It’s Possible™
Annual Report 2022
Global Business
Overview
James Hardie is the world’s
number one manufacturer and
marketer of fibre cement and fibre
gypsum, and we create value
by providing homeowners with
endless design possibilities.
James Hardie operates 19 manufacturing
facilities across three regions and sells
high-performance fiber cement and fiber
gypsum products in over 20 countries.
With James Hardie, It’s PossibleTM
FY22 GROUP RESULTS
NORTH AMERICA
Net Sales
US$3,614.7 million
^ 24% from FY21
Adjusted EBIT
US$815.6 million
^ 30% from FY21
Adjusted Net Income
US$620.7 million
^ 36% from FY21
Net Sales
US$2,551.3 million
^ 25% from FY21
Adjusted EBIT
US$741.2 million
^ 26% from FY21
Manufacturing Facilities
Research and Development
Marketing Directly to HomeownersLetter to ShareholdersGlobal Results SummaryGlobal Capacity Expansion Our Mission is to be a high-performance, global company that consistently
delivers organic growth above market with strong returns.
ASIA PACIFIC
Net Sales
US$574.9 million
^ 25% from FY21
Adjusted EBIT
US$160.8 million
^ 25% from FY21
EUROPE
Net Sales
US$488.5 million
^ 19% from FY21
Adjusted EBIT
US$62.9 million
^ 47% from FY21
Operating sites
19
Global R&D Centres
3
2022 Annual Report
| 1
20-F FinancialsBoard of DirectorsManagement TeamGlobal InnovationEnvironmental, Social & GovernanceShareholder Information In this Annual Report, pages 1-35,
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 amounts denoted
as “Adjusted” are done so consistently with
the Company’s other financial reporting,
please see Page 36, Financial Endnotes,
for further explanation of Non-GAAP
Financial Information.
2
Marketing Directly to HomeownersLetter to ShareholdersGlobal Results SummaryGlobal Capacity Expansion Letter to Shareholders
Global Results Summary
North America Fiber Cement
Asia Pacific Fiber Cement
Europe Building Products
Global Capacity Expansion
Marketing Directly to Homeowners
Global Innovation
Environmental, Social & Governance
20-F Financials
Board of Directors
Management Team
Shareholder Information
4
10
14
16
18
20
24
28
32
38
242
243
244
James Hardie acknowledges the traditional
custodians of the lands on which our business
and assets operate, and recognise their ongoing
connection to land, waters and community. We
pay our respects to the Indigenous Custodians
on these lands before us, the Indigenous
Peoples today, and the generations to come.
2022 Annual Report
| 3
20-F FinancialsBoard of DirectorsManagement TeamGlobal InnovationEnvironmental, Social & GovernanceShareholder Information CHAIRMAN’S
Letter to
Shareholders
Fiscal Year 2022 was our third
consecutive year of substantial
growth globally.
Adjusted Net Income of US$620.7 million is more than two
times the Adjusted Net Income result in Fiscal Year 2019. This
transformational growth was delivered across all three regions.
Over the three years since we unveiled our global strategy, group
sales have increased 44% to over US$3.6 billion and adjusted
net income grew 107% to $620.7 million. This exceptional growth
is the result of the successful execution of our strategy by our
5,000 employees across the globe.
I have been passionate about James Hardie’s growth for a long
time, and as I sit here today, I can tell you I have never been more
excited about the future for this business given what the Board
and the James Hardie team have put in motion.
4
MICHAEL HAMMES
Executive Chairman
FISCAL YEAR 2022 OPERATING RESULTS
Our North America segment is delivering a step change
in growth underpinned by strong volumes and execution
on our high value product mix strategy. Fiscal year 2022
net sales grew by 25% to over US$2.5 billion and were
reinforced by a 10% improvement in Price/Mix. The growth
in high value product mix is a testament to our improved
partnering with customers, initial gains in marketing directly
to the homeowner, and strong continued underlying demand
for James Hardie’s fiber cement products. North American
adjusted EBIT expanded by 26% to over US$740 million.
Despite high inflation across the U.S. during a disruptive year
for global supply chains, along with significant reinvestment
in our business as we transform into a premier consumer
branded company, the North American team was able to lift
adjusted EBIT margins to 29.1% from 28.8% in fiscal year
2021. This is truly an impressive business.
Our Asia Pacific segment continued to benefit from strong
demand and a focus on a high value product mix strategy.
Fiscal year 2022 net sales grew by 22% to over A$777 million.
Execution on a high value product mix drove an improvement
in Price/Mix of 5% and demand for our products resulted in
volumes expanding 17%. Asia Pacific adjusted EBIT expanded
23% to over A$217 million with an impressive adjusted EBIT
margin of 28.0%.
Our European segment delivered strong results in fiscal year
2022, with net sales expanding 20% to over €420 million.
Fiber cement sales grew 39% to over €65 million, a testament
to the growing demand for our fiber cement products
which ultimately supports our confidence in expanding our
European presence. European adjusted EBIT expanded 51%
to €54 million, an incredible result considering the massive
inflationary pressures facing continental Europe.
I would like to congratulate our team for a truly remarkable set
of results in terms of sales and profit growth.
Marketing Directly to HomeownersLetter to ShareholdersGlobal Results SummaryGlobal Capacity ExpansionLetter to Shareholders RECORD RESULTS IN FY22
Net Sales
US$3.6 billion
Adjusted Net Income
US$620.7 million
Dividends
US$312 million
+24% from FY21
+36% from FY21
+1% from FY21
Zero Harm and ESG
I am pleased with our team’s achievement delivering James
Hardie’s inaugural sustainability report in fiscal year 2022. We
recognise that keeping environmental and social considerations
at the core of everything we do is fundamental to our success,
and the report represents a significant milestone in our
sustainability journey.
Global capacity expansion
In fiscal 2022, we announced our global capacity expansion
program that will result in new plants being built in all three
of our operating regions. Now is the right time to undertake
this significant investment. Demand for fiber cement is strong,
supported by design trends as well as industry labour and skill
shortages, which our products look to alleviate. In addition, as we
begin to market directly to homeowners and start to expand our
product offering beyond the wood-look category, we need to have
the right capacity ahead of demand. Over the next four years, we
are committed to a US$1.6-1.8 billion investment in capacity.
Leadership Change
On 7 January 2022, Mr. Harold Wiens was appointed as
Interim CEO and I am pleased to report that the business has
continued its strong performance, and I thank Mr. Wiens for his
ongoing leadership.
A comprehensive search for a new CEO is now well underway.
I look forward to announcing a new CEO later this calendar year.
Board Changes
We remain committed to ensuring we have a strong, diverse,
and independent Board, and I would like to thank my fellow
Board members for their continued support and demonstrated
leadership during the year.
On 26 August 2021, Andrea Gisle Joosen retired from the board.
On 5 November 2021, David Harrison retired from the Board.
On 6 January 2022, Moe Nozari resigned from the Board and
on 21 March 2022, Dean Seavers resigned from the Board. The
Board would like to express its thanks to these four past Board
members for their service and significant efforts during their
respective tenures.
We continue our Board refresh program and intend to add two to
three new Board members in the next six months; I look forward
to informing you of these exciting appointments.
Towards the end of fiscal year 2022, I announced my intention to
retire from the Board during fiscal year 2023. I have served you,
the shareholders, the company, and the Board for over 14 years,
and I am truly proud of what this company has achieved during
my tenure. I believe the strategy we have put in place along with
the talented and deep leadership team, will continue to drive
further extraordinary growth for James Hardie. The Board and I
plan to announce my successor later this fiscal year.
Capital allocation and shareholder returns
We remain committed to investing in organic growth, maintaining
our ordinary dividend, and maintaining a strong balance sheet
while having the capacity for strategic opportunities or additional
shareholder returns.
Our underlying confidence in the business enabled the Board
to declare a first half dividend of US$0.40 cents per share and
a second half ordinary dividend of US$0.30 cents per share,
totaling US$312 million.
Asbestos Injury Compensation Fund (AICF)
Since inception of AICF, James Hardie has contributed
A$1.9 billion to the fund. We at James Hardie remain committed
to AICF and the terms of the Amended and Restated Final
Funding Agreement.
Annual General Meeting
Details of this year’s AGM will be contained in the Notice of
Meeting.
Shareholders can participate via teleconference. Details regarding
the matters to be acted upon at the 2022 AGM will be contained
in the Notice of Meeting and related materials.
Finally, I would like to thank our shareholders for their ongoing
support of the Board and Management, and I look forward to
speaking with you again at our AGM.
Michael Hammes
Executive Chairman
2022 Annual Report
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20-F FinancialsBoard of DirectorsManagement TeamGlobal InnovationEnvironmental, Social & GovernanceShareholder Information INTERIM CEO
Letter to
Shareholders
HAROLD WIENS
Interim Chief Executive Officer,
Executive Director
Dear shareholders,
At James Hardie, our mission is to be a
high-performance global company that consistently
delivers organic growth above market with strong
returns. In fiscal year 2022, the transformation of our
company has accelerated as we become a premier,
consumer branded company that consistently
provides value to our customers, employees,
and you — our shareholders.
ZERO HARM AND ESG & THREE YEARS OF RESULTS
Over the past three fiscal years, the James Hardie team has
made significant progress on our global transformation. This
would not have been possible without ongoing improvement in
our processes, with a view that the decisions we make each day
must also be environmentally and socially responsible to create
sustainable value for our investors. The Group’s sustainability
progress reflects the efforts of our global team. Their passion,
expertise and capability drives the success of our business
outcomes, and examples of our progress in fiscal year 2022 can
be found in the Building Sustainable Communities section of this
report. In addition to our relentless focus on Zero Harm and ESG,
what is foundational to our organic global strategy to transform
and enable consistent profitable growth globally is successful
execution of the following initiatives:
1. World Class Manufacturing via LEAN
The first transformation we undertook was to become a
world class manufacturer through the execution of our LEAN
manufacturing strategy. Our network of plants is on a continuous
journey of improvement, which began in 2019 to reduce variation,
increase efficiency and improve quality to serve our customers
better every day. Exceptional progress has been made to date,
as we have generated $215.1 million in cumulative global LEAN
savings, including $150.4 million LEAN savings in North America.
These ongoing efforts have enabled us to deliver premium quality
products consistently and efficiently, improve service to our
customers and mitigate inflationary pressures.
6
LEAN SAVINGS
US$215.1 million
cumulative global saving
for 36 month period
US$150.4 million
cumulative NA savings
for 36 month period
2. Partnership with Customers
Over the past two years, we have made a concerted effort to
be truly customer focused. We have taken direct steps to shift
from an organization focused solely on demand creation with
home builders and contractors, to partnering more closely with
our customers enabling profitable growth for them as well as
James Hardie. Instilling this true customer focused mindset
throughout the company has been critical to driving growth
above market while taking market share in all three geographies
that we operate in. Over the last two fiscal years, this increased
connectivity has helped our North America business to deliver
more than 9% per annum volume growth.
3. Supply Chain Integration
Another key component of our transformation has been the
improved integration of our supply chain. This critical initiative
ensures that we are 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 has led
to more optimal working capital for both our customers and
James Hardie.
Marketing Directly to HomeownersLetter to ShareholdersGlobal Results SummaryGlobal Capacity ExpansionLetter to Shareholders RECORD RESULTS IN FY22
North America Adjusted EBIT
US$741.2 million
APAC Adjusted EBIT
A$217.4 million
Europe Adjusted EBIT
€54.2 million
+26% from FY21
+23% from FY21
+51% from FY21
FY23 AND BEYOND
While the financial results delivered over the past three fiscal
years have been exceptional, from where I sit, I am equally
excited about how the foundations we have built will continue
to drive even more profitable growth globally. There are three
critical strategic initiatives that will enable us to leverage our
scale going forward.
1. Marketing to Homeowners
The first of our three critical initiatives began in early fiscal
year 2022 with the evolution of James Hardie to become a
premier, consumer branded company, and creating demand by
marketing directly to the homeowner. Historically, James Hardie
has been a trusted and appreciated brand that has resonated
strongest with building professionals and contractors, by
selling proven products that are durable, low maintenance, and
non-combustible. While these attributes focus on the important
functional aspects of our products, now is the time to extend
the James Hardie brand to become a true household name.
In early May 2021 we launched a 360 degree, fully integrated
marketing campaign, empowering homeowners 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 from James Hardie.
2. Penetrating Existing and New Markets
While historically we have had a strong business in the North
American repair and remodel segment, the opportunity for
future growth remains significant. Currently, 65-70% of our
North American business is in the repair and remodel segment.
According to the U.S. Census from 2021, approximately 40
million of the 80 million homes in the U.S. are 40 years or
older, having been built before 1979. These homes represent
a significant opportunity from which we can generate demand
for James Hardie’s exterior products. We plan to amplify and
accelerate demand creation by highlighting James Hardie’s
trusted brand and premium products, which will enable
homeowners to realize their dream homes with endless
design possibilities. This same principle holds true in our other
geographies, where opportunities exist to further penetrate and
expand our repair and remodel businesses.
Drive profitable growth globally
1
2
3
Market to homeowners
to create demand
Penetrate and drive profitable growth
in existing and new segments
Commercialize global innovations
by expanding into new categories
Continued execution and
expansion of foundational initiatives:
• LEAN Manufacturing
• Customer Engagement
• Supply Chain Integration
Zero Harm & ESG
“While the financial results delivered over the
past three fiscal years have been exceptional,
from where I sit, I am equally excited about how
the foundations we have built will continue to
drive even more profitable growth globally.”
2022 Annual Report
| 7
20-F FinancialsBoard of DirectorsManagement TeamGlobal InnovationEnvironmental, Social & GovernanceShareholder Information According to the US census
ONE in FIVE
New homes are built using Fiber
Cement as its primary cladding
3. Global Innovation
In order to maintain the considerable momentum of the past
three fiscal years, it is crucial that we continue introducing
new innovative products to the market. Our approach to
innovation is about developing market driven products that
address unmet needs and contribute to profitable, organic
growth. Our global innovation platform focuses on products
that deliver endless design possibilities for the homeowner.
This also extends to delivering the superior performance
the market has come to expect from James Hardie’s unique
fiber cement technology, including:
• durability,
•
low maintenance, and
• noncombustible.
Fundamental to our long term global innovation strategy, is
developing a product suite that allows us to participate in all
exterior siding categories, not just the wood-look category.
In February 2022, we launched the Hardie™ Architectural
Collection at the International Builders’ Show in Florida. The
Hardie™ Architectural Collection debuted with a brand-new
suite of premium Hardie™ Architectural Panels in distinctive
textures inspired by nature. We unveiled these new products
in response to several megatrends in the industry, including
labor shortages, consumers looking to personalize and
modernize their homes, and demand for more sustainable
exteriors that offer protection against damage from
severe weather.
These products extend James Hardie’s portfolio beyond
the wood-look category and mark the company’s most
significant product expansion to date. According to the U.S.
census, 1 in 5 new homes is built using Fiber Cement as its
primary cladding. This highlights the significant opportunity
ahead of us now that we have the products to compete in
the non-wood look category. The Hardie™ Architectural
Collection is a significant proof point in our mission to
transform the way the world builds and become a premier,
consumer branded company. Our intent is to continue to
evolve the HardieTM Architectural Collection, and launch
even more design-forward exterior options, as we empower
homeowners, architects, and homebuilders with endless
design possibilities.
8
CLOSING
It has been an exciting few months as your Interim CEO, and I
could not be more proud of all my colleagues around the world
for continuing to deliver excellent financial results.
The successful execution of our global strategic plan has
allowed James Hardie to deliver strong growth, with global sales
up 13% pa and adjusted net income up 27% pa since fiscal year
2019. This step change in financial results has been remarkable.
Harold Wiens
Interim Chief Exective Officer,
Executive Director
Marketing Directly to HomeownersLetter to ShareholdersGlobal Results SummaryGlobal Capacity ExpansionLetter to Shareholders 2022 Annual Report
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20-F FinancialsBoard of DirectorsManagement TeamGlobal InnovationEnvironmental, Social & GovernanceShareholder Information Global Results Summary
1010
Marketing Directly to HomeownersLetter to ShareholdersGlobal Results SummaryGlobal Capacity ExpansionGlobal Results Summary 2022 Annual Report
2022 Annual Report
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20-F FinancialsBoard of DirectorsManagement TeamGlobal InnovationEnvironmental, Social & GovernanceShareholder Information Driving Profitable Growth
The James Hardie team’s execution of the strategy has delivered a step
change in financial performance over the last 3 years.
Net Sales
Dollars in US millions
Adjusted EBIT
Dollars in US millions
Adjusted Net Income
Dollars in US millions
‘22
‘21
‘20
‘19
‘18
‘17
‘16
3 year
CAGR
13%
3,615
2,909
2,607
2,507
2,055
1,922
1,728
‘22
‘21
‘20
‘19
‘18
‘17
‘16
816
3 year
CAGR
26%
629
487
405
398
354
351
‘22
‘21
‘20
‘19
‘18
‘17
‘16
621
3 year
CAGR
27%
458
353
301
291
249
243
Adjusted Diluted EPS
US Dollars/share
Adjusted ROCE
%
Operating Cash Flow
Dollars in US millions
1.39
3 year
CAGR
27%
1.03
0.79
0.68
0.66
0.56
0.54
‘22
‘21
‘20
‘19
‘18
‘17
‘16
3 year
CAGR
22%
51
40
31
28
32
31
31
‘22
‘21
‘20
‘19
‘18
‘17
‘16
3 year
CAGR
36%
451
304
309
383
223
757
787
‘22
‘21
‘20
‘19
‘18
‘17
‘16
12
Marketing Directly to HomeownersLetter to ShareholdersGlobal Results SummaryGlobal Capacity ExpansionGlobal Results Summary Volume (mmsf)
Volume Growth
Price/Mix
Sales growth
Europe Building Products
EU€ Millions Net Sales
Volume (mmsf)
Volume Growth
Price/Mix
Sales growth
Group
633.3
17%
5%
22%
420.5
952.6
9%
11%
20%
542
2%
1%
3%
350.6
876
6%
-1%
5%
US$ Millions Net Sales
3,614.7
2,908.7
Volume (mmsf)
Volume Growth
Price/Mix
Sales growth
4,698.1
4,131.4
14%
10%
24%
8%
4%
12%
FY22
FY21
FY22
FY21
Change (%)
North America Fiber Cement
US$ Millions
US$ Millions Net Sales
2,551.3
2,040.2
North America Fiber Cement
2,551.3
2,040.2
Volume (mmsf)
Volume Growth
Price/Mix
Sales growth
3,112.2
2,713.4
Asia Pacific Fiber Cement
Europe Building Products
574.9
488.5
458.2
410.3
Global Net Sales
3,614.7
2,908.7
15%
10%
25%
9%
3%
12%
Asia Pacific Fiber Cement
A$ Millions Net Sales
777.7
635.2
Adjusted EBIT
US$ Millions
25%
25%
19%
24%
26%
25%
47%
19%
14%
30%
-17%
-100%
-300%
37%
41%
36%
North America Fiber Cement
Asia Pacific Fiber Cement
Europe Building Products
Research and Development
741.2
160.8
62.9
-34.4
588.0
128.2
42.7
-28.8
General Corporate
-114.9
-101.1
Adjusted EBIT
815.6
629.0
Adjusted interest expense
Loss on early debt
extinguishment
40.2
0.0
48.3
13.1
Other expense (income)
0.2
-0.1
Adjusted income before
income taxes
775.2
567.7
Adjusted income tax expense
154.5
109.7
Adjusted net income
620.7
458.0
Adjusted effective tax rate
19.9%
19.3%
0.6 pts
Dividends declared US$
0.70
0.70
0%
2022 Annual Report
| 13
20-F FinancialsBoard of DirectorsManagement TeamGlobal InnovationEnvironmental, Social & GovernanceShareholder Information North America Fiber Cement
In fiscal year 2022, our North America business
has once again delivered exceptional results.
By further integrating with our customers
and simultaneously marketing directly to
homeowners, the James Hardie North
America team was able to drive significant
market share gains and a higher average
selling price, while servicing our customers
and the end users seamlessly. In fiscal
year 2022, North America sales increased
25%, with volumes up 15% and Price/Mix
of 10%.
During the fiscal year, our North America
volumes increased by 15%, outpacing
single family completions, which were up
3%. Our growth above market reflects
both market share gains in single family
new construction as well as increasing
penetration in the repair and remodeling
segment. In 2021, the U.S. census
estimated that 22% of new homes used
fiber cement as its primary cladding. This
is up from 9% in 2005. There is long term
momentum in the markets’ adoption
of fiber cement, underpinned by the
desirable characteristics of our substrate,
including it being non-combustible, low
maintenance, and its curb appeal.
Looking forward, we are positively
amplifying demand for fiber cement in the
market by: 1) marketing directly to the
consumer, 2) partnering with customers,
and 3) delivering new innovations that take
fiber cement beyond our historical focus
on the wood-look category.
In North America, we sell an increasingly
high-value product mix into the repair and
remodel and new construction markets.
During the year, we improved this
product mix by focusing on product
with ColorPlus® TechnologyTM sales into
the NorthEast and refining our go-to
market strategy for backer boards
and CemplankTM, to ensure only the
right customers were accessing these
products. Improving our high-value
product mix drove price/mix growth of
10% for fiscal year 2022.
Looking forward, we have identified our
future state product mix (as shown on
the right-hand side page), with the goal
of increasing our exposure to high-value
products, namely Innovation and product
with ColorPlus® Technology.TM
Our products enable the homeowner
to create 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, and (iii) the recently introduced
Hardie® Architectural Collection.
This year also saw our network of plants
across the U.S. continue to improve
under the Hardie Manufacturing Operating
System (HMOS), delivering LEAN
performance improvements as well as
savings. These benefits as well as our
execution on product mix were crucial
during the high inflationary environment
experienced during the year, and allowed
us to expand our EBIT margin to 29.1%
for fiscal year 2022. Looking forward,
all else equal, profitability is expected
to improve further as we deliver on our
targeted product mix.
“Fiscal year 2022 has
been another very
successful year for the
James Hardie North America
fiber cement business. This
was achieved through our
ongoing focus on partnering
with our customers,
marketing directly to the
homeowner and improving
our LEAN execution.”
Sean Gadd
President, North America
14
Marketing Directly to HomeownersLetter to ShareholdersGlobal Results SummaryGlobal Capacity ExpansionGlobal Results Summary Our North America team
is focused on delivering
Growth Above Market AND
Strong Returns.
GROWTH ABOVE MARKET
• Net Sales exceeded $2.55 billion
in FY22
• Net Sales increased +25% in FY22
• Volumes increased 15%
• Price/Mix growth of 10% in FY22
STRONG RETURNS
• Adjusted EBIT growth of 26% in FY22;
following +25% growth in FY21
• Adjusted EBIT Margin expanded to
29.1% in FY22, up 30 basis points
vs FY21
• Adjusted EBITDA Margin expanded
to 33.5% in FY22, up 30 basis points
vs FY21
Photo © 2021 Discovery or its subsidiaries and affiliates. All rights reserved.
Segment Net Sales
% of total JH
Net Sales
Dollars in US billions
70
1.68
1.82
2.04
2.55
FY19
FY20
FY21
FY22
Segment Adjusted EBIT1
% of total JH
Adjusted EBIT
Adjusted EBIT (US$M)
Adjusted EBIT margin (%)
76
28.8
29.1
25.9
23.1
388
471
741
588
FY19
FY20
FY21
FY22
Core JH Market (%)
Other
R&R
North America Volume Mix
ColorPlus
Hardie Brand
Low End
Innovation
65-70
FY21 A
FY22 A
FY23
PROJECTED
FUTURE
STATE
2022 Annual Report
| 15
1. ^* of operating EBIT20-F FinancialsBoard of DirectorsManagement TeamGlobal InnovationEnvironmental, Social & GovernanceShareholder Information Asia Pacific Fiber Cement
In the Asia Pacific region, James Hardie
sells high-value building materials into
both the repair and remodel and new
construction markets.
These products provide homeowners
with endless design possibilities without
compromising on quality. Our high-value
products are utilized in the exteriors and
interiors of homes.
Demand for our products remains strong,
with volume growth of 17% in fiscal year
2022, and net sales increasing 22% to
over A$777 million on top of robust 12%
growth in fiscal year 2021. The team’s
execution of the global strategy of driving
a higher value product mix is evident
in the price/mix growth of 5% for fiscal
year 2022.
The strong results were underpinned
by solid operational performance with
our Rosehill, Carole Park and Cabuyao
manufacturing sites continuing to
generate savings by further enhancing our
LEAN manufacturing approach, increasing
yield and reducing delay. This, coupled
with several adjustments to our supply
chain model, allowed us to simultaneously
increase capacity and reduce working
capital across the network.
Innovation is a fundamental pillar of our
future growth in Asia Pacific, and the
teams have been leading the global roll
out of James Hardie’s latest market led
innovations. We have been in market with
this new technology for over 12 months,
and currently, over 3% of our revenue
comes from our first-generation product
marketed locally as Hardie™ Fine Texture
Cladding. These high value products are
quickly gaining traction with consumers
and customers and are adding more
depth to our portfolio of exterior cladding
solutions. At James Hardie, our highly
skilled, cross-functional teams are always
leveraging opportunities to share and
transfer knowledge we have gained in
selling innovative products and systems
in a given market. In this case we are
using our learnings in Australia to drive
our thinking and execution in our North
America and Europe markets.
James Hardie is progressively moving
towards its stated aim of becoming a
premier consumer branded company,
and the rollout of the inaugural consumer
marketing campaign in Australia this year
has delivered significant early results from
a brand health perspective. Three in four
homeowners recalled our ‘It’s Possible™’
campaign that was launched earlier this
year leading to increased specification
and demand for James Hardie exterior
solutions. These investments in the
consumer space will continue to ramp up
over the coming year, further building the
James Hardie brand in our core markets.
In conjunction with our global strategy
to build and embed strong strategic
partnerships with our customers,
there has been significant work done
to drive alignment and growth across
our customer base in fiscal year 2022.
“The ongoing execution of
LEAN principles and a focus
on driving a high-value
product mix has resulted
in strong revenue and EBIT
growth in fiscal year 2022.
The visibility we have on
future demand creation
across our ANZ markets has
driven the need for a third
manufacturing site in our
ANZ network.”
John Arneil
General Manager, Asia Pacific
16
Marketing Directly to HomeownersLetter to ShareholdersGlobal Results SummaryGlobal Capacity ExpansionGlobal Results Summary We work with our channel partners to
identify the right target market, segment
and product within their local geographies.
From here we then embark on extensive
training to ensure our partners are both
equipped and capable of capturing the
increasing demand for James Hardie
products. We are also investing in further
integration of our respective supply chains
to enable a more efficient market facing
approach, getting the right product to the
right locations at the right time.
Our channel partners also play a key
role in launching and driving sales of any
new innovative products. We directly
invest in demand creation for these new
products through our integrated marketing
campaigns, while working with our
partners to get the new products in store,
merchandised correctly and staff trained.
The above initiatives have driven a strong
result for the James Hardie APAC team
in fiscal year 2022 with significant market
share gains delivered at an adjusted EBIT
margin of 28.0%.
Our Asia Pacific team
is focused on delivering
Growth Above Market AND
Strong Returns.
STRONG RETURNS
GROWTH ABOVE MARKET
• Adjusted EBIT growth of 23% in FY22;
• Net Sales of A$777.7 million in FY22
following +27% growth in FY21
• Adjusted EBIT margin of 28% in FY22
• Adjusted EBITDA of 30.3% in FY22
• Net Sales increased +22% in FY22
• Volumes increased 17% in FY22
• Price/Mix growth of 5% in FY22
Segment Net Sales
% of total JH
Net Sales
Dollars in AUS millions
16
612
614
635
778
FY19
FY20
FY21
FY22
Segment Adjusted EBIT1
% of total JH
Adjusted EBIT
Adjusted EBIT (AUS$M)
Adjusted EBIT margin (%)
17
28.0
28.0
22.3
22.7
137
139
217
177
FY19
FY20
FY21
FY22
2022 Annual Report
| 17
1. ^* of operating EBITIn Australia, we have recently retrofitted shipping containers to provide an on-site customer experience which provides further education on James Hardie products to our customers, builders and consumers.20-F FinancialsBoard of DirectorsManagement TeamGlobal InnovationEnvironmental, Social & GovernanceShareholder Information Europe Building Products
Europe’s execution on the strategy drove
another year of margin expansion.
Our European team’s execution on the
high-value product mix strategy drove
a 20% increase in Net Sales to over
€420 million.
This was underpinned by an 11% growth
in Price/Mix. This growth in Price/Mix was
led by an exceptional 39% increase in
fiber cement sales and a 17% increase in
fiber gypsum sales. Key to fiber cement
sales in fiscal year 2022 was demand for
our Hardie VL PlankTM in the UK, France,
Germany, Switzerland and Denmark.
Hardie® VL Plank comes with a fantastic
design for homeowners and architects
as well as significant time savings for
installers. Strong demand for our products
is reflected in volumes lifting by 9% in
fiscal year 2022.
Momentum in our high-value product
mix strategy translated clearly into
margin performance.
In fiscal year 2022, the team delivered an
adjusted EBIT margin of 12.9%, up 250
basis points vs fiscal year 2021 and this
was despite the business experiencing
elevated levels of inflation in energy prices.
The teams adjustments to these market
dynamics saw the division achieve a
14.0% EBIT margin in Q4 fiscal year 2022.
James Hardie® continues to leverage
the Fermacell brand as we increase our
market share in the European siding
market through fiber cement sales
growth. 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.
“The Europe business has
again delivered a strong
finish to the year. Despite
unprecedented challenges
in the macro environment,
our team has diligently and
successfully embedded
the principles of HMOS
into the business, while
simultaneously driving
greater end-user demand
for our high-value products,
which has culminated in our
strong results.”
Jörg Brinkmann
General Manager, Europe
18
Marketing Directly to HomeownersLetter to ShareholdersGlobal Results SummaryGlobal Capacity ExpansionGlobal Results Summary Our European team is focused
on delivering Growth Above
Market AND Strong Returns.
GROWTH ABOVE MARKET
• Net Sales exceeded €420 million in
FY22
• Net Sales increased +20% in FY22
• Volumes increased 9% in FY22,
Price/Mix growth of 11% in FY22
• Fiber Cement Net Sales increased
+39% in FY22
• Fiber Gypsum Net Sales increased
+17% in FY22
STRONG RETURNS
• Adjusted EBIT growth of 51%
in FY22
• Adjusted EBIT Margin of 12.9% in
FY22, up 250 basis points vs FY21
• Adjusted EBITDA Margin of 19.0% in
FY22, up 190 basis points vs FY21
Segment Net Sales
% of total JH
Net Sales
Dollars in € million
14
318
334
351
421
FY19
FY20
FY21
FY22
Segment Adjusted EBIT1
% of total JH
Adjusted EBIT
Adjusted EBIT (€M)
Adjusted EBIT margin (%)
7
12.9
54.2
10.4
35.9
4.5
14.9
2.7
9.1
FY19
FY20
FY21
FY22
2022 Annual Report
| 19
1. ^* of operating EBIT20-F FinancialsBoard of DirectorsManagement TeamGlobal InnovationEnvironmental, Social & GovernanceShareholder Information Global Capacity Expansion
Prattville, Alabama
2020
Marketing Directly to HomeownersLetter to ShareholdersGlobal Results SummaryGlobal Capacity ExpansionGlobal Capacity Expansion 2022 Annual Report
| 21
20-F FinancialsBoard of DirectorsManagement TeamGlobal InnovationEnvironmental, Social & GovernanceShareholder Information Global Capacity Expansion
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.
And, as we continue to ramp up sheet
machines 1 and 2 in Prattville, we are
implementing plans to double its capacity
to 1.2 billion standard feet with the
addition of Sheet Machines 3 and 4.
Start-up is expected in the third quarter
of fiscal year 2024.
Beyond this, we are planning for a
greenfield expansion in the U.S. to
continue bolstering supply ahead of
anticipated growing demand for our
high-performance products. A location for
this site is expected to be announced in
fiscal year 2023 and its commissioning is
planned for fiscal year 2026.
NORTH AMERICA CAPACITY
EXPANSION
In fiscal year 2022, two new sources
of capacity commenced. Firstly, in
Prattville, Alabama, Sheet Machines 1
and 2 will add 600 million standard feet
of nameplate production to our North
American network once fully ramped up
later in fiscal year 2023. Secondly, the
restart of our Summerville facility in South
Carolina began in late fiscal year 2022,
which will add 190 million standard feet
of nameplate at the end add “once fully
ramped up later in fiscal year 2023.
We are also adding additional ColorPlus®
Technology finishing capacity in
Massachusetts, which will be key to
our long term product mix goals as we
penetrate the repair and remodel segment.
This finishing capacity is expected to start
ramping up in the fourth quarter of fiscal
year 2023.
INVESTMENT IN CAPACITY EXPANSION
FY23-26
US$1.6-1.8 billion
“As we drive profitable
growth in new and existing
segments, it is imperative
that we regularly add
capacity to ensure supply is
keeping ahead of demand.
Our global capacity
expansion program is
an integrated plan that
will ensure we take a
standardised approach
to new developments,
which seeks to shorten the
duration of developments
and ramp ups.”
Ryan Kilcullen
Executive Vice President,
Global Operations
22
Marketing Directly to HomeownersLetter to ShareholdersGlobal Results SummaryGlobal Capacity ExpansionGlobal Capacity Expansion APAC CAPACITY EXPANSION
In late fiscal year 2022, we announced that James Hardie had
entered into an agreement to purchase land in Melbourne,
Australia, which will be the location for our third Australian
operating site. As we continue our strategic focus on marketing
directly to the homeowner and commercializing market-led
innovations, this site will help us to not only meet growing demand
in Australia and New Zealand, but enable the manufacturing of
new innovations and existing high-value products.
Additionally, in Australia, we will build brownfield capacity at our
Carole Park facility in Brisbane, Australia, with start up expected
in the fourth quarter of fiscal year 2023.
EUROPE CAPACITY EXPANSION
In Europe, we have additional brownfield fiber gypsum capacity
planned at our site in Orejo, Spain, which is scheduled to be
commissioned in fiscal year 2026.
Similar to North America and Asia Pacific, we are planning to
add our first fiber cement manufacturing capacity on continental
Europe. We look forward to announcing a location in fiscal year
2023 ahead of commission in fiscal year 2026.
APAC FY26 planned capacity
911 mmsf
^ 49% from FY22
Europe FY26 planned capacity
1,736 mmsf
^ 47% from FY22
2022 Annual Report
| 23
North America FY26 planned capacity 5,826 mmsf^ 26% from FY2220-F FinancialsBoard of DirectorsManagement TeamGlobal InnovationEnvironmental, Social & GovernanceShareholder Information Marketing Directly
to Homeowners
24
Marketing Directly to HomeownersLetter to ShareholdersGlobal Results SummaryGlobal Capacity ExpansionMarketing Directly to Homeowners 2022 Annual Report
| 25
20-F FinancialsBoard of DirectorsManagement TeamGlobal InnovationEnvironmental, Social & GovernanceShareholder Information Marketing Directly
to Homeowners
Building the Brand, Driving Demand.
OUR FOUR PILLARS
INSPIRE
Application: James Hardie’s portfolio of
products brings your dream home to life with
endless design possibilities.
How this comes to life: Inspirational and
achievable examples that showcase James
Hardie’s ability to create homes that are
uniquely beautiful.
COMMUNITIES
Application: James Hardie makes life
better locally and globally, benefitting our
communities and the environment.
How this comes to life: From innovation
that builds stronger communities to
sustainability, James Hardie is invested in
the common good.
“The evolution of James Hardie
as a consumer brand, marketing
directly to homeowners, continues
to gain traction. The It’s Possible™
marketing campaign is resonating
with homeowners, inspiring them
to achieve their aspirational home
with James Hardie products. This
demand creation allows us to
have richer engagement with
homeowners, providing deeper
insights into their attitudes, habits,
and behaviors, enabling James
Hardie to fulfill our promise of
providing endless possibilities so
homeowners can achieve their
dream home exterior.”
Atousa Ghoreichi
Senior Vice President, North America
Marketing, PR, and Communications
26
ENABLE AND EMPOWER
Application: Hardie® products are the only
choice for trusted protection and
long-lasting beauty.
How this comes to life: By humanizing our
value propositions with innovative, real-world
performance examples.
OUR PEOPLE
Application: Stories from the people behind
the brand and products at James Hardie.
How this comes to life: Company news and
performance, thought leadership, and our
inclusive and diverse global culture.
THE HOMEOWNER: MEET CHRISTINE
Hardie® products have been in the market
for many years, and our knowledge with
channel partners, installers, specifiers
and architects has led to a strong brand
within the industry. As we move towards
extending our brand beyond our existing
trade audience to become a premier
consumer branded company, we are
shifting our center of attention towards
the homeowner.
More specifically, the female homeowner,
whom we have personified as ‘Christine’.
Our insights reveal Christine is the key
decision maker when it comes to the
design and aesthetics of both the interior
and the exterior of the home. Our goal is to
have female design-oriented homeowners
seek out James Hardie early in the
re-side or remodel process, or aspire to
incorporate Hardie® products in their future
home plans, maintaining a focus on the
exterior throughout the process.
Marketing Directly to HomeownersLetter to ShareholdersGlobal Results SummaryGlobal Capacity ExpansionMarketing Directly to Homeowners We aim to fulfil Christine’s unmet
needs and ultimately accelerate the
purchase cycle.
Now that we have identified our global
prime target, we are communicating
to Christine with a 360 degree, 24/7
integrated marketing campaign,
showcasing the value that James Hardie
can offer so she can confidently choose
and demand our products for her home.
As the global leader of fiber cement
exterior solutions, James Hardie has a
unique, ownable position that combines
the best functional benefits with endless
design possibilities. Our wide range of
premium exterior solutions provides the
flexibility for her to reflect her design
preferences, from traditional to modern
home styles. We will continue to direct
Christine to high value products like
ColorPlus® Technology in North America,
as well as our future innovations,
to show her how we can make her
personal vision for her home a reality.
Awareness: At the awareness phase,
we will introduce her to the James
Hardie brand with a deliberate focus
to elevate the role the exterior plays
in delivering curb appeal. We do
this by leveraging broad-reaching
media channels.
Consideration: We are using
targeted digital platforms, including
our own websites and an ecosystem
of influencers and social channels to
prove that only James Hardie can fully
empower her to bring her vision to life.
Purchase: We are aiding Christine
with planning her project by equipping
her with the tools and information
she needs to make final design and
contractor selection.
Amplification: We want to
encourage her to share the unique
vision she has built and achieved with
her family, friends, and peer group set.
360 INTEGRATED
MARKETING CAMPAIGN
N
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a t
e r i s
PLIFIC
T I O
A
omeo w
H
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A
t h e center of o
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it
h Ja
mes Hardi e ,
’ s P
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o
s sible.TM
S I D
C O N
3 KEY MARKETING METRICS FROM 3 TARGET AREAS IN THE NORTHEAST IN FISCAL YEAR 2022
This past year has seen the various components of the It’s Possible campaign develop traction across
several key initiatives, including:
New User web sessions
1.4 million
+505% Year on year
Marketing leads
33 thousand
+209% Year on year
Sales leads
6 thousand
+102% Year on year
2022 Annual Report
| 27
20-F FinancialsBoard of DirectorsManagement TeamGlobal InnovationEnvironmental, Social & GovernanceShareholder Information Global Innovation
28
Marketing Directly to HomeownersLetter to ShareholdersGlobal Results SummaryGlobal Capacity Expansion 2022 Annual Report
| 29
20-F FinancialsBoard of DirectorsManagement TeamGlobal InnovationEnvironmental, Social & GovernanceShareholder InformationGlobal Innovation Transforming the way
the World Builds
James Hardie is driven by
innovation. We focus on market
driven insights to deliver
high-impact new products that
address homeowners’ unmet
needs and drive profitable
organic growth.
We focus on megatrends in the market and conduct in depth
discovery and testing with homeowners to generate insights.
We take these insights and prioritize product concepts that
truly deliver on unfulfilled market needs and create value for
all of our stakeholders including homeowners, customers,
community, employees and shareholders.
We leverage our global scale, know-how and collaborations
with our world class research and development talents in
our three innovation centers in north America, Asia Pacific
and Europe.
Our focus on innovation will allow us to transform the way
the world builds. We create innovative products that provide
superior performance, durability, low maintenance and
non-combustibility, while also improving labor productivity for
the installers and the builders. By combining these qualities the
market has come to expect from James Hardie fiber cement
products with lasting beauty and endless design possibilities,
we believe that James Hardie can deliver both the ‘peace of
mind’ protection homeowners need with the cutting edge
design they want.
In January 2022, James Hardie appointed Dr. Joe Liu as
Chief Technology Officer. Dr. Liu joined James Hardie after
an impressive 26-year career with 3M Company, where he
held a variety of research & development, commercial and
international management roles of increasing responsibility
over the course of his career. His experience commercializing
innovations based on insights regarding the end consumer is
the perfect fit for our innovation strategy at James Hardie.
Pictured: James Hardie booth at the International Builders’ Show
in Florida in February 2022.
“As James Hardie transitions to become
a consumer brand, we are gaining
richer insights to better understand the
homeowners and the markets where
we can successfully commercialize
new products that provide more
design opportunities.
The Hardie™ Architectural Collection
is a significant example of this and
our mission to transform the way the
world builds.”
Dr. Joe Liu
Chief Technology Officer
30
Marketing Directly to HomeownersLetter to ShareholdersGlobal Results SummaryGlobal Capacity Expansion Pictured: Hardie™ Architectural Panel - Sculpted Clay.
Pictured: Hardie™ Architectural Panel - Sea Grass.
IN FEBRUARY 2022 WE LAUNCHED THE HARDIE®
ARCHIECTURAL COLLECTION
The Hardie™ Architectural Collection debuted with a brand-new
suite of premium Hardie™ Architectural Panels in distinctive
textures inspired by nature. James Hardie debuted these new
products in response to several megatrends in the industry,
including labor shortages, consumers looking to personalize
and modernize their homes, and demand for more sustainable
exteriors that resist damage from severe weather.
These products represent a significant proof point in our mission
to transform the way the world builds. Our intent is to continue
to evolve the Collection, and debut even more design-forward
exterior options, as we empower homeowners, architects, and
homebuilders with endless design possibilities.
External Cladding in U.S. New Single Family
Construction (%)
Addressable with current JHX Product Portfolio
Expansion Opportunity through innovation
51
49
The first generation of products in the Hardie™ Architectural
Collection offers a modern, integrated solution of fiber cement
panels and metal trims that deliver fresh looks with the
trusted protection and lasting beauty of Hardie™ fiber cement
technology. The first generation of Hardie™ Architectural Panels
in the Collection are:
Hardie™ Architectural Panel – Fine Sand
Hardie™ Architectural Panel – Fine Sand-Grooved
Hardie™ Architectural Panel – Mounded Sand
Hardie™ Architectural Panel – Sea Grass
Hardie™ Architectural Panel – Sculpted Clay
“The Hardie™ Architectural Collection is James
Hardie’s most significant expansion, to date, beyond
wood-look designs. This HardieTM Architectural
Collection will enable homeowners to reimagine the
exterior of their home and express their personal
style while enhancing the curb appeal of their home.
The Collection also provides homebuilders and
renovators installation efficiency compared to many
traditional building materials.”
Sean Gadd, North America President
2022 Annual Report
| 31
20-F FinancialsBoard of DirectorsManagement TeamGlobal InnovationEnvironmental, Social & GovernanceShareholder InformationGlobal Innovation Environmental, Social
& Governance
3232
Marketing Directly to HomeownersLetter to ShareholdersGlobal Results SummaryGlobal Capacity Expansion Environmental, Social
& Governance
2022 Annual Report
| 33
20-F FinancialsBoard of DirectorsManagement TeamGlobal InnovationEnvironmental, Social & GovernanceShareholder InformationEnvironmental, Social & Governance Building Sustainable Communities
In fiscal year 2022, James Hardie strengthened
its investment in ESG by building internal
capability and expertize, and by taking action
to deliver progress against our goals.
The Fiscal Year 2021 Sustainability Report can be found here, https://ir.jameshardie.com.
au/esg/sustainability. It covers our sustainability performance progress for fiscal year 2021
across our global operations and also highlights our future priorities. As our sustainability
program progresses, we are committed to aligning with best-practice reporting standards
and frameworks, including those set forth by Global Reporting Initiative (GRI), the
Sustainability Accounting Standards Board (SASB) and the Task Force on Climate-related
Financial Disclosures (TCFD).
Building on our credentials in ESG, in March of 2022, James Hardie appointed its first
Chief Sustainability Officer, Jill Kolling, Vice President ESG and Chief Sustainability
Officer. James Hardie looks forward to providing a detailed update on its ESG goals and
performance metrics in the Sustainability Report for fiscal year 2022 due to be published
in our second quarter of fiscal year 2023.
OUR PILLARS
COMMUNITIES
With a global mindset, we carefully manage
our business impact by employing, sourcing,
delivering, and giving locally.
ENVIRONMENT
We seek to minimize our impact on
the environment, and we prioritize the
management of water, waste, energy,
and emissions.
INNOVATION
We are committed to transforming new
technologies into high-quality and sustainable
products, solutions, and building practices.
ZERO HARM
With our Zero Harm culture, we seek
to ensure the safety of our products,
employees, partners, customers,
and communities.
“James Hardie is changing the
way the world builds by providing
homeowners with beautiful
building products that are
resource efficient and provide
the foundation for resilient and
sustainable communities. I am
very excited for our future and
the opportunity to further convert
our strategic vision into tangible
benefits for all of our stakeholders.
Our 5,000 employees around the
world are all committed to Building
Sustainable Communities.”
Jill Kolling - Vice President
ESG and Chief Sustainability Officer
34
Marketing Directly to HomeownersLetter to ShareholdersGlobal Results SummaryGlobal Capacity Expansion Progress in Fiscal Year 2022
BUILDING A BETTER
ENVIRONMENT
OUR ENERGY STRATEGY
James Hardie has a three-pronged long-term strategy to improve
energy efficiency and reduce emissions.
ELIMINATE THE USE OF COAL
IN OUR OPERATIONS
TRANSITION TO
RENEWABLE ENERGY
INVEST IN ENERGY-EFFICIENCY
PROJECTS
OUR WATER STRATEGY
We aim to maximize the efficient use of water, by conserving,
reusing, and recycling water.
IMPLEMENT ALTERNATIVE
TECHNOLOGIES TO REDUCE
CONSUMPTION
MANAGE CONSUMPTION
THROUGH RECYCLING
PROPER MANAGEMENT
OF EFFLUENT
2022 Annual Report
| 35
Goal: James Hardie is committed to improving its sustainability performance and proactively managing its environmental impact, in line with the goal to reduce our scope 1 and 2 greenhouse gas intensity by 40% by 2030.Strategy: Eliminate the use of coal in our operations.Action Taken: In fiscal year 2022, the last coal fired boiler in APAC was decommissioned and replaced by two new natural gas boilers at our Carole Park facility in Queensland, Australia. In taking this action, James Hardie is reducing greenhouse gas emissions of the boiler by over 40%, removed coal from APAC operations, reducing water consumption associated with the boiler, created a safer work environment for employees and the local community, while delivering improved output from the autoclaves.Goal: James Hardie is driving water efficiency in our operations and working to deliver on our commitment of recycling an additional 20 million cubic feet of water.Strategy: Implement alternative technologies to reduce consumption.Action Taken: We have multiple pilot projects currently being implemented at different plants across the globe to find the best solutions. Last year we piloted a new water project at our plant in Pulaski, Virginia USA. In fiscal year 2022, we implemented a full-scale installation, which resulted in an additional 2 million cubic feet of water being recycled.20-F FinancialsBoard of DirectorsManagement TeamGlobal InnovationEnvironmental, Social & GovernanceShareholder InformationEnvironmental, Social & Governance 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.
Financial Endnotes
Unless otherwise stated all items are in
U.S. currency and financial information
relates to fiscal year ended 31
March 2022.
NON-GAAP FINANCIAL INFORMATION
Pages 1-35 of this Annual Report contain
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 2022.
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
2022; changes in general economic,
political, governmental and business
conditions globally and in the countries
36
Marketing Directly to HomeownersLetter to ShareholdersGlobal Results SummaryGlobal Capacity Expansion 2022 Annual Report
| 37
20-F FinancialsBoard of DirectorsManagement TeamGlobal InnovationEnvironmental, Social & GovernanceShareholder InformationEnvironmental, Social & Governance 20-F Financials
Page references within the following 20-F Financials refer only
to this financial doccument.
38
Marketing Directly to HomeownersLetter to ShareholdersGlobal Results SummaryGlobal Capacity Expansion 2022 Annual Report
| 39
20-F FinancialsBoard of DirectorsManagement TeamGlobal InnovationEnvironmental, Social & GovernanceShareholder Information20-F Financials 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 2022
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: 445,348,933 shares of common stock at 31 March 2022
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
2022
ANNUAL REPORT
ON FORM 20-F
Table of Contents
James Hardie 2022 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
3
10
11
14
14
20
26
66
90
90
92
107
114
149
150
150
162
164
166
166
169
169
169
170
178
180
180
182
189
195
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James Hardie 2022 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
150-161
2-3; 13; 177
3-9
3; 10
11-13; 104-105
None
95-102
102-105
8
105-106
92-95
14-25
26-65
20-25; 66-89
166
54-57; 62-65
180-181
80
Not Applicable
107-148; 169
None
166-168
Not Applicable
166-167
Not Applicable
Not Applicable
Not Applicable
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James Hardie 2022 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 16. [Reserved]
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
Not Applicable
169
169
169
170-177
Not Applicable
Not Applicable
177
Not Applicable
178-179
Not Applicable
Not Applicable
Not Applicable
167-168
None
None
164-165
Not Applicable
84
81-82
149
None
None
None
66-89
12
Item 16I. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections
Not Applicable
PART III
Item 17. Financial Statements
Item 18. Financial Statements
Item 19. Exhibits
Not Applicable
107-148
189-194
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James Hardie 2022 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 and the
Philippines.
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 2022 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 corporate website is
www.jameshardie.com. 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, 1
Columbus Circle Floor 17S, New York, New York 10019, 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 benefit 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, which has plants in Germany,
the Netherlands and Spain.
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 2022 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 2022:
Business Overview
General Overview of Our Business
We are a world leader in the manufacture of fiber cement building materials. We market our fiber cement
products and systems under various brand names, such as HardiePlank®, HardiePanel®, HardieTrim®,
HardieBacker®, Hardie Architectural Collection®, 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.
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James Hardie 2022 Annual Report on Form 20-F
4
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
stucco, 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.
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.
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James Hardie 2022 Annual Report on Form 20-F
5
Significant New Products
In North America, new products released over the last three years include HardieBacker® boards with
Hydrodefense® Technology, an expanded ColorPlus® Technology offering
the Dream
CollectionTM and Statement CollectionTM, and higher ventilation VentedPlus® HardieSoffit® boards.
through
In Asia Pacific, we continue to expand our addressable market by extending our product portfolio in both
wood look and non-wood look exteriors. In 2021, we launched Hardie™ Fine Texture Cladding in
Australia to deliver the modern render look, which we now market as the Hardie Architectural Collection®.
Prior to this, the range of Linea® and Linea® Oblique 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 Hardie VL PlankTM, a
solution that provides interlocking looks for facades of single family and multi-family homes.
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 the locally based fiber cement manufacturer 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.
In Europe, our fiber cement building products are used in both residential and commercial building
applications in the form of external siding, soffits and internal tile underlayment for walls and floors.
Competition includes timber based products as well as other manufacturers of fiber cement.
Fiber Gypsum and Cement-Bonded Boards
Our European Fermacell brand products are sold into the residential repair and remodel, commercial and
residential new construction markets. The 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.
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James Hardie 2022 Annual Report on Form 20-F
6
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
have supply agreements and plans in place to navigate a challenging supply environment. 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.
Cement
Cement is acquired in bulk from local suppliers.
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 and Poland. 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.
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James Hardie 2022 Annual Report on Form 20-F
7
Recycled Paper
Recycled paper, utilized in the production of our fiber gypsum products in Europe, is generally sourced
locally by the various production plants in Europe.
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 May 2021, the Company launched 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.
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.
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James Hardie 2022 Annual Report on Form 20-F
8
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
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.
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James Hardie 2022 Annual Report on Form 20-F
9
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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James Hardie 2022 Annual Report on Form 20-F
10
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 2022.
Name of Company
James Hardie 117 Pty Ltd
James Hardie Australia Pty Ltd
James Hardie Building Products Inc.
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 North America, Inc
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
Australia
Australia
United States
Germany
Germany
Ireland
Ireland
Ireland
Ireland
Netherlands
Netherlands
United States
Ireland
Ireland
Bermuda
United States
Australia
Jurisdiction of
Tax Residence
Australia
Australia
United States
Germany
Germany
Ireland
Ireland
Ireland
Ireland
Netherlands
Netherlands
United States
Ireland
Ireland
Ireland
United States
Australia
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James Hardie 2022 Annual Report on Form 20-F
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
We own all the manufacturing facilities listed below which we operate 24/7 year round with the exception
of Siglingen.
Plant Location
United States fiber cement
Cleburne, Texas
Peru, Illinois
Plant City, Florida
Pulaski, Virginia
Reno, Nevada
Tacoma, Washington
Waxahachie, Texas
Fontana, California
Summerville, North Carolina
Prattville, Alabama
Greenfield plant
Total United States fiber cement
Asia Pacific fiber cement
Rosehill, New South Wales, Australia
Carole Park, Queensland, Australia
Greenfield - Melbourne, Victoria, Australia
Cabuyao City, Philippines
Total Asia Pacific fiber cement
Europe fiber gypsum
Münchehof, Germany
Orejo, Spain
Wijchen, the Netherlands
Siglingen, Germany3
Total Europe fiber gypsum
Total Europe fiber cement greenfield plant
Other
Calbe, Germany 2
Schraplau, Germany 2
31 March 2022
Nameplate Capacity
(mmsf)1
31 March 2026
Planned Future
Nameplate Capacity
(mmsf)1
666
560
600
600
300
500
360
250
190
600
—
4,626
180
260
—
172
612
441
275
273
154
1,143
—
41
N/A
666
560
600
600
300
500
360
250
190
1,200
600
5,826
180
319
240
172
911
441
527
273
154
1,395
300
41
N/A
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James Hardie 2022 Annual Report on Form 20-F
12
____________
The calculated annual nameplate capacity 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.
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.
For fiscal year 2022, capacity utilization at our Siglingen plant was 85%.
1
2
3
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 2027 (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 2022, 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 2022, 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 a license to make use of a mining facility in Schraplau, Germany as a
storage site. No active mining is being undertaken, or allowed with respect to the former owner FELS-
WERKE GmbH. We also have an investment in a natural gypsum mine in Spain.
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James Hardie 2022 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:
(US$ Millions)
North America Fiber Cement
Asia Pacific Fiber Cement
Europe Building Products
R&D and Corporate
Total Capital Expenditures
2022
2021
2020
$
$
188.4 $
46.9
18.7
3.8
257.8 $
76.8 $
18.3
13.5
2.1
110.7 $
137.1
32.2
23.5
1.0
193.8
Significant active capital expenditures
At 31 March 2022, the following significant capital expenditures remain in progress:
Approximate
Investment
(In millions)
Investment
to date
(US millions)
Project
Start Date
Expected
Commission
Date
US$
65.0
$
39.3
Q4 FY21
Project Description
Prattville Trim finishing capacity
Massachusetts ColorPlus® finishing
capacity
Prattville Greenfield expansion
(sheet machines #3 and #4)
Melbourne Greenfield expansion
US$
58.2
TBD
TBD
Orejo Brownfield expansion
€
110.0
Europe Greenfield expansion
TBD
Significant completed capital expenditure projects
14.1
25.2
6.2
0.7
0.2
Q1 FY22
Q3 FY22
Q4 FY22
Q3 FY22
Q3 FY22
FY23
FY23
FY24
FY26
FY26
FY26
Expected
Nameplate
Capacity
Increase
(mmsf)
N/A
N/A
600
240
252
300
The following is a list of significant capital expenditure projects completed in the three most recent fiscal
years:
Project Description
Tacoma Greenfield expansion
Carole Park Brownfield expansion
Prattville Greenfield expansion (sheet machines #1 and #2)
Summerville restart
Capital Divestitures
$
Total
Investment
(US Millions)
147.0
22.0
241.2
11.1
Fiscal Year of
Expenditure
FY17 - FY20
FY19 - FY21
FY18 - FY22
FY21 - FY22
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 2022 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 2022 are:
Harold Wiens BS
Interim Chief Executive Officer, Executive Director
Age 75
Harold Wiens was appointed Interim Chief Executive Officer ("CEO") of James
Hardie in January 2022. Prior to this Mr Wiens was serving as an independent non-
executive director since May 2020.
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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James Hardie 2022 Annual Report on Form 20-F
15
Jason Miele BA
Chief Financial Officer
Age 45
Jason Miele was appointed as Chief Financial Officer (“CFO”) in February 2020. As
CFO he oversees the Company’s overall financial activities, including accounting,
tax,
financial
operations, information systems, and investor and media relations.
treasury, performance and competitor analysis,
internal audit,
Mr Miele has over 15 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.
Joe Liu BS, PhD
Chief Technology Officer
Age 59
Dr Joe Liu joined James Hardie as Senior Vice President and General Manager,
Asia Pacific, in December 2021 and was appointed Chief Technology Officer in
January 2022.
Before joining James Hardie, Dr Liu concluded an impressive 26-year career with
3M Company, where he held a variety of R&D, Commercial and International
Management roles of increasing responsibility over the course of his career. Early
assignments in technical roles across multiple 3M product lines led to progression
to Vice President R&D of 3M International Operations, Vice President & Managing
Director of 3M Southeast Asia Region, to Dr Liu's most recent role of Senior Vice
President, R&D and Commercialization of 3M Global Consumer Business Group.
Dr Liu utilizes his vast and deep experiences across R&D, Commercial and General Management to
help drive the commercialization of innovative new products.
Dr Liu has a Bachelor of Science and a PhD in Thermal Energy and Power Engineering from Xi’an
Jiaotong University in China as well as an additional PhD in Mechanics from the University of
Minnesota.
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James Hardie 2022 Annual Report on Form 20-F
16
James Johnson II BA, MBA
Chief Information Officer
Age 50
James Johnson II joined James Hardie as Chief Information Officer (“CIO”) in
December 2021. Mr Johnson is responsible for all aspects of information
technology and cyber security globally. Mr Johnson and his team will drive a
focused Information Technology vision and strategy which integrates with, and
helps enable, the JHX global strategic plan.
Mr Johnson brings over 25 years of relevant and progressive IT experience,
including 15 years as CIO for businesses in a variety of industries, including
chemicals and metals industries. Most recently, Mr Johnson held the role of CIO at
Carpenter Technology since 2013. Prior to joining Carpenter Technology, Mr
Johnson held previous IT roles with Honeywell International, Performance Fibers
and Trinseo. Mr Johnson has a proven track record of developing effective, leading-edge technology
solutions that create business value.
Mr Johnson holds a Bachelor of Arts degree in Economics from the University of Virginia and a Master
of Business Administration degree with an emphasis in Marketing and Strategic Management from the
University of Maryland.
Joe Blasko BSFS, JD
General Counsel, Chief Compliance Officer and Company Secretary
Age 55
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, corporate security 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.
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James Hardie 2022 Annual Report on Form 20-F
17
Sean Gadd BEng, MBA
President, North America
Age 49
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. In January 2022, Mr Gadd was appointed President,
North America, with responsibility for running the companies’ North America activities.
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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James Hardie 2022 Annual Report on Form 20-F
18
Ryan Kilcullen BSc, MS
Executive Vice President, Global Operations
Age 41
Ryan Kilcullen joined James Hardie in 2007 as a PcI/PdI Engineer. Since then, Mr
Kilcullen has worked for the Company in various manufacturing and supply chain
roles including Process Engineer, Production Manager, and Supply Chain Engineer.
In 2012, Mr Kilcullen 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, Mr Kilcullen 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, Mr Kilcullen was appointed Vice
President – Central Operations, responsible for the Company’s Supply Chain
Operations and Centralized Manufacturing functions.
In August 2016, Mr Kilcullen was appointed Executive Vice President – North America Operations,
responsible for the Company's Supply chain, Manufacturing Engineering and Environmental, Health &
Safety Operations. In November 2020, Mr Kilcullen was appointed Senior Vice President – North
America Supply Chain Operations with responsibility for the Company’s production planning,
procurement and logistics operations. In January 2022, he was appointed Executive Vice President,
Global Operations in this newly developed role. Mr Kilcullen's experience in the areas of supply chain
operations, including engineering, construction and lean/HMOS will transition regional functions into
world class, seamlessly integrated and globally focused functions.
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 43
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 Dr Brinkmann 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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James Hardie 2022 Annual Report on Form 20-F
19
John Arneil, BBUS, MBA
General Manager, Asia Pacific
Age 42
John Arneil joined James Hardie as a graduate in 2002 and has gained extensive
business and leadership experience having worked across James Hardie’s
European, North American and Asia Pacific businesses in a variety of commercial
and operational roles.
This has included time as Country Manager UK and Ireland, Country Manager
Canada, Sales and Marketing Director for Australia and most recently Country
Manager for Australia and New Zealand where Mr Arneil was responsible for all
manufacturing and market activities in this region.
This experience has given Mr Arneil exposure to multiple markets in different phases
of business maturity and complexity enabling him to fully understand value creation from a consumer
and customer perspective and how this translates end-to-end through Innovation, manufacturing,
commercialization and supply chain. This coupled with deep industry relationships has enabled Mr
Arneil to deliver record results for the Australian and New Zealand businesses year-over-year while
running these business units.
Mr Arneil was appointed to General Manger, Asia Pacific in January 2022 where he is responsible for
running the company’s Asia Pacific activities which are headquartered in Sydney, Australia
Mr Arneil has a Bachelor of Business Management from The University of Queensland in Australia and
a Masters of Business Administration from The University of Leicester in the UK.
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James Hardie 2022 Annual Report on Form 20-F
20
Board of Directors
James Hardie’s Board of Directors (the "Board") 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 2022 are:
Michael Hammes BS, MBA
Age 80
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 Executive Chairman in January 2022.
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
Inc.
Corporation (1998-2000), Chairman and CEO of Coleman Company,
(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: None.
Other: Resident of the United States.
Last elected: August 2021
Term expires: August 2024
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James Hardie 2022 Annual Report on Form 20-F
21
Persio V. Lisboa BS
Age 56
Persio Lisboa was appointed as an independent non-executive director of James
Hardie in February 2018. He is Chairman of the Remuneration Committee and a
member of the Nominating and Governance Committee.
Experience: Mr Lisboa has extensive senior executive experience. He recently
served as President and Chief Executive Officer of Navistar, Inc. (Navistar), a
leading manufacturer of commercial trucks, buses, defense vehicles and engines,
a position he held from July 2020 to September 2021, when he decided to retire.
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 2021
Term expires: August 2024
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James Hardie 2022 Annual Report on Form 20-F
22
Anne Lloyd, BS, CPA
Age 60
Anne Lloyd was appointed as an independent non-executive director of James
Hardie in November 2018. During fiscal year 2020, Ms Lloyd served as a member of
the Audit Committee until 26 August 2019, at which time she stepped down from
such position concurrent with her appointment as Interim CFO. Effective 26 August
2019, Ms Lloyd was appointed as Interim CFO, a position she held until 25 February
2020. Effective 1 June 2020, Ms Lloyd became a member of the Audit Committee
and was appointed Chair of the Audit Committee, effective 8 August 2020. Ms Lloyd
also currently serves as Lead Independent Director and is 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 2019); Director of Highwoods Properties, Inc. (since 2018). Former - Director of Terra Nitrogen
Company, L.P. (2009-2018).
Other: Director of New Frontier Materials LLC (since November 2021); resident of the United States.
Last elected: August 2019
Term expires: August 2022
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James Hardie 2022 Annual Report on Form 20-F
23
Rada Rodriguez MSc
Age 63
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 and the Remuneration 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: None.
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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James Hardie 2022 Annual Report on Form 20-F
24
Suzanne B Rowland MS, BS
Age 60
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 and the
Remuneration Committee.
Experience: Ms Rowland has extensive senior executive experience leading
complex global 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
driving focused profitable growth.
Prior to this, Ms Rowland served in separate Vice President and General Manager roles in Tyco
International plc between 2009 and 2015 where she led significant improvement in customer
relationships, market position, and operational execution. Before joining Tyco, Ms Rowland worked for
Rohm and Haas Company for over twenty years, where she held multiple senior executive roles
including leading the global Adhesives division and Procurement & Logistics for the company..
Directorships of listed companies in the past five years: Current – Director of Sealed Air Corporation
(since 2020); Director of L.B. Foster Co. (since 2008). Former - Director of SPX Flow, Inc. (2018-2022).
Other: Resident of the United States.
Last elected: August 2021
Term expires: August 2024
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James Hardie 2022 Annual Report on Form 20-F
25
Nigel Stein CA, BSc
Age 66
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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James Hardie 2022 Annual Report on Form 20-F
26
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 2022) (“Senior Executive Officers”) in fiscal year
2022, and also includes an outline of the key changes for fiscal year 2023. Further details of these
changes are set out in the 2022 Notice of Annual General Meeting (“AGM”).
For fiscal year 2022, our senior executive officers are:
•
Jason Miele, Chief Financial Officer;
• Sean Gadd, President, North America;
•
• Ryan Kilcullen, Executive Vice President, Global Operations; and
• Dr Jack Truong, Former Chief Executive Officer (through 6 January 2022).
Joe Blasko, Chief Legal and Compliance Officer and Corporate Secretary;
As previously announced, on 6 January 2022, Dr Jack Truong was terminated as CEO and Executive
Director and Mr Harold Wiens was appointed as interim CEO. As compensation for his service as interim
CEO, Mr Wiens receives a temporary exertion fee of US$130,000 per month for the period he is in the
interim CEO role. The exertion fee is in addition to his regular board fees as a director. Reasonable
expenses associated with relocation and other costs incurred during this period because of undertaking
this role are also compensated. The compensation Mr Wiens receives for his service as our interim CEO
does not reflect our normal remuneration practices with respect to our executive compensation program
due to his service as CEO being interim in nature. As such, Mr Wiens does not participate in the STI and
LTI plans and programs that are discussed throughout the remainder of this Remuneration Report.
This Remuneration Report has been adopted by our Board on the recommendation of the Remuneration
Committee.
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James Hardie 2022 Annual Report on Form 20-F
27
EXECUTIVE SUMMARY
Fiscal Year 2022 Business Highlights1
Our operating results for fiscal year 2022 reflected strong and disciplined financial performance,
highlighted by adjusted net income of US$621 million and adjusted earnings before interest and taxes
(“EBIT”) of US$816 million, an increase of 36% and 30%, respectively, compared to fiscal year 2021. In
addition, we achieved net sales of US$3.6 billion, an increase of 24% compared to fiscal year 2021, and
US$1.39 adjusted diluted earnings per share.
The following graphs show our performance for key financial measures during fiscal year 2022, 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 2022 Compensation Highlights
Our fiscal year 2022 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 2022:
•
The core plan design for our Short-Term Incentive program in fiscal year 2022, which is comprised
of both the Company Performance Plan ("CP Plan") and 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. In the unprecedented and unpredictable
market conditions related to the COVID-19 pandemic, we maintained the simplified structure and
plan metrics we established in Fiscal Year 2021, which strengthened the connection between
consistent revenue growth and strong returns. A complete description of the CP Plan for fiscal
year 2022 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 2022.
The LTI plan remains similar to the fiscal year 2021 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 2022 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 2022:
Summary of Fiscal Year 2022 Senior Executive Officer Target Compensation
Senior Executive
Officer
FY2022 Annual
Base Salary (US$)
FY2022 STI Target
Value (US$)
FY2022 LTI Target
Value (US$)
J Miele
S Gadd
J Blasko
R Kilcullen
J Truong
500,000
577,830
471,398
380,544
300,000
346,698
282,839
228,326
600,000
800,000
500,000
400,000
1,000,000
1,250,000
5,750,000
FY2022 Total
Target
Compensation
(US$)
1,400,000
1,724,528
1,254,237
1,008,870
8,000,000
In January 2022, Messrs Miele, Gadd and Kilcullen received base salary and STI target increases as
noted under on page 35.
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James Hardie 2022 Annual Report on Form 20-F
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Results of 2021 Remuneration Report Vote
In August 2021, our shareholders were asked to cast a non-binding advisory vote on our remuneration
report for the fiscal year ended 31 March 2021. 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 2021 Annual General Meeting, our shareholders approved our remuneration report, with 96.7% 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 largest operating 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 creating 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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James Hardie 2022 Annual Report on Form 20-F
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Relative Weightings of Fixed and Variable Remuneration
The charts below detail the relative weightings of fixed versus variable remuneration for our former CEO
and other Senior Executive Officers for fiscal year 2022. 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.
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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)
incentive compensation and equity-based
administering and making recommendations on our
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
Remuneration Committee are Persio Lisboa (Chairman), Rada Rodriguez and Suzanne Rowland, 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 on our Investor Relations website (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 88% of our
CEO’s total target compensation being performance-based
“at risk” compensation and an average of approximately
64% 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 North
America 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
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James Hardie 2022 Annual Report on Form 20-F
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Remuneration Advisers
As permitted by the Remuneration Committee Charter, the Remuneration Committee re-evaluated its
independent advisors and appointed FW Cook (in the US) and Guerdon Associates (in Australia) as its
independent advisers for matters regarding remuneration for fiscal year 2022. The Remuneration
Committee reviews the appointment of its advisers each year. Both FW Cook and Guerdon Associates
provided the Remuneration Committee with written certification during fiscal year 2022 to support their
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 appointing FW Cook and re-
appointing Guerdon Associates for fiscal year 2022.
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. The Remuneration Committee
believes that US based companies are a more appropriate peer group than Australian based companies,
as they are exposed to the same macroeconomic factors in the US housing market as those we face.
For fiscal year 2022, the factors used to review and define the Peer Group included:
• Size (revenue and market cap);
Industry (builders and suppliers);
•
• Exposure to the US housing market;
• Operates and services global markets; and
•
Focus on innovation and intellectual property as a differentiating factor for the business.
As result, Apogee Enterprises, Inc., Eagle Materials, Inc., Mueller Water Products, Inc., and Quanex
Building Products Corporation were eliminated and A.O. Smith Corporation, Builders FirstSource, Inc.,
NVR, Inc., Newel Brands, Inc., The Toro Company and The Toll Brothers were added to the peer group.
Set forth below are the names of the 23 companies comprising the Peer Group, which was used to
benchmark the remuneration of our Senior Executive Officers in fiscal year 2022.
A.O. Smith Corporation
Lennox International, Inc
Simpson Manufacturing Co., Inc
Acuity Brands, Inc
Louisiana-Pacific Corp
The Toro Company
American Woodmark Corp
Martin Marietta Materials, Inc
Toll Brothers, Inc.
Armstrong World Indus, Inc
Masco Corporation
Trex Co., Inc
Builders FirstSource, Inc.
Mohawk Industries, Inc
Valmont Industries, Inc
Carlisle Companies Incorporated
NVR, Inc.
Vulcan Materials Co
Cornerstone Building Brands, Inc.
Newell Brands, Inc.
Watsco, Inc
Fortune Brands Home & Security
Owens Corning
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Performance Linkage with Remuneration Policy
During its annual review, the Remuneration Committee assessed our performance in fiscal year 2022
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 2022, during a continuing 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 2022; and (ii) when taken together with performance in fiscal years 2020 and 2021, at approximately
the 90th percentile of our Peer Group TSR performance is 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
2020-2022.
More details about this assessment are set out below in this Remuneration Report.
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James Hardie 2022 Annual Report on Form 20-F
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DESCRIPTION OF 2022 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 2022, 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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James Hardie 2022 Annual Report on Form 20-F
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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 2022, 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 2022, 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. In January
2022, Mr Gadd received a STI target increase to 70% of base salary due to his promotion to President,
North America, Mr Kilcullen received a STI target increase to 65% of base salary due to his promotion to
EVP, Global Operations and Mr Miele received a STI target increase to 70% to bring him closer to the
median of the peer group.
CP Plan
For fiscal year 2022, the core plan design was the same as prior years. We continue to measure both
Growth and Returns when assessing Company performance and shareholder value creation.
For fiscal year 2022, the metrics for all regions (North America, Asia Pacific and Europe) are the same as
fiscal year 2021 and 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 is based on the metrics for North
America and the Global 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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James Hardie 2022 Annual Report on Form 20-F
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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 2022
Our CP Plan results and the subsequent STI payouts for fiscal year 2022 were significantly above target
as a result of:
•
•
•
The North America 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 and New Zealand and significantly above 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 2022 were at or above target based on each Senior Executive Officer’s achievement of fiscal
year 2022 one-year individual performance and core organizational values and leadership behavior
goals.
For fiscal year 2022, 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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James Hardie 2022 Annual Report on Form 20-F
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Awards issued under the LTI are issued pursuant to the terms of the LTIP. During fiscal year 2022, our
Senior Executive Officers were granted the following awards under the LTIP:
J Miele
S Gadd
J Blasko
R Kilcullen
J Truong
ROCE RSUs
TSR RSUs
Scorecard LTI
Units
8,594
11,459
7,162
5,729
13,619
18,158
11,349
9,079
25,782
34,376
21,485
17,188
82,358
130,513
247,075
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 2022-2024)
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 2019, 2020 and 2021 was 33.0%.
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The hurdles for ROCE RSUs granted in fiscal year 2022 (for performance in fiscal years 2022 to 2024)
were increased from fiscal year 2021 as shown in the table below:
Fiscal Years 2022-2024
ROCE
Amount of Target
to Vest
< 35.0%
≥ 35.0%, but < 37.0%
≥ 37.0%, but < 38.5%
≥ 38.5%, but < 40.0%
> 40.0%
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 2022 (for Fiscal Years 2020-2022)
As a component of the fiscal year 2020 LTI Plan, we granted ROCE RSUs in August 2019. 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
2020-2022 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 2020-2022 of 40.9% and negative discretion applied
to the results, 1.25x target of the ROCE RSUs granted will vest on 17 August 2022.
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Relative TSR RSUs (25% of target LTI for Fiscal Years 2022-2024)
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 2022 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 2022, 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 2022
TSR RSUs Vested for Fiscal Years 2019-2021
As part of the fiscal year 2019 LTI Plan, in August 2018 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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James Hardie 2022 Annual Report on Form 20-F
40
In August 2021, the first and only test of Relative TSR performance was completed, resulting in our TSR
performance at the 95.0 percentile of the Peer Group in place at that time. As a result, 2.0x of target
outstanding Relative TSR RSUs vested.
Scorecard LTI (50% of target LTI for Fiscal Years 2022-2024)
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.
Further details related to the Scorecard for fiscal year 2022, 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 included in our Annual Report filed in May 2021. An
assessment of our Scorecard performance for fiscal years 2020-2022 is set out below. We will provide
an explanation of the final assessment of performance under the Scorecard for fiscal years 2022-2024 at
the conclusion of fiscal year 2024.
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James Hardie 2022 Annual Report on Form 20-F
41
Scorecard LTI Vesting in Fiscal Year 2022 (for Fiscal Years 2020-2022)
After fiscal year 2022, the Remuneration Committee reviewed our performance over fiscal years
2020-2022 against the Scorecard objectives set forth in fiscal year 2020, 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 with an average weighted target of 1.8x.
Performance Measure/Rationale
PDG (Primary Demand Growth)
Performance Metric/Results
Goal: APAC: 1% - 6%; NA: 2% -8 %
Organic Revenue Growth
Goal: Europe: 5% - 12%
Result: APAC: 1.5%; NA: 5.1%
Result: 10%
Board Assessment for the
Three-year Period
Performance exceeded
expectations
Performance exceeded
expectations
EBIT Margin
Goal: APAC: 20% - 25%;
Europe: 11% - 15%; NA 21% - 26%
Performance exceeded
expectations
Lean - Cumulative over 3 years
Goal: APAC: USD 19MM; Europe: USD
20MM; USD NA 100MM
Performance exceeded
expectations
Result: APAC: 26.4%; Europe: 10.4%
NA: 21.6%
Zero Harm
The safety of our employees is an
essential objective of the Company
Performance met expectations
Result: APAC: USD 34MM; Europe USD
31MM; NA: USD 150MM
Goal:
APAC: Safe Start Program; Driver/Fleet
Safety Program; Days Away, Restricted or
Transferred ("DART") rate: 0.17
Europe: Replicate systems from NA and
APAC; Safe Start Implementation
NA: 5S World Class Facilities; Energy
Control Program; DART rate: 0.75
Result: APAC and Europe completed their
Safe Start and Driver/Fleet Safety programs.
APAC DART rate is 0.17. NA completed
their 5S program and is continuing to work
on the Energy Control Program. DART rate
was at 0.75
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James Hardie 2022 Annual Report on Form 20-F
42
Board Assessment for the
Three-year Period
Performance exceeded
expectations
Performance exceeded
expectations
Performance met expectations
Performance Measure/Rationale
Innovation
Performance Metric/Results
Commercial-in-confidence metrics for
products and process efficiencies
Environment, Social & Governance
People and Culture
.
Goal: Establish team to globally drive ESG
reporting improvement; develop ESG
reporting and showing a clear plan on how to
address the Task Force For Climate Change
Disclosure; show improvement in all 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
Result: Achieved all ESG deliverables and
received significant positive feedback from
proxy firms and investors. Importantly, have
significant momentum to further integrate
ESG into the business
Goal: 3-Year average turnover:
APAC: 12%; Europe 8%; NA: 15%
Develop Leadership behaviors; and Hire key
executive Roles
Result: Turnover: APAC: 11%; Europe: 8%;
NA: 17%
Leadership behaviors were developed and
rolled out to employees. Key executive hires
were offered. NA turnover was higher than
the 3-year goal due to higher turnover in
2021 due to impact of COVID on the job
market
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James Hardie 2022 Annual Report on Form 20-F
43
CHANGES TO REMUNERATION FOR FISCAL YEAR 2023
Remuneration for Fiscal Year 2023
During our February and May 2022 meetings, 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 2023.
Other Senior Executive Officer Compensation
Base pay, target STI and LTI increases in fiscal year 2022 for the CFO and other Senior Executive
Officers are as follows:
Name
J Miele
S Gadd
J Blasko
R Kilcullen
Base Salary
Target STI
LTI Target
Fiscal Year
2022 (US$)
Fiscal Year
2023 (US$)
Fiscal Year
2022 (US$)
Fiscal Year
2023 (US$)
Fiscal Year
2022 (US$)
Fiscal Year
2023 (US$)
500,000
577,830
471,398
380,544
550,000
650,000
471,398
435,000
60%
60%
60%
60%
70%
70%
60%
65%
600,000
800,000
500,000
400,000
865,000
1,000,000
500,000
600,000
Mr Miele is receiving a 10% market increase in his base salary to bring base salary to slightly above the
25th percentile off the peer group of other CFOs. In addition, Mr Miele is receiving an increase in his STI
and LTI targets since he is currently below the 25th percentile of the peer group. Mr Gadd received a
base salary, STI and LTI target increase due to his promotion in January 2022 to President, North
America. Mr Kilcullen's base salary, STI and LTI targets are also being increased due to his promotion to
EVP, Global Operations; otherwise, there are no other target LTI changes for the Senior Executive
Officers for fiscal year 2023. 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 2023, the plan design will continue to be the same as fiscal year 2022. 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 fiscal year 2022, 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.
For fiscal year 2023, Mr Gadd will continue to be tied to the North America multiple. For executives with
global responsibility (Messrs Miele, Kilcullen and Blasko), their bonus 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 (STI Plans) for fiscal year 2023.
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James Hardie 2022 Annual Report on Form 20-F
44
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 2023 LTI Plan is consistent with the plan for fiscal year 2022
with updates to ROCE target measures and the Scorecard objectives.
The 2022 Notice of AGM will contain further details on the Relative TSR RSU and ROCE RSU grants for
fiscal year 2023.
For fiscal year 2023, the Remuneration Committee has set the following eight Scorecard goals for each
region (for the performance period in fiscal years 2023 to 2025) to ensure alignment with our strategic
priorities:
Zero Harm
Organic revenue
growth
EBIT Margin
Supply Ahead of
Demand
APAC
Europe
North America
• Empower all employees to
be Zero Harm Leaders
• Develop and implement
SAFE SYSTEMS to
reduce risks and enable
SAFE PEOPLE and SAFE
PLACES
• DART rate:
• FY23=0.08; FY24= 0.08;
• Empower all employees to
be Zero Harm Leaders
• Develop and implement
SAFE SYSTEMS to reduce
risks and enable SAFE
PEOPLE and SAFE
PLACES
• DART Rate: .
• FY23=0.47; FY24= 0.45;
• Empower all employees to
be Zero Harm Leaders
• Develop and implement
SAFE SYSTEMS to reduce
risks and enable SAFE
PEOPLE and SAFE
PLACES
• DART rate:
• FY23=0.79; FY24= 0.76;
FY25=0.07
FY25=0.43
FY25=0.73
11%+
27% - 32%
6%+
13% - 18%
11%+
27% - 32%
• LEAN (Net Hours:
149/150/151 RTY:
92.4%/92.7%/92.9%)
• EBIT margin expansion
through continued LEAN
savings
• Enable additional capacity
through continued LEAN
performance
improvements
Capacity Expansion
• FY23: Execute timely
ramp up of brownfield
expansion
• FY24 - FY26: Develop,
build and construct
greenfield facility with
commissioning in late
FY26
• LEAN (Net Hours:
146/148/150)
• EBIT margin expansion
through continued LEAN
savings
• Enable additional capacity
through continued LEAN
performance improvements
• LEAN (Net Hours:
146/148/150 RTY:
94.1%/94.4%/94.7%)
• EBIT margin expansion
through continued LEAN
savings
• Enable additional capacity
through continued LEAN
performance improvements
Capacity Expansion
• FY24 - FY25: Complete
Capacity Expansion
brownfield expansion with
commissioning in late
FY25
• FY23: Execute timely ramp
up of two additional sheet
machines
• FY24 - FY26: Develop,
• FY23 - FY24: Develop,
build and construct
greenfield facility with
commissioning in FY27
build and construct two-line
brownfield facility with
commissioning in late FY24
• FY24 - FY26: Develop,
build and construct
greenfield facility with
commissioning in late FY26
Innovation
• 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
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James Hardie 2022 Annual Report on Form 20-F
45
APAC
Europe
North America
High Value Product
Mix
Innovation Volume as Percent
of Mix: Annual improvement
with FY25 at 8+%
Fiber Cement Revenue Growth:
25%+
ColorPlus Volume Growth:
15+%
Innovation Volume as Percent of
Mix: Annual improvement with
FY25 at 4+%
People & Culture
• Turnover: <10%
• Turnover: <8%
• Turnover: <14%
Environment, Social &
Governance ("ESG")
•
•
•
Uphold and/or emulate the Company’s Code of Conduct, Leadership Behaviors and
Values, including Operate with Respect
Attract, develop and retain great talent, increasing proportion of diverse talent in
leadership roles
Advance Talent Management capabilities and processes; developing and maintaining
clear succession plans for key leadership roles
FY23:
•
•
•
FY24:
•
•
•
FY25:
•
•
•
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
Evolve social impact strategy and goals.
Develop strategy for reduction of Scope 3 (value chain) greenhouse gas emissions.
ESG efforts support consumer brand strategy
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James Hardie 2022 Annual Report on Form 20-F
46
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 2022, LTI grants made to Senior Executive Officers 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 2023, 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 2022 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 2022, 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 fiscal year 2022 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 2022. There are no loans
outstanding to Senior Executive Officers.
Employment and Severance Arrangements
During fiscal year 2022, 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 employment agreement, which was in effect prior to
his termination:
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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James Hardie 2022 Annual Report on Form 20-F
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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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James Hardie 2022 Annual Report on Form 20-F
49
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:
• 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;
• 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
• 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 2022 Annual Report on Form 20-F
50
REMUNERATION PAID TO SENIOR EXECUTIVE OFFICERS
Total Remuneration for Senior Executive Officers
Details of the remuneration for Senior Executive Officers in fiscal years 2022, 2021 and 2020 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 Miele
TOTAL
Relocation
Allowances,
and Other
Nonrecurring6
Fiscal Year 2022
487,000
1,462,785
42,480
17,400
1,291,915
148,071
—
3,449,651
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 2022
597,487
1,403,340
Fiscal year 2021
573,299
901,415
Fiscal Year 2020
558,038
747,252
J Blasko
Fiscal Year 2022
468,302
921,239
Fiscal year 2021
457,472
717,444
Fiscal Year 2020
447,347
489,117
R Kilcullen
Fiscal Year 2022
398,627
650,278
Fiscal year 2021
379,030
593,649
Fiscal Year 2020
371,038
476,898
J Truong7
Fiscal Year 2022
802,664
—
Fiscal year 2021
873,077
3,037,500
Fiscal Year 2020
800,000
2,160,000
TOTAL
62,027
38,808
35,249
54,350
71,350
54,088
45,927
33,788
26,046
57,406
73,377
75,038
17,400
2,443,365
503,632
17,100
1,438,684
3,082,202
—
5,027,251
—
6,051,508
18,230
1,347,237
(29,332)
—
2,676,674
19,913
17,100
714,513
193,341
609,857
1,129,200
—
2,371,658
—
3,002,423
17,012
568,651
11,022
—
1,587,237
18,922
1,232,884
205,533
12,453
635,010
1,132,357
—
2,552,171
—
2,786,287
18,022
552,189
(11,661)
—
1,432,532
20,381
—
—
17,100
5,740,243
9,973,788
—
880,451
— 19,715,085
17,366
3,329,423
(316,615)
3,051
6,068,263
Fiscal Year 2022
2,754,080
4,437,642
262,190
94,016
5,682,677
1,050,577
— 14,281,182
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
Base pay for fiscal years 2022, 2021 and 2020 includes salary paid to Senior Executive Officers for the 26 bi-weekly paychecks received
during the fiscal years.
For further details on STI awards payable for fiscal year 2022, see “Incentive Arrangements” above in this Remuneration section.
Amounts reflect actual STI awards to be paid in June 2022 and paid in June 2021 and 2020, for fiscal years 2022, 2021 and 2020,
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
Table of Contents
James Hardie 2022 Annual Report on Form 20-F
51
5
6
7
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 2022, 2021 and 2020 as well as adjustments to
performance ratings based on review by Executive Management and the Board of Directors. During fiscal year 2022, there was a 0.3%
increase in our share price from US$30.28 to US$30.38. During fiscal year 2021, there was a 164.7% increase in our share price from
US$11.44 to US$30.28.
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.
For Dr Truong, amounts reflect compensation received during fiscal year 2022 up though his date of termination. Dr Truong's base pay
includes US$157,729 in fiscal year 2022, which a portion is allocated for tax purposes to his services on the Company’s Board. As a
result of his termination, all previously issued LTI awards granted in fiscal year 2022 have lapsed resulting in a negative Ongoing
Expense of US$6,211,796 and a Mark to Market change of US$1,748,274.
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 fiscal years 2022-2024 equity awards that were granted to each executive.
Table of Contents
James Hardie 2022 Annual Report on Form 20-F
52
Name
Base Pay1
Bonus2
J Miele
Stock
Awards3
Options
Awards4
Non-Equity
Incentive Plan
Compensation5
Fiscal year 2022
487,000
600,000
300,003
Fiscal year 2021
411,692
Fiscal Year 2020
292,840
—
—
225,005
124,997
S Gadd
Fiscal year 2022
597,487
400,000
400,003
Fiscal year 2021
573,299
Fiscal Year 2020
558,038
—
—
399,998
399,999
J Blasko
Fiscal year 2022
468,302
200,000
250,006
Fiscal year 2021
457,472
Fiscal Year 2020
447,347
R Kilcullen
Fiscal year 2022
398,627
Fiscal year 2021
379,030
Fiscal Year 2020
371,038
J Truong7
—
—
—
—
—
249,993
250,000
199,993
199,999
200,003
Fiscal year 2022
802,664
—
2,874,989
Fiscal year 2021
873,077
—
1,737,499
Fiscal Year 2020
800,000
—
1,049,998
TOTAL
Fiscal Year 2022
2,754,080
1,200,000
4,024,994
Fiscal Year 2021
2,694,570
—
2,812,494
Fiscal Year 2020
2,469,263
—
2,024,997
____________
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,289,402
795,901
312,260
2,349,680
2,095,596
933,695
1,121,185
1,056,239
618,197
1,076,895
985,476
548,614
8,071,587
5,983,696
2,160,000
13,908,749
10,916,908
4,572,766
Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
All Other
Compensation6
Total
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
59,880
2,736,285
412,313
1,844,911
439,550
1,169,647
79,427
3,826,597
55,907
3,124,800
53,479
1,945,211
74,263
2,113,756
88,450
1,852,154
71,101
1,386,645
64,849
1,740,364
46,241
1,610,746
44,068
1,163,723
77,787 11,827,027
90,477
8,684,749
95,455
4,105,453
356,206 22,244,029
693,388 17,117,360
703,653
9,770,679
1
2
3
4
5
6
7
Base pay for fiscal years 2022, 2021 and 2020 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. Messrs Miele, Gadd and
Blasko received special bonuses for their work due to the departure of the CEO in the amounts of US$600,000, US$400,000 and
US$200,000, respectively.
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 2022 is US$22.03 and ROCE RSU 20-day average share price of US$34.91.
We do not grant stock options to executives.
For further details on STI awards paid for fiscal year 2022, see “Incentive Arrangements” above in this Remuneration section. Amounts
reflect actual STI awards to be paid in June 2022 and paid in June 2021 and 2020, for fiscal years 2022, 2021 and 2020, respectively.
In addition, the LTI Scorecard cash payouts are included that were paid in August 2021, 2020 and 2019.
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$157,729 in fiscal year 2022, which a portion is allocated for tax purposes to his services on the
Company’s Board.
Table of Contents
James Hardie 2022 Annual Report on Form 20-F
53
Variable Remuneration Payable in Future Years
Details of the accounting cost of the variable remuneration for fiscal year 2022 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)
FY2022
FY2023
FY2024
FY2025
TOTAL
70,367
126,521
126,868
48,182
371,938
93,822
168,695
169,157
64,243
495,917
58,636
105,429
105,718
40,150
309,933
46,911
84,347
84,579
32,121
247,958
—
—
—
—
—
269,736
484,992
486,322
184,696
1,425,746
ROCE RSUs2
(US dollars)
FY2022
FY2023
FY2024
FY2025
TOTAL
33,423
60,095
60,260
22,886
176,664
44,564
80,127
80,347
30,514
235,552
27,850
50,075
50,212
19,069
147,206
22,276
40,054
40,164
15,253
117,747
—
—
—
—
—
128,113
230,351
230,983
87,722
677,169
Relative TSR RSUs3
(US dollars)
FY2022
FY2023
FY2024
FY2025
TOTAL
64,775
116,467
116,786
44,353
342,381
86,363
155,283
155,709
59,135
456,490
53,978
97,054
97,320
36,960
285,312
43,182
77,642
77,854
29,568
228,246
—
—
—
—
—
248,298
446,446
447,669
170,016
1,312,429
J Miele
S Gadd
J Blasko
R Kilcullen
J Truong
J Miele
S Gadd
J Blasko
R Kilcullen
J Truong
J Miele
S Gadd
J Blasko
R Kilcullen
J Truong
____________
1
2
Represents annual SG&A expense for Scorecard LTI granted in fiscal year 2022. 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 2024 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 2022. The fair value of each RSU is adjusted for
changes in JHI plc’s common stock price at each balance sheet date until August 2024 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.
Table of Contents
James Hardie 2022 Annual Report on Form 20-F
54
3
Represents annual SG&A expense for the Relative TSR RSUs granted in fiscal 2022 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 2022.
Options
As of 30 April 2022, no Senior Executive Officers held stock options.
Table of Contents
James Hardie 2022 Annual Report on Form 20-F
55
Restricted Stock Units
Name
J Miele
S Gadd
J Blasko
R Kilcullen
Grant
Date
17-Aug-183
17-Aug-184
17-Aug-193
17-Aug-194
25-Feb-205
25-Feb-205
17-Aug-203
17-Aug-204
17-Aug-213
17-Aug-214
21-Aug-175
21-Aug-176
17-Aug-183
17-Aug-184
17-Aug-193
17-Aug-194
17-Aug-203
17-Aug-204
17-Aug-213
17-Aug-214
17-Aug-183
17-Aug-184
17-Aug-193
17-Aug-194
17-Aug-203
17-Aug-204
Release
Date
17-Aug-21
17-Aug-21
17-Aug-22
17-Aug-22
17-Aug-22
17-Aug-22
17-Aug-23
17-Aug-23
17-Aug-24
17-Aug-24
21-Aug-20
21-Aug-20
17-Aug-21
17-Aug-21
17-Aug-22
17-Aug-22
17-Aug-23
17-Aug-23
17-Aug-24
17-Aug-24
17-Aug-21
17-Aug-21
17-Aug-22
17-Aug-22
17-Aug-23
17-Aug-23
17-Aug-214
17-Aug-183
17-Aug-184
1-Mar-197
17-Aug-193
17-Aug-194
17-Aug-203
17-Aug-204
17-Aug-213
17-Aug-214
17-Aug-24
17-Aug-21
17-Aug-21
9-Dec-19
17-Aug-22
17-Aug-22
17-Aug-23
17-Aug-23
17-Aug-24
17-Aug-24
Holding and
Unvested at
2021
Granted
Total
Value at
Grant¹
(US$)
Vested
Lapsed
Holding and
Unvested at
30 April 2022
Fair
Value
per RSU2
(US$)
11,335
11,335 $
98,969
(11,335)
6,111
6,111 $
88,881
(6,111)
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
16,457 $
239,778
10,636
10,636 $
236,226
—
—
13,619 $
342,382
8,594 $
309,298
—
—
—
—
—
—
—
—
32,920
49,380 $
376,809
(16,460)
—
—
—
—
—
—
—
—
—
—
—
— $
— $
16,599 $
8,993 $
6,676 $
4,767 $
16,457 $
10,636 $
13,619 $
8,594 $
16,460 $
8.73
14.54
10.68
13.91
13.58
17.87
14.57
22.21
25.14
35.99
7.63
18,192
27,288 $
387,269
(5,685)
(3,411)
9,096 $
14.19
45,342
45,342 $
395,895
(45,342)
24,442
24,442 $
355,494
(24,442)
53,117
53,117 $
567,290
28,779
28,779 $
400,316
29,256
29,256 $
426,260
18,908
18,908 $
419,947
—
—
18,158 $
456,492
11,459 $
412,409
—
—
—
—
—
—
28,339
28,339 $
247,436
(28,339)
15,276
15,276 $
222,113
(15,276)
33,198
33,198 $
354,555
17,987
17,987 $
250,199
18,285
18,285 $
266,412
11,817
11,817 $
262,456
—
7,162 $
257,760
22,671
22,671 $
197,947
(22,671)
12,221
12,221 $
177,747
(12,221)
2,719
8,159 $
99,213
(2,719)
26,559
26,559 $
283,650
14,390
14,390 $
200,165
14,628
14,628 $
213,130
9,454
9,454 $
209,973
—
—
9,079 $
228,246
5,729 $
206,187
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
— $
— $
53,117 $
28,779 $
29,256 $
18,908 $
18,158 $
11,459 $
— $
— $
33,198 $
17,987 $
18,285 $
11,817 $
8.73
14.54
10.68
13.91
14.57
22.21
25.14
35.99
8.73
14.54
10.68
13.91
14.57
22.21
11,349 $
25.14
7,162 $
35.99
— $
— $
— $
26,559 $
14,390 $
14,628 $
9,454 $
9,079 $
5,729 $
8.73
14.54
12.16
10.68
13.91
14.57
22.21
25.14
35.99
17-Aug-213
17-Aug-24
—
11,349 $
285,314
Table of Contents
James Hardie 2022 Annual Report on Form 20-F
56
Restricted Stock Units (continued)
Name
J Truong
Grant
Date
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
27-Aug-213
27-Aug-214
Release
Date
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
17-Aug-24
17-Aug-24
Holding and
Unvested at
1 April 2021
Granted
Total
Value at
Grant¹
(US$)
Vested
Lapsed
Holding and
Unvested at
30 April 2022
Fair
Value
per RSU2
(US$)
41,151
61,726 $
471,019
(20,576)
(20,575)
22,740
34,110 $
484,086
(7,106)
(15,634)
56,677
56,677 $
494,864
(56,677)
30,553
30,553 $
444,375
(30,553)
49,381
49,381 $
334,255
(49,381)
25,385
25,385 $
343,817
(25,385)
18,518
18,518 $
138,885
(18,518)
9,519
9,519 $
131,933
(9,519)
—
—
—
—
—
—
139,432
139,432 $
1,489,134
—
(139,432)
75,545
75,545 $
1,050,831
—
(75,545)
127,083
127,083 $
2,365,015
—
(127,083)
82,131
82,131 $
2,104,196
—
(82,131)
—
—
130,513 $
3,177,992
—
(130,513)
82,358 $
2,949,240
—
(82,358)
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
7.63
14.19
8.73
14.54
6.77
13.54
7.50
13.86
10.68
13.91
18.61
25.62
24.35
35.81
____________
1
2
3
4
5
6
7
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
vested one-third in December 2019, 2020 and 2021.
Table of Contents
James Hardie 2022 Annual Report on Form 20-F
57
Scorecard LTI
Name
J Miele
Grant
Date
Release Date
Holding at
1 April
2021
Granted
Vested1
Lapsed
Holding at 30
April 20222
17-Aug-18
17-Aug-21
18,332
18,332
(12,221)
(6,111)
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
30,907
—
—
—
—
—
—
—
—
S Gadd
17-Aug-21
21-Aug-173
17-Aug-24
21-Aug-20
—
25,782
54,576
81,865
(13,826)
(13,462)
17-Aug-18
17-Aug-21
73,327
73,327
(24,442)
(48,885)
17-Aug-19
17-Aug-22
86,337
86,337
17-Aug-20
17-Aug-23
56,724
56,724
17-Aug-21
17-Aug-24
—
34,376
—
—
—
J Blasko
17-Aug-18
17-Aug-21
45,829
45,829
(45,829)
17-Aug-19
17-Aug-22
53,961
53,961
17-Aug-20
17-Aug-23
35,452
35,452
17-Aug-21
17-Aug-24
—
21,485
R Kilcullen
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
28,362
J Truong
17-Aug-21
21-Aug-173
17-Aug-24
21-Aug-20
—
17,188
68,220
102,331
(34,110)
(34,110)
17-Aug-18
17-Aug-21
91,659
91,659
(91,659)
6-Sep-18
17-Aug-21
76,155
76,155
(76,155)
31-Jan-19
17-Aug-21
28,558
28,558
(28,558)
—
—
—
17-Aug-19
17-Aug-22
226,636
226,636
—
(226,636)
17-Aug-20
17-Aug-23
246,394
246,394
—
(246,394)
17-Aug-21
17-Aug-24
—
247,075
(247,075)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
26,980
14,301
31,907
25,782
27,288
—
86,337
56,724
34,376
—
53,961
35,452
21,485
36,663
43,169
28,362
17,188
—
—
—
—
—
—
—
____________
1 Represents the number of Scorecard LTI awards vesting after the Remuneration Committee’s application of the Scorecard in respect of
fiscal years 2018-2021. A detailed assessment of the reasons for the Scorecard ratings was set out in the fiscal year 2021 Remuneration
Report.
2
3
4
Scorecard LTI awards in respect of fiscal years 2020-2022 will vest on 17 August 2022. A detailed assessment of the Remuneration
Committee’s assessment of management’s performance is set out on pages 41 to 42 of this Remuneration Report.
Special retention award grant of Scorecard LTI awards granted under the LTIP, which are also subject to service-based vesting criteria.
Granted upon promotion to SVP, CFO; performance period ends 17 August 2022 with vesting one-third on 17 August 2022, 2023 and
2024.
Table of Contents
James Hardie 2022 Annual Report on Form 20-F
58
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$3.8 million per annum.
Remuneration Structure
Non-executive directors are paid a base fee for service on the Board. Additional fees are paid to the
person occupying the positions of Chairman and Board Committee Chairmen, as well as for attendance
at ad-hoc sub-committee meetings.
There was no increase to the non-executive director fees in fiscal year 2022.
Position
Chairman
Board member
Audit Committee Chair
Remuneration Committee Chair
Nominating & Governance Committee Chair
Ad-hoc Board sub-committee attendance1
____________
1
Fee is payable in respect of each ad-hoc Board sub-committee attended.
Fiscal Year
2022 (US$)
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 Nominating and Governance Committee (previously the Remuneration Committee) may
approve special exertion fees in the event of an extraordinary workload imposed on a director in special
circumstances. For example, as previously announced in January 2022: (1) Mr Hammes currently
receives a temporary exertion fee of US$40,000 per month for the period he is in the Executive Chairman
role; and (2) as compensation for his service as interim CEO, Mr Wiens currently receives a temporary
exertion fee of US$130,000 per month for the period he is in the interim CEO role. For both Messrs
Hammes and Wiens, the exertion fees are in addition to their regular board fees as a director.
Reasonable expenses associated with relocation and other costs incurred during this interim period for
both Messrs Hammes and Wiens are also compensated. 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 2022 Annual Report on Form 20-F
59
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
the guidelines and non-executive directors’
Nominating and Governance Committee reviews
shareholdings on a periodic basis. In fiscal year 2021, the Company introduced a Non-Executive Director
Equity Plan whereby non-executive directors could elect to receive some or all of their base fee in the
form of ADRs, which was approved by shareholders at the 2020 Annual General Meeting. Each calendar
year, approved non-executives may make a share election to designate a portion of their fees that they
wish to apply to acquire shares. During fiscal year 2022, a total of 7,568 ADRs were issued under the
Non-Executive Director Equity Plan.
Director Retirement Benefits
We do not provide any benefits for our non-executive directors upon termination of their service on the
Board.
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James Hardie 2022 Annual Report on Form 20-F
60
Total Remuneration for Non-Executive Directors for the Years Ended 31 March 2022 and 2021
The table below sets out the remuneration for those non-executive directors who served on the Board
during the fiscal years ended 31 March 2022 and 2021:
(US dollars)
Name
M Hammes
Fiscal Year 2022
Fiscal Year 2021
B Anderson
Fiscal Year 2022
Fiscal Year 2021
D Harrison
Fiscal Year 2022
Fiscal Year 2021
R Chenu
Fiscal Year 2022
Fiscal Year 2021
A Gisle Joosen
Fiscal Year 2022
Fiscal Year 2021
P Lisboa
Fiscal Year 2022
Fiscal Year 2021
A Lloyd
Fiscal Year 2022
Fiscal Year 2021
R Rodriguez
Fiscal Year 2022
Fiscal Year 2021
M Nozari
Fiscal Year 2022
Fiscal Year 2021
N Stein
Fiscal Year 2022
Fiscal Year 2021
H Wiens
Fiscal Year 2022
Fiscal Year 2021
S Rowland
Fiscal Year 2022
Fiscal Year 2021
D Seavers
Fiscal Year 2022
Fiscal Year 2021
Primary
Directors’ Fees1
Other Payments2
Other Benefits3
TOTAL
429,794
432,794
—
129,950
132,395
231,734
—
122,993
89,300
217,734
210,401
217,093
228,734
221,777
217,734
217,734
158,301
205,734
231,734
190,072
211,665
181,430
205,734
31,565
205,734
31,565
254,566
703,651
—
—
110,208
112,498
—
—
—
—
—
—
—
—
—
—
—
12,937
—
—
364,839
—
—
—
—
—
5,729
3,873
690,089
1,140,318
—
—
724
1,195
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
129,950
243,327
345,427
—
122,993
89,300
217,734
210,401
217,093
228,734
221,777
217,734
217,734
158,301
218,671
231,734
190,072
576,504
181,430
205,734
31,565
205,734
31,565
Total Compensation for Non-Executive Directors
Fiscal Year 2022
Fiscal Year 2021
2,321,526
2,432,175
729,613
829,086
6,453
5,068
3,057,592
3,266,329
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James Hardie 2022 Annual Report on Form 20-F
61
____________
1
2
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 2022 relates to: (i) a supplemental compensation payment of US$142,308 in relation to income for the
calendar year ended 31 December 2021 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; and (ii) an exertion fee of US$112,258 for his Executive Chairman role. Mr Hammes receives a temporary exertion fee of
US$40,000 per month for the period he is in the Executive Chair role.
Amount for D Harrison for fiscal year 2022 relates to a supplemental compensation payment of US$110,208 in relation to income for the
calendar year ending 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 H Wiens for fiscal year 2022 relates to a supplemental compensation payment of US$364,839 in relation to his service as
interim CEO. Mr Wiens currently receives a temporary exertion fee of US$130,000 per month for the period he is in the interim CEO role.
3
Amount includes the cost of non-executive directors’ fiscal compliance in Ireland and other costs connected with Board-related events paid
for by the Company.
Director Remuneration for the years ended 31 March 2022 and 2021
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
2022
722,721
423,151
1,145,872
$
$
2021
19,509,351
3,472,063
22,981,414
$
$
____________
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 former
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 2022 and 2021.
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James Hardie 2022 Annual Report on Form 20-F
62
SHARE OWNERSHIP AND STOCK BASED COMPENSATION ARRANGEMENTS
As of 30 April 2022 and 30 April 2021, the number of CUFS and RSUs beneficially owned by Senior
Executive Officers is set forth below:
Name
CUFS at
30 April
2022
CUFS at
30 April
2021
RSUs at
30 April
2022
RSUs at
30 April
2021
J Miele
S Gadd
J Blasko
R Kilcullen
J Truong
41,022
140,419
122,957
42,331
279,383
29,997
89,216
98,578
21,875
61,669
86,341
185,233
99,798
79,839
—
81,574
250,956
124,902
102,642
678,114
As of 30 April 2022 and 30 April 2021, the number of CUFS and RSUs beneficially owned by non-
executive directors is set forth below:
Name
CUFS at
30 April
2022
CUFS at
30 April
2021
43,109
5,412
18,167
1,230
2,000
4,573
10,841
44,109
3,089
18,000
270
2,000
3,653
6,633
M Hammes 1
P Lisboa 2
A Lloyd 3
R Rodriguez 4
S Rowland 5
N Stein 6
H Wiens 7
____________
1
2
3
4
5
6
7
35,109 CUFS held in the name of Mr and Mrs Hammes and 8,000 CUFS held as ADSs in the name of Mr and Mrs Hammes.
5,412 CUFS held as ADSs in the name of Mr Lisboa.
18,000 CUFS held as ADSs in the name of Ms and Mr Lloyd and 167 CUFS held as ADSs in the name of Ms Lloyd.
1,230 CUFS held as ADSs in the name of Ms Rodriguez.
2,000 CUFS held as ADSs in the name of Ms Rowland.
3,400 CUFS held in the name of Mr Stein and 1,173 CUFS held as ADSs in the name of Mr Stein.
7,370 CUFS held as ADSs in the name of Mr and Mrs Wiens and 3,471 CUFS held as ADSs in the name of Mr Wiens.
Based on 445,348,933 shares of common stock outstanding at 30 April 2022 (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 2022 and none of the shares held by directors or Senior Executive Officers
have any special voting rights. As of 30 April 2022, there were no options outstanding under any of the
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 2022, we had the following equity award plans:
•
•
the LTIP; and
the 2001 Plan.
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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, 2018 and 2021.
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.
As of 31 March 2022, there were 782,326 RSUs granted and outstanding under the LTIP, as follows:
Restricted Stock Units
Vested as of
31 March 2022
Outstanding as of
31 March 2022
Grant Type
TSR - Retention
Grant Date
August 2017
ROCE - Retention
August 2017
TSR
ROCE
TSR
ROCE
TSR
ROCE
TSR
ROCE
August 2019
August 2019
February 2020
February 2020
August 2020
August 2020
August 2021
August 2021
Granted
246,903
136,440
496,497
268,491
6,676
4,767
294,574
190,376
223,469
141,015
79,627
27,118
18,518
9,519
—
—
—
—
—
—
Total Outstanding
16,460
5,685
240,292
130,190
6,676
4,767
139,919
90,426
90,686
57,225
782,326
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).
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As of 31 March 2022, there were 875,124 Scorecard LTI units granted and outstanding under the LTIP, as
follows:
Scorecard LTI
Grant Date
August 2017
August 2019
February 2020
August 2020
August 2021
Grant Type
Scorecard - Retention
Scorecard
Scorecard
Scorecard
Scorecard
Granted and
Outstanding as of
31 March 2022
27,288
390,576
14,301
271,280
171,679
875,124
For additional information regarding the LTIP and award grants made thereunder, see Note 16 to our
consolidated financial statements.
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. In August 2021, the plan was reapproved at the 2021 AGM for
another three years. 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.
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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 2022, there were no options outstanding under the 2001
Plan.
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 233,433 restricted stock units under the 2001 Plan in the fiscal year ended 31
March 2022. As of 31 March 2022, there were 414,675 restricted stock units outstanding under this plan,
divided as follows:
Restricted Stock Units
Vested as of
31 March 2022
Outstanding as of
31 March 2022
Grant Date
June 2020
August 2020
December 2020
February 2021
June 2021
August 2021
December 2021
Granted
330,961
32,628
7,792
425
216,220
7,122
10,101
80,439
14,659
1,951
171
1,122
1,271
—
Total Outstanding
203,427
1,957
5,841
127
191,179
2,043
10,101
414,675
For additional information regarding the 2001 Plan and award grants made thereunder, see Note 16 to
our consolidated financial statements.
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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 2022, the Board evaluated the Company’s corporate governance framework and
practices and approved this Statement. This Statement is current as at 30 April 2022.
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 2022 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 2022, 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. As of the date of this Statement, the membership of each of the Audit,
Remuneration and Nominating and Governance Committee is comprised solely of independent
directors.
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James Hardie 2022 Annual Report on Form 20-F
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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 on the Company’s investor relations website (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 Board committee charters and other key governance and corporate policies referenced in this
Statement were reviewed by the Board during fiscal year 2022.
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 CEO1. 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;
1
References to CEO in this Corporate Governance Report include any person acting as the CEO in an interim capacity or otherwise.
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James Hardie 2022 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 on our investor relations website (ir.jameshardie.com.au).
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 our investor relations website (ir.jameshardie.com.au).
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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James Hardie 2022 Annual Report on Form 20-F
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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 with the
exception of unforeseen circumstances such as the global pandemic when certain meetings were held
virtually. 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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The following table provides the composition of each standing Board committee during fiscal year 2022,
as well as sets out the number of Board and Board committee meetings held, and each director’s
attendance:
Board
Audit
Remuneration
Nominating &
Governance
Member
•
•
C
•
•
•
H
3
2
4
4
4
4
A
6
3
2
6
6
3
6
6
5
6
6
A
3
2
4
4
4
4
Member
•
•*
C*
•
•
•*
H
5
3
6
6
1
5
Member
•
•
•
•
C
H
3
4
3
4
4
A
5
3
6
6
1
5
A
3
4
3
4
4
Name
M Hammes1
D Harrison2
A Gisle Joosen3
P Lisboa
A Lloyd
M Nozari4
R Rodriguez
S Rowland
D Seavers5
N Stein
H Wiens6
____________
H
6
3
2
6
6
3
6
6
5
6
6
●
C
*
H
A
1
2
3
4
5
6
Board Committee member
Board Committee chair
D Harrison, P Lisboa and H Wiens held the Remuneration Committee chair position during the fiscal year.
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.
Effective January 2022, M Hammes is no longer a member of the Remuneration Committee or Nominating and Governance
Committee.
D Harrison retired as director in November 2021.
A Gisle Joosen retired as director at our 2021 Annual General Meeting.
M Nozari resigned as director in January 2022.
D Seavers resigned as director in March 2022.
Effective January 2022, H Wiens is no longer a member of the Remuneration Committee or Nominating and Governance Committee.
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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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. 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 2022 were conducted in accordance with the process outlined
above in April and May 2022. 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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72
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 2022, the process, which was
undertaken in March 2022, 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
2022, the Chair of the Nominating and Governance Committee discussed with the Board, the Chair’s
performance and contribution to the effectiveness of the Board as well as the performance of each of the
Board committees. The Board also has responsibility for overseeing and evaluating the Nominating and
Governance Committee.
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 on the Company’s investor relations website
(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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73
Details of diversity composition across various levels of the organization at the end of fiscal year 2022 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
43% (3 of 7)
Percentage of
employees with
diversity
characteristics
43% (3 of 7)
22% (42 of 191)
18% (83 of 454)
36% (68 of 191)
35% (159 of 454)
14% (486 of 3,542)
43% (1,532 of 3,542)
17% (8 of 48)
19% (62 of 319)
17% (338 of 2,046)
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 (collectively known as the Short-Term Incentive Plans).
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 more than 20% among Senior Leadership positions.
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Regarding the Company’s senior leadership, management, and the organization, the following table
outlines the organization’s five primary objectives in promoting diversity during fiscal year 2022, the
actions in place or undertaken to achieve these objectives, the progress made against these objectives
during fiscal year 2022 and the fiscal year 2023 plans.
Objectives
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).
FY22 Actions and Outcomes
• Continued to develop and expand our global inclusion and
diversity programs. Objectives are to align and refine our
culture, define employee value proposition, grow and
develop talent, and improve our hiring processes.
Introduced and launched new Employee Resource Group in
North America for Asian American employees.
•
• Our new North American Headquarters have a “mother’s/
wellness room” with appropriate accommodations and
refrigeration for lactating working mothers.
• An employee engagement survey was 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.
•
FY23 Plans
• Continue to develop and expand our global
inclusion and diversity programs. Objectives
are to align and refine our culture, define
employee value proposition, grow, and
develop talent, and improve our hiring
processes.
• Continue to use tools like engagement and/or
pulse surveys to development of programs
and initiatives to improve engagement, support
diversity and further enhance our culture.
• Asia Pacific introduced its first Employee
Resource Group ("ERG") specifically for
women with a second ERG in the planning. A
calendar of events is in place recognizing days
of cultural importance across Asia Pacific.
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.
• North America’s EDP hired 23 individuals for
FY23’s class, eleven of whom (48%) were
either female and/or diverse.
• As of the end of FY22 total new hires in North America were
14% female, with 42 out of 191 (22%) open Leadership
roles filled by women.
• Results for North America’s Engineering Development
• Continue showcasing diverse talent on
LinkedIn and other recruiting platforms to
attract more diverse talent into the
organization.
Program ("EDP") recruits, 10 out of 28 (35%) hires were
either female and/or diverse.
• 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.
• Across APAC 38% of all new salaried hires in FY22 were
•
women.
Introduced a scholarship program for high school students
local to our operations in North America with diversity
characteristics as one of the selection criteria to create a
pipeline of local talent for our organization.
• The expectation is that all slates of candidates
for positions manager and above are diverse
(race and gender).
• 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.
• Continue the scholarship program for high
school students local to our operations in
North America with diversity characteristics as
one of the selection criteria, to create a
pipeline of local talent for our organization.
To provide talent
management and
development opportunities
which provide equal
opportunities for all current
employees.
• Conducted global talent and organizational review
• Continue the global talent and organizational
•
•
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.
review processes, including succession
planning throughout the organization including
levels below senior leadership.
• APAC Women’s network introduced with an
event on International Woman’s Day and the
next event is planned for May.
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James Hardie 2022 Annual Report on Form 20-F
75
Objectives
To reward and remunerate
employees fairly across the
globe.
FY22 Actions and Outcomes
• Launched a global job structure and market-based pay
review to standardize job levels and job titles across the
organization. Review includes evaluating compensation and
incentive levels to ensure we are competitive with the local
markets where we operate.
• Asia Pacific will extend the Workplace Gender Equity
Agency ("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.
FY23 Plans
• Complete the global job structure and market-
based pay review 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.
• Global focus on employee well-being
(physical, financial, emotional, and social).
Continue to promote & expand local programs
as needed. Review regional best practice &
programs that could be expanded globally.
To provide flexible work
practices across the globe.
Introduce and implement new and updated
paid time off, family, and parental leave
programs in North America.
• Flexible working arrangements will continue to
be offered across all global locations post-
COVID as job requirements allow and
continue to be discussed with employees
throughout the organization.
• 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.
• Flexible working arrangements and pandemic pay 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.
Principle 2: Structure the Board to Add Value
Composition of the Board
As of the date of this Annual Report, the Board comprises five non-executive directors and two executive
directors (being the Interim CEO and Executive Chair). 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
Harold Wiens
Persio Lisboa
Anne Lloyd
Board tenure
7 February 2007
14 May 2020
Independence
Executive Chair
Interim Chief Executive Officer and executive
director
2 February 2018
4 November 2018
Independent non-executive director
Lead independent director
Rada Rodriguez
13 November 2018
Independent non-executive director
Nigel Stein
14 May 2020
Independent non-executive director
Suzanne B Rowland
4 February 2021
Independent non-executive director
For additional information on each director, see “Section 1 – Directors, Senior Management and
Employees” of this Annual Report.
Ms Andrea Gisle Joosen and Mr David Harrison each retired as a non-executive director of the Board on
26 August 2021 and 5 November 2021, respectively. These retirements were in line with the Board’s
ongoing succession plan. In addition, Mr Moe Nozari resigned as a non-executive director of the Board
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James Hardie 2022 Annual Report on Form 20-F
76
on 7 January 2022, Mr Jack Truong was terminated as Chief Executive Officer and Executive Director on
6 January 2022 and Mr Dean Seavers resigned as a non-executive director of the Board on 21 March
2022.
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 2022, 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 and the CEO), 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 changes continued in fiscal year 2022 with the retirement/resignation of four non-executive
directors. It is anticipated that during fiscal year 2023, the Board will be renewed with at least two new
non-executive directors and a new CEO.
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Director Independence
In accordance with applicable listing standards and its Board and committee charters, the Company
requires that a majority of directors on the Board and the Board committees 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. Additionally, the Company's board and committee charters provide that
the Chair of the Board and each committee must also be independent, non-executive directors, except in
unusual circumstances. In January 2022, in conjunction with the appointment of Harold Wiens as interim
CEO, Mr Hammes was appointed as Executive Chair on an interim basis while the Board undertakes its
CEO succession process. With Mr Wiens and Mr Hammes both taking on executive, non-independent
responsibilities, Anne Lloyd was also appointed as Lead Independent Director in January 2022. In this
role, Ms Lloyd has the responsibility of ensuring proper governance of the Board and the independence
and objectivity of the Board in its stewardship of the Company.
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
conflicting relationships on a case-by-case basis, considering the materiality of each potential or actual
conflict of interest.
During fiscal year 2022, 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 Harold Wiens, as Interim CEO of the Company and Michael Hammes, as Executive Chair of the
Company, each of Persio Lisboa, Anne Lloyd, Rada Rodriguez, Suzanne B. Rowland and Nigel Stein is
independent.
In assessing Mr Wiens' independence, the Board considered his role as interim Chief Executive Officer of
the Company from 6 January 2022 to date and determined that Mr Wiens is not independent given the
executive nature of his role.
In assessing the independence of Mr Hammes, the Board considered his expanded role as Executive
Chair of the Company for the period from 6 January 2022 to date, and determined that Mr Hammes is not
independent given the executive nature of his role.
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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James Hardie 2022 Annual Report on Form 20-F
78
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.
Governance
• Experience in overseeing management for the delivery of strategic objectives.
• 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.
Commercial Brand
Management/ Marketing
• Experience in retail industry and merchandise expertise.
• Industry knowledge.
• Australian market and investor base experience.
• 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 a
number of areas that could be strengthened on the Board, including (i) executive leadership, (ii) financial
acumen/corporate finance, and (iii) Australian market and investor base experience. Each of these areas
are key considerations as part of the Board renewal process and are aligned 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
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James Hardie 2022 Annual Report on Form 20-F
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commitments of directors annually and otherwise, as required. In fiscal year 2022, the Nominating and
Governance Committee noted that Ms Lloyd, who is considered a financial expert by virtue of her
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 on the Company’s investor relations
website (ir.jameshardie.com.au).
Nominating and Governance Committee
Director
Committee tenure
Independence
Nigel Stein – Committee Chair
21 October 2020
Independent non-executive director
Rada Rodriguez
Persio Lisboa
13 November 2018
Independent non-executive director
21 October 2020
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 on the Company’s investor relations website (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 Report” of this Annual Report, the Company has not entered into any
related party transactions requiring disclosure during fiscal year 2022.
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
As discussed above, the Company's Board charter provides that the Chair of the Board will be an
independent, non-executive director. However, due to the need for Mr Hammes to provide additional
'operational' assistance to Mr Wiens and the broader executive leadership team while the Company
undertakes its CEO succession process, Mr Hammes was appointed as Executive Chair (on an interim
basis) in January 2022. In order to ensure proper governance of the Board during this interim period, Ms
Lloyd was appointed as Lead Independent Director in January 2022. As the Lead Independent Director,
Ms Lloyd is involved in, amongst other things, leading executive session discussions of the independent
directors, briefing Mr Hammes on issues arising in executive sessions of the independent directors,
acting as a liaison between Mr Hammes and Mr Wiens and the independent directors of the Board on key
issues and collaborating with Mr Hammes on Board and committee agendas. While the Board continues
to believe that the role of Board Chair should be held by an independent, non-executive director, due to
the extraordinary nature of the leadership changes that occurred during fiscal year 2022, the Board
believes that its current governance structure is best positioned to allow the Board to provide
independent oversight and stewardship of the Company, while also maintaining a high functioning
management team focused on promoting the Company's continued operational excellence and long-term
growth.
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 Report” 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 Nominating and Governance Committee reviews the guidelines and non-executive
directors’ shareholdings on a periodic basis. Details of the Company's Non-Executive Director Equity Plan
are set out in “Section 1 – Remuneration Report” of this Annual Report.
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 (ir.jameshardie.com.au).
The Company did not grant any waivers from the provisions of the Code of Conduct during fiscal year
2022.
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 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 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 on the Company’s investor relations website
(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 on the Company’s investor relations website
(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
Lead Independent Director
Nigel Stein
1 June 2020
Independent non-executive director
Suzanne B Rowland
6 February 2021
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 to include
strategic, operational, financial, treasury and IT/cybersecurity 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.
To ensure the appropriateness and integrity of any periodic corporate records, the Audit Committee also
reviews this Annual Report, together with other reports and materials provided to stakeholders, including
annual and half-yearly financial statements, quarterly results materials and our Sustainability Report, and
recommend them to the Board for approval. This ensures any estimates, judgments and disclosures
made by management are materially accurate and balanced.
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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 on the Company’s investor relations website
(ir.jameshardie.com.au).
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 Ms
Lloyd and Mr Stein qualify as “audit committee financial experts". 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 2022. A copy of the Continuous Disclosure and Market
Communication policy is available on the Company’s investor relations website (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;
regular engagement with institutional shareholders to discuss a wide range of governance issues;
•
•
•
•
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•
•
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 (ir.jameshardie.com.au).
Annual General Meeting
The 2021 AGM was held in Ireland and shareholders were able to participate in the AGM via
teleconference of proceedings. The Company currently anticipates that the 2022 AGM will be held
virtually, and shareholders 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 2022 AGM will be set out in the 2022 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 2022. 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 2022, 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 2022. 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 July 2021, the Company released its first global sustainability report, Building
Sustainable Communities, which outlined its sustainable future, company commitments and significant
progress made to date in four key areas: Communities, Environment, Innovation, and Zero Harm. The
Company's sustainability strategy, which was formalized in fiscal year 2021, is integrated with its global
strategy for value creation and operational performance. In July 2022, the Company intends to publish its
FY22 sustainability report.
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
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to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company
have been detected.
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
Persio Lisboa –
Committee Chair
Anne Lloyd
Committee tenure
9 August 2018
Chair since 6 January 2022
Independence
Independent non-executive director
26 October 2020
Lead Independent Director
Rada Rodriguez
21 April 2022
Independent non-executive director
Suzanne B Rowland
21 April 2022
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 on the Company’s investor relations
website (ir.jameshardie.com.au), and 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 2022 are disclosed in "Section 1 – Remuneration Report" of this Annual Report.
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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 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.
Words such as “believe,” “anticipate,” “plan,” “expect,” “intend,” “target,” “estimate,” “project,” “predict,”
“forecast,” “guideline,” “aim,” “will,” “should,” “likely,” “continue,” “may,” “objective,” “outlook” and similar
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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.
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92
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.
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.
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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.
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
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94
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.
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.
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James Hardie 2022 Annual Report on Form 20-F
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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.
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.
Operating Results
Overview
James Hardie Industries plc is a world leader in the manufacturing of fiber cement building solutions, and
a market leader in fiber gypsum and cement-bonded boards in Europe. Our fiber cement building
materials include a wide-range of products for both external and internal use across a broad range of
applications. We have four reportable segments: North America Fiber Cement, Asia Pacific Fiber Cement,
Europe Building Products and Research and Development.
Year ended 31 March 2022 compared to year ended 31 March 2021
Financial Highlights
US$ Millions (except per share data)
Net sales
Gross margin (%)
Selling, general and administrative expenses
Operating income
Operating income margin (%)
Net income
Earnings per share - basic
Earnings per share - diluted
FY22
FY21
Change
$
3,614.7 $
2,908.7
36.3
461.2
682.6
18.9
459.1
$
$
1.03 $
1.03 $
36.2
389.6
472.8
16.3
262.8
0.59
0.59
24%
0.1 pts
18%
44%
2.6 pts
75%
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James Hardie 2022 Annual Report on Form 20-F
96
Net sales increased 24% to US$3,614.7 million, driven by Price/Mix growth of 10% as we continue to
execute our global strategy of driving high value product mix, and volume growth of 14%. Our Price/Mix is the
result of 1) enabling our customers to drive an increase in revenue by selling more James Hardie products
and, 2) marketing directly to homeowners to create demand for our high value products through our
customers.
Gross margin increased 0.1 percentage points to 36.3% On a global basis, the shift to driving growth with
a high value product mix combined with the continued execution of LEAN, enabled us to absorb high input
cost pressures in fiscal year 2022.
Selling, general and administrative ("SG&A") expenses increased 18% primarily due to our global
strategy to invest significantly in marketing, innovation and talent capabilities, compared to global cost
containment actions taken in the prior year.
Operating income increased 44% to US$682.6 million primarily due to a 25% increase in gross profit
and lower restructuring expenses, partially offset by the 18% increase in SG&A expenses.
Our critical strategic initiatives for the next three years remain unchanged and our global management
team is committed to continuing to execute on these strategies which include: (1) marketing directly to
homeowners to accelerate demand creation, (2) penetrating and driving profitable growth in existing and
new segments, especially Repair and Remodel, and (3) commercializing global innovations by expanding
into new categories.
As part of our global strategic initiatives, we announced the release of the following new products in fiscal
year 2022: our Hardie™ Architectural Collection and Hardie® VL Plank in Europe.
Our fiscal year 2022 consolidated results delivered strong results and growth above market, as we are
continuing to deliver on these stated strategic goals.
North America Fiber Cement Segment
Operating results for the North America Fiber Cement segment were as follows:
US$ Millions unless otherwise noted
Volume (mmsf)
FY22
FY21
Change
3,112.2
2,713.4
15%
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
2,551.3
2,040.2
741.2
29.1
—
741.2
29.1
585.5
28.7
2.5
588.0
28.8
25%
26%
0.3 pts
27%
0.4 pts
(100%)
26%
0.3 pts
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James Hardie 2022 Annual Report on Form 20-F
97
FY22 vs FY21
Net sales increased 25% on the strength of exteriors volume growth of 17% and an increase in our Price/
Mix of 10% resulting from the execution of our strategy to drive a high value product mix combined with
our strategic pricing increases during the year.
Gross margin increased as a result of the following components:
Higher average net sales price
Higher production and distribution costs
Total percentage point change in gross margin
5.2 pts
(4.9 pts)
0.3 pts
Higher production and distribution costs resulted from higher input costs, primarily pulp, freight costs and
start-up costs related to our Prattville and Summerville plants.
SG&A expenses increased 27%, driven by our strategy to market directly to homeowners and strategic
investments in growth initiatives, compared to cost containment actions taken in the prior year. As a
percentage of sales, SG&A expenses increased 0.1 percentage point.
Restructuring expenses of US$2.5 million in the prior year consist solely of severance costs related to a
reduction in headcount across the region in order to strategically realign our resources.
Operating income margin increased 0.4 percentage points to 29.1%, driven by higher gross margin and
lower restructuring expenses.
Asia Pacific Fiber Cement Segment
The Asia Pacific Fiber Cement segment is comprised of the following regions: (i) Australia; (ii) New
Zealand; and (iii) the Philippines.
Operating results for the Asia Pacific Fiber Cement segment in US dollars were as follows:
US$ Millions unless otherwise noted
Volume (mmsf)
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
FY22
FY21
Change
633.3
574.9
160.8
28.0
—
160.8
28.0
542.0
458.2
124.8
27.2
3.4
128.2
28.0
17%
25%
29%
0.9 pts
29%
0.8 pts
(100%)
25%
— pts
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James Hardie 2022 Annual Report on Form 20-F
98
Operating results for the Asia Pacific Fiber Cement segment in Australian dollars were as follows:
A$ Millions unless otherwise noted
Volume (mmsf)
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
FY22 vs FY21 (A$)
FY22
FY21
Change
633.3
777.7
217.4
28.0
—
217.4
28.0
542.0
635.2
172.4
27.2
4.9
177.3
28.0
17%
22%
26%
0.9 pts
26%
0.8 pts
(100%)
23%
— pts
Net sales increased 22%, driven by volume growth of 17% and Price/Mix growth of 5%. All three regions
experienced strong volume growth, compared to lower volumes in the prior year due to the COVID-19
government enforced lockdowns in the Philippines and New Zealand. The 5% growth in Price/Mix was
driven by our execution of our high value product mix strategy in Australia and New Zealand where Price/
Mix increased 10%. This was offset by geographic mix, as a higher proportion of our sales were in the
Philippines which has a lower average net sales price. Volumes in the Philippines increased 28%.
The increase in gross margin can be attributed to the following components:
Higher average net sales price
Higher production and distribution costs
Total percentage point change in gross margin
2.8 pts
(1.9 pts)
0.9 pts
Higher production and distribution costs were driven by higher input costs, and higher manufacturing
costs related to producing a high value product mix. This increase was partially offset by favorable plant
performance including LEAN manufacturing savings in Australia, the efficiencies realized from shifting to
an import model for the New Zealand region and a higher proportion of sales in the Philippines which
have a lower cost.
SG&A expenses increased 36%, primarily driven by higher marketing expenses and our investment in
additional headcount to drive growth. As a percentage of sales, SG&A expenses increased 0.9
percentage points.
In the prior year, restructuring expenses of A$4.9 million consist solely of severance costs, primarily
associated with our strategic decision to shift our New Zealand regional production to our two Australia
based plants, and a reduction in headcount across the region to realign our resources.
Operating income margin of 28.0% represents an increase of 0.8 percentage points, primarily driven by
higher gross margin and lower restructuring expenses, partially offset by higher SG&A expenses as a
percentage of sales.
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James Hardie 2022 Annual Report on Form 20-F
99
Europe Building Products Segment
The Europe Building Products segment is comprised of: (i) Europe Fiber Cement and (ii) Europe Fiber
Gypsum.
Operating results for the Europe Building Products segment in US dollars were as follows:
US$ Millions unless otherwise noted
Volume (mmsf)
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.
FY22
FY21
Change
952.6
76.3
412.2
488.5
62.9
12.9
—
62.9
12.9
876.0
55.3
355.0
410.3
37.6
9.2
5.1
42.7
10.4
9%
38%
16%
19%
13%
(1.5 pts)
67%
3.7 pts
(100%)
47%
2.5 pts
Operating results for the Europe Building Products segment in Euros were as follows:
€ Millions unless otherwise noted
Volume (mmsf)
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.
FY22 vs FY21 (€)
FY22
FY21
Change
952.6
65.6
354.9
420.5
54.2
12.9
—
54.2
12.9
876.0
47.2
303.4
350.6
31.4
9.2
4.5
35.9
10.4
9%
39%
17%
20%
14%
(1.5 pts)
73%
3.7 pts
(100%)
51%
2.5 pts
Net sales increased 20%, driven by increases in fiber cement and fiber gypsum of 39% and 17%,
respectively. The increase in net sales is attributed to our continued execution of our push/pull strategy,
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James Hardie 2022 Annual Report on Form 20-F
100
the introduction of our new Hardie® VL Plank product and low volumes in Q1 of the prior year resulting
from the COVID-19 government enforced shutdowns in the UK and France. Price/Mix increased 11%,
due to our shift to a higher value mix in both our fiber cement and fiber gypsum product lines.
The decrease in gross margin is attributed to the following components:
Higher average net sales price
Higher production and distribution costs
Total percentage point change in gross margin
5.0 pts
(6.5 pts)
(1.5 pts)
Higher production and distribution costs were driven by higher input costs (primarily energy, paper and
packaging costs). The unfavorable impact of energy costs, mainly related to the hyperinflation in natural
gas, was approximately €9.4 million.
SG&A expenses decreased from prior year primarily due to the favorable impact of reversing a bad debt
allowance, and a focus to moderate spending to neutralize the higher energy costs. These decreases more
than offset our spend related to our growth initiatives, including talent and marketing. As a percentage of sales,
SG&A expenses decreased 3.9 percentage points.
In the prior year, 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.
Operating income margin of 12.9% increased 3.7 percentage points, driven by the 14% increase in gross
profit, lower SG&A expenses as a percentage of sales and lower restructuring expenses.
General Corporate
Results for General Corporate were as follows:
US$ Millions
General Corporate SG&A expenses
Asbestos:
Asbestos adjustments loss
AICF SG&A expenses
General Corporate costs
FY22
FY21
Change %
$
$
114.9 $
131.7
1.3
247.9 $
101.1
143.9
1.2
246.2
14
(8)
8
1
General Corporate SG&A expenses increased US$13.8 million primarily due to legal reserves recorded in
the fourth quarter, investment in global growth initiatives, including talent and marketing investments,
partially offset by lower stock compensation expenses.
Asbestos adjustments primarily reflect the annual actuarial adjustment recorded in line with KPMGA's
actuarial report, as well as the non-cash foreign exchange re-measurement impact on asbestos related
balance sheet items, driven by the change in the AUD/USD spot exchange rate from the beginning
balance sheet date to the ending balance sheet date, for each respective period. In addition, these
amounts are partially offset by gains and losses on foreign currency forward contracts related to future
AICF payments.
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James Hardie 2022 Annual Report on Form 20-F
101
The AUD/USD spot exchange rates are shown in the table below:
FY22
FY21
31 March 2021
31 March 2022
Change ($)
Change (%)
0.7601 31 March 2020
0.7482 31 March 2021
(0.0119) Change ($)
(2) Change (%)
0.6177
0.7601
0.1424
23
Asbestos adjustments recorded by the Company were made up of the following components:
US$ Millions
Change in estimates
Effect of foreign exchange on Asbestos net liabilities
Loss (gain) on foreign currency forward contracts
Other
Asbestos adjustments loss
$
$
FY22
FY21
140.9 $
(13.2)
5.3
(1.3)
131.7 $
32.5
123.0
(11.7)
0.1
143.9
The increase in the actuarial adjustment for fiscal year 2022 is due to the annual inflation adjustment,
increased claims sizes and expected mesothelioma claims activity.
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 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
FY22
FY21
Change %
555
411
144
573
(18)
314,000
312,000
2,000
545
392
153
624
(79)
248,000
296,000
(48,000)
2
5
(6)
(8)
27
5
For the fiscal year ended 31 March 2022, we noted the following related to asbestos-related claims:
Total claims received were 3% below actuarial expectations and 2% higher than prior year;
•
• Mesothelioma claims reported were 1% above actuarial expectations and 3% higher than prior year;
• Number of claims settled were 1% below actuarial expectations and 5% below prior year;
• Average claim settlement was 1% above actuarial expectations and 27% above prior year; and
• Average mesothelioma claim settlement sizes were higher than expected for three of the four age
groups for direct claims and lower than expected for all age groups for cross claims.
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James Hardie 2022 Annual Report on Form 20-F
Interest, net
US$ Millions
Gross interest expense
Capitalized interest
Interest income
Net AICF interest income
Interest, net
FY22
FY21
Change %
$
$
42.2 $
(1.9)
(0.1)
(0.9)
39.3 $
58.0
(9.5)
(0.2)
(0.5)
47.8
102
(27)
(80)
(50)
80
(18)
Gross interest expense decreased US$15.8 million, primarily due to the redemption of our 2025 senior
unsecured notes in the fourth quarter of fiscal year 2021. The decrease in capitalized interest is due to a lower
average amount of accumulated capital expansion project spend, primarily due to the commissioning of our
Prattville, Alabama plant.
Income Tax Expense
Income tax expense (US$ Millions)
Effective tax rate (%)
FY22
FY21
184.0
28.6
149.2
36.2
The effective tax rate decreased 7.6 percentage points, primarily due to Asbestos, partially offset by tax
adjustments.
Year ended 31 March 2021 compared to year ended 31 March 2020
Readers are referred to the "Management's Discussion and Analysis" in Section 2 our fiscal year 2021
Form 20-F filed with the SEC on 18 May 2021 for comparative analysis relating to fiscal years 2021 and
2020.
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 decreased by US$83.5 million, from US$208.5 million at 31 March 2021 to US$125.0
million at 31 March 2022.
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James Hardie 2022 Annual Report on Form 20-F
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Our gross debt balance increased from US$868.3 million at 31 March 2021 to US$886.4 million at 31
March 2022. During the third quarter of fiscal year 2022, we entered into a new US$600.0 million
revolving credit facility maturing in December 2026, which replaced the prior revolving credit facility which
was set to expire in December 2022. The new facility includes two optional one year extension periods. At
31 March 2022, we had outstanding borrowings of US$40.0 million, and US$7.5 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$552.5 million of available borrowing capacity under the revolving credit facility.
Readers are referred to Note 10 of our 31 March 2022 consolidated financial statements for further
information on our borrowings.
Sources of Liquidity
During fiscal year 2022, we met our liquidity and capital requirements through a mix of external debt
facilities, cash reserves and cash flows from operations. These internal and external sources of liquidity
were primarily used to fund:
•
•
•
•
expansion, renovation and maintenance of production capacity;
our annual contribution to AICF in accordance with the terms of the AFFA;
the payment of a special and ordinary dividend; and
our working capital requirements.
There are certain restrictions that are either imposed upon us as an Irish plc operating under Irish law, or
imposed upon us as a party to the AFFA, which may restrict the ability of subsidiaries to transfer funds to
us in the form of cash dividends, loans or advances. For more detailed discussion on these restrictions,
see “Section 3 – Risk Factors.” Even with these restrictions, based on our existing cash balances,
together with anticipated operating cash flows and unutilized credit facilities, we anticipate we will have
sufficient funds to meet our planned working capital and other expected cash requirements for the next
twelve months.
Table of Contents
James Hardie 2022 Annual Report on Form 20-F
104
Cash Flow
US$ Millions
FY22
FY21
Change
Change %
Net cash provided by operating activities
$
757.2 $
786.9 $
(29.7)
Net cash used in investing activities
Net cash used in financing activities
348.2
449.6
120.4
540.2
227.8
(90.6)
(4)
189
(17)
Significant sources and uses of cash during fiscal year 2022 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$849.9 million;
◦ Working capital increased by US$1.5 million; and
◦ Asbestos claims paid of US$118.8 million.
• Cash used in investing activities:
◦ Capital expenditures of US$257.8 million, including the following capacity expansion
projects: Prattville Trim line, Prattville Sheet Machines #3 and #4, Massachusetts
ColorPlus® finishing line, the Summerville restart and a deposit on land in Melbourne,
Australia; and
◦ AICF net investments of US$88.5 million.
• Cash used in financing activities:
◦ Dividend payments of US$484.0 million;
◦ Partially offset by US$40.0 million net drawdowns on our revolving credit facility.
The 4% decrease in net cash provided by operating activities is primarily related to the US$64.8 million
US Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") tax refund received in the prior
year.
Capital Expenditures and Lease Obligations
Our total capital expenditures for fiscal years 2022 and 2021 were US$257.8 million and US$110.7
million, respectively. We are investing in a transformational global capacity expansion program, including
brownfield and greenfield expansions in all three regions. Through the end of fiscal year 2026, we expect to
commission the following:
North America
Trim finishing capacity in Prattville, Alabama
•
• ColorPlus® finishing capacity in Westfield, Massachusetts
•
•
Sheet Machines #3 and #4 in Prattville, Alabama
Fiber Cement greenfield capacity (location TBD)
Asia Pacific
•
•
Brownfield expansion in Carole Park, Australia
Fiber Cement greenfield capacity in Melbourne, Australia
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James Hardie 2022 Annual Report on Form 20-F
105
Europe
•
•
Fiber Gypsum brownfield expansion in Orejo, Spain
Fiber Cement greenfield capacity (location TBD)
Over the next four years we anticipate investing between US$1.6 billion to US$1.8 billion in capital
expenditures.
Refer to “Section 1 – Property, Plants and Equipment – Capital Expenditures” for further discussion and a
listing of our significant capital expenditures in fiscal years 2022 and 2021.
Refer to Note 8 of our 31 March 2022 consolidated financial statements for our future lease payments for
non-cancellable leases at 31 March 2022.
Capital Management
We periodically review our capital structure and capital allocation objectives and expect the following
capital management focus in the short term:
• Preserve and enable strong liquidity position and financial flexibility;
•
Invest in organic growth: capacity expansion, market driven innovation and marketing directly to
the homeowner;
• Maintain leverage ratio of 1-2x; and
• Return capital to shareholders:
◦ Returned US$309.9 million through special dividend in April 2021; and
◦ Returned US$174.1 million through ordinary half-year dividend in December 2021.
AICF Funding
We funded US$248.5 million (A$328.2 million) to AICF during fiscal year 2022, 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$1,899.2 million to the fund.
In accordance with the terms of the AFFA, the Company anticipates that it will contribute approximately
A$157.5 million (US$117.8 million based on the exchange rate at 31 March 2022) to AICF during the
fiscal year ending 31 March 2023.
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 2023. A number of external
factors will impact underlying demand for our products including, the aging stock of homes, the backlog of
homes to be completed, changes in GDP, low levels of unemployment, record home equity, changing
consumer preferences, changing interest rates, home prices and new household formation. Internal
Table of Contents
James Hardie 2022 Annual Report on Form 20-F
106
factors that will impact demand include, new capacity, customer integration, marketing directly to
homeowners and new innovations.
Our expanded focus for fiscal year 2023 and beyond is to execute on the three strategic initiatives that
we introduced in February 2021. This includes 1) Marketing directly to homeowners to create demand, 2)
Penetrate and drive profitable growth in existing and new segments and 3) Commercializing global
innovations by expanding into new categories. In addition, we continue to focus on 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. Our 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 2023
compared to fiscal year 2022. Net sales from our Australian business are expected to trend above the
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 (PCAOB ID:42)
Consolidated Balance Sheets as of 31 March 2022 and 2021
Consolidated Statements of Operations and Comprehensive Income for the Fiscal Years
Ended 31 March 2022, 2021 and 2020
Consolidated Statements of Cash Flows for the Fiscal Years Ended 31 March 2022, 2021 and
2020
Consolidated Statements of Changes in Shareholders’ Equity for the Fiscal Years Ended 31
March 2022, 2021 and 2020
Notes to Consolidated Financial Statements
107
Page
108
110
111
112
113
114
Table of Contents
Report of Independent Registered Public Accounting Firm
108
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 2022 and 2021, the related consolidated statements of operations and comprehensive income,
changes in shareholders' equity and cash flows for each of the three years in the period ended 31 March 2022, 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 2022
and 2021, and the results of its operations and its cash flows for each of the three years in the period ended 31
March 2022, 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 2022, 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 17 May 2022 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 judgment. 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
109
Description of
the Matter
Asbestos Liability Valuation
At 31 March 2022, the aggregate asbestos liability was US$1,143.7 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.
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.
How We
Addressed the
Matter in Our
Audit
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 compared 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
17 May 2022
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; 445,348,933 shares issued and
outstanding at 31 March 2022 and 444,288,874 shares issued and outstanding at 31 March 2021
Additional paid-in capital
Retained earnings
Accumulated other comprehensive loss
Total shareholders’ equity
Total liabilities and shareholders’ equity
31 March
2022
31 March
2021
$
125.0 $
5.0
141.9
119.7
398.4
279.7
43.2
7.9
3.2
1,124.0
1,457.0
57.8
2.3
199.5
162.8
37.8
18.6
819.2
360.1
4.1
110
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
$
$
$
4,243.2 $
4,089.0
458.0 $
116.6
12.5
1.1
6.7
9.5
132.9
3.2
—
29.4
769.9
877.3
86.9
63.1
1.5
31.0
2.3
1,010.8
18.6
48.9
2,910.3
232.1
230.4
892.4
(22.0)
1,332.9
4,243.2 $
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
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
111
(Millions of US dollars, except per share data)
Net sales
2022
2021
2020
$
3,614.7 $
2,908.7 $
Years Ended 31 March
Cost of goods sold
Gross profit
Selling, general and administrative expenses
Research and development expenses
Restructuring expenses
Asbestos adjustments loss
Operating income
Interest, net
Loss on early debt extinguishment
Other expense (income)
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
Pension adjustments
Currency translation adjustments
Comprehensive income
2,301.2
1,313.5
461.2
38.0
—
131.7
682.6
39.3
—
0.2
643.1
184.0
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
$
$
$
$
$
459.1 $
262.8 $
1.03 $
1.03 $
444.9
445.9
0.59 $
0.59 $
443.7
445.4
459.1 $
262.8 $
(0.7)
(14.7)
(0.4)
55.9
443.7 $
318.3 $
2,606.8
1,673.1
933.7
415.8
32.8
84.4
58.2
342.5
54.4
—
0.1
288.0
46.5
241.5
0.55
0.54
442.6
444.1
241.5
0.8
(32.6)
209.7
The accompanying notes are an integral part of these consolidated financial statements.
Table of Contents
James Hardie Industries plc – Consolidated Statements of Cash Flows
112
(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
2022
2021
2020
$
459.1 $
262.8 $
241.5
Depreciation and amortization
Lease expense
Deferred income taxes
Stock-based compensation
Asbestos adjustments loss
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
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
Repayment of senior unsecured notes
Call redemption premium paid to note holders
Debt issuance costs
Proceeds from issuance of shares
Repayment of finance lease obligations and borrowings
Dividends paid
Taxes paid related to net share settlement of equity awards
Net cash used in financing activities
Effects of exchange rate changes on cash and cash equivalents, restricted cash and
restricted cash - Asbestos
Net (decrease) increase 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 payment (refund) during the year for income taxes, net
Cash paid to AICF
161.8
23.2
49.8
9.0
131.7
(2.4)
—
—
17.7
(70.9)
(64.3)
(19.2)
(5.7)
8.3
136.7
(118.8)
0.2
41.0
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
757.2 $
786.9 $
131.5
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
451.2
(257.8) $
—
(1.9)
(114.6)
26.1
(348.2) $
390.0 $
(350.0)
—
—
(2.1)
0.3
(1.0)
(484.0)
(2.8)
(449.6) $
(110.7) $
(193.8)
1.6
(9.5)
(25.0)
23.2
8.0
(9.5)
(75.5)
67.0
(120.4) $
(203.8)
— $
(130.0)
(400.0)
(9.5)
—
0.1
(0.8)
—
—
330.0
(350.0)
—
—
—
—
(0.4)
(158.6)
—
(540.2) $
(179.0)
(5.9) $
6.3 $
(6.2)
(46.5)
318.4
132.6
185.8
62.2
123.6
271.9 $
318.4 $
185.8
32.3 $
18.0 $
8.3
37.0 $
92.7 $
248.5 $
56.4 $
(3.7) $
153.3 $
61.5
52.5
108.9
$
$
$
$
$
$
$
$
$
$
$
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
113
(Millions of US dollars)
Common
Stock
Additional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
(Loss) Gain
Total
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
—
—
—
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)
Balances as of 31 March 2021
$
231.4 $
224.6 $
611.4 $
(6.6) $
1,060.8
Net income
Other comprehensive loss
Stock-based compensation
Issuance of ordinary shares
Dividends declared
—
—
0.7
—
—
—
—
5.5
0.3
—
459.1
—
—
—
(178.1)
—
(15.4)
—
—
—
459.1
(15.4)
6.2
0.3
(178.1)
Balances as of 31 March 2022
$
232.1 $
230.4 $
892.4 $
(22.0) $
1,332.9
The accompanying notes are an integral part of these consolidated financial statements.
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements
114
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 and the Philippines.
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.
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 2022, 2021 and 2020, 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)
115
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. 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.
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James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
116
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
10 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.
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James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
117
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 goodwill and intangibles annually, or whenever events or
changes in circumstances indicate their carrying value may be impaired. During the third quarter of fiscal
year 2022, the Company performed its annual test noting no impairment.
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.
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James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
118
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.
Debt
The Company’s debt consists of senior unsecured notes and an unsecured revolving credit facility. 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 vendor managed inventory
agreements whereby revenue is recognized upon the transfer of title and risk of loss to the distributors.
Advertising Costs
Advertising costs are expensed as incurred and were US$53.7 million, US$27.2 million and
US$44.6 million for the fiscal years ended 31 March 2022, 2021 and 2020, respectively.
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.
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James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
119
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.
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, forward exchange contracts are used to manage market risks and reduce exposure resulting
from fluctuations in 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 loss, Other
expense, net 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.
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James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
120
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.
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
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James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
121
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.
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.
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James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
122
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.
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 loss 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.
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James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
123
Asbestos Adjustments loss
in
loss reflected
The Asbestos adjustments
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 loss 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 loss.
Accounting Pronouncements
Adopted in Fiscal Year 2022
In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards
Update ("ASU") No. 2019-12, Income taxes (Topic 740). The amendments in the standard were issued to
simplify the accounting for income taxes and were effective for fiscal years and interim periods within
those fiscal years, beginning after 15 December 2020 with early adoption permitted. The Company
adopted ASU No. 2019-12 starting with the fiscal year beginning 1 April 2021 and the adoption of this
standard did not have a material impact on the Company's condensed 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
2022
2021
2020
444.9
1.0
445.9
443.7
1.7
445.4
442.6
1.5
444.1
There were no potential common shares which would be considered anti-dilutive for the fiscal years
ended 31 March 2022, 2021 and 2020.
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
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James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
124
the contingency period. Once these RSUs vest, they are included in the basic EPS calculation on a
weighted-average basis.
Potential common shares of 0.7 million, 0.9 million and 1.5 million for the fiscal years ended 31 March
2022, 2021 and 2020, respectively, have been excluded from the calculation of diluted common shares
outstanding as they are considered contingent shares which are not expected to vest.
2. Revenues
The following represents the Company's disaggregated revenues:
(Millions of US dollars)
Fiber cement revenues
Fiber gypsum revenues
Total revenues
(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
Year Ended 31 March 2022
North America
Fiber Cement
Asia Pacific
Fiber Cement
Europe Building
Products
Consolidated
$
$
2,551.3 $
574.9 $
76.3 $
3,202.5
—
—
412.2
412.2
2,551.3 $
574.9 $
488.5 $
3,614.7
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
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.
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.
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James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
125
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.
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
Total cash and cash equivalents, restricted cash and restricted cash - Asbestos
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
2022
2021
125.0 $
5.0
141.9
271.9 $
208.5
5.0
104.9
318.4
31 March
2022
2021
336.4 $
29.8
35.6
(3.4)
398.4 $
296.7
25.4
17.2
(6.1)
333.2
$
$
$
$
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
2022
31 March
2021
2020
$
$
6.1 $
(2.2)
(0.5)
3.4 $
4.4 $
3.1
(1.4)
6.1 $
2.9
1.7
(0.2)
4.4
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James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
126
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
6. Goodwill and Other Intangible Assets
Goodwill
The following are the changes in the carrying value of goodwill:
(Millions of US dollars)
Balance - 31 March 2020
Foreign exchange impact
Balance - 31 March 2021
Foreign exchange impact
Balance - 31 March 2022
Intangible Assets
31 March
2022
2021
$
187.3 $
149.9
16.2
82.1
(5.9)
279.7 $
17.9
60.4
(9.9)
218.3
$
Europe
Building
Products
$
$
$
196.9
12.4
209.3
(9.8)
199.5
The following are the net carrying amount of indefinite lived intangible assets other than goodwill:
(Millions of US dollars)
Tradenames
Other
Total
31 March
2022
2021
$
$
115.0 $
7.4
122.4 $
120.6
7.4
128.0
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
127
The following are the net carrying amount of amortizable intangible assets:
(Millions of US dollars)
Customer Relationships
Total
(Millions of US dollars)
Customer Relationships
Other
Total
Gross Carrying
Amount
Year Ended 31 March 2022
Accumulated
Amortization
Net Carrying Amount
52.9 $
52.9 $
(12.5) $
(12.5) $
40.4
40.4
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
$
$
$
$
The amortization of intangible assets was US$3.5 million, US$2.6 million and US$3.1 million for the fiscal
years ended 31 March 2022, 2021 and 2020, respectively.
At 31 March 2022, the estimated future amortization of intangible assets is as follows:
Years ended 31 March (Millions of US dollars):
2023
2024
2025
2026
2027
$
$
$
$
$
4.1
4.4
4.6
4.7
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
2022
2021
$
$
83.6 $
530.6
1,880.0
167.9
2,662.1
(1,205.1)
1,457.0 $
85.2
512.8
1,775.5
91.8
2,465.3
(1,093.0)
1,372.3
Depreciation expense for the fiscal years ended 31 March 2022, 2021 and 2020 was US$155.6 million,
US$129.6 million and US$125.4 million, respectively.
The amount of capitalized interest was US$1.9 million and US$9.5 million for the years ended 31 March
2022 and 2021, respectively.
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
128
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
Charges recorded to Restructuring expenses
North America Fiber Cement segment
Years Ended 31 March
2021
2020
2022
$
$
0.4 $
—
—
0.4 $
2.0 $
—
—
2.0 $
44.0
15.0
5.5
64.5
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 were 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.
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)
129
Charges recorded to Cost of goods sold
Other impairment charges in the North America Fiber Cement segment related to individual assets
totaled US$0.4 million, US$2.0 million and US$2.8 million during fiscal years ended 31 March 2022, 2021
and 2020, 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
2022
2021
57.8 $
2.3
60.1 $
12.5 $
63.1
75.6 $
1.1 $
1.5
2.6 $
46.4
2.7
49.1
7.8
53.3
61.1
1.0
1.9
2.9
78.2 $
64.0
$
$
$
$
$
$
$
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
130
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
2021
2020
2022
$
$
21.6 $
1.7
—
1.0
0.1
24.4 $
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
2022
2021
8.0
3.2
7.8
3.5
31 March
2022
2021
4.3 %
4.1 %
4.6 %
4.5 %
The following are future lease payments for non-cancellable leases at 31 March 2022:
Years ended 31 March (Millions of US dollars):
2023
2024
2025
2026
2027
Thereafter
Total
Less: imputed interest
Total lease liabilities
Operating
Leases
Finance
Leases
Total
$
14.6 $
1.1 $
15.7
11.3
9.5
5.7
37.4
0.6
0.5
0.3
—
—
$
94.2 $
2.5 $
$
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
2022
2021
23.8 $
0.1
1.0
31.8
1.3
15.7
16.3
11.8
9.8
5.7
37.4
96.7
18.5
78.2
19.2
0.1
0.8
26.0
(5.1)
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
131
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
2022
2021
$
$
273.6 $
4.6
126.2
53.6
458.0 $
174.0
4.5
80.0
48.5
307.0
31 March
2022
2021
Principal amount 3.625% notes due 2026 (€400.0 million)
$
Principal amount 5.000% notes due 2028
Total
Unsecured revolving credit facility
Unamortized debt issuance costs:
Total Long-term debt
$
446.4
400.0
846.4
40.0
(9.1)
468.3
400.0
868.3
—
(9.7)
858.6
$
877.3
$
Weighted average interest rate of Long-term debt
Weighted average term of available Long-term debt
4.2 %
5.0 years
4.3 %
4.5 years
Fair value of Senior unsecured notes (Level 1)
$
845.1
$
904.7
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)
132
Unsecured Revolving Credit Facility
In December 2021, 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
new US$600.0 million revolving credit facility with certain commercial banks and HSBC Bank USA,
National Association, as administrative agent. The size of the revolving credit facility may be increased by
up to US$250.0 million through the exercise of an accordion option. The revolving credit facility, which will
mature in December 2026 and may be extended for two additional one year terms, replaces the prior
credit facility agreement of US$500.0 million which was scheduled to mature in December 2022. Debt
issuance costs in connection with the revolving credit facility will be 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%. Included in
the revolving credit facility is a benchmark provision for the migration from LIBOR, which will be in effect
no later than June 2023. 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 2022, 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.
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 2022, 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.
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
133
Off Balance Sheet Arrangements
As of 31 March 2022, the Company had a total borrowing base capacity under the revolving credit facility
of US$600.0 million with outstanding borrowings of US$40.0 million, and US$7.5 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$552.5 million of available borrowing capacity under the revolving credit facility.
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 in accrual
Settlements made in cash or in kind
Balance at end of period
12. Asbestos
2022
31 March
2021
2020
$
$
39.6 $
1.9
(3.8)
37.7 $
42.4 $
2.4
(5.2)
39.6 $
46.6
0.8
(5.0)
42.4
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 loss
included
The Asbestos adjustments
comprehensive income comprise the following:
loss
in
the consolidated statements of operations and
(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
Loss (gain) on foreign currency forward contracts
Other
Asbestos adjustments loss
Years Ended 31 March
2022
2021
2020
$
$
145.6 $
(5.3)
0.6
140.9
(13.2)
5.3
(1.3)
131.7 $
33.0 $
(2.0)
1.5
32.5
123.0
(11.7)
0.1
143.9 $
133.8
(5.7)
(0.1)
128.0
(69.0)
(0.8)
—
58.2
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
134
Actuarial Study; Claims Estimate
AICF commissioned an updated actuarial study of potential asbestos-related liabilities as of 31 March
2022. 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 actuarial estimated future cash flows.
The following table sets forth the central estimates, net of insurance recoveries, calculated by KPMGA as
of 31 March 2022:
(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 2022
US$
A$
1,213.8
1,499.1
1,040.0
1,622.3
2,003.6
1,389.9
The asbestos liability has been revised to reflect the most recent undiscounted and uninflated actuarial
estimate prepared by KPMGA as of 31 March 2022.
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.
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.
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
135
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 2022
US$
A$
932.8
1,914.8
1,131.5
2,471.2
1,246.7
2,559.1
1,512.2
3,302.8
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.
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
2022
360
411
144
550
365
For the Years Ended 31 March
2021
393
392
153
578
360
2020
332
449
208
596
393
2019
336
430
138
572
332
2018
352
422
140
578
336
Average settlement amount per settled claim
Average settlement amount per case closed 1
A$314,000
A$282,000
A$248,000
A$277,000
A$262,000
A$253,000
A$225,000
A$245,000
A$234,000
A$217,000
Average settlement amount per settled claim
Average settlement amount per case closed 1
1 The average settlement amount per case closed includes nil settlements.
US$232,000
US$208,000
US$178,000
US$162,000
US$189,000
US$191,000
US$196,000
US$167,000
US$171,000
US$168,000
During fiscal year 2022, mesothelioma claims reporting activity was 1% above actuarial expectations and
3% unfavorable compared to the prior corresponding period. Average claim sizes were higher than
expectations for direct claims and lower than expectations for cross claims. Net cash outflow was 1%
below actuarial expectations.
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)
136
The following is a detailed rollforward of the Net Unfunded AFFA liability, net of tax, for the fiscal year
ended 31 March 2022:
(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 2021
$ (1,135.8) $
49.5 $
131.5 $
(1.9) $
(956.7) $ 367.4 $
35.2 $
(554.1)
Asbestos claims paid1
Payment received in accordance with AFFA
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
117.6
—
1.2
—
(145.6)
(0.6)
—
—
—
—
—
—
—
—
5.3
—
—
(8.3)
—
—
(117.6)
248.5
(1.2)
(1.3)
—
—
—
8.3
—
—
—
—
—
—
—
—
—
—
—
248.5
—
(1.3)
(140.3)
(0.6)
—
—
—
—
—
—
—
—
—
42.3
—
(43.3)
(7.4)
1.0
(6.4)
0.1
Effect of foreign exchange
19.5
(0.8)
0.8
(0.2)
19.3
(6.4)
—
—
—
—
—
—
—
—
8.4
—
0.3
—
248.5
—
(1.3)
(140.3)
(0.6)
42.3
—
(34.9)
(6.3)
13.2
Closing Balance - 31 March 2022
$ (1,143.7) $
45.7 $
261.6 $
(1.1) $
(837.5) $ 360.1 $
43.9 $
(433.5)
___________
1
Claims paid of US$117.6 million reflects A$159.1 million converted at the average exchange rate for the period based on the
assumption that these transactions occurred evenly throughout the period.
AICF Funding
In accordance with the terms of the AFFA, the Company anticipates that it will contribute approximately
A$157.5 million (US$117.8 million based on the exchange rate at 31 March 2022) to AICF during the
fiscal year ending 31 March 2023.
the
fiscal years ended 31 March 2022, 2021 and 2020,
During
the Company contributed
US$248.5 million (A$328.2 million), US$153.3 million (A$220.9 million) and US$108.9 million
(A$156.7 million), respectively, to AICF.
Restricted Short-Term Investments
AICF invests its excess cash in time deposits, which are classified as available-for-sale investments until
maturity. The following table represents the investments entered into or maturing during the fiscal year
ended 31 March 2022:
Date Invested
January 2022
January 2022
October 2021
October 2020
Maturity Date
Interest Rate
A$ Millions
25 January 2024
25 January 2023
6 October 2023
2 July 2021
1.41%
0.79%
0.60%
0.59%
30.0
100.0
30.0
35.0
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
137
At 31 March 2022, 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$239.4
million, based on the exchange rate at 31 March 2022). 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. At 31 March 2022 and
2021, 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.
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 2022 and 2021:
(Millions of US dollars)
Derivatives not accounted for
as hedges
Foreign currency forward
contracts
Notional Amount
31 March 2022
31 March 2021
Fair Value as of
31 March 2022 31 March 2021
Assets
Liabilities
Assets
Liabilities
$
251.0 $
456.1 $
2.0 $
1.9 $
5.5 $
8.3
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 loss (gain)
Selling, general and administrative expenses
Total loss (gain)
$
$
2022
31 March
2021
2020
5.3 $
(2.1)
3.2 $
(11.7) $
7.2
(4.5) $
(0.8)
1.3
0.5
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
138
14. Commitments and Contingencies
Legal Matters
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 weathertightness 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, two 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”). From August to December 2020, the trial of phase
one of the Cridge litigation was held in Wellington, New Zealand solely to determine whether the
Company’s New Zealand subsidiaries had a duty to the plaintiffs and breached that duty. In August 2021,
the Wellington High Court issued its decision finding in favor of the Company on all claims (the “Cridge
Decision”). In September 2021, plaintiffs filed a notice of appeal of the trial court’s decision, and
subsequently the appellate court set an appeal hearing date in August 2022 scheduled for 10-days. The
Company anticipates the appellate court to issue its decision no sooner than December 2022. As of 31
March 2022, the Company has not recorded a reserve related to the Cridge litigation as the chance of
loss remains not probable following the Cridge Decision.
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 2022, 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.
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
139
The other two claims filed in 2015 were resolved in the Company’s favor. The litigation known as “The
Hub” was voluntarily discontinued by the plaintiffs. The “White litigation” was settled on 3 August 2021 on
terms favorable to the Company.
The resolution of one or more of the litigation matters by way of a court decision or settlement 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
The operations of the Company, 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. 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)
140
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
2022
2021
2020
295.0 $
241.9 $
348.1
170.1
643.1 $
412.0 $
209.6
78.4
288.0
44.4 $
53.9
98.3
9.4
76.3
85.7
38.5 $
(8.6)
29.9
1.4
117.9
119.3
$
184.0 $
149.2 $
31.1
(39.8)
(8.7)
4.5
50.7
55.2
46.5
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
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
Years Ended 31 March
2022
2021
2020
$
109.7
$
58.1
$
9.2
(3.5)
1.9
(0.8)
55.2
(1.2)
9.9
—
3.6
8.0
36.8
2.0
5.5
49.8
(5.9)
1.6
(4.9)
(1.8)
$
184.0
$
149.2
$
38.7
5.7
(20.9)
5.5
1.7
43.5
0.4
(2.7)
(25.5)
0.1
46.5
28.6 %
36.2 %
16.1 %
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
141
Deferred tax balances consist of the following components:
(Millions of US dollars)
Deferred tax assets:
Intangible assets
Asbestos liability
Tax credit carryforwards
Other provisions and accruals
Net operating loss 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
2022
2021
$
$
958.2 $
360.1
118.7
73.3
66.2
1,576.5
(261.2)
1,315.3
(164.0)
(59.0)
(223.0)
1,092.3 $
1,038.7
367.4
122.1
62.2
61.0
1,651.4
(262.7)
1,388.7
(151.7)
(49.1)
(200.8)
1,187.9
At 31 March 2022, the Company had tax loss carry-forwards in Australia, New Zealand, Europe and the
US of US$66.2 million, that are available to offset future taxable income in the respective jurisdiction.
Carry-forwards in Australia, New Zealand and Europe are not subject to expiration.
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 2022, the Company recognized a tax deduction of
US$144.8 million (A$195.8 million) for the current year relating to total contributions to AICF of US$715.9
million (A$979.1 million) incurred in tax years 2018 through 2022.
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 2022, the Company had foreign tax credit carry-forwards of US$113.9 million that are
available to offset future taxes payable and against which there is a 100% valuation allowance. The
Company also had US tax credit carry-forwards of US$4.8 million that are available to offset future taxes
payable which expire between tax years 2022 through 2025, and against which there is a partial valuation
allowance of US$4.0 million.
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 2022. In the future, based on review of the empirical
evidence by management at that time, if management determines that realization of its asbestos related
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
142
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.
During the fiscal year ended 31 March 2022, total income tax and withholding tax paid, net of refunds
received, was US$92.7 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 utilized and
intends to further utilize these carryback provisions to obtain tax refunds. At 31 March 2022, the
Company recorded current taxes receivable of US$29.6 million.
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, including by the Australian Taxation Office in Australia and the Internal Revenue Service ("IRS")
in the US. The Company is no longer subject to general tax examinations in Ireland for the tax years prior
to tax year 2018, 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 2022, 2021, and 2020, 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 2022, 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$0.7 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
2022
2021
2020
$
$
3.2 $
9.0
12.2 $
21.7 $
18.0
39.7 $
2.8
10.3
13.1
As of 31 March 2022, the unrecorded future stock-based compensation expense related to outstanding
equity awards was US$10.4 million and will be recognized over an estimated weighted average
amortization period of 1.5 years.
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
143
2001 Equity Incentive Plan
Under the Company’s 2001 Equity Incentive Plan (the “2001 Plan”), which was amended and restated in
August 2021 and approved by shareholders, 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 2020
Granted
Balance at 31 March 2021
Granted
Balance at 31 March 2022
RSUs
Shares
Available for
Grant
22,944,379
(856,756)
22,087,623
(597,927)
21,489,696
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)
Outstanding at 31 March 2020
Granted
520,632
371,806
864,165
190,376
1,777,640
294,574
Total
3,162,437
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
Granted
593,486
233,443
726,288
141,015
1,286,922
223,469
2,606,696
597,927
Vested
Forfeited
(313,641)
(248,202)
(565,878)
(1,127,721)
(98,613)
(327,397)
(450,480)
(876,490)
Outstanding at 31 March 2022
414,675
291,704
494,033
1,200,412
Weighted
Average Fair
Value at Grant
Date (A$)
14.64
26.56
13.03
17.05
19.01
41.73
14.96
27.73
27.83
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
144
The following table includes the assumptions used for RSU grants (market condition) valued:
Vesting Condition:
Date of grant
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
FY22
Market
FY22
Market
FY21
Market
FY21
27 Aug 2021
9 Sep 2021
15 Sep 2020
5 Nov 2020
2.0 %
40.0 %
0.4 %
3.0
52.66
130,513
2.0 %
40.2 %
0.4 %
2.9
52.12
92,956
— %
39.2 %
0.2 %
2.9
30.33
1.3 %
40.1 %
0.2 %
2.8
37.24
167,491
127,083
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
FY22
FY21
423,051
433,872
1,292,934
571,132
377,506
607,253
For the fiscal years ending 31 March 2022, 2021 and 2020, US$15.2 million, US$8.2 million and US$2.0
million, respectively, was paid in cash upon vesting of CSU units.
17. Dividends
The following table summarizes the dividends declared or paid during the fiscal years 2022, 2021 and
2020:
(Millions of US dollars)
FY 2022 first half dividend
FY 2021 special dividend
FY 2020 first half dividend
FY 2019 second half dividend
US
Cents/Security
US$ Millions
Total Amount Paid
0.40
0.70
0.10
0.26
174.1
309.9
44.7
113.9
Announcement Date
Record Date
Payment Date
9 November 2021
19 November 2021
17 December 2021
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
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
145
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 loss, officer and employee
compensation and related benefits, professional and legal fees, administrative costs and rental expense
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
Research and Development
Segments total
General Corporate
Total operating income
$
$
$
Net Sales
Years Ended 31 March
2022
2021
2020
2,551.3 $
574.9
488.5
—
3,614.7 $
2,040.2 $
1,816.4
458.2
410.3
—
418.4
371.4
0.6
2,908.7 $
2,606.8
Operating Income
Years Ended 31 March
2022
2021
2020
741.2 $
160.8
62.9
(34.4)
930.5
(247.9)
682.6
585.5 $
124.8
37.6
(28.9)
719.0
(246.2)
472.8
429.3
58.5
11.2
(27.0)
472.0
(129.5)
342.5
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
(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
2022
2021
2020
$
$
114.4 $
13.6
29.8
—
2.8
1.2
161.8 $
89.1 $
13.9
28.0
—
2.8
1.2
146
88.7
12.7
25.6
0.2
3.2
1.1
135.0 $
131.5
Total Identifiable Assets
31 March
2022
2021
$
$
1,434.8 $
429.1
745.2
13.5
2,622.6
1,620.6
4,243.2 $
1,273.9
371.0
762.1
10.3
2,417.3
1,671.7
4,089.0
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
2022
2021
2020
$
$
2,551.3 $
391.7
165.0
115.9
390.8
3,614.7 $
2,040.2 $
1,817.0
321.9
143.0
81.9
321.7
290.4
135.7
72.2
291.5
2,908.7 $
2,606.8
Total Identifiable Assets
31 March
2022
2021
$
$
1,442.7 $
314.4
503.7
48.9
312.9
2,622.6
1,620.6
4,243.2 $
1,279.4
256.7
527.6
46.3
307.3
2,417.3
1,671.7
4,089.0
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
147
____________
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$4.1 million, US$2.9 million and US$3.0 million in fiscal years 2022,
2021 and 2020, respectively.
(Millions of US dollars)
North America Fiber Cement
Asia Pacific Fiber Cement
Europe Building Products
Research and Development
Years Ended 31 March
2022
2021
2020
$
$
5.3 $
1.5
0.9
30.3
38.0 $
5.6 $
1.1
1.6
26.0
34.3 $
5.3
1.8
1.7
24.0
32.8
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
$
41.2 $
Asia Pacific
Fiber Cement
Europe
Building
Products
General
Corporate
Total
—
—
—
—
—
—
15.0 $
11.2
—
2.9
0.2
5.8
1.2
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
2
3
4
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.
Relates to the closure of the Penrose, New Zealand plant.
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.
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.
Table of Contents
James Hardie Industries plc – Notes to Consolidated Financial Statements (Continued)
148
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 represents net sales generated by this customer, which is from the North America Fiber
Cement segment:
(Millions of US dollars)
Customer A
2022
418.3
$
Years Ended 31 March
2021
347.3
12.0 % $
12.0 % $
2020
306.0
12.0 %
Approximately 33%, 33% and 34% of the Company’s net sales in fiscal year 2022, 2021 and 2020,
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 2022:
(Millions of US dollars)
Balance at 31 March 2021
Other comprehensive (loss) gain
Balance at 31 March 2022
20. Employee Benefit Plan
Cash Flow
Hedges
Pension
Actuarial Gain
(Loss)
Foreign
Currency
Translation
Adjustments
$
$
0.2 $
—
0.2 $
0.4 $
(0.7)
(0.3) $
(7.2) $
(14.7)
(21.9) $
Total
(6.6)
(15.4)
(22.0)
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 2022, 2021 and 2020, the Company made matching contributions of
US$14.1 million, US$11.1 million and US$11.1 million, respectively.
In January 2021, the Company established a deferred compensation plan for its executives whereby the
plan assets are held in a rabbi trust. The deferred compensation is funded to the rabbi trust which holds
investments directed by the participants and are accounted for as held for sale. The Company will match
up to a maximum of the first 6% of an employee's eligible compensation that would not be eligible in the
401(k) Plan due to IRS contribution limits so long as the participant defers eligible compensation to the
deferred compensation plan. As of 31 March 2022, the assets held in trust and related deferred
compensation liability recorded in the accompanying consolidated balance sheets are immaterial.
Table of Contents
James Hardie 2022 Annual Report on Form 20-F
149
REMUNERATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
(UNAUDITED, NOT FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS)
Fees billed for each of the last three fiscal years for professional services provided by our independent
registered public accounting were as follows:
Description of Service
Audit fees1
Audit-related fees2
Tax fees
All other fees
____________
FY22
US$ Millions
FY21
FY20
$
$
6.1 $
0.1
—
— $
5.6 $
—
—
— $
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 engaged one temporary employee to participate in a
minor portion of the audit of our consolidated financial statements for fiscal year 2022. In fiscal years 2021 and 2020, no
temporary employees were used to conduct the audits of our consolidated financial statements.
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 COVID-19 pandemic may adversely impact 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. There have been, and in some jurisdictions continue to be,
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. Although some
restrictions have eased in many jurisdictions, certain regions across the world continue to impose or are
re-imposing restrictions.
We operate facilities around the world that are subject to being affected by this pandemic. The continued
health and productivity of our employees throughout the COVID-19 pandemic remains a key priority and
we continue to monitor developments and update our practices in accordance with applicable workplace
safety and health standards.
Additionally, the ongoing COVID-19 pandemic could negatively impact our future manufacturing
operations, as well as adversely affect our supply chain and transportation networks. This may result in
continued disruptions or delays in the availability and shipments of certain materials or equipment. We
have engaged with supply chain partners to mitigate disruptions and delays; however, if we are unable to
successfully mitigate, then such disruptions or delays may impact our ability to meet market demand for
our products. Our business may also 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.
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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.
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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
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, significant cost inflation, 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, including continued significant
inflation of key energy prices in Europe which may be exacerbated by ongoing conflict in the region,
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.
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.
Additionally, 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
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future shortages or curtailments could significantly disrupt our operations and increase our expenses.
While our insurance includes coverage for certain “business interruption” losses (i.e., lost profits) and for
certain “service interruption” losses, 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. 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. We accrue 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 that we believe are adequate, we
cannot assure you that warranty expense levels will not exceed our reserves. Costs significantly
exceeding our warranty reserves 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 one third of our net sales in fiscal years 2020, 2021
and 2022 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. 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.
Legal and Regulatory Risks
Our ability to sell our products is influenced by local building codes and ordinances which may
hinder our ability to compete effectively in certain markets and 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
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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 large construction defect and/or product liability
claims in New Zealand that relate to weathertightness claims in residential buildings 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 and breach of certain legal duties related to the testing,
warnings and marketing of those products and systems. Losses incurred in connection with defending
and resolving New Zealand weathertightness claims 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, we are subject to environmental, health and safety laws and regulations. Under these
laws and regulations, we may be held jointly and severally responsible for the remediation of 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 regulated
materials, other environmental damage, including damage to natural resources, or our failure to comply
with applicable environmental regulations.
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 tort litigation.
Many jurisdictions, including the United States, Australia and New Zealand, have recently adopted or are
considering adopting 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 additional impacts on our business as a
result of further 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 changes 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 our failure to comply 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 also 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. Such
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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. Like other large business organizations, we face numerous and evolving cyber risks of
increasing scale and volume.
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, are
targeted by those seeking to gain unauthorized access to technology systems and may be vulnerable to
security breaches, cyber-attacks, employee theft or misconduct, computer viruses and malware
infections, 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 significant 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 all computer security incidents 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, significantly disrupt our operations and have a material
adverse effect on our business, results of operations and financial condition. We may be required to
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expend additional resources to continue to enhance our security measures or to investigate and
remediate any security vulnerabilities.
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”),
the California Consumer Privacy Act ("CCPA"), and the California Privacy Rights Act (“CPRA”). The
GDPR became effective in May 2018 and regulates the collection, processing, storing, 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. The
CPRA amends and expands CCPA and most provisions will become operative in 2023.
Laws such as the GDPR, CCPA and CPRA place limitations on how companies can process customer
data, which 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, reputational harm, or litigation expenses
due to violations 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.
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. 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.
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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.
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 or the liabilities arising from them are larger than that currently
estimated by AICF’s actuary, KPMGA, it is possible we will be required to pay to AICF our current annual
funding payments 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.
that contained asbestos.
Prior to 1988, a New Zealand subsidiary in the James Hardie Group manufactured products in New
the majority of asbestos-related disease
Zealand
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
In New Zealand,
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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.
Because the 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 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.
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 are actively considering making changes to existing tax laws and treaties, which could alter or
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increase our tax obligations, could materially affect 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 audits and reviews by
authorities, including the Internal Revenue Service in the United States and the Australian Taxation Office
in Australia, 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 2019
and subsequent periods, which could adversely affect our financial position, liquidity, results of operations
and cash flows.
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LEGAL PROCEEDINGS
Legal Matters
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, 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 audits and reviews by taxing
authorities, including the Internal Revenue Service in the United States and the Australian Taxation Office
in Australia, 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, two 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.
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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”). From August to December 2020, the trial of phase
one of the Cridge litigation was held in Wellington, New Zealand solely to determine whether the
Company’s New Zealand subsidiaries had a duty to the plaintiffs and breached that duty. In August 2021,
the Wellington High Court issued its decision finding in favor of the Company on all claims (the “Cridge
Decision”). In September 2021, plaintiffs filed a notice of appeal of the trial court’s decision, and
subsequently the appellate court set an appeal hearing date in August 2022 scheduled for 10-days. The
Company anticipates the appellate court to issue its decision no sooner than December 2022. As of 31
March 2022, the Company has not recorded a reserve related to the Cridge litigation as the chance of
loss remains not probable following the Cridge Decision.
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 2022, 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.
The other two claims filed in 2015 were resolved in the Company’s favor. The litigation known as “The
Hub” was voluntarily discontinued by the plaintiffs. The “White litigation” was settled on 3 August 2021 on
terms favorable to the Company.
The resolution of one or more of the litigation matters by way of a court decision or settlement 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 to our consolidated financial statements in Section 2 for further
information related to our policies related to asserted and unasserted claims.
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 Interim 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 Interim 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 2022, 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 Interim 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 2022. 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 2022.
The effectiveness of our internal control over financial reporting as of 31 March 2022 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 2022, 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 2022,
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 2022 and 2021, the related
consolidated statements of operations and comprehensive income, changes in shareholders’ equity and cash flows for
each of the three years in the period ended 31 March 2022, and the related notes and our report dated 17 May 2022
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
Annual 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
17 May 2022
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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
2021
2020
2022
Fiber Cement United States and Canada
Europe Building Products
Fiber Cement Australia
Fiber Cement New Zealand1
Fiber Cement Philippines
Research & Development, including Technology
General Corporate
Total Employees
____________
3,014
935
583
53
362
186
63
5,196
2,662
937
580
116
348
155
63
4,861
2,563
972
597
180
340
156
61
4,869
1
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 2022, of the 5,196 average number of people employed, approximately 902
employees have their employment conditions determined by collective agreements negotiated with labor
unions (approximately 654 and 248 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,
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.
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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, 1
Columbus Circle Floor 17S, New York, New York 10019, 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.
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
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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$30,820 in reimbursements of
this type in fiscal year 2022); (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 2.17 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 Union ("EU") 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
EU. 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.
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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
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
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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.
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
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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.
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.
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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
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.
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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.
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;
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•
•
•
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
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 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 2022, 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
66.6 %
63.5 %
25.3 %
10.8 %
13.7 %
61.7 %
13.5 %
14.8 %
10.0 %
3.2 %
3.4 %
2.4 %
5.9 %
4.6 %
0.6 %
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 %
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 0.7601 as of 31 March 2021 to
0.7482 as of 31 March 2022, a 2% movement, resulting in a US$13.2 million favorable impact on our
fiscal year 2022 net income. Assuming that our unfunded net AFFA liability in Australian dollars remains
unchanged at A$579.4 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 2022 exchange rate of
0.7482) would have approximately a US$43.4 million favorable or unfavorable impact on our net income.
For fiscal year 2021, 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.
Interest Rate Risk
We have market risk from changes in interest rates, primarily related to our revolving credit facility. As of
31 March 2022 and 2021, our revolving credit facility was subject to variable interest rates. Assuming all
loans were fully drawn, each one percentage point change in interest rates would result in a US$6.1
million change in annual cash interest expense under the revolving credit facility. At 31 March 2022 and
31 March 2021, we had US$40.0 million and nil outstanding under our revolving credit facility exposing us
to market risk due to changes in the rate at which interest accrues.
Commodity Price Risk
We are exposed to changes in prices of commodities used in our operations, primarily associated with
energy, fuel and raw materials. 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 and believe that a +/- 10% change in the
average cost of these materials for the year ended 31 March 2022 would have resulted in +/- US$55.9
million or 2.4% impact on our cost of sales for fiscal year 2022.
For fiscal year 2021, we have assessed the market risk of our core commodities 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.
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SECTION 4
SHARE/CHESS UNITS OF FOREIGN SECURITIES INFORMATION
As of 30 April 2022, JHI plc had 445,348,933 CUFS issued over ordinary shares listed on the ASX and
held by CHESS Depositary Nominees Pty Ltd (“CDN”) on behalf of 31,745 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 2022, 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
2022 and 2021:
Geographic Region
Australia
United States
United Kingdom
Europe (excluding the United Kingdom)
Asia
Other
31 March
2022
31 March
2021
56.02 %
18.73 %
6.17 %
4.75 %
4.81 %
9.52 %
60.32 %
15.93 %
3.65 %
6.26 %
4.49 %
9.35 %
As of 30 April 2022, 0.07% of the outstanding shares of our common stock was held by 74 CUFS holders
with registered addresses in the United States. In addition, as of 30 April 2022, 1.37% 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 1.44% of our outstanding capital stock was registered to 80 US holders as of 30 April
2022.
Distribution Schedule of James Hardie Industries plc
The following table shows a distribution of the holders of our CUFS at 30 April 2022:
Size of Holding Range
Holders
CUFS
Holdings
Total %
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001 and over
Totals
24,497
7,441,898
6,094
12,766,035
690
410
4,891,924
9,170,178
54
411,078,898
31,745
445,348,933
1.67
2.87
1.10
2.06
92.30
100.00
Options
Holders
-
Holdings
-
-
-
-
-
-
-
-
-
-
-
Table of Contents
James Hardie 2022 Annual Report on Form 20-F
181
Based on the closing price of A$41.54 on 30 April 2022, there were 449 CUFS holders that held less than
a marketable parcel of shares.
Substantial CUFS holders of James Hardie Industries plc
As at 30 April 2022, the Company had received notification of the following interests in its share capital,
which were equal to, or in excess of, 3%:
CUFS holder
AustralianSuper Pty Ltd
Blackrock, Inc
OppenheimerFunds, Inc.
Bennelong Funds Management Group Pty Ltd
Commonwealth Bank of America
The Vanguard Group, Inc.
KKR Entities
Challenger Limited
Mitsubishi UFJ Financial Group, Inc.
Schroders plc
Shares
Beneficially
Owned
31,061,184
29,902,153
23,564,091
22,359,348
22,198,835
20,182,692
19,730,075
18,918,753
17,451,381
14,529,189
Percentage
of Shares
Outstanding
Date became
substantial
shareholder
6.97 % 2 September 2019
6.71 % 16 October 2014
5.29 %
30 June 2016
5.02 % 16 December 2020
4.98 % 15 August 2014
4.53 % 17 August 2018
4.43 % 1 December 2021
4.25 %
3.92 %
3.26 %
23 May 2018
2 August 2019
1 June 2015
James Hardie Industries plc 20 largest CUFS holders and their holdings as of 30 April 2022
Name
HSBC Custody Nominees (Australia) Limited
J P Morgan Nominees Australia Pty Limited
Citicorp Nominees Pty Limited
National Nominees Limited
BNP Paribas Noms Pty Ltd
BNP Paribas Nominees Pty Ltd
Citicorp Nominees Pty Limited
Australian Foundation Investment Company Limited
HSBC Custody Nominees (Australia) Limited
BNP Paribas Nominees Pty Six Sis Ltd
BNP Paribas Nominees Pty Ltd
CS Third Nominees Pty Limited
HSBC Custody Nominees (Australia) Limited
Netwealth Investments Limited
BNP Paribas Nominees Pty Ltd
Argo Investments Limited
Millenium Pty Ltd
Carlton Hotel Limited
Djerriwarrh Investments Limited
BNP Paribas Noms Pty Ltd
TOTAL
CUFS Holdings
155,916,130
101,056,344
59,742,048
26,498,381
13,890,691
12,890,949
11,502,831
4,400,000
4,099,258
2,733,458
2,068,338
1,111,643
1,074,729
989,069
697,000
691,000
630,000
625,362
593,920
545,869
401,757,020
Percentage
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
35.01 %
22.69 %
13.41 %
5.95 %
3.12 %
2.89 %
2.58 %
0.99 %
0.92 %
0.61 %
0.46 %
0.25 %
0.24 %
0.22 %
0.16 %
0.16 %
0.14 %
0.14 %
0.13 %
0.12 %
90.21 %
Table of Contents
James Hardie 2022 Annual Report on Form 20-F
182
GLOSSARY OF ABBREVIATIONS AND DEFINITIONS
Abbreviations
2001 Plan
ADR
ADS
AFFA
AGM
AICF
ASC
ASIC
ASU
ASX
ATO
CARES Act
CCPA
CDN
CEO
CFO
CIO
CHESS
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
Chief Information Officer
Clearing House Electronic Subregister System
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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James Hardie 2022 Annual Report on Form 20-F
183
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.
Price/Mix – The percentage growth in revenue attributable to price increases and shift in mix of products
sold. Price/Mix is calculated as the Net Sales growth percentage less the Volume growth percentage.
Energy Inflation (Europe) – Hyperinflation in energy costs is defined as the increase in energy costs
above normal energy inflation.
Normal Energy Inflation – Calculated based on average rates per unit from April 2021 - July 2021, compared to
average rates per unit for the prior corresponding period.
Energy Hyperinflation – Calculated based on average rates per unit from August 2021 - March 2022, less Normal
Energy Inflation (as defined above).
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James Hardie 2022 Annual Report on Form 20-F
184
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");
• Adjusted interest, net;
• Adjusted income before income taxes;
• Adjusted income tax expense;
• Adjusted effective tax rate;
• 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.
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James Hardie 2022 Annual Report on Form 20-F
185
Adjusted operating income
(Millions of US dollars)
Operating income
Excluding:
Asbestos:
FY22
FY19
$ 682.6 $ 472.8 $ 342.5 $ 351.6 $ 229.2 $ 393.2 $ 354.0
FY21
FY20
FY18
FY17
FY16
Asbestos adjustments loss (gain)
AICF SG&A expenses
131.7
1.3
143.9
1.2
58.2
1.7
84.4
—
22.0
1.5
156.4
1.9
(40.4)
1.5
(5.5)
1.7
29.5
—
—
10.0
—
—
—
—
—
—
11.1
—
Restructuring and product line
discontinuation expenses
Fermacell acquisition costs
New Zealand weathertightness
claims
Adjusted operating income
—
0.5
$ 815.6 $ 629.0 $ 486.8 $ 404.6 $ 397.5 $ 354.3 $ 350.7
—
—
—
—
—
Adjusted net income
(Millions of US dollars)
Net income
Excluding:
Asbestos:
Asbestos adjustments loss (gain)
AICF SG&A expenses
AICF interest (income) expense, net
Restructuring and product line
discontinuation expenses
Fermacell acquisition costs
New Zealand weathertightness claims
Loss on early debt extinguishment
Tax adjustments1
Adjusted net income
FY22
FY19
$ 459.1 $ 262.8 $ 241.5 $ 228.8 $ 146.1 $ 276.5 $ 244.4
FY21
FY17
FY20
FY16
FY18
131.7
1.3
(0.9)
143.9
1.2
(0.5)
58.2
1.7
(1.4)
22.0
1.5
(2.0)
156.4
1.9
(1.9)
(40.4)
1.5
1.1
(5.5)
1.7
0.3
—
—
—
—
29.5
—
—
0.5
—
1.5
$ 620.7 $ 458.0 $ 352.8 $ 300.5 $ 291.3 $ 248.6 $ 242.9
84.4
—
—
—
(31.6)
—
10.0
—
26.1
(47.3)
11.1
—
—
—
39.5
29.5
—
—
1.0
19.7
—
—
—
—
9.9
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)
FY22
FY21
FY20
FY19
FY18
FY17
FY16
$ 620.7 $ 458.0 $ 352.8 $ 300.5 $ 291.3 $ 248.6 $ 242.9
445.9
445.4
444.1
443.0
442.3
443.9
447.2
1.39
1.03
0.79
0.68
0.66
0.56
0.54
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James Hardie 2022 Annual Report on Form 20-F
186
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
FY22
FY21
FY20
FY19
FY18
FY17
FY16
$ 815.6 $ 629.0 $ 486.8 $ 404.6 $ 397.5 $ 354.3 $ 350.7
—
—
—
(7.3)
—
—
—
815.6
629.0
486.8
397.3
397.5
354.3
350.7
(56.4)
1,653.9 1,780.8 1,753.7 1,492.7 1,272.0 1,107.6 1,102.7
40.5
$ 1,597.5 $ 1,587.2 $ 1,558.2 $ 1,415.3 $ 1,247.7 $ 1,157.9 $ 1,143.2
30.7%
28.1%
51.1%
31.9%
30.6%
31.2%
39.6%
(195.5)
(193.6)
(77.4)
(24.3)
50.3
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 (FY16-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
Asia Pacific Fiber Cement Segment Adjusted operating income
(Millions of US dollars)
Asia Pacific Fiber Cement Segment 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
Europe Building Products Segment Adjusted operating income
(Millions of US dollars)
Europe Building Products Segment 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
FY22
FY21
$
160.8 $
124.8
$
$
$
—
160.8 $
574.9
28.0%
3.4
128.2
458.2
28.0%
FY22
FY21
62.9 $
37.6
—
62.9 $
488.5
12.9%
5.1
42.7
410.3
10.4%
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James Hardie 2022 Annual Report on Form 20-F
187
Adjusted interest, net
(Millions of US dollars)
Interest, net
AICF interest income, net
Adjusted interest, net
FY22
FY21
39.3 $
47.8
(0.9)
40.2 $
(0.5)
48.3
$
$
Adjusted effective tax rate
(Millions of US dollars)
Income before income taxes
Asbestos:
Asbestos adjustments loss
AICF SG&A expenses
AICF interest income, net
FY22
FY21
$
643.1 $
412.0
131.7
1.3
(0.9)
—
775.2 $
184.0
(29.5)
154.5 $
28.6%
19.9%
143.9
1.2
(0.5)
11.1
567.7
149.2
(39.5)
109.7
36.2%
19.3%
Restructuring expenses
Adjusted income before income taxes $
Income tax expense
Tax adjustments1
Adjusted income tax expense
Effective tax rate
Adjusted effective tax rate
$
1
Includes tax adjustments related to the amortization benefit of certain US
intangible assets, asbestos, and other tax adjustments
North America Fiber Cement Segment Adjusted operating income
(Millions of US dollars)
Operating income
Excluding:
FY22
FY21
FY20
FY19
$
741.2 $
585.5 $
429.3 $
382.5
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
$
741.2 $
588.0 $
470.5 $
2,551.3
2,040.2
1,816.4
387.9
1,676.9
29.1%
28.8%
25.9%
23.1%
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James Hardie 2022 Annual Report on Form 20-F
188
Asia Pacific Fiber Cement Segment Adjusted operating income
(Millions of Australian dollars)
Operating income
Excluding:
Restructuring expenses
FY22
FY21
FY20
FY19
A$
217.4 A$
172.4 A$
80.8 A$
136.5
Asia Pacific Fiber Cement Segment Adjusted
operating income
Asia Pacific Fiber Cement segment net sales
A$
Asia Pacific Fiber Cement Segment Adjusted
operating income margin
—
4.9
58.3
—
217.4 A$
777.7
177.3 A$
635.2
139.1 A$
614.1
136.5
612.2
28.0%
28.0%
22.7%
22.3%
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
FY22 Segment Adjusted EBITDA margins
FY22
FY21
FY20
FY19
€
€
54.2 €
31.4 €
10.0 €
—
4.5
4.9
54.2 €
420.5
35.9 €
350.6
14.9 €
334.2
12.9%
10.4%
4.5%
9.1
—
9.1
318.0
2.7%
(In Millions)
Operating income
Excluding:
North America
Fiber Cement
$
741.2 A$
Asia Pacific
Fiber Cement
Europe
Building
Products
217.4 €
54.2
Depreciation and amortization
Segment Adjusted EBITDA
Segment net sales
Segment Adjusted EBITDA margin
$
114.4
855.6 A$
2,551.3
33.5%
18.4
235.8 €
777.7
30.3%
25.7
79.9
420.5
19.0%
Table of Contents
James Hardie 2022 Annual Report on Form 20-F
189
EXHIBIT LIST
Exhibit
Number
Exhibit Description
1.1
1.2
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
Memorandum of Association of James Hardie Industries plc, as amended (filed as Exhibit 1.1 to the
Company’s Annual Report on Form 20-F filed on 18 May 2021 (Commission File 001-15240) and
incorporated by reference herein)
Articles of Association of James Hardie Industries plc (filed as Exhibit 1.2 to the Company’s Annual
Report on Form 20-F filed on 18 May 2021 (Commission File 001-15240) and incorporated by
reference herein)
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
James Hardie 2022 Annual Report on Form 20-F
190
Exhibit
Number
Exhibit Description
2.9
2.10
2.11
2.12
2.13
2.14
2.15
2.16
2.17
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)
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 (filed as
Exhibit 2.19 to the Company’s Annual Report on Form 20-F filed on 18 May 2021 (Commission File
001-15240) and incorporated by reference herein)
2.18*
Credit and Guaranty Agreement, dated 21 December 2021, 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
4.1*
Amended and Restated James Hardie Industries SE 2001 Equity Incentive Plan
4.2*
Amended and Restated James Hardie Industries plc Long Term Incentive Plan 2006
4.3
4.4
4.5
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)
Table of Contents
James Hardie 2022 Annual Report on Form 20-F
191
Exhibit
Number
Exhibit Description
4.6
4.7
4.8
4.9
4.10
4.11
4.12
4.13
4.14
4.15
4.16
4.17
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)
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)
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)
Table of Contents
James Hardie 2022 Annual Report on Form 20-F
192
Exhibit
Number
Exhibit Description
4.18
4.19
4.20
4.21
4.22
4.23
4.24
4.25
4.26
4.27
4.28
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)
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)
Table of Contents
James Hardie 2022 Annual Report on Form 20-F
193
Exhibit
Number
4.29
4.30
4.31
4.32
4.33
4.34
Exhibit Description
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)
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)
James Hardie Industries plc 2020 Non-Executive Director Equity Plan (filed as Exhibit 4.34 to the
Company’s Annual Report on Form 20-F filed on 18 May 2021 (Commission File 001-15240) and
incorporated by reference herein)
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
Table of Contents
James Hardie 2022 Annual Report on Form 20-F
194
Exhibit
Number
Exhibit Description
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 2022 Annual Report on Form 20-F
195
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: 17 May 2022
JAMES HARDIE INDUSTRIES plc
By:
/s/ HAROLD WIENS
Harold Wiens
Interim Chief Executive Officer
This Annual Report has been approved by the Board of Directors of James Hardie Industries plc.
Date: 17 May 2022
JAMES HARDIE INDUSTRIES plc
By:
/s/ MICHAEL N. HAMMES
Michael N. Hammes
Executive Chairman
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: 445,348,933 shares of common stock at 31 March 2022
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
2022 Annual Report
| 241
Board of Directors
James Hardie’s directors have widespread experience, spanning
general management, innovation, finance, manufacturing, marketing,
and accounting.
MICHAEL HAMMES (BS, MBA)
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 Executive Chairman in January 2022.
SUZANNE ROWLAND (MS, BS)
Non-executive Director
Suzanne Rowland was appointed as an
independent non-executive director in February
2021. She is a member of the Audit Committee
and the Remuneration 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.
ANNE LLOYD (BS)
Lead Independent Director
Anne Lloyd was appointed as an independent
non-executive director in November 2018, and
became the Lead Independent Director in January
2022. She is a member of the Remuneration
Committee and Chair of the Audit 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, and the
Remuneration Committee.
PERSIO LISBOA (BS)
Non-executive Director
Persio Lisboa was appointed as an independent
non-executive director in February 2018. He
is Chairman of the Remuneration Committee
and a member of the Nominating and
Governance Committee.
242
Marketing Directly to HomeownersLetter to ShareholdersGlobal Results SummaryGlobal Capacity Expansion Management Team
Our management team covers the key areas of general management,
commercial marketing, innovation, manufacturing and operations,
finance, human resources, and legal.
HAROLD WIENS (BS)
Interim CEO
Harold Wiens was appointed Interim CEO of
James Hardie in January 2022. He remains a
member of the Board of Directors.
SEAN GADD (BENG, MBA)
President, North America
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. He was
appointed North America President in January 2022.
JOE BLASKO (BSFS, JD)
General Counsel, Chief Compliance Officer
and Company Secretary
JAMES JOHNSON II (BA, MBA)
Chief Information Officer
BOB STEFANSIC
Interim CHRO
Bob Stefansic joined James Hardie in July 2020 as
Executive Vice President, North America, End to End
Supply Chain with responsibility for driving operational
efficiencies and improvements across the supply
chain, with emphasis on delivering business value via
the Hardie Manufacturing Operating System. In early
2022, he took the position of Interim Chief Human
Resources Officer.
JASON MIELE (BA)
Chief Financial Officer
RYAN KILCULLEN (BSC, MS)
Executive Vice President, Global 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. He was appointed Executive Vice
President, Global Operations in January 2022 and is
overseeing the global capacity expansion program.
DR. JOE LIU (BS, PHD)
Chief Technology Officer
JOHN ARNEIL
General Manager, Asia Pacific
John Arneil joined James Hardie in 2002 and
was appointed Country Manager, Australia in
2018. He is responsible for running the company’s
Australian activities, which are headquartered in
Sydney, Australia.
JÖRG BRINKMANN (MS, PHD)
General Manager, Europe
2022 Annual Report
| 243
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, corporate security, and government relations.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.Dr. Joe Liu joined James Hardie as Senior Vice President and General Manager, Asia Pacific , in December 2021 and was appointed Chief Technology Officer in January 2022. Before joining James Hardie, Dr. Liu concluded an impressive 26-year career with 3M Company, where he held a variety of R&D, Commercial and International Management roles.James Johnson II joined James Hardie as Chief Information Officer (CIO) in December 2021. He is responsible for all aspects of information technology and cyber security globally, and will drive a focused IT vision and strategy.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.20-F FinancialsBoard of DirectorsManagement TeamGlobal InnovationEnvironmental, Social & GovernanceShareholder InformationBoard of DirectorsManagement Team Shareholder Information
244
Marketing Directly to HomeownersLetter to ShareholdersGlobal Results SummaryGlobal Capacity Expansion 2022 Annual Report
| 245
20-F FinancialsBoard of DirectorsManagement TeamGlobal InnovationEnvironmental, Social & GovernanceShareholder InformationShareholder Information Shareholder Information
2022 Key dates and calendar 1
Share/Cufs Registry
17 May
FY22 Fourth Quarter and
Full Year results and management
presentation
12-13 September
Global Investor Day
16 August
FY23 First Quarter results and
management presentation
8 November
FY23 Second Quarter and
Half-Year results and management
presentation
1. AUS 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.
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)
Details of the 2022 AGM of James Hardie Industries
plc will be set out in the Notice of Annual General
Meeting 2022.
246
Marketing Directly to HomeownersLetter to ShareholdersGlobal Results SummaryGlobal Capacity Expansion 20-F FinancialsBoard of DirectorsManagement TeamGlobal InnovationEnvironmental, Social & GovernanceShareholder InformationShareholder Information © 2022 James Hardie Building Products Inc. All Rights Reserved. TM, SM, and ® denote trademarks or registered trademarks of James Hardie Technology Limited. HS2218 05/22
2022 Annual Report
jameshardie.com