately expected to be paid, which we update over time as more information becomes available. Such
amounts are included in taxes payable or other non-current liabilities, as appropriate. If we ultimately
determine that payment of these amounts is unnecessary, we reverse the liability and recognize a tax
benefit during the period in which we determine that the liability is no longer necessary. We record
additional tax expense in the period in which we determine that the recorded tax liability is less than the
ultimate assessment we expect.
We file income tax returns in various jurisdictions, including Ireland, the United States, Germany, the
Netherlands, Spain, Australia, New Zealand and the Philippines.
New Zealand Weathertightness Claims
Since fiscal year 2002, the Company’s New Zealand subsidiaries have been joined in a number of
weathertightness claims in New Zealand that relate to residential buildings (single dwellings and
apartment complexes) and a small number of non-residential buildings, primarily constructed from 1998
to 2004. The claims often involve multiple parties and allege that losses were incurred due to excessive
moisture penetration of the buildings’ structures. The claims typically include allegations of poor building
design, inadequate certification of plans, inadequate construction review and compliance certification and
deficient work by sub-contractors.
Historically, the Company’s New Zealand subsidiaries have been joined to these claims as one of several
co-defendants, including local government entities responsible for enforcing building codes and practices,
resulting in the Company’s New Zealand subsidiaries becoming liable for only a portion of each claim. In
addition, the Company’s New Zealand subsidiaries have had access to third-party recoveries to defray a
portion of the costs incurred in resolving such claims.
In 2015, the Company and/or its subsidiaries were named as the sole defendants in four claims on behalf
of multiple defendants, three of which are still pending and each of which allege that the New Zealand
subsidiaries’ products were inherently defective. The Company believes it has substantial factual and
legal defenses to these claims and is defending the claims vigorously.
Cridge, et al. (Case Nos. CIV-2015-485-594 and CIV-2015-485-773), In the High Court of New Zealand,
Wellington Registry (hereinafter the “Cridge litigation”). In August 2020, trial of phase one of the Cridge
litigation commenced in Wellington, New Zealand solely to determine whether the Company’s New
Zealand subsidiaries had a duty to the plaintiffs and breached that duty. This phase of the trial concluded
in December 2020, and a decision by the Wellington High Court is expected to be announced late in the
first quarter of FY 2022. We believe we have substantial factual and legal defenses to the claims in the
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Cridge litigation. While an unfavorable outcome in this phase is possible as litigation is inherently
unpredictable, management does not believe that the outcome of this phase of the litigation will have a
material adverse effect on the Company’s financial position. As of 31 March 2021, the Company has not
recorded a reserve related to the Cridge litigation as the chance of loss is not probable and the amount of
loss, if any, cannot be reasonably estimated. If an adverse decision is reached by the Wellington High
Court, certain factors anticipated to be included in the decision may allow the Company to estimate a
reasonable range of liability in the Cridge litigation.
White, et al. (Case No. CIV-2015-404-2981 [2021] NZHC 930), In the High Court of New Zealand,
Auckland Registry (hereinafter the “White litigation”). The trial of phase one of the White litigation is
scheduled to commence on 17 May 2021 in Auckland, New Zealand solely to determine whether the
Company’s New Zealand subsidiaries, along with three non-New Zealand Group entities, had a duty to
the plaintiffs and breached that duty. As of 31 March 2021, the Company has not recorded a reserve
related to the White litigation as the chance of loss is not probable and the amount of loss, if any, cannot
be reasonably estimated.
Waitakere, et al. (Case No. CIV-2015-404-3080), In the High Court of New Zealand, Auckland Registry
(hereinafter the “Waitakere litigation”). The trial in the Waitakere litigation is currently not scheduled to
begin until May 2023 in Auckland, New Zealand. As of 31 March 2021, the Company has not recorded a
reserve related to the Waitakere litigation as the chance of loss is not probable and the amount of loss, if
any, cannot be reasonably estimated.
A court’s decision in one or more of the litigation matters has the potential to impact the accounting
treatment regarding the probability of a potential loss and the Company’s ability to reasonably estimate a
reserve with regards to the other litigation matters discussed above. Furthermore, an adverse judgement
in one or more of these litigation matters could have a material adverse impact on our consolidated
financial position, results of operations or cash flows.
For further information, see Note 14 to our consolidated financial statements in Section 2.
Environmental
Our operations, like those of other companies engaged in similar businesses, are subject to a number of
laws and regulations on air, soil and water quality, waste handling and disposal. Our policy is to accrue for
environmental costs when it is determined that it is probable that an obligation exists, and the amount can
be reasonably estimated.
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CONTROLS AND PROCEDURES
Management’s Annual Report on Internal Control Over Financial Reporting
Evaluation of Disclosure Controls and Procedures
We carried out an evaluation, under the supervision and with the participation of management, including
our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of
our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the
end of the period covered by this Annual Report. In designing and evaluating our disclosure controls and
procedures, our management recognizes that any controls and procedures, no matter how well designed
and operated, can provide only reasonable assurance of achieving the desired control objectives and are
subject to certain limitations, including the exercise of judgment by individuals, the difficulty in identifying
unlikely future events, and the difficulty in eliminating misconduct completely. Based upon that evaluation,
our Chief Executive Officer and Chief Financial Officer have concluded that, our disclosure controls and
procedures were effective at a reasonable assurance level as of 31 March 2021, to ensure the
information required to be disclosed in the reports that we file or submit under the Exchange Act were
recorded, processed, summarized and reported within the time periods specified in the rules and forms of
the SEC and that such information was accumulated and communicated to our management, including
our Chief Executive Officer and Chief Financial Officer, to allow for timely decisions regarding required
disclosures.
Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial
reporting as defined in Rule 13a-15(f) of the Exchange Act. Because of its inherent limitations, internal
control over financial reporting may not prevent or detect all misstatements. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.
We assessed the effectiveness of our internal control over financial reporting as of 31 March 2020. In
making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of
the Treadway Commission in Internal Control – Integrated Framework (2013). Based on our assessment
using those criteria, we concluded that our internal control over financial reporting was effective as of
31 March 2021.
The effectiveness of our internal control over financial reporting as of 31 March 2021 has been audited by
Ernst & Young LLP, an independent registered public accounting firm, as stated in their report below.
Changes in Internal Control over Financial Reporting
There were no changes in our internal controls over financial reporting that occurred during the period
covered by this Annual Report that have materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting.
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Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of James Hardie Industries plc
Opinion on Internal Control Over Financial Reporting
We have audited James Hardie Industries plc’s internal control over financial reporting as of 31 March 2021, based on
criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (2013 framework) (the COSO criteria). In our opinion, James Hardie Industries plc (the Company)
maintained, in all material respects, effective internal control over financial reporting as of 31 March 2021, based on the
COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the consolidated balance sheets of the Company as of 31 March 2021 and 2020, the related
consolidated statements of operations and comprehensive income, changes in shareholders’ equity (deficit) and cash
flows for each of the three years in the period ended 31 March 2021, and the related notes and our report dated 18 May
2021 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s
Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal
control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was
maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed
risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit
provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and
procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of
management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the
financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.
/s/ Ernst & Young LLP
Irvine, California
18 May 2021
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EMPLOYEES
During each of the last three fiscal years, we employed the following average number of people:
Fiscal Years Ended 31 March
2020
2019
2021
Fiber Cement United States and Canada
Europe Building Products1
Fiber Cement Australia
Fiber Cement New Zealand2
Fiber Cement Philippines
Other Businesses – United States
Research & Development, including Technology
General Corporate
Total Employees
____________
2,662
937
580
116
348
—
155
63
4,861
2,563
972
597
180
340
—
156
61
4,869
2,592
994
603
186
304
19
159
59
4,916
1
2
On 3 April 2018, we completed the Fermacell acquisition. As such, the total number of employees for the fiscal year ended 31
March 2019 for Europe Building Products represent the actual number of people employed for the fiscal year ended 31 March
2019 and not the average number of people employed.
In fiscal year 2021, based on our strategic decision to move to a regional model for the manufacture and supply of fiber cement
products for the New Zealand market, we ceased all manufacturing of products in New Zealand and shifted manufacturing from
New Zealand to Australia.
As of the end of 31 March 2021, of the 4,861 average number of people employed, approximately 680
employees have their employment conditions determined by collective agreements negotiated with labor
unions (approximately 596 and 84 employees in Europe and Australia, respectively). Under European
law, employees that are part of a collective agreement are not required to inform their employer if they are
a member of a labor union. In Australia, it is a matter of individual choice whether an employee in a
collective agreement is a member of a union. As such, it is possible that some of our employees covered
by collective agreements in Europe and Australia may not be members of a union. In accordance with
Australian law, we do not keep records of union membership. Our management believes that we have a
satisfactory relationship with these unions and there are currently no ongoing labor disputes. We currently
have no employees who are members of a union in the United States.
LISTING DETAILS
Trading Markets
As a company incorporated under the laws of Ireland, we have listed our securities for trading on the
ASX, through the Clearing House Electronic Subregister System (“CHESS”), via CHESS Units of Foreign
Securities (“CUFS”). CUFS are a form of depositary security that represent a beneficial ownership
interest in the securities of a non-Australian corporation. Each of our CUFS represents the beneficial
ownership of one share of common stock of JHI plc, the legal ownership of which is held by CHESS
Depositary Nominees Pty Ltd ("CDN"). The CUFS are listed and traded on the ASX under the symbol
“JHX.”
We have also listed our securities for trading on the NYSE. We sponsor an ADS program, whereby
beneficial ownership of CUFS is represented by ADS. These ADSs trade on the NYSE in the form of
ADRs, under the symbol “JHX.” Deutsche Bank Trust Company Americas (“Deutsche Bank“) has acted
as the depository for our ADS program. Unless the context indicates otherwise, when we refer to ADSs,
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we are referring to ADRs or ADSs and when we refer to our common stock we are referring to the shares
of our common stock that are represented by CUFS.
We cannot predict the prices at which our shares and ADSs will trade or the volume of trading for such
securities, nor can we assure you that these securities will continue to meet the applicable listing
requirements of these exchanges.
Trading on the Australian Securities Exchange
The ASX is headquartered in Sydney, Australia, with branches located in each Australian state capital.
Our CUFS trade on the ASX under the symbol “JHX.” The ASX is a publicly listed company with trading
being undertaken by brokers licensed under the Australian Corporations Act. Trading principally takes
place between the hours of 10:00 a.m. and 4:00 p.m. Australian Eastern Standard Time on each weekday
(excluding Australian public holidays). Settlement of trades in uncertificated securities listed on the ASX is
generally effected electronically. This is undertaken through CHESS, which is the clearing and settlement
system operated by the ASX.
Trading on the New York Stock Exchange
In the United States, our ADSs trade on the NYSE under the symbol “JHX.” Trading principally takes
place between the hours of 9:30 a.m. and 4:00 p.m. Eastern Time on each weekday (excluding US public
holidays). All inquiries and correspondence regarding ADSs should be directed to Deutsche Bank, 60
Wall Street, New York, New York 10005, United States. To speak directly to a Deutsche Bank
representative, please call 1-212-250-9100. You may also send an e-mail inquiry to adr@db.com or visit
the Deutsche Bank website at https:\\www.adr.db.com.
Fees and Charges Payable by Holders of our ADSs
The following is a summary of the fee provisions of our deposit agreement with Deutsche Bank. For more
complete information regarding our ADS program, investors are directed to read the entire amended
deposit agreement, a copy of which has been filed as Exhibit 2.1 and 2.2 to this Annual Report.
Service
Issuance of ADSs, including issuances resulting
from a distribution of shares or rights or other
property
Cancellation of ADSs
Distribution of cash dividends or other cash
distributions
Operational and maintenance costs
Fees
Up to US$0.05 per ADS issued
Up to US$0.05 per ADS issued
Up to US$0.05 per ADS issued
An annual fee of US $0.05 per ADS held on the
applicable record date established by the
depositary
Additionally, under the terms of our deposit agreement, Deutsche Bank is entitled to charge each
registered holder the following:
•
•
•
•
•
•
taxes and other governmental charges;
registration fees as may from time to time be in effect for the registration of transfers of CUFS
generally on the CHESS;
expenses for cable, telex and fax transmissions and delivery services;
expenses incurred for converting foreign currency into US dollars;
fees and expenses incurred in connection with compliance with exchange control regulations and
other regulatory requirements applicable to CUFS, deposited securities, ADSs and ADRs; and
fees and expenses incurred in connection with the delivery or servicing of CUFS on deposit.
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If any tax or other governmental charge becomes payable with respect to any security on deposit, such
tax or other governmental charge is payable by the ADS holder to Deutsche Bank. Deutsche Bank may
refuse to affect any transfer or withdrawal of a deposited security until such payment is made. Deutsche
Bank may withhold any dividends or other distributions or may sell for the account of the ADS holder any
part or all of the deposited securities, and may apply such dividends, other distributions, or proceeds of
any such sale in payment of such tax or other governmental charge and the ADS holder will remain liable
for any deficiency.
Generally, Deutsche Bank collects its fees for delivery and surrender of ADSs directly from investors
depositing shares or surrendering ADSs for the purpose of withdrawal or from intermediaries acting for
them. Additionally, Deutsche Bank collects fees for making distributions to investors by deducting those
fees from the amounts distributed or by selling a portion of distributable property to pay the fees.
Deutsche Bank may collect its annual fee for depositary services by deductions from cash distributions or
by directly billing investors or by charging the book-entry system of accounts of participants acting for
them. Deutsche Bank may generally refuse to provide fee-attracting services until its fees for those
services are paid.
As part of its service as depositary, Deutsche Bank has agreed: (i) to arrange for the local custody of the
underlying shares and absorb the costs of servicing the same; (ii) to make certain annual
reimbursements to us based on a percentage of net revenues collected for ADS issuance and
cancellation fees, net of custody costs, which we will use toward investor relations expenses and other
expenses related to the maintenance of the ADS program (we received US$35,458 in reimbursements of
this type in fiscal year 2021); (iii) to waive the cost associated with administrative and reporting services
under the ADS program, such costs being valued at US$60,000 per year; and (iv) to waive the access
charges to www.adr.db.com, such costs being valued at US$10,000 per year.
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CONSTITUTION
Our corporate domicile is in Ireland and our registered office is located at Europa House, 2nd Floor,
Harcourt Centre, Harcourt Street, Dublin 2, D02 WR20, Ireland. We are registered at the Companies
Registration Office of the Department of Jobs, Enterprise and Innovation in Dublin, Ireland under number
485719. Copies of our Memorandum of Association and our Articles of Association are filed as Exhibits
1.1 and 1.2 to this Annual Report. A description of each class of securities registered under Section 12 of
the Securities Exchange Act of 1934 is included in Exhibit 2.19 to this Annual Report and is incorporated
herein by reference.
MATERIAL CONTRACTS
Other than the contracts that are described elsewhere in this Annual Report, including, without limitation,
the AFFA and related agreements, our Revolving Credit Facility, the indentures governing our senior
unsecured notes, the deposit agreement governing our ADS program, our executive compensation and
equity incentive plans and certain material employment contracts described in “Section 1 – Remuneration
Report” and any material contracts that have been entered into in the ordinary course of business, the
Company does not have any material contracts otherwise requiring disclosure in this Annual Report.
EXCHANGE CONTROLS
The European Commission has imposed financial sanctions on a number of countries throughout the
world that are suspected of being involved in activities such as terrorism or repression of its citizens.
Ireland has given effect to these sanctions through the implementation of regulations and statutory
instruments. We do not have any subsidiaries located in countries with imposed financial sanctions by the
European Commission. In addition, we do not conduct business or other revenue-generating activities in
these countries.
Except for restrictions contained in the regulations or statutory instruments referred to above, there are no
legislative or other legal provisions currently in force in Ireland or arising under our Constitution restricting
the import or export of capital, including the availability of cash and cash equivalents for use by JHI plc
and its wholly owned subsidiaries, or remittances to our security holders not resident in Ireland. In
addition, except for restrictions contained in the regulations or statutory instruments referred to above,
cash dividends payable in US dollars on our common stock may be officially transferred from Ireland and
converted into any other convertible currency.
There are no limitations, either by Irish law or in our Constitution, on the right of non-residents of Ireland
to hold or vote our common stock.
TAXATION
The following summarizes the material US and Irish tax consequences of an investment in shares of our
common stock. This summary does not address every aspect of taxation relevant to a particular investor
subject to special treatment under any applicable law and is not intended to apply in all respects to all
categories of investors. In addition, except for the matters discussed under “Irish Taxation”, this summary
does not consider the effect of other foreign tax laws or any state, local or other tax laws that may apply
to an investment in shares of our common stock. This summary assumes that we will conduct our
business in the manner described in this Annual Report. Changes in our organizational structure or the
manner in which we conduct our business may invalidate all or parts of this summary. The laws on which
this summary is based could change, perhaps with retroactive effect, and any law changes could
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invalidate all or parts of this summary. We will not update this summary for any law changes after the
date of this Annual Report.
This discussion does not bind either the US or Irish tax authorities or the courts of those jurisdictions.
Except where outlined below, we have not sought a ruling nor will we seek a ruling of the US or Irish tax
authorities about matters in this summary. We cannot assure you that those tax authorities will concur
with the views in this summary concerning the tax consequences of the purchase, ownership or
disposition of our common stock or that any reviewing judicial body in the United States or Ireland would
likewise concur.
investors should consult
Prospective
tax
consequences of acquiring, owning and disposing of shares of our common stock, including the
effect of any foreign, state or local taxes.
tax advisors regarding
the particular
their
United States Taxation
The following is a summary of the material US federal income tax consequences generally applicable to
“US Shareholders” (as defined below) who beneficially own shares of our common stock and hold the
shares as capital assets. For purposes of this summary, a “US Shareholder” means a beneficial owner of
our common stock that is: (1) an individual who is a citizen or resident of the United States (as defined for
US federal income tax purposes); (2) a corporation or other entity created or organized in or under the
law of the United States or any of its political subdivisions; (3) an estate whose income is subject to US
federal income taxation regardless of its source; or (4) a trust if (i) a court in the United States can
exercise primary supervision over the administration of the trust, and one or more United States persons
can control all of the substantial decisions of the trust, or (ii) the trust has in effect a valid election to be
treated as a United States person for US federal income tax purposes. If a partnership (including for this
purpose any entity treated as a partnership for US federal tax purposes) is a beneficial owner of a share
of our common stock, the US federal tax treatment of a partner in the partnership generally will depend
on the status of the partner and the activities of the partnership. A holder of our common stock that is a
partnership and partners in that partnership should consult their own tax advisers regarding the US
federal income tax consequences of holding and disposing of those shares.
This summary does not comprehensively describe all possible tax issues that could influence a current or
prospective US Shareholder’s decision to buy or sell shares of our common stock. In particular, this
summary does not discuss: (1) the tax treatment of special classes of US Shareholders, like financial
institutions, life insurance companies, tax exempt organizations, tax-qualified employer plans and other
tax-qualified or qualified accounts, investors liable for the alternative minimum tax, dealers in securities,
shareholders who hold shares of our common stock as part of a hedge, straddle or other risk reduction
arrangement, or shareholders whose functional currency is not the US dollar; (2) the tax treatment of US
Shareholders who own (directly or indirectly by attribution through certain related parties) 10% or more of
our voting stock; and (3) the application of other US federal taxes, like the US federal estate tax. The
summary is based on the Internal Revenue Code (the “Code”), applicable US Department of Treasury
regulations, judicial decisions and administrative rulings and practice, all as of the date of this Annual
Report.
Treatment of ADSs
For US federal income tax purposes, a holder of an ADS is considered the owner of the shares of stock
represented by the ADS. Accordingly, except as otherwise noted, references in this summary to
ownership of shares of our common stock includes ownership of the shares of our common stock
underlying the corresponding ADSs.
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Taxation of Distributions
Subject to the passive foreign investment company rules discussed below, the tax treatment of a
distribution on shares of our common stock held by a US Shareholder depends on whether the
distribution is from our current or accumulated earnings and profits (as determined under US federal
income tax principles). To the extent a distribution is from our current or accumulated earnings and
profits, a US Shareholder will include the amount of the distribution in gross income as a dividend. To the
extent a distribution exceeds our current and accumulated earnings and profits, a US Shareholder will
treat the excess first as a non-taxable return of capital to the extent of the US Shareholder’s tax basis in
those shares and thereafter as capital gain. See the discussion of “Capital Gain Rates” below.
Notwithstanding the foregoing described treatment, we do not intend to maintain calculations of our
current and accumulated earnings and profits. Dividends received on shares of our common stock will not
qualify for the inter-corporate dividends received deduction.
Distributions to US Shareholders that are treated as “qualified dividend income” are generally subject to a
maximum rate of 20%. “Qualified dividend income” includes dividends received from a “qualified foreign
corporation.” A “qualified foreign corporation” includes (1) a foreign corporation that is eligible for the
benefits of a comprehensive income tax treaty with the United States that contains an exchange of
information program and (2) a foreign corporation that pays dividends with respect to shares of its stock
that are readily tradable on an established securities market in the United States. We believe that we are,
and will continue to be, a “qualified foreign corporation” and that dividends we pay with respect to our
shares will qualify as “qualified dividend income.” To be eligible for the 20% tax rate, a US Shareholder
must hold our shares un-hedged for a minimum holding period (generally, 61 days during the 121-day
period beginning on the date that is 60 days before the ex-dividend date of the distribution). Although we
believe we presently are, and will continue to be, a “qualified foreign corporation,” we cannot guarantee
that we will so qualify. For example, we will not constitute a “qualified foreign corporation” if we are
classified as a “passive foreign investment company” (discussed below) in either the taxable year of the
distribution or the preceding taxable year. In addition, the net investment income (including dividend
income) of certain taxpayers are subject to an additional 3.8% tax rate.
Distributions to US Shareholders that are treated as dividends are generally considered income from
sources outside the United States and, for purposes of computing the limitations on foreign tax credits
that apply separately to specific categories of income, foreign source “passive category” income or, in the
case of certain holders, “general category” income. In addition, special rules will apply to determine a US
Shareholder’s foreign tax credit limitation if a dividend distributed with respect to our shares constitutes
“qualified dividend income” (as described above). See the discussion of “Credit of Foreign Taxes
Withheld” below.
The amount of any distribution we make on shares of our common stock in foreign currency generally will
equal the fair market value in US dollars of that foreign currency on the date a US Shareholder receives
it. A US Shareholder will have a tax basis in the foreign currency equal to its US dollar value on the date
of receipt and will recognize ordinary US source gain or loss when it sells or exchanges the foreign
currency. US Shareholders who are individuals will not recognize gain upon selling or exchanging foreign
currency if the gain does not exceed US$200 in a taxable year and the sale or exchange constitutes a
“personal transaction” under the Code. The amount of any distribution we make with respect to shares of
our common stock in property other than money will equal the fair market value of that property on the
date of distribution.
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Credit of Foreign Taxes Withheld
Under certain conditions, including a requirement to hold shares of our common stock un-hedged for a
certain period, and subject to limitations, a US Shareholder may claim a credit against the US
Shareholder’s federal income tax liability for the foreign tax owed and withheld or paid with respect to
distributions on our shares. Alternatively, a US Shareholder may deduct the amount of withheld foreign
taxes, but only for a year for which the US Shareholder elects to deduct all foreign income taxes.
Complex rules determine how and when the foreign tax credit applies, and US Shareholders should
consult their tax advisers to determine whether and to what extent they may claim foreign tax credits.
Sale or Other Disposition of Shares
Subject to the passive foreign investment company rules discussed below, a US Shareholder will
recognize capital gain or loss on the sale or other taxable disposition of shares of our common stock,
equal to the difference between the US Shareholder’s adjusted tax basis in the shares sold or disposed
of and the amount realized on the sale or disposition. Individual US Shareholders may benefit from lower
marginal tax rates on capital gains recognized on shares sold, depending on the US Shareholder’s
holding period for the shares. See the discussion of “Capital Gain Rates” below. Capital losses that do
not offset capital gains are subject to limitations on deductibility. The gain or loss from the sale or other
disposition of shares of our common stock generally will be treated as income from sources within the
United States for foreign tax credit purposes, unless the US Shareholder is a US citizen residing outside
the United States and certain other conditions are met.
Capital Gain Rates
Long-term capital gains of certain US individual Shareholders are subject to a maximum rate of 20%. In
addition, the “net investment income” (including long and short-term capital gain income) of certain
taxpayers is subject to an additional tax of 3.8%.
Passive Foreign Investment Company (“PFIC”) Status
Special US federal income tax rules apply to US Shareholders owning capital stock of a PFIC. A foreign
corporation will be a PFIC for any taxable year in which 75% or more of its gross income is passive
income or in which 50% or more of the average value of its assets is “passive assets” (generally assets
that generate passive income or assets held for the production of passive income). For these purposes,
passive income excludes certain interest, dividends or royalties from related parties. If we were a PFIC,
each US Shareholder would likely face increased tax liabilities upon the sale or other disposition of
shares of our common stock or upon receipt of “excess distributions,” unless the US Shareholder elects
(1) to be taxed currently on its pro rata portion of our income, regardless of whether the income was
distributed in the form of dividends or otherwise (provided we furnish certain information to our
shareholders), or (2) to mark its shares to market by accounting for any difference between the shares’
fair market value and adjusted basis at the end of the taxable year by either an inclusion in income or a
deduction from income (provided our ADSs, CUFS or common shares satisfy a test for being regularly
traded on a qualified exchange or other market). Because of the manner in which we operate our
business, we are not, nor do we expect to become, a PFIC.
Controlled Foreign Corporation Status
If more than 50% of either the voting power of all classes of our voting stock or the total value of our stock
is owned, directly or indirectly, by citizens or residents of the United States, United States domestic
partnerships and corporations or estates or trusts other than foreign estates or trusts, each of which owns
10% or more of the total combined voting power of all classes of our stock entitled to vote, which we refer
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to as “10-Percent Shareholders,” we could be treated as a Controlled Foreign Corporation (“CFC”), under
the Code. This classification would, among other consequences, require 10-Percent Shareholders to
include in their gross income their pro rata shares of our “Subpart F income” (as specifically defined by
the Code) and our earnings invested in US property (as specifically defined by the Code).
In addition, gain from the sale or exchange of our common shares by a United States person who is or
was a 10-Percent Shareholder at any time during the five-year period ending with the sale or exchange is
treated as dividend income to the extent of the earnings and profits attributable to the stock sold or
exchanged. Under certain circumstances, a corporate shareholder that directly owns 10% or more of our
voting shares may be entitled to an indirect foreign tax credit for income taxes we paid in connection with
amounts so characterized as dividends under the Code.
US Federal Income Tax Provisions Applicable to Non-United States Holders
A Non-US Holder means a beneficial owner of our common stock that is (1) a non-resident alien of the
United States for US federal income tax purposes; (2) a corporation created or organized in or under the
law of a country, or any of its political subdivisions, other than the United States; or (3) an estate or trust
that is not a US Shareholder. A Non-US Shareholder generally will not be subject to US federal income
taxes, including US withholding taxes, on any dividends paid on our shares or on any gain realized on a
sale, exchange or other disposition of the shares unless the dividends or gain is effectively connected
with the conduct by the Non-US Shareholder of trade or business in the United States (and is attributable
to a permanent establishment or fixed base the Non-US Shareholder maintains in the United States if an
applicable income tax treaty so requires as a condition for the Non-US Shareholder to be subject to US
taxation on a net income basis on income related to the common stock). A corporate Non-US
Shareholder under certain circumstances may also be subject to an additional “branch profits tax” on that
type of income, the rate of which may be reduced pursuant to an applicable income tax treaty. In addition,
gain recognized on a sale, exchange or other disposition of our shares by a Non-US Shareholder who is
an individual generally will be subject to US federal income taxes if the Non-US Shareholder is present in
the United States for 183 days or more in the taxable year in which the sale, exchange or other
disposition occurs and certain other conditions are met.
US Information Reporting and Backup Withholding
Dividend payments on shares of our common stock and proceeds from the sale, exchange or redemption
of shares of our common stock may be subject to information reporting to the Internal Revenue Service
and possible US backup withholding at a current rate of 24%. Backup withholding will not apply to a
shareholder who furnishes a correct taxpayer identification number or certificate of foreign status and
makes any other required certification or who is otherwise exempt from backup withholding. United
States persons who are required to establish their exempt status generally must provide that certification
on a properly completed Internal Revenue Service Form W-9 (Request for Taxpayer Identification
Number and Certification). Non-US Shareholders generally will not be subject to US information reporting
or backup withholding. However, Non-US Shareholders may be required to provide certification of non-
US status in connection with payments received in the United States or through certain US related
financial intermediaries.
Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited
against a shareholder’s US federal income tax liability, and a shareholder may obtain a refund of any
excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund
with the Internal Revenue Service and furnishing any required information.
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Irish Taxation
The following is a summary of the material Irish tax consequences generally applicable to shareholders
who invest in shares of our common stock, who are neither tax resident, nor ordinarily resident in, Ireland.
This summary does not contain a detailed description of all of the Irish tax consequences for all
shareholders, which depend on that shareholder’s particular circumstances, and should not be a
substitute for advice from an appropriate professional adviser in relation to all of the possible tax issues
that could influence a prospective shareholder’s decision to acquire shares of our common stock. This
summary is based on Irish tax legislation, relevant Irish case law, other Irish Revenue guidance and
published opinions and administrative pronouncements of the Irish tax authorities, income tax treaties to
which Ireland is a party, and such other authorities as we have considered relevant, all as in effect and
available as at the date of this Annual Report, any of which may change possibly with retroactive effect.
Treatment of ADSs
In general, for Irish tax purposes, an owner of depositary receipts is considered the owner of the shares
of stock represented by depositary receipts. Accordingly, except as otherwise noted, references in this
Annual Report to ownership of shares of our common stock includes ownership of the shares underlying
the corresponding ADSs.
Irish Dividend Withholding Tax
Distributions made by us to non-Irish resident shareholders will, subject to certain exceptions, be subject
to Irish dividend withholding tax at a standard rate of income tax (which, from 1 January 2020 is 25% and
prior to this was 20%) unless you are a shareholder who falls within one of the categories of exempt
shareholders referred to below. Where dividend withholding tax applies, we will be responsible for
withholding the dividend withholding tax at source. For dividend withholding tax purposes, a dividend
includes any distribution made by us to our shareholders, including cash dividends, non-cash dividends
and additional shares taken in lieu of a cash dividend.
Dividend withholding tax is not payable where an exemption applies provided that we have received all
necessary documentation required by the relevant legislation from our shareholders prior to payment of
the dividend.
Certain of our non-Irish tax resident shareholders (both individual and corporate) are entitled to an
exemption from dividend withholding tax. In particular, a non-Irish tax resident shareholder is not subject
to dividend withholding tax on dividends received from us where the shareholder is:
•
•
•
•
an individual shareholder resident for tax purposes in either a member state of the EU (apart from
Ireland) or in a country with which Ireland has a double tax treaty, and the individual is neither
resident nor ordinarily resident in Ireland;
a corporate shareholder not resident for tax purposes in Ireland nor ultimately controlled, directly or
indirectly, by persons so resident and which is resident for tax purposes in either a member state of
the EU (apart from Ireland) or a country with which Ireland has a double tax treaty;
a corporate shareholder that is not resident for tax purposes in Ireland and which is ultimately
controlled, directly or indirectly, by persons resident in either a member state of the EU (apart from
Ireland) or in a country with which Ireland has a double tax treaty;
a corporate shareholder that is not resident for tax purposes in Ireland and whose principal class of
shares (or those of its 75% parent) is substantially and regularly traded on a recognized stock
exchange in either a member state of the EU (including Ireland where the Company trades only on
the Irish stock exchange) or in a country with which Ireland has a double tax treaty or on an
exchange approved by the Irish Minister for Finance; or
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•
•
a corporate shareholder that is not resident for tax purposes in Ireland and is wholly-owned,
directly or indirectly, by two or more companies the principal class of shares of each of which is
substantially and regularly traded on a recognized stock exchange in either a member state of the
EU (including Ireland where the Company trades only on the Irish stock exchange) or in a country
with which Ireland has a double tax treaty or on an exchange approved by the Irish Minister for
Finance; and
provided that, in all cases noted above, the shareholder has made the appropriate non-resident
declaration to us prior to payment of the dividend.
Where the shareholder is not the beneficial owner, we will be required to withhold Irish dividend
withholding tax at an income tax rate of 25% unless the shareholder is a qualifying intermediary under
Irish law and that shareholder has received all necessary documentation required by the relevant
legislation, as described above, from the beneficial owner prior to payment of the dividend.
Where our shareholders hold ADSs, they may not be required to submit an appropriate declaration in
order to receive dividends without deduction of Irish dividend withholding tax provided their registered
address is in the US.
Shareholders must complete and send to us a non-resident declaration form in order to avoid Irish
dividend withholding tax. If the appropriate declaration is not made, these shareholders will be liable for
Irish dividend withholding tax of 25% on dividends paid by us and may not be entitled to offset this tax. In
this case, it will be necessary for shareholders to apply for a refund of the withholding tax directly from the
Irish Revenue authorities.
Shareholders that do not fulfill the documentation requirements or otherwise do not qualify for one of the
withholding tax exemptions outlined above may be able to claim treaty benefits under a double taxation
convention. In this regard, where a double taxation convention is in effect between Ireland and the
country of residence of a non-resident shareholder, depending on the terms of that double taxation
convention, such a non-resident shareholder may be eligible for a full or partial exemption resulting in a
lower dividend withholding tax rate than 25%.
For example, under the US-Ireland Treaty, certain US corporate shareholders owning directly at least
10% of our voting power, are eligible for a reduction in withholding tax to 5% with respect to dividends
that we pay, unless the shares of common stock held by such residents form part of the business
property of a business carried on through a permanent establishment in Ireland. The same exception
applies if the beneficial owner of the shares, being a citizen or resident of the United States, performs
independent personal services from a fixed base situated in Ireland and the holding of the shares of
common stock in respect of which the dividends are paid pertains to such fixed base in Ireland. A
shareholder of our common stock, other than an individual, will be ineligible for the benefits of the US-
Irish Treaty unless the shareholder satisfies certain tests under the LOB provisions of Article 23 of the
US-Ireland Treaty. To prevent so-called dividend stripping, Irish law generally denies the treaty benefit of
a reduced dividend withholding tax rate for any dividend paid to a recipient who is not the “beneficial
owner” of the dividend.
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Irish Taxes on Income and Capital Gains
Shareholders who are neither tax resident of, nor ordinarily resident in, Ireland should not be subject to
any Irish taxes in respect of dividends distributed by us (other than the dividend withholding tax described
above) or capital gains realized on the disposition of shares of our common stock unless such shares are
used, held or acquired for the purposes of a trade carried on in Ireland through a branch or an agency. An
individual who is temporarily a non-resident of Ireland at the time of the disposal may, under anti-
avoidance legislation, still be liable to Irish taxation on any chargeable gains realized (subject to the
availability of exemptions).
Capital Acquisitions Tax
Irish capital acquisitions tax (“CAT”) applies to gifts and inheritances. Subject to certain tax-free
thresholds (which are determined by the relationship between the donor and successor or donee), gifts
and inheritances are liable to tax at the rate of 33%. Gifts and inheritances passing between spouses are
exempt from CAT.
Where a gift or inheritance is taken under a disposition made on or after 1 December 1999, it will be
within the charge of CAT:
•
to the extent that the property of which the gift or inheritance consists is situated in Ireland at the
date of the gift or inheritance;
• where the person making the gift or inheritance is or was resident or ordinarily resident in Ireland at
the date of the disposition under which the gift or inheritance is taken; or
• where the person receiving the gift or inheritance is resident or ordinarily resident in Ireland at the
date of the gift or inheritance.
Please note that the charge to CAT in respect of appointments from a discretionary trust can be different
and as a result, specific advice should be taken in this regard.
A non-Irish domiciled individual will not be regarded as resident or ordinarily resident in Ireland for CAT
purposes on a particular date unless they are resident or ordinarily resident in Ireland on that date and
have been resident in Ireland for the five consecutive tax years immediately preceding the year of
assessment in which the date falls.
A gift or inheritance of our common stock will be within the charge of CAT, notwithstanding that the person
from whom or by whom the gift or inheritance is received is domiciled or resident outside Ireland.
The Estate Tax Convention between Ireland and the United States generally provides for CAT paid on
inheritances in Ireland to be credited against US federal estate tax payable in the United States and for
tax paid in the United States to be credited against tax payable in Ireland, based on priority rules set forth
in the Estate Tax Convention. The Estate Tax Convention does not apply to CAT paid on gifts. Irish
domestic legislation also provides for a general relief from double taxation in respect of gifts and
inheritances.
Irish Stamp Duty
Any electronic transfers of shares through the CHESS or the ADR system will not be regarded as
transfers of interests in securities and will not be brought within the charge to Irish stamp duty. If a
shareholder undertakes an off-market transaction involving a transfer of the underlying shares, this will be
subject to Irish stamp duty at a rate of 1% of market value or consideration paid, whichever is greater and
will not be able to be registered until duly stamped. An off-market transfer of CUFS will also, where
evidenced in writing, be subject to the 1% Irish stamp duty. In addition, a conversion of shares into CUFS
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or ADSs or a conversion of CUFS or ADSs into underlying shares will be liable to 1% Irish stamp duty
where the conversion is on a sale or in contemplation of a sale. In each case, payment of this stamp duty
will be the responsibility of the person receiving the transfer.
Documents Available for Review
We are subject to the reporting requirements of the Exchange Act applicable to “foreign private issuers”
and in accordance therewith file reports, including annual reports, and other information with the SEC.
Such reports and other information have been filed electronically with the SEC since 4 November 2002.
The SEC maintains a site on the Internet, at www.sec.gov, which contains reports and other information
regarding issuers that file electronically with the SEC. In addition, such reports may be obtained, upon
written request, from our company secretary at our corporate headquarters in Ireland or our Investor
Relations department in Australia. Such reports and other information filed with the SEC prior to
November 2002 may be inspected and copied at prescribed rates at the public reference facilities
maintained by the SEC at 100 F Street N.E., Washington, D.C. 20549, or obtained by written request to
our company secretary. Although, as a foreign private issuer, we are exempt from the rules under the
Exchange Act prescribing the furnishing and content of proxy statements and annual reports to
shareholders and the quarterly reporting requirements of the Exchange Act, we:
•
•
furnish our shareholders with annual reports containing consolidated financial statements
examined by an independent registered public accounting firm; and
furnish quarterly reports for the first three quarters of each fiscal year containing unaudited
consolidated financial information in filings with the SEC under Form 6-K.
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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Cash and cash equivalents include amounts on deposit in banks and cash invested temporarily in various
highly liquid financial instruments with original maturities of three months or less when acquired.
We have operations in foreign countries and, as a result, are exposed to foreign currency exchange rate
risk inherent in purchases, sales, assets and liabilities denominated in currencies other than the US
dollar. We also are exposed to interest rate risk associated with our long-term debt, foreign exchange risk
relative to our AFFA liability and our Euro denominated long-term debt and commodity price risk relative
to changes in prices of commodities we use in production.
Periodically, interest rate swaps, commodity swaps and forward exchange contracts are used to manage
market risks and reduce exposure resulting from fluctuations in interest rates, commodity prices and
foreign currency exchange rates. Our policy is to enter into derivative instruments solely to mitigate risks
in our business and not for trading or speculative purposes. There can be no assurance that we will be
successful in these mitigation strategies or that fluctuation in interest rates, commodity prices and foreign
currency exchange rates will not have a material adverse effect on our financial position, liquidity, results
of operations and cash flows.
Foreign Currency Exchange Rate Risk
We have significant operations outside of the United States and, as a result, are exposed to changes in
exchange rates which affect our financial position, results of operations and cash flow. In addition,
payments to AICF are required to be made in Australian dollars which, because the majority of our
revenues are produced in US dollars, exposes us to risks associated with fluctuations in the US dollar/
Australian dollar exchange rate. See “Section 3 – Risk Factors” of this Annual Report.
For our fiscal year ended 31 March 2021, the following currencies comprised the following percentages of
our net sales, expenses and liabilities:
Net sales
Expenses2
Liabilities (excluding borrowings)2
US$
A$
Euros
NZ$
Other1
66.5 %
61.0 %
32.2 %
11.1 %
15.7 %
55.6 %
14.1 %
15.4 %
9.2 %
2.8 %
3.4 %
2.3 %
5.5 %
4.5 %
0.7 %
For our fiscal year ended 31 March 2020, the following currencies comprised the following percentages of
our net sales, expenses and liabilities:
Net sales
Expenses2
Liabilities (excluding borrowings)2
____________
US$
A$
Euros
NZ$
Other1
66.4 %
63.4 %
21.0 %
11.1 %
12.6 %
64.2 %
14.2 %
16.3 %
12.0 %
2.8 %
3.1 %
2.0 %
5.5 %
4.6 %
0.8 %
1
2
Comprised of Philippine pesos and Canadian dollars.
Liabilities include A$ denominated asbestos liability, which was initially recorded in the fourth quarter of fiscal year 2006.
Expenses include cost of goods sold, SG&A expenses, R&D expenses and adjustments to the asbestos liability. See “Section 3 –
Risk Factors,” and Note 12 to our consolidated financial statements further information regarding the asbestos liability.
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We purchase raw materials and fixed assets and sell some finished product for amounts denominated in
currencies other than the functional currency of the business in which the related transaction is
generated. Further, in order to protect against foreign exchange rate movements, we may enter into
forward exchange contracts timed to mature when settlement of the underlying transaction is due to
occur. For further information, see Note 13 to our consolidated financial statements in Section 2.
Funding Under the AFFA
The Australian dollar to US dollar assets and liabilities rate moved from 0.6177 as of 31 March 2020 to
0.7601 as of 31 March 2021, a 23% movement, resulting in a US$123.0 million unfavorable impact on
our fiscal year 2021 net income. Assuming that our unfunded net AFFA liability in Australian dollars
remains unchanged at A$729.0 million and that we do not hedge this foreign exchange exposure, a 10%
movement in the Australian dollar to US dollar exchange rate (at the 31 March 2021 exchange rate of
0.7601) would have approximately a US$55.4 million favorable or unfavorable impact on our net income.
For fiscal year 2020, assuming that our unfunded net AFFA liability in Australian dollars remains
unchanged at A$881.4 million and that we do not hedge this foreign exchange exposure, a 10%
movement in the Australian dollar to US dollar exchange rate (at the 31 March 2020 exchange rate of
0.6177) would have approximately a US$54.4 million favorable or unfavorable impact on our net income.
Interest Rate Risk
We have market risk from changes in interest rates, primarily related to our revolving credit facility. As of
31 March 2021 and 2020, our revolving credit facility was subject to variable interest rates. The interest
rate is calculated two business days prior to the commencement of each draw-down period based on the
London Interbank Offered Rate (“LIBOR”) plus the bank margin and is payable at the end of each draw-
down period or interest period in the case of a continuation of a loan. If interest rates increase, our debt
service obligations on such variable rate indebtedness would increase even though the amount borrowed
remained the same, and our net income and cash flows, including cash available for servicing our
indebtedness, would correspondingly decrease. Assuming all loans were fully drawn, each one
percentage point change in interest rates would result in a US$5.1 million change in annual cash interest
expense under the revolving credit facility.
From time to time, we may enter into interest rate swap contracts in an effort to mitigate interest rate risk.
These contracts were entered into to protect against upward movements in LIBOR and the associated
interest the Company pays on its external debt. For further information, see Note 13 to our consolidated
financial statements in Section 2.
At 31 March 2021 and 31 March 2020, we had nil and US$130.0 million outstanding under our revolving
credit facility exposing us to market risk due to changes in the rate at which interest accrues.
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Commodity Price Risk
We are exposed to changes in prices of commodities used in our operations, primarily associated with
energy, fuel and raw materials such as pulp and cement. While we expect to continue operating in tight
markets for these commodities, we do enter into various sourcing arrangements in an effort to minimize
additional working capital requirements caused by rising prices. These arrangements provide discounts
on the prices of such commodities in relation to market prices and indices, however, if such commodity
prices do not continue to rise, these fixed pricing arrangements may negatively impact our cost of sales
over the longer-term.
We have assessed the market risk of our core commodities (pulp, cement and silica) and believe that, a
+/- 10% change in the average cost of these materials for the year ended 31 March 2021 would have
resulted in +/- US$32.8 million or 1.8% impact on our cost of sales for fiscal year 2021.
For fiscal year 2020, we have assessed the market risk of our core commodities (pulp, cement and silica)
and believe that, a +/- 10% change in the average cost of these materials for the year ended 31 March
2020 would have resulted in +/- US$31.8 million or 1.9% impact on our cost of sales for fiscal year 2020.
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SECTION 4
SHARE/CHESS UNITS OF FOREIGN SECURITIES INFORMATION
As of 30 April 2021, JHI plc had 444,288,874 CUFS issued over ordinary shares listed on the ASX and
held by CHESS Depositary Nominees Pty Ltd (“CDN”) on behalf of 27,534 CUFS holders. Each CUFS
represents the beneficial ownership of one ordinary share and carries the right to one vote. Each CUFS
holder can direct CDN on how to vote the ordinary shares on a one vote per CUFS basis. RSUs issued
by the Company carry no voting rights.
At 30 April 2021, to our knowledge, we are not directly or indirectly owned or controlled by another
corporation, by a foreign government or by any other natural or legal persons severally or jointly, and we
are not aware of any arrangements the operation of which may at a subsequent date result in a change in
control of the Company.
Geographic Distribution of Beneficial Ownership of James Hardie Industries plc
The following table shows the geographic distribution of the beneficial holders of our CUFS at 31 March
2021 and 2020:
Geographic Region
Australia
United States
United Kingdom
Europe (excluding the United Kingdom)
Asia
Other
31 March
2021
31 March
2020
60.32 %
15.93 %
3.65 %
6.26 %
4.49 %
9.35 %
61.38 %
14.65 %
4.50 %
6.27 %
5.08 %
8.12 %
As of 30 April 2021, 0.29% of the outstanding shares of our common stock was held by 80 CUFS holders
with registered addresses in the United States. In addition, as of 30 April 2021, 1.22% of the outstanding
shares of our common stock was represented by ADSs held by 8 holders, all of whom have registered
addresses in the United States, except 2 holders having registered addresses in Germany and the United
Kingdom. A total of 1.51% of our outstanding capital stock was registered to 86 US holders as of 30 April
2021.
Distribution Schedule of James Hardie Industries plc
The following table shows a distribution of the holders of our CUFS at 30 April 2021:
Size of Holding Range
Holders
CUFS
Holdings
Total %
Holders
Holdings
Options
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001 and over
Totals
20,271
6,630,331
6,052
12,770,759
723
432
5,151,774
9,782,187
56
409,953,823
27,534
444,288,874
1.49
2.87
1.16
2.20
92.28
100.00
-
-
-
-
-
-
-
-
-
-
-
-
Based on the closing price of A$42.90 on 30 April 2021, there were 274 CUFS holders that held less than
a marketable parcel of shares.
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Substantial CUFS holders of James Hardie Industries plc
As at 30 April 2021, the Company had received notification of the following interests in its share capital,
which were equal to, or in excess of, 3%:
CUFS holder
Shares
Beneficially
Owned
Percentage
of Shares
Outstanding
Date became
substantial
shareholder
AustralianSuper Pty Ltd
Blackrock, Inc
The Vanguard Group, Inc.
Bennelong Funds Management Group Pty Ltd
OppenheimerFunds, Inc.
Commonwealth Bank of America
Pinnacle Investment Management Group Limited
Challenger Limited
Mitsubishi UFJ Financial Group, Inc.
Schroders plc
31,173,374
26,109,637
25,402,152
25,018,691
23,564,091
22,894,697
22,274,919
18,918,753
17,451,381
14,529,189
7.02 % 2 September 2019
5.88 % 16 October 2014
5.72 % 17 August 2018
5.63 % 16 December 2020
5.30 %
30 June 2016
5.15 % 15 August 2014
5.01 %
4.26 %
3.93 %
3.27 %
14 April 2021
23 May 2018
2 August 2019
1 June 2015
James Hardie Industries plc 20 largest CUFS holders and their holdings as of 30 April 2021
Name
HSBC Custody Nominees (Australia) Limited
J P Morgan Nominees Australia Pty Limited
Citicorp Nominees Pty Limited
National Nominees Limited
BNP Paribas Nominees Pty Ltd
Citicorp Nominees Pty Limited
BNP Paribas Noms Pty Ltd
Australian Foundation Investment Company Limited
HSBC Custody Nominees (Australia) Limited
HSBC Custody Nominees (Australia) Limited
BNP Paribas Nominees Pty Ltd
BNP Paribas Nominees Pty Ltd
Netwealth Investments Limited
Argo Investments Limited
HSBC Custody Nominees (Australia) Limited
HSBC Custody Nominees (Australia) Limited
BNP Paribas Noms (NZ) Ltd
Mutual Trust Pty Ltd
Millenium Pty Ltd
Carlton Hotel Limited
TOTAL
CUFS Holdings
155,689,528
104,425,642
52,951,959
26,360,328
19,612,718
11,212,924
9,125,151
4,400,000
3,064,669
2,800,599
2,662,685
1,633,212
1,119,321
946,000
871,579
825,509
754,054
681,576
630,000
625,362
400,392,816
Percentage
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
35.04 %
23.50 %
11.92 %
5.93 %
4.41 %
2.52 %
2.05 %
0.99 %
0.69 %
0.63 %
0.60 %
0.37 %
0.25 %
0.21 %
0.20 %
0.19 %
0.17 %
0.15 %
0.14 %
0.14 %
90.12 %
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GLOSSARY OF ABBREVIATIONS AND DEFINITIONS
Abbreviations
2001 Plan
ADR
ADS
AFFA
AGM
AICF
ASC
ASIC
ASU
ASX
ATO
CARES Act
CCPA
CDN
CEO
CFO
CHESS
CHRO
CP Plan
CUFS
EPS
ESG
FASB
GDPR
IP Plan
IRS
KPMGA
LIBOR
LOB
LTI
LTIP
NOLs
NSW
NYSE
OSB
PDG
R&D
ROCE
2001 Equity Incentive Plan
American Depositary Receipt
American Depositary Share
Amended and Restated Final Funding Agreement, as amended from time to
time
Annual General Meeting
Asbestos Injuries Compensation Fund
Accounting Standards Codification
Australian Securities and Investments Commission
Accounting Standards Update
Australian Securities Exchange
Australian Taxation Office
US Coronavirus Aid, Relief, and Economic Security Act
California Consumer Privacy Act
CHESS Depositary Nominees Pty Ltd
Chief Executive Officer
Chief Financial Officer
Clearing House Electronic Subregister System
Chief Human Resources Officer
Company Performance Plan
CHESS Units of Foreign Securities
Earnings Per Share
Environmental, Social and Governance
Financial Accounting Standards Board
General Data Protection Regulation
Individual Performance Plan
Internal Revenue Service
KPMG Actuarial
London Interbank Offered Rate
Limitation on Benefits
Long-Term Incentive
Long-Term Incentive Plan 2006
US net operating losses
New South Wales
New York Stock Exchange
Oriented Strand Board
Primary Demand Growth
Research and Development
Return on Capital Employed
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RSU
SEC
SG&A
STI
TSR
Definitions
Restricted Stock Unit
United States Securities and Exchange Commission
Selling, General and Administrative
Short-Term Incentive
Total Shareholder Return
This Annual Report contains financial measures that are considered to be non-US GAAP, but are
consistent with those used by Australian companies. Because the Company prepares its consolidated
financial statements in accordance with US GAAP, the following cross-references each US GAAP
financial measure as used in the Company’s consolidated financial statements to the equivalent non-US
GAAP financial measure listed.
EBIT - Earnings before interest and tax is equivalent to the US GAAP financial statement line item
Operating income (loss).
EBIT margin - EBIT margin is defined as EBIT as a percentage of net sales. EBIT margin is equivalent to
the US GAAP terminology Operating income (loss) margin.
EBITDA - Earnings before interest, tax, depreciation and amortization is equivalent to the US GAAP
financial statement line item Operating income (loss), plus depreciation and amortization expenses.
EBITDA margin - EBITDA margin is defined as EBITDA as a percentage of net sales.
Other Financial Measures
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
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Non-GAAP Financial Information Derived from GAAP Measures
This Annual Report includes certain financial information to supplement the Company’s 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 measures for the same purposes. These financial
measures include:
• Adjusted operating income;
• Adjusted net income;
• Adjusted diluted earnings per share;
• Adjusted Return on Capital Employed ("ROCE");
• North America Fiber Cement Segment Adjusted operating income;
• Asia Pacific Fiber Cement Segment Adjusted operating income;
• Europe Building Products Segment Adjusted operating income;
• North America Fiber Cement Segment Adjusted operating income margin;
• Asia Pacific Fiber Cement Segment Adjusted operating income margin;
• Europe Building Products Segment Adjusted operating income margin;
• North America Fiber Cement Segment Adjusted EBITDA margin;
• Asia Pacific Fiber Cement Segment Adjusted EBITDA margin; and
• Europe Building Products Segment Adjusted EBITDA margin.
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 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.
Adjusted operating income
(Millions of US dollars)
Operating income
Excluding:
Asbestos:
Asbestos adjustments
AICF SG&A expenses
Restructuring and product line
discontinuation expenses
Fermacell acquisition costs
New Zealand weathertightness
claims
Non-recurring stamp duty
Adjusted operating income
FY21
FY18
$ 472.8 $ 342.5 $ 351.6 $ 229.2 $ 393.2 $ 354.0 $ 335.0
FY15
FY20
FY19
FY16
FY17
143.9
1.2
11.1
—
58.2
1.7
84.4
—
22.0
1.5
156.4
1.9
(40.4)
1.5
(5.5)
1.7
(33.4)
2.5
29.5
—
—
10.0
—
—
—
—
—
—
—
—
(4.3)
4.2
$ 629.0 $ 486.8 $ 404.6 $ 397.5 $ 354.3 $ 350.7 $ 304.0
0.5
—
—
—
—
—
—
—
—
—
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James Hardie 2021 Annual Report on Form 20-F
190
Adjusted net income
(Millions of US dollars)
Net income
Excluding:
Asbestos:
Asbestos adjustments
AICF SG&A expenses
AICF interest income, net
Restructuring and product line
discontinuation expenses
Fermacell acquisition costs
New Zealand weathertightness
claims
Loss on early debt
extinguishment
Non-recurring stamp duty
Tax adjustments1
Adjusted net income
FY21
FY18
$ 262.8 $ 241.5 $ 228.8 $ 146.1 $ 276.5 $ 244.4 $ 291.3
FY16
FY19
FY20
FY15
FY17
143.9
1.2
(0.5)
11.1
—
58.2
1.7
(1.4)
84.4
—
22.0
1.5
(2.0)
29.5
—
156.4
1.9
(1.9)
—
10.0
(40.4)
1.5
1.1
—
—
(5.5)
1.7
0.3
—
—
(33.4)
2.5
(1.4)
—
—
—
—
—
—
—
0.5
(4.3)
—
—
39.5
—
4.2
(37.5)
$ 458.0 $ 352.8 $ 300.5 $ 291.3 $ 248.6 $ 242.9 $ 221.4
26.1
—
(47.3)
—
—
(31.6)
1.0
—
19.7
—
—
9.9
—
—
1.5
1. Includes tax adjustments related to the amortization benefit of certain US intangible assets, asbestos, and
other tax adjustments
Adjusted diluted earnings per share
Adjusted net income (millions of
US dollars)
Weighted average common
shares outstanding - Diluted
(millions)
Adjusted diluted earnings per
share (US dollars)
FY21
FY20
FY19
FY18
FY17
FY16
FY15
$ 458.0 $ 352.8 $ 300.5 $ 291.3 $ 248.6 $ 242.9 $ 221.4
445.4
444.1
443.0
442.3
443.9
447.2
446.4
1.03
0.79
0.68
0.66
0.56
0.54
0.50
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Adjusted Return on Capital Employed ("Adjusted ROCE")
(Millions of US dollars)
Numerator
Adjusted operating income
Adjustments to operating
income1
Adjusted operating income for
ROCE
Denominator
Gross capital employed (GCE)
Adjustments to GCE2
Adjusted gross capital employed
Adjusted ROCE
FY21
FY20
FY19
FY18
FY17
FY16
FY15
$ 629.0 $ 486.8 $ 404.6 $ 397.5 $ 354.3 $ 350.7 $ 304.0
—
—
(7.3)
—
—
—
—
629.0
486.8
397.3
397.5
354.3
350.7
304.0
(193.6)
1,780.8 1,753.7 1,492.7 1,272.0 1,107.6 1,102.7 1,042.1
20.0
$ 1,587.2 $ 1,558.2 $ 1,415.3 $ 1,247.7 $ 1,157.9 $ 1,143.2 $ 1,062.1
28.6%
31.9%
39.6%
30.6%
31.2%
28.1%
30.7%
(195.5)
(24.3)
(77.4)
50.3
40.5
1 Adjustments as calculated according to ROCE stock compensation plan documents
2 Calculated as Total Assets minus Current Liabilities as reported in our financial results; adjusted by (i) excluding balance sheet items
related to legacy issues (such as asbestos adjustments) dividends payables and deferred taxes; (ii) adding back asset impairment charges
in the relevant period, unless otherwise determined by the renumeration committee; (iii) adding back leasehold assets for manufacturing
facilities and other material leased assets (FY15-FY19) and (iv) deducting all greenfield construction-in-progress, and any brownfield
construction-in-progress projects involving capacity expansion that are individually greater than US$20 million, until such assets reach
commercial production and are transferred to the fixed asset register
North America Fiber Cement Segment Adjusted operating income
(Millions of US dollars)
Operating income
Excluding:
FY21
FY20
FY19
FY18
FY17
$
585.5 $
429.3 $
382.5 $
381.9 $
343.9
Restructuring and product line discontinuation
expenses
North America Fiber Cement Segment
Adjusted operating income
North America Fiber Cement segment net sales
North America Fiber Cement Segment
Adjusted operating income margin
2.5
41.2
5.4
—
—
$
588.0 $
470.5 $
387.9 $
381.9 $
2,040.2
1,816.4
1,676.9
1,578.1
343.9
1,493.4
28.8%
25.9%
23.1%
24.2%
23.0%
Asia Pacific Fiber Cement Segment Adjusted operating income
(Millions of Australian dollars)
Operating income
Excluding:
Restructuring expenses
Asia Pacific Fiber Cement Segment Adjusted
operating income
Asia Pacific Fiber Cement segment net sales
Asia Pacific Fiber Cement Segment Adjusted
operating income margin
FY21
FY20
FY19
FY18
FY17
A$ 172.4 A$
80.8 A$ 136.5 A$ 139.8 A$ 125.0
4.9
58.3
—
—
—
A$ 177.3 A$ 139.1 A$ 136.5 A$ 139.8 A$ 125.0
493.5
635.2
549.7
612.2
614.1
28.0%
22.7%
22.3%
25.4%
25.3%
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192
Europe Building Products Segment Adjusted operating income
(Millions of Euros)
Operating income
Excluding:
Restructuring expenses
Europe Building Products Segment
Adjusted operating income
Europe Building Products segment net sales
Europe Building Products Segment
Adjusted operating income margin
€
FY21 Segment Adjusted EBITDA margins
FY21
FY20
FY19
€
31.4 €
10.0 €
4.5
4.9
35.9 €
350.6
14.9 €
334.2
10.4%
4.5%
9.1
—
9.1
318.0
2.7%
(In Millions)
Operating income
Excluding:
North America
Fiber Cement
$
585.5 A$
Asia Pacific
Fiber Cement
Europe
Building
Products
172.4 €
31.4
Restructuring expenses
Depreciation and amortization
Segment Adjusted EBITDA
Segment net sales
Segment Adjusted EBITDA margin
$
2.5
89.1
677.1 A$
2,040.2
33.2%
4.9
19.1
196.4 €
635.2
30.9%
4.5
23.9
59.8
350.6
17.1%
Table of Contents
James Hardie 2021 Annual Report on Form 20-F
193
EXHIBIT LIST
Exhibit
Number
1.1*
1.2*
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
Exhibit Description
Memorandum of Association of James Hardie Industries plc, as amended
Articles of Association of James Hardie Industries plc
Amended and Restated Deposit Agreement, by and among James Hardie Industries plc, Deutsche
Bank Trust Company Americas, as depositary, and the holders and beneficial owners of American
depositary shares evidenced by American depositary receipts issued thereunder (filed as Exhibit 99.A
to the Company’s Registration Statement on Form F-6 filed on 25 September 2014 (Commission File
Number 333-198928) and incorporated by reference herein)
Form of Amendment No. 1 to Amended and Restated Deposit Agreement (filed as Exhibit 99(A)(2) to
the Company’s Post-Effective Amendment No. 1 to Form F-6 filed on 03 September 2015
(Commission File Number 333-198928) and incorporated by reference herein)
Guarantee Trust Deed, dated 19 December 2006, by and between James Hardie Industries N.V. and
AET Structured Finance Services Pty Limited (filed as Exhibit 4.12 to the Company’s Post-Effective
No. 1 to Form F-4 filed on 17 June 2010 (Commission File Number 333-165531) and incorporated by
reference herein)
Performing Subsidiary Undertaking and Guarantee Trust Deed, dated 19 December 2006, by and
between James Hardie 117 Pty Limited and AET Structured Finance Services Pty Limited (filed as
Exhibit 4.14 to the Company’s Post-Effective No. 1 to Form F-4 filed on 17 June 2010 (Commission
File Number 333-165531) and incorporated by reference herein)
Intercreditor Deed, dated 19 December 2006, by and among The State of New South Wales, James
Hardie Industries N.V., Asbestos Injuries Compensation Fund Limited and AET Structured Finance
Services Pty Limited (filed as Exhibit 10.34 to the Company’s Post-Effective No. 1 to Form F-4 filed on
17 June 2010 (Commission File Number 333-165531) and incorporated by reference herein)
Letter Agreement, dated 21 March 2007, amending the Intercreditor Deed, dated 19 December 2006,
by and among The State of New South Wales, James Hardie Industries N.V., Asbestos Injuries
Compensation Fund Limited and AET Structured Finance Services Pty Limited (filed as Exhibit 10.35
to the Company’s Post-Effective No. 1 to Form F-4 filed on 17 June 2010 (Commission File Number
333-165531) and incorporated by reference herein)
Performing Subsidiary Intercreditor Deed, dated 19 December 2006, by and among The State of New
South Wales, James Hardie 117 Pty Limited, Asbestos Injuries Compensation Fund Limited and AET
Structured Finance Services Pty Limited (filed as Exhibit 10.37 to the Company’s Post-Effective No. 1
to Form F-4 filed on 17 June 2010 (Commission File Number 333-165531) and incorporated by
reference herein)
Letter Agreement, dated 21 March 2007, amending the Performing Subsidiary Intercreditor Deed,
dated 19 December 2006, by and among The State of New South Wales, James Hardie 117 Pty
Limited, Asbestos Injuries Compensation Fund Limited and AET Structured Finance Services Pty
Limited (filed as Exhibit 10.38 to the Company’s Post-Effective No. 1 to Form F-4 filed on 17 June
2010 (Commission File Number 333-165531) and incorporated by reference herein)
Table of Contents
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194
Exhibit
Number
Exhibit Description
2.9
2.10
2.11
2.12
2.13
2.14
2.15
2.16
Amending Deed to Guarantee Trust Deed, dated 6 October 2009, by and between James Hardie
Industries N.V. and AET Structured Finance Services Pty Limited (filed as Exhibit 2.10 to the
Company’s Annual Report on Form 20-F filed on 30 June 2010 (Commission File 001-15240) and
incorporated by reference herein)
Amending Deed to Performing Subsidiary Undertaking and Guarantee Trust Deed, dated 6 October
2009, by and between James Hardie 117 Pty Limited and AET Structured Finance Services Pty
Limited (filed as Exhibit 2.12 to the Company’s Annual Report on Form 20-F filed on 30 June 2010
(Commission File 001-15240) and incorporated by reference herein)
Amending Deed (Intercreditor Deed), dated 23 June 2009, by and among The State of New South
Wales, James Hardie Industries N.V., Asbestos Injuries Compensation Fund Limited and AET
Structured Finance Services Pty Limited (filed as Exhibit 4.36 to the Company’s Annual Report on
Form 20-F filed on 30 June 2010 (Commission File 001-15240) and incorporated by reference herein)
Amending Deed (Performing Subsidiary Intercreditor Deed), dated 23 June 2009, by and among The
State of New South Wales, James Hardie 117 Pty Limited, Asbestos Injuries Compensation Fund
Limited and AET Structured Finance Services Pty Limited (filed as Exhibit 4.39 to the Company’s
Annual Report on Form 20-F filed on 30 June 2010 (Commission File 001-15240) and incorporated by
reference herein)
Indenture, dated 13 December 2017, by and among James Hardie International Finance Designated
Activity Company, the guarantors named therein and Deutsche Bank Trust Company Americas (filed
as Exhibit 2.13 to the Company’s Annual Report on Form 20-F filed on 22 May 2018 (Commission File
001-15240) and incorporated by reference herein)
Form of 5.000% Senior Note due 2028 (filed as Exhibit 2.15 to the Company’s Annual Report on Form
20-F filed on 22 May 2018 (Commission File 001-15240) and incorporated by reference herein)
Amended and Restated Credit and Guaranty Agreement, dated 13 December 2017, by and among
James Hardie International Finance Designated Activity Company and James Hardie Building
Products Inc., as borrowers, James Hardie International Group Limited and James Hardie Technology
Limited, as guarantors, James Hardie Industries plc, as parent, HSBC Bank USA, National
Association, as administrative agent, and the other lender parties thereto (filed as Exhibit 2.16 to the
Company’s Annual Report on Form 20-F filed on 22 May 2018 (Commission File 001-15240) and
incorporated by reference herein)
364-Day Term Loan and Guaranty Agreement, dated 13 December 2017, by and among James
Hardie International Finance Designated Activity Company and James Hardie Building Products Inc.,
as borrowers, James Hardie International Group Limited and James Hardie Technology Limited, as
guarantors, James Hardie Industries plc, as parent, HSBC Bank USA, National Association, as
administrative agent, and the other lender parties thereto (filed as Exhibit 2.17 to the Company’s
Annual Report on Form 20-F filed on 22 May 2018 (Commission File 001-15240) and incorporated by
reference herein)
Table of Contents
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195
Exhibit
Number
2.17
2.18
2.19*
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
Exhibit Description
Indenture, dated 4 October 2018, among James Hardie International Finance Designated Activity
Company, the guarantors listed therein, Deutsche Bank Trust Company Americas, as Trustee and
Registrar and Deutsche Bank AG, London Branch, as Paying Agent and Transfer Agent (filed as
Exhibit 99.8 to the Company’s Report on Form 6-K filed 8 November 2018 (Commission File Number
001-15240 and incorporated by reference herein)
Form of 3.625% Senior Notes due 2026 ((filed as Exhibit 99.8 to the Company’s Report on Form 6-k
filed 8 November 2018 (Commission File Number 001-15240 and incorporated by reference herein)
Description of Securities Registered Under Section 12 of the Securities Exchange Act of 1934
Amended and Restated James Hardie Industries SE 2001 Equity Incentive Plan (filed as Exhibit 4.1 to
the Company’s Annual Report on Form 20-F filed on 2 July 2012 (Commission File 001-15240) and
incorporated by reference herein)
Amended and Restated James Hardie Industries plc Long Term Incentive Plan 2006 (filed as Exhibit
99.5 to the Company’s Report on Form 6-K filed 14 August 2018 (Commission File Number
001-15240 and incorporated by reference herein)
Form of Joint and Several Indemnity Agreement among James Hardie N.V., James Hardie (USA) Inc.
and certain indemnitees thereto (filed as Exhibit 4.15 to the Company’s Annual Report on Form 20-F
filed on 7 July 2005 (Commission File 001-15240) and incorporated by reference herein)
Form of Joint and Several Indemnity Agreement among James Hardie Industries N.V., James Hardie
Inc. and certain indemnitees thereto (filed as Exhibit 4.16 to the Company’s Annual Report on Form
20-F filed on 7 July 2005 (Commission File 001-15240) and incorporated by reference herein)
Form of Deed of Access, Insurance and Indemnity between James Hardie Industries N.V. and
supervisory board directors and managing board directors (filed as Exhibit 4.9 to the Company’s
Annual Report on Form 20-F filed on 8 July 2008 (Commission File 001-15240) and incorporated by
reference herein)
Form of Indemnity Agreement between James Hardie Building Products, Inc. and supervisory board
directors, managing board directors and certain executive officers (filed as Exhibit 4.10 to the
Company’s Annual Report on Form 20-F filed on 8 July 2008 (Commission File 001-15240) and
incorporated by reference herein)
Form of Irish law-governed Deed of Access, Insurance and Indemnity between James Hardie
Industries SE, a European Company registered in Ireland, and its directors, company secretary and
certain senior employees thereto (filed as Exhibit 10.10 to the Company’s Registration Statement on
Form F-4 filed on 23 June 2009 (Commission File 333-160177) and incorporated by reference herein)
Form of Deed of Access, Insurance and Indemnity between James Hardie Industries plc, and certain
indemnitees thereto (filed as Exhibit 4.9 to the Company’s Annual Report on Form 20-F filed on 21
May 2015 (Commission File 001-15240) and incorporated by reference herein)
Table of Contents
James Hardie 2021 Annual Report on Form 20-F
196
Exhibit
Number
Exhibit Description
4.9
4.10
4.11
4.12
4.13
4.14
4.15
4.16
Deed of Release - Unions and Banton, dated 21 December 2005, by and among James Hardie
Industries N.V., Australian Council of Trade Unions, Unions New South Wales, and Bernard Douglas
Banton (filed as Exhibit 4.23 to the Company’s Annual Report on Form 20-F filed on 29 September
2006 (Commission File 001-15240) and incorporated by reference herein)
Deed of Release, dated 22 June 2006, by and between James Hardie Industries N.V. and The State of
New South Wales (filed as Exhibit 4.25 to the Company’s Annual Report on Form 20-F filed on 29
September 2006 (Commission File 001-15240) and incorporated by reference herein)
Amended and Restated Final Funding Agreement, dated 21 November 2006, by and among James
Hardie Industries N.V., James Hardie 117 Pty Ltd, The State of New South Wales and Asbestos
Injuries Compensation Fund Limited in its capacity as trustee of the Asbestos Injuries Compensation
Fund (filed as Exhibit 99.4 to the Company’s Report on Form 6-K filed on 05 January 2007
(Commission File 001-15240) and incorporated by reference herein)
Asbestos Injuries Compensation Fund Amended and Restated Trust Deed, dated 14 December 2006,
by and between James Hardie Industries N.V. and Asbestos Injuries Compensation Fund Limited (filed
as Exhibit 4.22 to the Company’s Annual Report on Form 20-F filed on 6 July 2007 (Commission File
001-15240) and incorporated by reference herein)
Second Irrevocable Power of Attorney, dated 14 December 2006, by and between Asbestos Injuries
Compensation Fund Limited and The State of New South Wales (filed as Exhibit 4.26 to the
Company’s Annual Report on Form 20-F filed on 6 July 2007 (Commission File 001-15240) and
incorporated by reference herein)
Deed of Accession, dated 14 December 2006, by and among Asbestos Injuries Compensation Fund
Limited, James Hardie Industries N.V., James Hardie 117 Pty Limited and The State of New South
Wales (filed as Exhibit 4.27 to the Company’s Annual Report on Form 20-F filed on 6 July 2007
(Commission File 001-15240) and incorporated by reference herein)
Amendment to Amended and Restated Final Funding Agreement, dated 6 August 2007, by and
among, James Hardie Industries NV, James Hardie 117 Pty Limited, The State of New South Wales
and Asbestos Injuries Compensation Fund Limited in its capacity as trustee of the Asbestos Injuries
Compensation Fund (filed as Exhibit 4.22 to the Company’s Annual Report on Form 20-F filed on 8
July 2008 (Commission File 001-15240) and incorporated by reference herein)
Deed Poll, dated 11 June 2008, amendment of the Asbestos Injuries Compensation Fund Amended
and Restated Trust Deed (filed as Exhibit 4.27 to the Company’s Annual Report on Form 20-F filed on
8 July 2008 (Commission File 001-15240) and incorporated by reference herein)
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Exhibit
Number
Exhibit Description
4.17
4.18
4.19
4.20
4.21
4.22
4.23
4.24
Amendment to Amended and Restated Final Funding Agreement, dated 8 November 2007, by and
among, James Hardie Industries NV, James Hardie 117 Pty Limited, The State of New South Wales
and Asbestos Injuries Compensation Fund Limited in its capacity as trustee of the Asbestos Injuries
Compensation Fund (filed as Exhibit 4.23 to the Company’s Annual Report on Form 20-F filed on 8
July 2008 (Commission File 001-15240) and incorporated by reference herein)
Amendment to Amended and Restated Final Funding Agreement, dated 11 June 2008, by and among,
James Hardie Industries NV, James Hardie 117 Pty Limited, The State of New South Wales and
Asbestos Injuries Compensation Fund Limited in its capacity as trustee of the Asbestos Injuries
Compensation Fund (filed as Exhibit 4.24 to the Company’s Annual Report on Form 20-F filed on 8
July 2008 (Commission File 001-15240) and incorporated by reference herein)
Amended and Restated Final Funding Agreement - Address for Service of Notice on Trustee, dated
13 June 2008 (filed as Exhibit 4.25 to the Company’s Annual Report on Form 20-F filed on 8 July 2008
(Commission File 001-15240) and incorporated by reference herein)
Amendment to Amended and Restated Final Funding Agreement, dated 17 July 2008, by and among,
James Hardie Industries NV, James Hardie 117 Pty Limited, The State of New South Wales and
Asbestos Injuries Compensation Fund Limited in its capacity as trustee of the Asbestos Injuries
Compensation Fund (filed as Exhibit 10.27 to the Company’s Registration Statement on Form F-4 filed
on 23 June 2009 (Commission File 333-160177) and incorporated by reference herein)
Deed of Confirmation, dated 23 June 2009, by and among James Hardie Industries N.V, James
Hardie 117 Pty Limited, The State of New South Wales and Asbestos Injuries Compensation Fund
Limited in its capacity as trustee of the Asbestos Injuries Compensation Fund (filed as Exhibit 10.37 to
the Company’s Registration Statement on Form F-4/A filed on 10 July 2009 (Commission File
333-160177) and incorporated by reference herein)
Amending Agreement (Parent Guarantee), dated 23 June 2009, by and among Asbestos Injuries
Compensation Fund Limited, The State of New South Wales and James Hardie Industries N.V. (filed
as Exhibit 4.30 to the Company’s Annual Report on Form 20-F filed on 30 June 2010 (Commission
File 001-15240) and incorporated by reference herein)
Deed to amend the Amended and Restated Final Funding Agreement and facilitate the Authorized
Loan Facility, dated 9 December 2010, by and among James Hardie Industries SE, James Hardie 117
Pty Limited, The State of New South Wales and Asbestos Injuries Compensation Fund Limited in its
capacity as trustee of each of the Compensation Funds (filed as Exhibit 4.25 to the Company’s Annual
Report on Form 20-F filed on 29 June 2011 (Commission File 001-15240) and incorporated by
reference herein)
AICF facility agreement, dated 9 December 2010, by and among Asbestos Injuries Compensation
Fund Limited, ABN 60 Pty Limited, Amaca Pty Ltd, Amaba Pty Ltd and The State of New South Wales
(filed as Exhibit 4.40 to the Company’s Annual Report on Form 20-F filed on 29 June 2011
(Commission File 001-15240) and incorporated by reference herein)
Table of Contents
James Hardie 2021 Annual Report on Form 20-F
198
Exhibit
Number
Exhibit Description
4.25
4.26
4.27
4.28
4.29
4.30
4.31
4.32
Fixed and Floating Charge, dated 9 December 2010, by and among Asbestos Injuries Compensation
Fund Limited, ABN 60 Pty Limited, Amaca Pty Ltd, Amaba Pty Ltd and The State of New South Wales
(filed as Exhibit 4.41 to the Company’s Annual Report on Form 20-F filed on 29 June 2011
(Commission File 001-15240) and incorporated by reference herein)
Deed to amend the Amended and Restated Final Funding Agreement, dated 29 February 2012, by
and among James Hardie Industries SE, James Hardie 117 Pty Limited, The State of New South
Wales and Asbestos Injuries Compensation Fund Limited in its capacity as trustee of each of the
Compensation Funds (filed as Exhibit 4.27 to the Company’s Annual Report on Form 20-F filed on 2
July 2012 (Commission File 001-15240) and incorporated by reference herein)
Deed to amend the Amended and Restated Final Funding Agreement, dated 28 March 2012, by and
among James Hardie Industries SE, James Hardie 117 Pty Limited, The State of New South Wales
and Asbestos Injuries Compensation Fund Limited in its capacity as trustee of each of the
Compensation Funds (filed as Exhibit 4.28 to the Company’s Annual Report on Form 20-F filed on 2
July 2012 (Commission File 001-15240) and incorporated by reference herein)
Summary of Amendments to Amended and Restated Final Funding Agreement, dated 20 December
2013, by and among, James Hardie Industries NV, James Hardie 117 Pty Limited, The State of New
South Wales and Asbestos Injuries Compensation Fund Limited in its capacity as trustee of the
Asbestos Injuries Compensation Fund (filed as Exhibit 4.37 to the Company’s Annual Report on Form
20-F filed on 26 June 2014 (Commission File 001-15240) and incorporated by reference herein)
Deed of Amendment, dated 27 February 2015, by and among Asbestos Injuries Compensation Fund
Limited, ABN 60 Pty Limited, Amaca Pty Ltd, Amaba Pty Ltd and The State of New South Wales (filed
as Exhibit 4.32 to the Company’s Annual Report on Form 20-F filed on 21 May 2015 (Commission File
Number 001-15240) and incorporated by reference herein)
Sale and Purchase Agreement related to XI (DL) Holdings GmbH, dated 7 November 2017, by and
among Xella International S.A., as seller, Platin 1391. GmbH (now known as James Hardie Germany
GmbH) as purchaser, and James Hardie International Group Limited, as guarantor (filed as Exhibit
4.30 to the Company’s Annual Report on Form 20-F filed on 22 May 2018 (Commission File
001-15240) and incorporated by reference herein)
Deed of Amendment, Amended and Restated Final Funding Agreement, dated 19 December 2017, by
and among James Hardie Industries plc, James Hardie 117 Pty Limited, The State of New South
Wales and Asbestos Injuries Compensation Fund Limited in its capacity as trustee for each of the
Compensation Fund (filed as Exhibit 4.31 to the Company’s Annual Report on Form 20-F filed on 22
May 2018 (Commission File 001-15240) and incorporated by reference herein)
Amendment to Sale and Purchase Agreement, dated 13 December 2017, by and among Xella
International S.A., as seller, Platin 1391. GmbH (now known as James Hardie Germany GmbH) as
purchaser, and James Hardie International Group Limited, as guarantor (filed as Exhibit 4.32 to the
Company’s Annual Report on Form 20-F filed on 22 May 2018 (Commission File 001-15240) and
incorporated by reference herein)
Table of Contents
James Hardie 2021 Annual Report on Form 20-F
199
Exhibit
Number
4.33
Exhibit Description
Second Amendment and Accession Agreement to the Sale and Purchase Agreement related to XI
(DL) Holdings GmbH, dated 3 April 2018, by and among Xella International S.A., James Hardie
Germany GmbH, James Hardie International Group Limited and James Hardie International Finance
Designated Activity Company (filed as Exhibit 4.33 to the Company’s Annual Report on Form 20-F
filed on 22 May 2018 (Commission File 001-15240) and incorporated by reference herein)
4.34*
James Hardie Industries plc 2020 Non-Executive Director Equity Plan
8.1*
List of significant subsidiaries of James Hardie Industries plc
12.1*
Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
12.2*
Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
13.1*
Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
15.1*
Consent of Ernst & Young LLP, independent registered public accounting firm
15.2*
Consent of KPMG Actuarial
101.INS*
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File
because its XBRL tags are embedded within the Inline XBRL document)
101.SCH*
Inline XBRL Taxonomy Extension Schema Document
101.CAL*
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*
Inline XBRL Taxonomy Extension Labels Linkbase Document
101.PRE*
Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*
Cover Page Interactive Data File (formatted as Inline XBRL and included as part of the Exhibit 101
Inline XBRL Document Set)
____________
*
Filed herewith
Table of Contents
James Hardie 2021 Annual Report on Form 20-F
200
SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has
duly caused and authorized the undersigned to sign this Annual Report on its behalf.
Date: 18 May 2021
JAMES HARDIE INDUSTRIES plc
By:
/s/ JACK TRUONG
Jack Truong
Chief Executive Officer
This Annual Report has been approved by the Board of Directors of James Hardie Industries plc.
Date: 18 May 2021
JAMES HARDIE INDUSTRIES plc
By:
/s/ MICHAEL N. HAMMES
Michael N. Hammes
Chairman
This page is left intentionally blank.
BOARD OF DIRECTORS
James Hardie’s non-executive directors have widespread experience, spanning general
management, innovation, finance, manufacturing, marketing and accounting.
Michael Hammes BS, MBA
Non-executive Chairman
Michael Hammes was elected as an independent
non-executive director in February 2007. He was
appointed Chairman of the Board in January 2008
and is a member of the Remuneration Committee
and the Nominating and Governance Committee.
Jack Truong BS, PhD
Executive Director
Dr. Jack Truong joined James Hardie in April 2017
and was announced CEO successor and appointed
President and Chief Operating Officer with the
responsibility of running the company’s global business
in September 2018. He was officially appointed CEO
and to the Board of Directors in January 2019.
David Harrison BA, MBA, CMA
Non-executive Director
David Harrison was appointed as an independent
non-executive director in May 2008. He is
Chairman of the Remuneration Committee and a
member of the Audit Committee.
Andrea Gisle Joosen MSc, BSc
Non-executive Director
Andrea Gisle Joosen was appointed as an
independent non-executive director of James
Hardie in March 2015. She is a member of the
Audit Committee.
Persio Lisboa BS
Non-executive Director
Persio Lisboa was appointed as an independent
non-executive director in February 2018. He is a
member of the Remuneration Committee and the
Nominating and Governance Committee.
Anne Lloyd BS, CPA
Non-executive Director
Anne Lloyd was appointed as an independent
non-executive director in November 2018. She is
Chair of the Audit Committee and a member of
the Remuneration Committee.
Moe Nozari BA, MS, PhD and Postdoctoral
Research Fellow
Non-executive Director
Dr. Moe Nozari was appointed as an independent
non-executive director in November 2019. He is
a member of the Nominating and Governance
Committee.
Rada Rodriguez MSc
Non-executive Director
Rada Rodriguez was appointed as an independent
non-executive director in November 2018. She is a
member of the Nominating and Governance
Committee.
Suzanne Rowland MS, BS
Non-executive Director
Suzanne Rowland was appointed as an indepen-
dent non-executive director in February 2021. She
is a member of the Audit Committee.
Dean Seavers MBA, BBA
Non-executive Director
Dean Seavers was appointed as an independent
non-executive director in February 2021. He is a
member of the Audit Committee.
Nigel Stein CA, BSc
Non-executive Director
Nigel Stein was appointed as an independent
non-executive director in May 2020. He is
Chairman of the Nomination and Governance
Committee and a member of the Audit Committee.
Harold Wiens BS
Non-executive Director
Harold Wiens was appointed as an independent
non-executive director in May 2020. He is a
member of the Remuneration Committee.
MANAGEMENT TEAM
Our management team covers the key areas of general management, commercial marketing,
innovation, manufacturing and operations, finance, human resources and legal.
Jack Truong BS, PhD
Chief Executive Officer
Dr Jack Truong joined James Hardie in April
2017 and was announced CEO successor
and appointed President and Chief Operating
Officer with the responsibility of running the
company’s global business in September
2018. He was officially appointed CEO in
January 2019.
Julie Katigan BA, MA
Chief Human Resources Officer
Julie Katigan joined James Hardie in May
2019. She is responsible for the company’s
global human resource activities, including
employee engagement, leadership and talent
development and human resources strategy.
Sean Gadd BEng, MBA
Executive Vice President, North America Commercial
Sean Gadd joined James Hardie in 2004 and was appointed
Executive Vice President, North America Commercial in
December 2018 with responsibility for sales, products,
segments and marketing.
Johnny Cope BA
Senior Vice President, North America Sales
Johnny Cope joined James Hardie in February 2019. He is
responsible for delivering the James Hardie value
proposition, trusted brand and products, best-in-class
supply chain and technical service framework to the
company’s most valued customers.
Jörg Brinkmann MS, PhD
General Manager, Europe
Dr. Jörg Brinkmann joined James Hardie in April 2018 as
part of the Fermacell acquisition. He is responsible for
running the company’s European activities, which are
headquartered in Düsseldorf, Germany.
Fran Flanagan BS, MBA
Head of Consumer Marketing
Fran Flanagan joined James Hardie in 2019 with responsibility
for consumer insights to ensure James Hardie understands the
behaviors, needs and beliefs of its consumers enabling James
Hardie to deliver innovative new products and solutions that
are market-driven.
Jason Miele BA
Chief Financial Officer
Jason Miele joined James Hardie in 2007 and
was appointed as CFO in February 2020. As
CFO he oversees the company’s overall financial
activities, including accounting, tax, treasury,
performance and competitor analysis, internal
audit, financial operations, information systems,
and investor and media relations.
Joe Blasko BSFS, JD
General Counsel, Chief Compliance Officer and
Company Secretary
Joe Blasko joined James Hardie as General Counsel
and Chief Compliance Officer in June 2011 and was
appointed Company Secretary in June 2020. Mr.
Blasko has responsibility for the company’s legal and
regulatory compliance, corporate governance,
enterprise risk management and government relations.
Robert Stefansic BSc, MBA
Executive Vice President, North America End to End Supply Chain
Robert Stefansic joined James Hardie in July 2020. He is responsible
for driving operational efficiencies and improvements across the
supply chain, with emphasis on delivering business value via the
Hardie Manufacturing Operation System.
Ryan Kilcullen BSc, MS
Senior Vice President, North America Supply Chain Operations
Ryan Kilcullen joined James Hardie in 2007 and was appointed
Senior Vice President, Supply Chain Operations in November 2020
with responsibility for the company’s production planning,
procurement and logistics operations.
Jennifer Bressler BA
Head of Retail Business Development
Jennifer Bressler joined James Hardie in 2020 with responsibility
for driving strategic growth priorities within the retail channel,
including expansion opportunities to drive business develop-
ment within the segment across all product lines.
John Arneil BBus, MBA
Country Manager, Australia and New Zealand
John Arneil joined James Hardie in 2005 and was appointed
Country Manager, Australia and New Zealand, in 2017. He is
responsible for running the company’s Australian and New Zealand
activities, which are headquartered in Sydney, Australia.
SHAREHOLDER INFORMATION
2021 KEY DATES AND CALENDAR*
SHARE/CUFS REGISTRY
31 March
End of James Hardie Industries plc
Fiscal Year 2021
17 May
FY21 Fourth Quarter and Full Year
results and management presentation
24 May
Global Investor Day
4 August
Voting Instruction Forms close
10:00am (Irish Standard Time)/
7:00pm (Australian Eastern Standard
Time) for Annual General Meeting
6 August
Annual General Meeting, Dublin
9 August
FY22 First Quarter results and
management presentation
8 November
FY22 Second Quarter and Half Year
results and management presentation
* USA time and future dates are indicative only and are subject
to change.
James Hardie Industries plc’s registry is managed by
Computershare. All enquiries and correspondence
regarding holdings should be directed to:
Computershare Investor Services Pty Ltd
Level 5, 115 Grenfell Street
Adelaide SA 5000
Or
GPO Box 2975
Melbourne VIC 3001
Telephone within Australia: 1300 850 505
Telephone outside Australia: +61 (0) 3 9415 4000
Website: www.computershare.com
James Hardie Industries plc
(ARBN 097 829 895)
Incorporated in Ireland with its registered office at
Europa House, 2nd Floor, Harcourt Centre, Harcourt
Street, Dublin 2, D02 WR20, Ireland and registered
number 485719. The liability of its members is limited.
™ or ® denotes a trademark or Registered mark owned
by James Hardie Technology Ltd.
©2021. James Hardie Industries plc.
CORPORATE HEADQUARTERS
Europa House, 2nd Floor
Harcourt Centre (Block 9)
Harcourt Street, Dublin 2, D02 WR20, Ireland
Telephone +353 1 411 6924
Facsimile +353 1 479 1128
ANNUAL GENERAL MEETING (AGM)
The 2021 AGM of James Hardie Industries plc will be
held in Dublin, Ireland, at 7.00am (Irish Standard Time),
on Friday, 6 August 2021. The AGM will be broadcast via
a teleconference at 4.00pm (Australian Eastern Standard
Time). Further details will be set out in the Notice of
Annual General Meeting 2021.
©This LandTM LTD 2021
2021 Annual Report 37