FLETCHER BUILDING LIMITED — Interim / Quarterly Report 2012

Feb 21, 2012

Appendix 4D (rule 4.2A.3) ASX - Half Year Report

Appendix 4D (rule 4.2A.3)

Half Year Report

Fletcher Building Limited

Half Year ended 31 December 2011

ARBN - 002 232 368

Preliminary half year report on results (including the results for the previous corresponding half year) in accordance with Listing Rule 4.2A.3

The financial information presented has been prepared in accordance with NZ IAS 34 Interim Financial Reporting, and gives a true and fair view of the matters to which the report relates and is based on unaudited accounts.

The Listed Issuer (Fletcher Building Limited) has a formally constituted Audit Committee of the Board of Directors.

Results for Announcement to the Market
				NZ$million
2.1 Revenues from ordinary activities	Up	30.0%	to	4,509
2.2 Profit (loss) from ordinary activities after
tax attributable to members	Down	(13.3%)	to	144
2.3 Net Profit (loss) from ordinary activities after tax
attributable to members	Down	(13.3%)	to	144
2.4 Dividends (distributions)			Amount	Franked amount
			per security	per security
Interim dividend, payable 18 April 2012			NZ17.00 cps	NZ7.2857 cps
No New Zealand imputation credits will be attached to this dividend. Australian		franking credits to the value of NZ 7.2857 cps
will be attached. Please refer to the press release for further details.
2.5 Record date for determining entitlement to the dividend:			30 March 2012

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Appendix 4D (rule 4.2A.3) ASX - Half Year Report

2.6 Statement of Earnings

Refer to attachment.

2.7 Balance Sheet

Refer to attachment.

2.8 Statement of Cash Flows

Refer to attachment.

2.9 Statement of Movements in Equity

Refer to attachment.

2.10 Notes to the Accounts

Refer to attachment.

3. Net Tangible Assets per security

Net tangible assets per ordinary security (NZ$)

Dec 2011 Dec 2010 2.72 3.10

4. Control of Entities gained or lost during period

Control gained:

Name of subsidiary or group of subsidiaries Various minor acquisitions totalling $31m Contribution to net profit for the period attributable to members $0.4 million Date from which such contribution has been calculated Various dates Control Lost: Name of subsidiary or group of subsidiaries Assets of Tasman Access Floors Contribution to net profit for the period attributable to members (excluding unusual items) $3.7m,( $2.7m gain on sale) Date to which such contribution has been calculated 31-Dec-11 Contribution to net profit for the period attributable to members for the previous corresponding Full Year $0.7m

5. Dividends

Amount per Franked amount per security per security Interim dividend, payable 18 April 2012 NZ17.00 cps NZ7.2857 cps No New Zealand imputation credits will be attached to this dividend. Australian franking credits to the value of NZ 7.2857 cps will be attached. Please refer to the press release for further details. 2.5 Record date for determining entitlement to the dividend: 30 March 2012

6. Dividend Reinvestment Plan

Refer to the attached press release for further details of the dividend reinvestment plan.

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Appendix 4D (rule 4.2A.3) ASX - Half Year Report

7. Associates

Fletcher Building's Share of Associates: Carrying amount at the beginning of the period Advances to associates during the period Disposal during the period Equity accounted earnings of associates Dividends from associates Foreign currency translation movement to reserves Carrying amount at the end of the period	Dec 2011	Dec 2010
	NZ$million	NZ$million
	209 (1) (3) 15 (16)	189 2 16 (17) 5
	204	195

Material Interests in Associates

Fletcher Building has an interest (that is material to it) in the following associates:

Name of Associates	Percentage of ownership interest (ordinary shares, units, etc) held at end of halfyear	Percentage of ownership interest (ordinary shares, units, etc) held at end of halfyear	Contribution to Operating Profit and Extraordinary Items after Taxation	Contribution to Operating Profit and Extraordinary Items after Taxation
	Dec 2011	Dec 2010	Dec 2011	Dec 2010
			NZ$million	NZ$million
Equity Accounted Associates Sims Pacific Metals Laminex associates -Wespine and Dynea Formica Associate - Homapal Plattenwerk GmbH Miscellaneous	50.0% 50.0% 50.0%	50.0% 50.0% 50.0%	Equity Accounted	Equity Accounted
			4 5 3 3	4 6 3 3
Total			15	16
Other Material Interests NIL
Total			15	16

8. The financial information presented has been prepared in accordance with NZ IAS 34 Interim Financial Reporting, and gives a true and fair view of the matters to which the report relates and is based on unaudited accounts.

9. Other Significant information to assess entity's financial performance and financial position

Refer Press Release.

10. Commentary on results for the period.

Refer Press Release.

11. Details of basic and diluted EPS Basic EPS Diluted EPS	Dec 2011	Dec 2010
	NZ cents	NZ cents
	21.2 20.9	27.3 26.9

Diluted net earnings per share uses the weighted average number of shares used for basic net earnings per share, adjusted for dilutive securities. Capital notes and options are convertible into the Company's shares, and are therefore considered dilutive securities for diluted net earnings per share.

Numerator
Net earnings	144	166
Numerator for basic earnings per share	144	166
Dilutive capital notes distribution	14	12
Numerator for diluted net earningsper share	158	178
Denominator (millions of shares)
Denominator for basic net earnings per share	680	609
Conversion of dilutive capital notes	75	53
Denominator for diluted net earningsper share	755	662

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Appendix 4D (rule 4.2A.3) ASX - Half Year Report

12. Returns to Shareholders including distributions and buy backs.

Refer to items 5& 6 for details of dividend distributions. There were no other distributions in the current or prior period.

13. Segment results

Refer to attachment and press release for industry segment information.

Geographical

Geographical
NZ$ million	Operating Revenue byorigin	EBIT
New Zealand Australia North America Asia Europe Other Total	1,830 2,156 191 135 150 47	95 121 10 20 3 7
	4,509	256

14. Any other factors which have affected the results in the period, or which are likely to affect results in the future . Refer to press release.

15. This report is based on unaudited accounts.

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Earnings statement (unaudited)

For the six months ended 31 December 2011

FLETCHER BUILDING GROUP

	Six months	Year ended	Six months
	Dec 2011	June 2011	Dec 2010
	NZ$M	NZ$M	NZ$M
Sales	4,509	7,416	3,468
Cost of goods sold	(3,386)	(5,566)	(2,613)
Gross margin	1,123	1,850	855
Selling and marketing expenses	(557)	(788)	(337)
Administration expenses	(305)	(516)	(246)
Share of profits of associates	15	33	16
Other investment income		4
Other gains/(losses)	3	14	(3)
Amortisation of intangibles	(2)	(1)
Unusual items-restructuring costs	(21)	(104)
Operating earnings (EBIT)	256	492	285
Funding costs	(73)	(122)	(51)
Earnings before taxation	183	370	234
Taxation expense	(35)	(79)	(63)
Earnings after taxation	148	291	171
Earnings attributable to minority interests	(4)	(8)	(5)
Net earnings attributable to the shareholders	144	283	166
Net earnings per share (cents)
Basic	21.2	45.0	27.3
Basic (excluding unusual)	23.4	57.1	27.3
Diluted	20.9	45.0	26.9
Weighted average number of shares outstanding (millions
of shares)
Basic	680	629	609
Diluted	755	644	662
Dividends declared pershare (cents)	17.0	33.0	16.0

The accompanying notes form part of and are to be read in conjunction with these financial statements.

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Statements of comprehensive income and movements in equity (unaudited)

For the six months ended 31 December 2011

FLETCHER BUILDING GROUP

Statement of comprehensive income (unaudited)

	Six months	Year ended	Six months
	Dec 2011	June 2011	Dec 2010
	NZ$M	NZ$M	NZ$M
Net earnings - parent interest	144	283	166
Net earnings-minority interest	4	8	5
Net earnings	148	291	171
Movement in the cashflow hedge reserve	(15)	(6)	(8)
Movement in currency translation reserve	44	10	65
Income and expenses recognised directly in equity	29	4	57
Total comprehensive income for the period	177	295	228

Statement of movements in equity (unaudited)

Total equity
At the beginning of the period	3,700	3,023	3,023
Total comprehensive income for the period	177	295	228
Movement in minority equity	(7)	(8)	(7)
Movement in reported capital	16	645	32
Dividends	(115)	(189)	(92)
Distribution to Crane minority shareholders		(62)
Less movement in shares held under the
treasury stock method	(3)	(4)	(4)
Total equity	3,768	3,700	3,180

The accompanying notes form part of and are to be read in conjunction with these financial statements.

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Balance sheet (unaudited)

As at 31 December 2011

	FLETCHER	BUILDING GROUP	BUILDING GROUP
	Dec 2011	June 2011	Dec 2010
	NZ$M	NZ$M	NZ$M
Assets
Current assets:
Cash and liquid deposits	182	115	84
Current tax asset	6
Debtors	1,412	1,517	1,053
Stocks	1,598	1,527	1,139
Total current assets	3,198	3,159	2,276
Non current assets:
Fixed assets	2,218	2,218	1,940
Goodwill	1,473	1,424	845
Intangibles	415	404	410
Investments in associates	204	209	195
Investments - other	75	72	219
Deferred tax asset		6
Total non current assets	4,385	4,333	3,609
Total assets	7,583	7,492	5,885
Liabilities
Current liabilities:
Provisions	74	78	50
Creditors and accruals	1,275	1,435	992
Current tax liability		27	41
Contracts	99	92	88
Borrowings	621	139	103
Total current liabilities	2,069	1,771	1,274
Non current liabilities:
Provisions	23	23	16
Creditors and accruals	97	93	67
Retirement Plan liability	34	37	40
Deferred taxation liability	5		68
Borrowings	1,587	1,868	1,240
Total non current liabilities	1,746	2,021	1,431
Total liabilities	3,815	3,792	2,705
Equity
Reported capital	2,566	2,553	1,940
Revenue reserves	1,076	1,031	1,073
Other reserves	95	82	135
Shareholders' funds	3,737	3,666	3,148
Minority equity	31	34	32
Total equity	3,768	3,700	3,180
Total liabilities and equity	7,583	7,492	5,885

The accompanying notes form part of and are to be read in conjunction with these financial statements.

On behalf of the Board, 22 February 2012

Ralph Waters Chairman of Directors

Jonathan Ling Managing Director

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Statement of cashflows (unaudited)

For the six months ended 31 December 2011

	FLETCHER BUILDING	FLETCHER BUILDING	GROUP
	Six months	Year ended	Six months
	Dec 2011	June 2011	Dec 2010
	NZ$M	NZ$M	NZ$M
Cashflow from operating activities
Receipts from customers	4,643	7,370	3,532
Dividends received	16	33	17
Interest received	2		1
Total received	4,661	7,403	3,550
Payments to suppliers, employees and other	4,409	6,793	3,262
Interest paid	72	122	53
Income tax paid	51	86	33
Total applied	4,532	7,001	3,348
Net cash from operating activities	129	402	202
Cashflow from investing activities
Sale of fixed assets	7	41	6
Sale of investments		1	1
Total received	7	42	7
Purchase of fixed assets	123	249	96
Purchase of investments		2	143
Purchase of subsidiaries	31	1,106	52
(Cash)/net debt in subsidiaries acquired		323
Total applied	154	1,680	291
Net cash from investing activities	(147)	(1,638)	(284)
Cashflow from financing activities
Issue of shares		645	32
Net debt drawdowns / (settlements)	159	754	125
Issue of capital notes	29	69
Total received	188	1,468	157
Repurchase of capital notes		29
Distribution to minority shareholders	8	13	9
Dividends	99	189	92
Total applied	107	231	101
Net cash from financing activities	81	1,237	56
Net movement in cash held	63	1	(26)
Add opening cash and liquid deposits	115	112	112
Effect of exchange rate changes on net cash	4	2	(2)
Closing cash and liquid deposits	182	115	84

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Reconciliation of net earnings to net cash from operating activities (unaudited)

For the six months ended 31 December 2011

FLETCHER BUILDING GROUP

	Six months	Year ended	Six months
	Dec 2011	June 2011	Dec 2010
	NZ$M	NZ$M	NZ$M
Cash was received from:
Net earnings	144	283	166
Earnings attributable to minority interests	4	8	5
	148	291	171
Non cash and other adjustments:
Depreciation, depletions, and amortisation	116	205	96
Unusual items included in earnings - restructuring costs	12	89
Provisions and other adjustments	(24)	(7)	(17)
Taxation	(16)	(7)	30
Non cash and other adjustments	88	280	109
Cashflow from operations(1)	236	571	280
Less (gain) / loss on disposal of affiliates and fixed assets	(4)	(21)
Cashflow from operations before net working capital movements	232	550	280
Net workingcapital movements	(103)	(148)	(78)
Net cash from operating activities (2)	129	402	202

(1) Includes loss on disposal of affiliates and fixed assets. (2) As per the statement of cashflows.

The accompanying notes form part of and are to be read in conjunction with these financial statements.

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FLETCHER BUILDING FINANCIAL STATEMENTS (unaudited)

Notes to the financial statements

1 Basis of presentation

The interim financial statements presented are those of Fletcher Building Limited and its subsidiaries (the "group"). Fletcher Building Limited is a company domiciled in New Zealand, is registered under the Companies Act 1993, and is an issuer in terms of the Securities Act 1978 and the Financial Reporting Act 1993. The interim financial statements have been prepared in accordance with NZ IAS 34 Interim Financial Reporting.

2 Changes in accounting policies

The International Accounting Standards Board has issued a number of other standards, amendments and interpretations which are not yet effective. The group has not applied these in preparing these interim financial statements although the application of these standards, amendments and interpretations would require further disclosures, but they are not expected to have a material impact on the group's results.

There have been no other changes in accounting policies in the six months ended 31 December 2011, however certain comparatives have been restated to conform with the current period's presentation.

3 Contingencies and commitments

Provision has been made in the ordinary course of business for all known and probable future claims to the extent they can be reliably measured. There have been no material movements in capital expenditure commitments, lease commitments, contingent liabilities or contingent assets to those disclosed in the 2011 annual report.

FLETCHER BUILDING GROUP

4 5 6	Six months Year ended Six months Dec 2011 June 2011 Dec 2010 NZ$M NZ$M NZ$M Unusual items Restructuring costs 21 Acquisition and other costs 40 Acquisition income (25) Goodwill impairment 50 Fixed asset impairment 14 Write-offofstock 25
	Total unusual items - EBIT 21 104 Interest 4 Tax benefit on above items (6) (19) Tax benefit - reversal of recognition of deferred tax liability on buildings(NZ) (13)
	Total unusual items - net earnings 15 76
	Costs totalling $21 million were incurred in restructuring Laminex's operations in the period to 31 December 20 of redundancies of $9 million and asset write downs of $11 million. Other gains and losses Other gains/(losses) include the following: Sale of assets 4 21 1 Restructuring and redundancies (9) (2) Othergains/(losses) (1) 2 (2)
	3 14 (3)
	Taxation expense Earnings before taxation: 183 370 234
	Taxation at 28 (prior year 30) cents per dollar 51 111 70 Adjusted for: Differences in tax rates 2 (3) (2) Non assessable income (1) (17) (2) Non deductible expenses 2 22 3 Tax in respect of prior periods (8) (9) 1 Impact of tax losses not recognised 4 1 Recognition of deferred tax liability on buildings (NZ) (13) Otherpermanent differences (11) (16) (8)
	35 79 63

Costs totalling $21 million were incurred in restructuring Laminex's operations in the period to 31 December 2011 consisting of redundancies of $9 million and asset write downs of $11 million.

7 Borrowings

The group had $621 million of short term borrowings at 31 December 2011. On 10 January 2012, US$300 million (NZ$391 million) was refinanced through the issue of a US private placement, with two maturities of ten and twelve years.

At 31 December 2011 the group had unutilised banking facilities of $350 million (30 June 2011: $492 million; 31 December 2010: $998 million).

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Financial highlights (unaudited)

FLETCHER BUILDING GROUP

	Six months	Year ended	Six months
	Dec 2011	June 2011	Dec 2010
Return on average funds employed (%)	9.4	10.6	13.5
Return on average equity (%)	7.8	8.2	10.7
Earnings per share (cents)	21.2	45.0	27.3
Dividends per share (cents)	17.0	33.0	16.0
Gearing (%)	35.0	33.8	28.4
Interest cover (times)	3.8	5.1	5.6

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Breakdown of Financial performance (unaudited)

	Six months	Year ended	Six months
	Dec 2011	June 2011	Dec 2010
	NZ$M	NZ$M	NZ$M
Results for the period's performance
Sales - gross	4,707	7,715	3,592
Sales-inter-segment	(198)	(299)	(124)
Sales - external	4,509	7,416	3,468
Operating earnings (EBIT)	256	492	285
Unusual items included in Operating Earnings above	(21)	(104)
Cashflow from operations	129	402	202
Net earnings	144	283	166
Sales
Building Products	355	692	371
Concrete	468	912	442
Crane	1,229	623
Construction	520	1,140	592
Distribution	402	856	446
Laminates & Panels	939	1,979	1,001
Steel	596	1,214	616
Other
Total	4,509	7,416	3,468
Operating earnings
Building Products	43	31	56
Crane	53	11
Concrete	60	125	57
Construction	25	60	33
Distribution	15	39	25
Laminates & Panels	42	159	80
Steel	24	83	43
Other	(6)	(16)	(9)
Total	256	492	285
Total assets
Building Products	685	711	796
Concrete	1,170	1,161	1,184
Crane	1,793	1,788
Construction	402	473	435
Distribution	206	242	235
Laminates & Panels	2,192	2,173	2,182
Steel	707	750	730
Other	428	194	323
Total	7,583	7,492	5,885

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