Title of each class | Name of each exchange on which registered | |
Common Stock (par value $.01 per share) | New York Stock Exchange |
Class | Outstanding Shares | |
Common Stock, $.01 Par Value
|
47,980,097 |
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
The highest fiscal year operating earnings in our history, due principally to
record operating earnings of both our gypsum wallboard and cement segments;
We completed the twenty-first consecutive year of selling all of our cement
production, as well as setting a fiscal year sales record for volume with over 3.2 million
tons of cement sold;
Completed the expansion of Illinois Cement Company on-time and under-budget;
and
Began construction of the new greenfield wallboard plant in Georgetown, South
Carolina, which is expected to be completed and operational by December 2007.
We completed the $65 million expansion of Illinois Cement Company, increasing
clinker capacity 70% to 1.0 million tons. The expansion was completed in December 2006 and
became fully operational in January 2007.
The Company is developing its plans to expand and modernize our Nevada Cement
Company plant and our Mountain Cement Company plant. The plans will expand the per plant
production capacity of Nevada Cement Company and Mountain Cement Company to 1.0 million
tons each of clinker annually representing an increase in production of 60% and 100%,
respectively. We anticipate beginning the modernization of the plants during the first
half of calendar 2008, with the completion of Nevada Cement expected to be in mid calendar
2009 and the completion of Mountain Cement to be in late calendar 2009. We anticipate
investing a total of approximately $320 million for both projects.
Table of Contents
After the completion of the modernization and expansions of our Nevada Cement
and Mountain Cement plants, along with the Illinois Cement expansion, our total net clinker
capacity is expected to increase by 50% to 3.7 million tons per year and our total cement
capacity is expected to increase to approximately 4.1 million tons per year.
For the Fiscal Years Ended March 31,
2007
2006
2005
(dollars in millions)
$
511.6
$
479.1
$
350.1
321.9
285.3
211.3
127.5
133.5
125.2
97.3
89.8
70.8
4.5
2.3
0.2
1,062.8
990.0
757.6
(63.9
)
(65.1
)
(58.8
)
(76.5
)
(65.2
)
(82.3
)
$
922.4
$
859.7
$
616.5
Table of Contents
For the Fiscal Years Ended March 31,
2007
2006
2005
(dollars in millions)
$
198.1
$
154.2
$
81.6
92.2
78.3
57.6
19.0
20.1
25.4
16.2
9.6
7.7
4.5
1.5
(0.7
)
330.0
263.7
171.6
(20.3
)
(16.4
)
(10.3
)
$
309.7
$
247.3
$
161.3
For the Fiscal Years Ended March 31,
2007
2006
2005
55.5
%
55.8
%
56.8
%
25.6
24.9
20.4
8.1
8.9
11.5
6.7
6.5
6.8
3.6
3.9
4.5
10.3
10.4
11.3
0.5
100.0
%
100.0
%
100.0
%
Table of Contents
Annual Gypsum
Estimated Minimum
Wallboard Capacity
Gypsum
Estimated Gypsum
Location
(MMSF)
(1)
Rock Reserves (years)
Reserve (million tons)
430
50+
(2)(3)
39
(2)
495
50+
(2)(3)
39
(2)
690
25
(4)
15
1,285
29
(4)(5)
31
2,900
750
(7)
60
(6)
-
(6)
3,650
(1)
Million Square Feet (MMSF).
(2)
The same reserves serve both New Mexico plants.
(3)
Includes mining claims and leased reserves.
(4)
Includes both owned and leased reserves.
(5)
Additional reserves available.
(6)
The Company has a sixty year supply agreement with Santee Cooper for synthetic gypsum.
(7)
Georgetown, South Carolina plant is currently under construction.
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Table of Contents
Estimated
Minimum
Rated Annual
Limestone
Clinker Capacity
Manufacturing
Number of
Dedication
Reserves
Location
(M short tons)
(1)
Process
Kilns
Date
(Years)
1,300
Dry 4 Stage
1
1983
50+
(5)
Preheater/
Pre-calciner
1,000
Dry 5 Stage
1
2006
36
(5)
Preheater/
Pre-calciner
640
Dry 2 Stage
1
1988
30
(6)
Preheater
Dry Long
1
1996
Dry Kiln
505
Dry Long
1
1964
50+
(6)
Dry Kiln
Dry 1 Stage
1
1969
Preheater
3,445
2,795
(1)
One short ton equals 2,000 pounds.
(2)
The amounts shown represent 100% of plant capacity and production. This plant is
owned by a separate partnership in which the Company has a 50% interest.
(3)
Generally, a plants cement grinding production capacity is greater than its
clinker production capacity.
(4)
Net of partners 50% interest in the Buda, Texas plant.
(5)
Owned reserves.
(6)
Includes both owned and leased reserves.
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Plant Location
Principal Geographic Areas
Distribution Terminals
Texas and western Louisiana
Corpus Christi, Texas
Houston, Texas
Orange, Texas
Roanoke (Ft. Worth), Texas
Waco, Texas
Houston Cement Company (Joint Venture),
Houston, Texas
Illinois and southern Wisconsin
Hartland, Wisconsin
Wyoming, Utah, Colorado and
Salt Lake City, Utah
western Nebraska
Denver, Colorado
North Platte, Nebraska
Northern Nevada and northern California
Sacramento, California
Table of Contents
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Location
Number of Plants
Number of Trucks
3
43
6
86
9
129
Estimated Annual
Estimated
Production Capacity
Minimum
Location
Types of Aggregates
(Thousand tons)
Reserves (Years)
Sand and Gravel
3,500
100+
(1)
Limestone
2,500
60
(2)
6,000
(1)
Owned reserves through various subsidiaries.
(2)
Leased reserves.
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Table of Contents
Levels of construction spending.
Demand for the Companys products is directly
related to the level of activity in the construction industry, which includes
residential, commercial and infrastructure construction. Furthermore, activity in the
infrastructure construction business is directly related to the amount of government
funding available for such projects. Any decrease in the amount of government funds
available for such projects or any decrease in construction activity in general,
including the continued slow down of home building activity, could have a material
adverse effect on the Companys financial condition and results of operations.
Interest rates.
The Companys business is significantly affected by the movement of
interest rates. Interest rates have a direct impact on the level of residential,
commercial and infrastructure construction activity put in place. Higher interest
rates could have a material adverse effect on our business and results of operations.
In addition, increases in interest rates could result in higher interest expense
related to the Companys borrowings under its credit facilities.
Price fluctuations and supply/demand for our products.
The products sold by the
Company are commodities and competition among manufacturers is based largely on price.
Prices are often subject to material changes in response to relatively minor
fluctuations in supply and demand, general economic conditions and other market
conditions beyond our control. Increases in the production capacity for products such
as gypsum wallboard may create an oversupply of such products and negatively impact
product prices. There can be no assurance that prices for products sold by the Company
will not decline in the future or that such declines will not have a material adverse
effect on our financial condition and results of operations.
Significant changes in the cost of, and the availability of, fuel, energy and other
raw materials.
Significant increases in the cost of fuel, energy or raw materials used
in connection with our businesses or substantial decreases in their availability could
materially and adversely effect our sales and operating profits. Major cost components
in each of our businesses are the cost of fuel, energy and raw materials. Prices for
fuel, energy or raw materials used in connection with our businesses could change
significantly in a short period of time for reasons outside our control. In the event
of large or rapid increases in prices, we may not be able to pass the increases through
to our customers in full, which would reduce our operating margin.
The seasonal nature of the Companys business.
A majority of our business is
seasonal with peak revenues and profits occurring primarily in the months of April
through November. Quarterly results have varied significantly in the past and are
likely to vary significantly from
quarter to quarter in the future. Such variations could have a negative impact on the
price of the Companys common stock.
Table of Contents
National and regional economic conditions.
A majority of our revenues are from
customers who are in industries and businesses that are cyclical in nature and subject
to changes in general economic conditions. In addition, since operations occur in a
variety of geographic markets, our businesses are subject to the economic conditions in
each such geographic market. General economic downturns or localized downturns in the
regions where we have operations, including any downturns in the construction industry
or increases in capacity in the gypsum wallboard, paperboard and cement industries,
could have a material adverse effect on our business, financial condition and results
of operations.
Unfavorable weather conditions during peak construction periods and other unexpected
operational difficulties.
Because a majority of our business is seasonal, bad weather
conditions and other unexpected operational difficulties during peak periods could
adversely affect operating income and cash flow and could have a disproportionate
impact on our results of operations for the full year.
Competition from new or existing competitors or the ability to successfully
penetrate new markets.
The construction products industry is highly competitive. If
we are unable to keep our products competitively priced, our sales could be reduced
materially. Also, we may experience increased competition from companies offering
products based on new processes that are more efficient or result in improvements in
product performance, which could put us at a disadvantage and cause us to lose
customers and sales volume. Our failure to continue to compete effectively could have
a material adverse effect on our business, financial condition and results of
operations.
Environmental liabilities.
Our operations are subject to state, federal and local
environmental laws and regulations, which impose liability for clean up or remediation
of environmental pollution and hazardous waste arising from past acts; and require
pollution control and prevention, site restoration and operating permits and/or
approvals to conduct certain of its operations. Certain of our operations may from
time-to-time involve the use of substances that are classified as toxic or hazardous
substances within the meaning of these laws and regulations. Risk of environmental
liability is inherent in the operation of our businesses. As a result, it is possible
that environmental liabilities could have a material adverse effect on the Company in
the future.
Compliance with governmental regulations.
Our operations and our customers are
subject to and affected by federal, state and local laws and regulations with respect
to land usage, street and highway usage, noise level and health and safety and
environmental matters. In many instances, various permits are required for
construction and related operations. Although management believes that we are in
compliance in all material respects with regulatory requirements, there can be no
assurance that the Company will not incur material costs or liabilities in connection
with regulatory requirements or that demand for its products will be affected by
regulatory issues affecting its customers.
Events that may disrupt the U.S. or world economy.
Future terrorist attacks, the
ensuing U.S. military and other responsive actions, could have a significant adverse
effect on the general economic, market and political conditions, which in turn could
have material adverse effect on the Companys business.
Significant changes in the cost and availability of transportation.
Some of the raw
materials used in our manufacturing processes, such as coal or coke, are transported to
our facilities by truck or rail. In addition, the transportation costs associated with
the delivery of our wallboard products are a significant portion of the variable cost
of the wallboard division. Significant increases in the cost of fuel or energy can
result in material increases in the cost of transportation which could
materially and adversely affect our operating profits. In addition, reductions in the
availability of certain modes of transportation such as rail or trucking could limit our
ability to deliver product and therefore materially and adversely affect our operating
profits.
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16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
Fiscal Year Ended March 31, 2007
Fiscal Year Ended March 31, 2006
Quarter ended:
High
Low
Dividends
High
Low
Dividends
$
74.30
$
38.04
$
0.175
$
31.41
$
24.19
$
0.10
$
46.62
$
33.58
$
0.175
$
40.26
$
30.13
$
0.10
$
44.73
$
32.30
$
0.175
$
41.52
$
31.62
$
0.10
$
49.39
$
42.84
$
0.175
$
63.76
$
37.76
$
0.10
Total Number of Shares
Maximum Number of
Total Number
Average
Purchased as Part of
Shares that May Yet
of Shares
Price Paid
Publicly Announced
be Purchased Under
Period
Purchased
Per Share
Plans or Programs
the Plans or Programs
$
196,300
$
45.69
196,300
353,691
$
44.91
307,900
549,991
$
45.19
504,200
5,495,800
Table of Contents
(amounts in thousands, except per share data)
For the Fiscal Years Ended March 31,
2007
2006
2005
2004
2003
$
922,401
$
859,702
$
616,541
$
502,622
$
429,178
304,288
241,066
158,089
102,123
86,613
202,664
160,984
106,687
66,901
57,606
4.07
3.02
1.91
1.19
1.04
0.70
(3)
0.40
0.40
2.15
(2)
0.07
971,410
888,916
780,001
692,975
706,355
200,000
200,000
84,800
82,880
80,927
546,046
464,738
485,368
439,022
(2)
479,611
$
11.40
$
9.24
$
8.88
$
7.80
$
8.70
49,787
53,330
55,884
56,208
55,572
(1)
The Financial Highlights should be read in conjunction with the
Consolidated Financial Statements and the Notes to Consolidated Financial Statements for
matters that affect the comparability of the information presented above.
(2)
Includes a special one-time $2.00 per share ($112.9 million total) dividend
paid in connection with the Spin-off from Centex Corporation.
(3)
On March 21, 2007 the Company announced that it was increasing its annual dividend
payment to $0.80 beginning with the July 20, 2007 dividend
payment.
Table of Contents
ITEM 7.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
EXECUTIVE SUMMARY
Table of Contents
Revenues
Operating Earnings
(1)
For the Fiscal Years Ended March 31,
For the Fiscal Years Ended March 31,
2007
2006
2007
2006
(dollars in thousands)
(dollars in thousands)
$
511,615
$
479,134
$
198,085
$
154,227
321,852
285,289
92,182
78,311
127,545
133,482
18,998
20,087
97,323
89,778
16,249
9,613
4,547
2,279
4,547
1,539
1,062,882
989,962
$
330,061
$
263,777
(63,959
)
(65,096
)
(76,522
)
(65,164
)
$
922,401
$
859,702
(1)
Prior to Corporate General and Administrative and interest expense.
Table of Contents
For the Fiscal Years Ended
March 31,
Percentage
2007
2006
Change
(dollars in thousands)
$
511,615
$
479,134
7
%
(89,121
)
(89,374
)
%
$
422,494
$
389,760
8
%
2,610
2,832
(8
)%
$
161.86
$
137.65
18
%
$
85.97
$
83.17
3
%
$
75.89
$
54.48
39
%
$
198,085
$
154,227
28
%
$
34.15
$
31.57
8
%
(1)
Net of freight per MSF.
The increase in revenues during fiscal 2007 is due
primarily to increased sales prices during the year,
partially offset by the decline in sales volume. Sales
prices increased through July 2006, before beginning to
decline over the remainder of the year. Additionally,
demand, particularly in residential homebuilding,
declined, which reduced marketplace utilization during
the fiscal third and fourth quarters of 2007 as
compared to 2006.
Wallboard operating margins increased in fiscal 2007 as
compared to fiscal 2006 primarily due to increased
sales prices and lower fuel costs during the fiscal
year, offset slightly by increased transportation and
raw materials costs along with increased incentive
compensation expenses.
The Company expects residential housing to remain soft,
which will have an adverse impact on our fiscal 2008
operating results. During the first quarter of
calendar 2007, wallboard shipments declined 18% from
the first quarter of calendar 2006. Additionally, we
expect that pricing will continue to decline in fiscal
2008 as industry utilization is expected to remain in
the low-to-mid 80% range. The non-residential housing
market is expected to remain strong; however, these
markets are not expected to completely offset the
impact of the reduction in residential housing.
Table of Contents
For the Fiscal Years Ended
March 31,
Percentage
2007
2006
Change
(dollars in thousands)
$
321,852
$
285,289
13
%
(13,013
)
(19,212
)
(32
)%
$
308,839
$
266,077
16
%
3,235
3,200
1
%
$
93.13
$
83.15
12
%
$
64.63
$
58.68
10
%
$
28.50
$
24.47
16
%
$
92,182
$
78,311
18
%
The increase in revenues in fiscal 2007 as compared to
fiscal 2006 is due primarily to increased average sales
prices and a slight increase in sales volume.
Purchased cement comprised approximately 26% of total
sales during fiscal 2007, as compared to 21.1% in
fiscal 2006.
Operating margins increased by 16% due to increased net
sales prices, offset by higher fuel, maintenance and
purchased cement costs coupled with the impact of
153,000 additional tons of high cost purchased cement
sales in fiscal 2007 as compared to fiscal 2006. The
start up of the Illinois Cement plant adversely
impacted margins by approximately $2.25 per ton.
Purchased cement cost in fiscal 2007 increased by
approximately 13% over fiscal 2006. The purchased
cement volume increase is attributed to purchases
through our newly-acquired interest Houston Cement
Company along with 70,000 tons of purchased cement at
Illinois Cement Company during the start up of the new
plant.
Demand for cement is expected to remain strong, as
imports are expected to comprise over 27% of all cement
consumed in the United States in calendar 2007. Price
increases scheduled for the early part of calendar year
2007 were delayed due primarily to poor weather in most
of our markets, but we expect these price increases to
take effect during the middle of calendar 2007. We
expect operating margins to increase during fiscal 2008
as additional production from our Illinois Cement plant
expansion will replace low margin purchased cement
sales with manufactured cement in this market.
Additionally, state budgets look strong, which should
enable consistent infrastructure spending during fiscal
2008.
Table of Contents
For the Fiscal Years Ended
March 31,
Percentage
2007
2006
Change
(dollars in thousands)
$
127,545
$
133,482
(4
)%
(2,950
)
(2,587
)
14
%
$
124,595
$
130,895
(5
)%
275
289
(5
)%
$
452.99
$
452.63
%
$
383.91
$
383.12
%
$
69.08
$
69.51
(1
)%
$
18,998
$
20,087
(5
)%
Net revenues declined during fiscal 2007 as compared to
fiscal 2006 due to a decrease in sales volume during
fiscal 2007. The decrease in sales volume was due
primarily to the reduction in demand for gypsum liner
during fiscal 2007 as compared to fiscal 2006. Gypsum
liner sales volume declined 14% in fiscal 2007 as
compared to fiscal 2006. The gypsum liner sales volume
decline was partially offset by a 28,000 ton sales
volume increase for medium and containerboard.
Operating margin remained relatively flat during fiscal
2007 as compared to fiscal 2006. High margin gypsum
liner sales volume declined 14% in fiscal 2007
compared to fiscal 2006. The gypsum liner sales
volume decline was partially offset by the increased
sales prices for all grades of paper. Also, higher
fiber costs were offset by lower gas and chemicals
costs.
The reduced demand for high margin gypsum liner is
expected to adversely impact our recycled paperboard
operations. The start up of our new wallboard plant
in Georgetown, South Carolina is expected to have a
positive impact during the fourth quarter of fiscal
2008 as it is expected to increase sales of higher
priced gypsum liner. Additionally, increases in
the cost of fiber and natural gas could have an adverse
impact on our paperboard operations as these two costs
comprise a significant portion of our production costs.
Table of Contents
For the Fiscal Years Ended
March 31,
Percentage
2007
2006
Change
(dollars in thousands)
$
63,354
$
55,269
15
%
882
883
%
$
71.81
$
62.61
15
%
$
60.71
$
55.37
10
%
$
11.10
$
7.24
53
%
$
9,793
$
6,395
53
%
$
33,968
$
34,509
(2
)%
(406
)
(831
)
(51
)%
$
33,562
$
33,678
%
4,875
5,714
(15
)%
$
6.88
$
5.89
17
%
$
5.56
$
5.33
4
%
$
1.32
$
0.56
135
%
$
6,456
$
3,218
101
%
Concrete revenues increased 15% in fiscal 2007 as
compared to fiscal 2006, primarily due to the increase
in the average sales price during the year. Aggregate
revenues remained relatively flat despite the increase
in average sales price, primarily due to the decline in
sales volume during the year. The decline in sales
volumes was primarily in our northern California
market, and was generally due to poor weather during
the first and fourth quarters of fiscal 2007.
Concrete operating margins increased 53% during fiscal
2007 as compared to 2006, primarily due to a 15%
increase in the average sales price during the year,
partially offset by higher cement and aggregate costs.
Aggregate operating margins in fiscal 2007 increased
135% from fiscal 2006 due primarily to a 17% increase
in the average net sales price; partially offset by the
negative impact on fixed costs of a 6% decline in
production volume in addition to the decline of higher
margin concrete aggregates sales volumes.
The Company expects aggregate pricing to remain strong
during fiscal year 2008, principally because of strong
construction activity in the Austin, Texas market.
Concrete pricing may weaken during fiscal year 2008 in
both of our markets due to increased competition in the
marketplace.
Table of Contents
Revenues
Operating Earnings
(1)
For the Fiscal Years Ended March 31,
For the Fiscal Years Ended March 31,
2006
2005
2006
2005
(dollars in thousands)
(dollars in thousands)
$
479,134
$
350,101
$
154,227
$
81,616
285,289
211,343
78,311
57,616
133,482
125,184
20,087
25,406
89,778
70,786
9,613
7,742
2,279
193
1,539
(721
)
989,962
757,607
$
263,777
$
171,659
(65,096
)
(58,812
)
(65,164
)
(82,254
)
$
859,702
$
616,541
(1)
Prior to Corporate General and Administrative and interest expense.
Table of Contents
For the Fiscal Years Ended
March 31,
Percentage
2006
2005
Change
(dollars in thousands)
$
479,134
$
350,101
37
%
(89,374
)
(73,140
)
22
%
$
389,760
$
276,961
41
%
2,832
2,547
11
%
$
137.65
$
108.74
27
%
$
83.17
$
76.70
8
%
$
54.48
$
32.04
70
%
$
154,227
$
81,616
89
%
$
31.57
$
28.72
10
%
(1)
Net of freight per MSF.
Price increases throughout the year and record Company
wallboard shipments positively impacted revenues for
fiscal 2006 as compared to fiscal 2005. Pricing has
continued to strengthen as consumption was at an
all-time high resulting in the near full capacity
utilization of the U.S. wallboard industry. Our sales
volume of 2,832 MMSF represents a record for the
Company as the Company operated at full capacity.
Operating margins were impacted by increasing paper
costs and transportation costs for raw materials, as
well as natural gas costs which increased 43% in fiscal
2006 as compared to fiscal 2005. On a per unit basis,
freight costs, which are deducted to determine average
net sales price, have increased 10% from fiscal 2005.
Operating earnings for fiscal 2006 represented the
highest earnings in Company history.
Throughout fiscal 2006 industry utilization rates
averaged about 95% and as a result pricing has remained
strong in all of the markets we serve. We implemented
a 10% price increase in late March 2006, which helped
us achieve an average net sales price of approximately
$165.00 during April 2006. Demand remains strong with
supply being currently allocated. Single family
residential housing is expected to decline during
fiscal 2007 at an estimated rate of 5% to 10%; however,
we anticipate that commercial construction and repair
and remodel demand will remain strong. Expected
capacity additions during fiscal 2007 are not expected
to be significant; therefore industry utilization, even
with the anticipated decline in single family
residential housing, is expected to remain high.
Table of Contents
For the Fiscal Years Ended
March 31,
Percentage
2006
2005
Change
(dollars in thousands)
$
285,289
$
211,343
35
%
(19,212
)
(16,499
)
16
%
$
266,077
$
194,844
37
%
3,200
2,753
16
%
$
83.15
$
70.77
17
%
$
58.68
$
49.84
18
%
$
24.47
$
20.93
17
%
$
78,311
$
57,616
36
%
Price increases were implemented throughout the fiscal
year, which resulted in a 17% increase in average sales
prices for fiscal 2006 as compared to fiscal 2005.
Sales volume was greater due to our purchase of the
remaining 50% interest in Illinois Cement Company
during January 2005, which resulted in our
consolidating all of the sales revenue from Illinois in
fiscal 2006, and only 50% for the majority of fiscal
2005. Additionally, consumption was at an all-time
high due to several favorable market factors, such as
increased construction spending and very favorable
weather conditions in our markets.
Operating margins increased during fiscal 2006 as
compared to fiscal 2005, primarily due to increased
sales prices. The increases in sales prices were
slightly offset by increased volumes of low margin
purchased cement, which increased to 675,000 tons in
fiscal 2006 from 402,000 tons in fiscal 2005, an
increase of 68%. Additionally, fuel and energy costs
increased 20% over the prior year period due primarily
to increased cost of petroleum coke and coal and
electricity.
U.S. cement consumption remains strong as a result of
strong federal and state infrastructure projects,
strong housing activity and a recovering commercial
construction market. The passage of the $286.4
billion, six year federal highway transportation bill
SAFETEALU in July of 2005 represents a 40% increase
over the previous TEA 21 bill and is anticipated to
further strengthen the long-term demand for cement in
the U.S. The U.S. Government and the Government of
Mexico have entered into an agreement providing for the
elimination of the antidumping duties imposed by the
U.S. on cement imported from Mexico. The agreement
provides for a three year transition period during
which the volume of Mexican cement imported into the
southern tier of the U.S. will be limited to 3 million
metric tons per year and the antidumping duty imposed
on Mexican cement will be set at $3 per ton. This is
not expected to impact cement prices in the short term
as the Portland Cement Association estimates that the
current industry wide domestic production capacity is
25% short of domestic consumption. Additionally the
major Mexican cement producers also own a much larger
percentage of US domestic production than previously
when dumping occurred. In the near term, we expect
U.S. cement pricing to remain stable or increase due to
strong domestic consumption, increasing world demand
and historically high international freight costs for
imported cement. The Company has sold 100% of its
production for the last twenty years and anticipates
selling all of its fiscal 2007 production.
Table of Contents
For the Fiscal Years Ended
March 31,
Percentage
2006
2005
Change
(dollars in thousands)
$
133,482
$
125,184
7
%
(2,587
)
(3,048
)
-15
%
$
130,895
$
122,136
7
%
289
268
8
%
$
452.63
$
455.73
-1
%
$
383.12
$
360.93
6
%
$
69.51
$
94.99
-27
%
$
20,087
$
25,406
-21
%
Paperboard achieved price increases in gypsum paper,
primarily as a result of previously established price
escalators in its contracts; however, prices declined
for trims, containerboard and B grade, which made up a
larger percentage of total sales in fiscal 2006
compared to fiscal 2005. Due to the change in sales
mix, average sales price declined slightly in fiscal
2006 as compared to fiscal 2005. Total sales volume
increased 8% due to a 16,000 ton increase in non-gypsum
paperboard and higher sales to our wallboard division.
Paperboard sales to our wallboard division were 114,000
tons at $57.5 million compared to 109,000 tons at $54.1
million for last fiscal year.
Our operating margin per ton was adversely impacted by
increased sales of lower margin containerboard and B
grade paper during fiscal 2006 as compared to fiscal
2005. Additionally, operating margins were adversely
impacted by increased natural gas, electricity and
repair costs, offset positively by reduced recovered
fiber costs.
As a result of strong market demand, capital
improvements and improved operating efficiency, our
paperboard mill is currently producing at 150% of its
original design capacity. While we anticipate
continued strong demand for our products over the next
six to twelve months, continued increases in natural
gas and electricity costs over the next six months may
adversely affect operating earnings.
Table of Contents
For the Fiscal Years Ended
March 31,
Percentage
2006
2005
Change
(dollars in thousands)
$
55,269
42,228
31
%
883
769
15
%
$
62.61
$
54.92
14
%
$
55.37
$
51.01
9
%
$
7.24
$
3.91
85
%
$
6,395
$
3,007
113
%
$
34,509
$
28,558
21
%
(831
)
(1,071
)
-22
%
$
33,678
$
27,487
23
%
5,714
5,196
10
%
$
5.89
$
5.29
11
%
$
5.33
$
4.38
22
%
$
0.56
$
0.91
-38
%
$
3,218
$
4,735
-32
%
Revenues increased for both concrete and aggregates
during fiscal 2006 due to increases in sales prices and
volumes due to strong construction activity in both the
Austin, Texas and Sacramento, California markets.
Aggregate pricing in Austin has increased by 18% during
fiscal 2006 from fiscal 2005.
Increases in operating margins for concrete are due
primarily to increased sales prices in fiscal 2006 as
compared to fiscal 2005, partially offset by increased
raw materials (cement and aggregates) and delivery
costs. Operating margins for aggregates declined for
fiscal 2006 as compared to fiscal 2005, primarily due
to significantly higher mobile equipment maintenance
costs, as well as the timing of other plant maintenance
projects.
Concrete pricing in the Austin, Texas market increased
during fiscal 2006 as a result of increased
construction activity in the region in both the
commercial and residential sectors. We expect improved
pricing in the Austin, Texas market and continued
strong pricing in the northern California market in
fiscal 2007.
Aggregates pricing in the Sacramento area is expected
to continue to remain strong in the near term due
primarily to demand outpacing capacity. Aggregates
pricing in the Austin, Texas market is anticipated to
increase moderately over the near term due to increased
levels of construction activity in the Austin area and
a changing mix in the products sold.
Table of Contents
Table of Contents
For the Fiscal Years Ended March 31,
2007
2006
(dollars in thousands)
$
242,423
$
188,246
(3,000
)
(12,250
)
(136,869
)
(72,929
)
(152,119
)
(72,929
)
4,141
1,662
115,200
(100,376
)
(165,335
)
(34,665
)
(21,312
)
3,045
2,013
(127,855
)
(67,772
)
$
(37,551
)
$
47,545
Table of Contents
Principal
Maturity Date
Interest Rate
$40 million
November 15, 2012
5.25%
$80 million
November 15, 2015
5.38%
$80 million
November 15, 2017
5.48%
Table of Contents
For the Fiscal Years Ended
Ended March 31,
2007
2006
(dollars in thousands)
$
6,323
$
2,067
122,315
56,376
8,231
14,486
$
136,869
$
72,929
Payments Due by Period
Less than
Total
1 year
1-3 years
3-5 years
More
than 5 years
(dollars in thousands)
$
200,000
$
$
$
$
200,000
8,443
1,937
2,006
524
3,976
17,882
7,584
10,298
$
226,325
$
9,521
$
12,304
$
524
$
203,976
Table of Contents
Table of Contents
Index to Financial Statements and Related Information
Page
35
36
37
38
39
65
Table of Contents
(dollars in thousands, except per share data)
Table of Contents
(dollars in thousands)
Table of Contents
(dollars in thousands)
Table of Contents
(dollars in thousands)
Unamortized
Accumulated
Capital in
Value of
Other
Common
Excess of
Restricted
Retained
Comprehensive
Stock
Par Value
Stock
Earnings
Losses
Total
$
564
$
27,847
$
(591
)
$
413,079
$
(1,877
)
$
439,022
106,687
106,687
4
3,886
3,890
1,873
1,873
(22,040
)
(22,040
)
34
34
(21
)
(33,606
)
(10,506
)
(44,133
)
35
35
547
(557
)
487,220
(1,842
)
485,368
160,984
160,984
2
2,013
2,015
1,662
1,662
(24,637
)
(24,637
)
3,687
9
3,696
(46
)
(7,362
)
548
(157,928
)
(164,788
)
438
438
503
$
$
465,639
(1,404
)
464,738
202,664
202,664
3
3,042
3,045
4,141
4,141
(34,241
)
(34,241
)
5,521
5,521
(27
)
(12,704
)
(87,645
)
(100,376
)
142
142
412
412
$
479
$
$
$
546,417
$
(850
)
$
546,046
Table of Contents
Table of Contents
March 31,
2007
2006
(dollars in thousands)
$
22,286
$
15,494
6,378
6,621
12,640
10,978
5,321
3,536
3,392
5,579
25,300
23,962
3,591
1,629
$
78,908
$
67,799
20 to 30 years
20 to 40 years
3 to 20 years
Table of Contents
March 31, 2007
Amortization
Accumulated
Period
Cost
Amortization
Net
(dollars in thousands)
15 years
$
1,300
$
(549
)
$
751
40 years
22,000
(1,180
)
20,820
48,647
48,647
$
71,947
$
(1,729
)
$
70,218
March 31, 2006
Amortization
Accumulated
Period
Cost
Amortization
Net
(dollars in thousands)
15 years
$
1,300
$
(463
)
$
837
40 years
22,000
(630
)
21,370
45,647
45,647
$
68,947
$
(1,093
)
$
67,854
Table of Contents
For the Years Ended March 31,
2007
2006
2005
(dollars in thousands)
$
202,664
$
160,984
$
106,687
142
438
35
$
202,806
$
161,422
$
106,722
Table of Contents
For the Years Ended March 31,
2007
2006
2005
(dollars in thousands)
$
38,936
$
37,698
$
30,414
20,344
16,370
10,280
$
59,280
$
54,068
$
40,694
For the Years Ended March 31,
2007
2006
2005
49,090,010
52,599,080
55,241,025
1,492,045
1,816,865
1,755,357
(866,624
)
(1,142,793
)
(1,127,793
)
71,682
57,152
14,685
49,787,113
53,330,304
55,883,274
(1)
Includes unearned compensation related to outstanding stock options.
Table of Contents
For the Year Ended
March 31, 2005
(dollars in thousands)
$
106,687
1,091
(3,334
)
$
104,444
$
1.93
$
1.89
$
1.91
$
1.87
Table of Contents
Before
After
Application of
Application of
FAS 158
Adjustments
FAS 158
( dollars in thousands)
$
679
$
(221
)
$
458
679
(221
)
458
850
850
850
850
1,262
(412
)
850
$
1,262
$
(412
)
$
850
March 31,
2007
2006
(dollars in thousands)
$
62,282
$
56,327
766,172
734,853
71,260
31,813
87,107
33,234
986,821
856,227
(333,641
)
(298,665
)
$
653,180
$
557,562
Table of Contents
March 31,
2007
2006
(dollars in thousands)
$
200,000
$
200,000
$
200,000
$
200,000
March 31,
(dollars in thousands)
$
$
200,000
$
200,000
Principal
Maturity Date
Interest Rate
$40 million
November 15, 2012
5.25
%
$80 million
November 15, 2015
5.38
%
$80 million
November 15, 2017
5.48
%
Table of Contents
Table of Contents
For the Years Ended March 31,
2007
2006
2005
(dollars in thousands)
$
96,686
$
73,341
$
31,178
7,375
5,853
2,282
104,061
79,194
33,460
(3,769
)
630
19,359
1,332
258
(1,417
)
(2,437
)
888
17,942
$
101,624
$
80,082
$
51,402
For the Years Ended March 31,
2007
2006
2005
(dollars in thousands)
$
304,288
$
241,066
$
158,089
$
106,501
$
84,373
$
55,331
5,316
3,972
(232
)
(8,338
)
(4,544
)
(3,955
)
(2,799
)
(2,281
)
944
(1,438
)
258
$
101,624
$
80,082
$
51,402
33
%
33
%
33
%
Table of Contents
For the Years Ended March 31,
2007
2006
2005
(dollars in thousands)
$
1,696
$
3,458
$
8,885
174
90
7,394
177
(80
)
187
(2,211
)
(666
)
601
(2,273
)
(1,914
)
875
$
(2,437
)
$
888
$
17,942
March 31,
2007
2006
(dollars in thousands)
$
135,320
$
133,624
1,948
3,923
137,268
137,547
(17,551
)
(15,340
)
(1,945
)
(2,119
)
(432
)
(609
)
(19,928
)
(18,068
)
$
117,340
$
119,479
Table of Contents
$
6,493
42,138
22,000
8,359
(3,990
)
$
75,000
Table of Contents
For the Years Ended March 31,
2007
2006
2005
(dollars in thousands)
$
511,615
$
479,134
$
350,101
321,852
285,289
211,343
127,545
133,482
125,184
97,323
89,778
70,786
4,547
2,279
193
1,062,882
989,962
757,607
(63,959
)
(65,096
)
(58,812
)
(76,522
)
(65,164
)
(82,254
)
$
922,401
$
859,702
$
616,541
For the Years Ended March 31,
2007
2006
2005
(dollars in thousands)
$
9,614
$
6,146
$
3,609
52,883
57,546
54,108
1,462
1,404
1,095
$
63,959
$
65,096
$
58,812
2,388
2,381
1,566
846
819
1,187
3,234
3,200
2,753
Table of Contents
For the Years Ended March 31,
2007
2006
2005
(dollars in thousands)
$
198,085
$
154,227
$
81,616
92,182
78,311
57,616
18,998
20,087
25,406
16,249
9,613
7,742
4,547
1,539
(721
)
330,061
263,777
171,659
(20,344
)
(16,370
)
(10,280
)
309,717
247,407
161,379
(5,429
)
(6,341
)
(3,290
)
$
304,288
$
241,066
$
158,089
$
59,417
$
51,394
$
30,694
32,765
26,917
26,922
$
92,182
$
78,311
$
57,616
$
392,377
$
335,985
$
331,367
309,974
257,976
212,022
171,735
179,776
181,854
61,181
46,799
37,135
36,143
68,380
17,623
971,410
$
888,916
$
780,001
$
86,946
$
3,271
$
5,791
30,209
48,175
8,509
5,875
4,936
4,502
13,737
11,110
3,467
102
5,437
104
136,869
$
72,929
$
22,373
$
16,622
$
16,755
$
16,923
10,889
9,955
6,064
8,326
8,075
8,026
3,345
2,986
2,810
858
828
673
$
40,040
$
38,599
$
34,496
(1)
Basis conforms with equity method accounting.
Table of Contents
For the Years Ended March 31,
2007
2006
(dollars in thousands)
$
8,359
$
5,359
37,842
37,842
2,446
2,446
$
48,647
$
45,647
For the Years Ended March 31,
2007
2006
2005
(dollars in thousands)
$
163,267
$
138,331
$
170,223
$
64,702
$
57,637
$
59,750
$
65,530
$
53,833
$
53,844
March 31,
2007
2006
(dollars in thousands)
$
48,826
$
36,056
$
49,991
$
29,104
$
12,039
$
10,503
Table of Contents
Table of Contents
For the Years Ended March 31,
2007
2006
(dollars in thousands)
$
5,456
$
4,905
3,331
4,603
(3,205
)
(4,052
)
$
5,582
$
5,456
Fiscal Year
Total
$
1,937
$
708
$
663
$
635
$
152
$
4,348
Table of Contents
2007
2006
1.2
%
1.2
%
30.0
%
23.0
%
4.93
%
4.1
%
9 years
7 years
Table of Contents
For the Years Ended March 31,
2007
2006
2005
Weighted
Weighted
Weighted
Number
Average
Number
Average
Number
Average
of
Exercise
of
Exercise
of
Exercise
Shares
Price
Shares
Price
Shares
Price
1,816,865
$
15.74
1,755,357
$
12.57
1,885,380
$
10.43
150,364
$
49.16
346,191
$
30.84
279,600
$
23.01
(263,489
)
$
11.55
(175,156
)
$
11.49
(409,623
)
$
9.82
(66,888
)
$
25.78
(109,527
)
$
19.76
1,636,852
$
19.07
1,816,865
$
15.74
1,755,357
$
12.57
1,366,744
1,225,955
1,402,713
$
21.88
$
8.88
$
7.41
Options Outstanding
Options Exercisable
Weighted
Average
Weighted
Weighted
Number of
Remaining
Average
Number of
Average
Shares
Contractual
Exercise
Shares
Exercise
Range of Exercise Prices
Outstanding
Life
Price
Outstanding
Price
307,587
3.6 years
$
7.41
300,572
$
7.39
207,488
2.7 years
$
10.29
204,722
$
10.30
472,472
5.5 years
$
12.21
441,737
$
12.21
417,976
6.4 years
$
25.65
333,821
$
25.02
164,522
4.9 years
$
37.18
85,892
$
36.30
66,807
9.1 years
$
62.83
1,636,852
5.1 years
$
19.07
1,366,744
$
15.51
Fiscal Year
Awarded
Earned
Vested
Unearned
51,951
51,951
51,951
70,895
55,046
36,698
15,849
47,979
24,714
3,746
23,265
Table of Contents
Fair Value
(dollars in thousands)
$
39,749
79,284
79,141
$
198,174
Table of Contents
For the Years Ended March 31,
2007
2006
(dollars in thousands)
$
13,931
$
13,411
515
497
836
767
95
144
(358
)
(432
)
(386
)
15,089
13,931
12,246
10,455
1,151
1,190
816
987
(432
)
(386
)
13,781
12,246
$
(1,308
)
$
(1,685
)
For the Years Ended March 31,
2007
2006
(dollars in thousands)
$
(1,308
)
$
(2,646
)
1,060
486
1,308
2,160
$
$
1,060
March 31,
2007
2006
(dollars in thousands)
$
15,089
$
13,931
$
14,809
$
13,667
$
13,781
$
12,246
Table of Contents
For the Years Ended March 31,
2007
2006
2005
(dollars in thousands)
$
515
$
497
$
366
836
767
512
(979
)
(842
)
(529
)
155
241
239
150
139
120
$
677
$
802
$
708
March 31,
2007
2006
2005
6.0
%
5.8
%
5.8
%
8.0
%
8.0
%
8.0
%
3.5
%
3.5
%
3.5
%
March 31,
2007
2006
6.0
%
6.0
%
3.5
%
3.5
%
Range of
Percentage of Plan
Target
Assets at March 31,
Allocation
2007
2006
40 60%
70
%
70
%
35 60%
30
%
30
%
0 5%
100
%
100
%
Table of Contents
Table of Contents
For the Years Ended March 31,
2007
2006
2005
(dollars in thousands)
$
(2,282
)
$
(898
)
$
(36
)
11,278
7,747
2,852
(3,998
)
(1,051
)
431
543
474
$
5,429
$
6,341
$
3,290
Table of Contents
Table of Contents
For the Years Ended March 31,
2007
2006
(dollars in thousands, except per share data)
$
259,974
$
204,798
89,756
50,182
59,092
34,908
1.16
0.64
256,468
221,784
99,192
65,729
66,095
43,322
1.32
0.80
214,179
211,515
61,351
58,866
40,917
38,987
0.83
0.73
191,780
221,605
53,989
66,289
36,560
43,767
$
0.75
$
0.86
Table of Contents
Eagle Materials Inc.:
/s/ERNST & YOUNG LLP
May 24, 2007
Table of Contents
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
ITEM 9A.
CONTROLS AND PROCEDURES
pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the Company;
provide reasonable assurance that the 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
provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the Companys assets that could have a material effect
on the financial statements.
Table of Contents
Eagle Materials Inc.
Table of Contents
/s/ERNST & YOUNG LLP
May 24, 2007
ITEM 9B.
OTHER INFORMATION
ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERANCE
Items
Caption in the 2007 EXP Proxy Statement
Named Executive Officers who are not Directors
Election of Directors and Related Matters
Stock Ownership-Section 16(a) Beneficial Ownership Reporting Compliance
Stock Ownership Code of Conduct
Executive Compensation
Stock Ownership
Certain Transactions
Election of Directors and Related Matters
Relationship with Independent Public Accountants
Table of Contents
ITEM 11.
EXECUTIVE COMPENSATION
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED SHAREHOLDER MATTERS
Number of securities
remaining available for
future issuance under
Number of securities to
Weighted average
equity compensation
be issued upon exercise
exercise price of
plans excluding
of outstanding options,
outstanding options,
securities reflected in
Incentive
warrants and rights
warrants and rights
column (a)
Plan Category
Plan
(a)
(b)
(c)
2004
1,636,852
$
19.07
2,580,869
1,636,852
$
19.07
2,580,869
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
ITEM 14.
PRINCIPAL ACCOUNTING FEES AND SERVICES
Table of Contents
ITEM 15.
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
a)
The following documents are filed as part of this Report:
(1)
Financial Statements
Reference is made to the Index to Financial Statements under Item 8 in Part
II hereof, where these documents are listed.
(2)
Schedules
Schedules are omitted because they are not applicable or not required or the
information required to be set forth therein is included in the consolidated
financial statements referenced above in section (a) (1) of this Item 15.
(3)
Exhibits
The information on exhibits required by this Item 15 is set forth in the
Eagle Materials Inc. Index to Exhibits appearing on pages 73-75 of this
Report.
Table of Contents
EAGLE MATERIALS INC.
Registrant
/s/ STEVEN R. ROWLEY
Steven R. Rowley, Chief Executive Officer
/s/ STEVEN R. ROWLEY
Steven R. Rowley
Chief Executive Officer
/s/ ARTHUR R. ZUNKER, JR.
Arthur R. Zunker, Jr., Senior Vice President
Finance and Treasurer
(principal financial and accounting officer)
/s/ F. WILLIAM BARNETT
F. William Barnett, Director
/s/ ROBERT L. CLARKE
Robert L. Clarke, Director
/s/ O. GREG DAGNAN
O. Greg Dagnan, Director
Table of Contents
/s/ LAURENCE E. HIRSCH
Laurence E. Hirsch, Director
/s/ FRANK W. MARESH
Frank W. Maresh, Director
/s/ MICHAEL R. NICOLAIS
Michael R. Nicolais, Director
/s/ DAVID W. QUINN
David W. Quinn, Director
/s/ RICHARD R. STEWART
Richard R. Stewart, Director
Table of Contents
AND SUBSIDIARIES
Exhibit
Number
Description of Exhibits
Amended and Restated Agreement and Plan of Merger, dated as of November 4, 2003, among
Centex Corporation, Centex Construction Products, Inc. (now known as Eagle Materials Inc.)
and ARG Merger Corporation filed as Exhibit 2.1 to the Companys Current Report on Form 8-K/A
filed with the Securities Exchange Commission (the Commission) on November 12, 2003 and
incorporated herein by reference.
Amended and Restated Distribution Agreement dated as of November 4, 2003 between Centex
Corporation and Centex Construction Products, Inc. (now known as Eagle Materials Inc.) filed
as Exhibit 2.2 to the Companys Current Report on Form 8-K/A filed with the Commission on
November 12, 2003 and incorporated herein by reference.
Restated Certificate of Incorporation filed as Exhibit 3.1 to the Companys Current Report
on Form 8-K for the filed with the Commission on April 11, 2006 and incorporated herein by
reference.
Restated Certificate of Designation, Preferences and Rights of Series A Preferred Stock
filed as Exhibit 3.2 to the Companys Current Report on Form 8-K filed with the Commission on
April 11, 2006 and incorporated herein by reference.
Amended and Restated Bylaws.
Amended and Restated Credit Agreement dated as of December 16, 2004 among Eagle Materials
Inc., the lenders party thereto, JPMorgan Chase Bank, N.A. as Administrative Agent, Bank of
America, N.A. and PNC Bank, N.A. as Co-Syndication Agents, and Sun Trust Bank and Wells Fargo
Bank, N.A. as Co-Documentation Agents, filed as Exhibit 4.1 to the Quarterly Report on Form
10-Q for the quarter ended December 31, 2005 filed with the Commission on February 6, 2006
and incorporated herein by reference.
Fifth Amendment to the Amended and
Restated Credit Agreement dated June 30, 2006, among Eagle Materials Inc. and the lenders party thereto, JP Morgan Chase Bank, N.A., as
administrative agent, Bank of America, N.A. and Branch Banking and Trust Company as co-syndication
agent and Wells Fargo Bank N.A. and Union Bank of California, N.A., as co-documentation agents filed as
Exhibit 4.1 to the Companys Current Report on Form 8-K filed with the Commission on July 7,
2006 and incorporated herein by reference.
Sixth Amendment to the Amended and Restated Credit Agreement dated October 17, 2006 filed as
Exhibit 4.1 to the Companys Current Report on Form 8-K filed with the Commission on October
17, 2006 and incorporated herein by reference.
Note Purchase Agreement dated as of November 15, 2005, among the Company and the purchasers
named therein filed as Exhibit 10.1 to the Companys Current Report on Form 8-K filed with
the Commission on November 18, 2005 and incorporated herein by reference.
Amended and Restated Rights Agreement, dated as of April 11, 2006, between Eagle Materials
Inc. and Mellon Investor Services LLC, as Rights Agent, filed as Exhibit 99.1 to the
Amendment No. 1 to the Registration Statement on Form 8-A/A of the Company filed with the
Commission on April 11, 2006 and incorporated herein by reference.
Joint Venture Interest Purchase Agreement, dated as of November 28, 2004, by and between
Eagle ICC LLC, Texas Cement Company and RAAM Limited Partnership filed as Exhibit 2.1 to the
Companys Current Report on Form 8-K filed with the Commission on November 29, 2004 and
incorporated herein by reference.
Table of Contents
Exhibit
Number
Description of Exhibits
Limited Partnership Agreement of Texas Lehigh Cement Company LP by and between Texas Cement
Company and Lehigh Portland Cement Company effective as of October 1, 2000 filed as Exhibit
10.2 to the Companys Annual Report on
Form 10-K for the fiscal year ended March 31, 2001
filed with the Commission on June 27, 2001 (the 2001 Form 10-K) and incorporated herein by
reference.
Amendment No. 1 to Agreement of Limited Partnership by and among Texas Cement Company,
TLCC LP LLC, TLCC GP LLC, Lehigh Portland Cement Company, Lehigh Portland Investments, LLC
and Lehigh Portland Holdings, LLC effective as of October 2, 2000 filed as Exhibit 10.2(a) to
the 2001 Form 10-K and incorporated herein by reference.
The Eagle Materials Inc. Incentive Plan filed as Exhibit 10.3 to the Companys Annual Report
on Form 10-K for the fiscal year ended March 31, 2005 filed with the Commission on June 10,
2005.
(1)
Form of Restricted Stock Unit Agreement filed as Exhibit 10.1 to the Companys Current
Report on Form 8-K filed with the Commission on August 30, 2004 and incorporated herein by
reference.
Form of Non-Qualified Stock Option Agreement (EBIT) filed as Exhibit 10.2 to the
Companys Current Report on Form 8-K filed with the Commission on August 30, 2004 and
incorporated herein by reference.
Form of Non-Qualified Stock Option Agreement (ROE) filed as Exhibit 10.3 to the
Companys Current Report on Form 8-K filed with the Commission on August 30, 2004 and
incorporated herein by reference.
Form of Non-Qualified Director Stock Option Agreement filed as Exhibit 10.4 to the
Companys Current Report on Form 8-K filed with the Commission on August 30, 2004 and
incorporated herein by reference.
Form of Restricted Stock Unit Agreement filed as Exhibit 10.5 to the Companys Quarterly
Report on Form 10-Q for the quarter ended June 30, 2005 filed with the Commission on August
9, 2005 and incorporated herein by reference.
Form of Non-Qualified Stock Option Agreement filed as Exhibit 10.6 to the Companys
Quarterly Report on Form 10-Q for the quarter ended June 30, 2005 filed with the Commission
on August 9, 2005 and incorporated herein by reference.
Form of Restricted Stock Unit Agreement for Non-Employee Directors filed as Exhibit 10.1 to
the Companys Current Report on Form 8-K filed with the Commission on August 1, 2006 and
incorporated by reference herein.
Form of Non-Qualified Stock Option Agreement for Non-Employee Directors filed as Exhibit
10.2 to the Companys Current Report on Form 8-K filed with the Commission on August 1, 2006
and incorporated by reference herein.
Form of Restricted Stock Unit Agreement for Senior Executives filed as Exhibit
10.3 to the Companys Current Report on Form 8-K filed with the Commission on August 1, 2006
and incorporated by reference herein.
Form of Non-Qualified Stock Option Agreement for Senior Executives filed as
Exhibit 10.4 to the Companys Current Report on Form 8-K filed with the Commission on August
1, 2006 and incorporated by reference herein.
Eagle Materials Inc. Salaried Incentive Compensation Program for Fiscal Year 2007 (filed as
Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange
Commission on May 15, 2006, and incorporated herein by reference).
(1)
Eagle Materials Inc. Cement Companies Salaried Incentive Compensation Program for Fiscal
Year 2007 (filed as Exhibit 10.2 to the Current Report on Form 8-K filed with the Securities
and Exchange Commission on May 15, 2006, and incorporated herein by reference).
(1)
Eagle Materials Inc. Concrete and Aggregates Companies Salaried Incentive Compensation
Program for Fiscal Year 2007 (filed as Exhibit 10.3 to the Current Report on Form 8-K filed
with the Securities and Exchange Commission on May 15, 2006, and incorporated herein by
reference).
(1)
American Gypsum Company Salaried Incentive Compensation Program for Fiscal Year 2007 (filed
as Exhibit 10.4 to the Current Report on Form 8-K filed with the Securities and Exchange
Commission on May 15, 2006, and incorporated herein by reference).
(1)
The Eagle Materials Inc. Amended and Restated Supplemental Executive Retirement Plan filed
as Exhibit 10.4 to the Companys Annual Report on Form 10-K for the fiscal year ended March
31, 2000 and incorporated herein by reference.
(1)
Table of Contents
Exhibit
Number
Description of Exhibits
First Amendment to the Eagle Materials Inc. Amended and Restated Supplemental Executive
Retirement Plan, dated as of May 11, 2004, filed as Exhibit 10.4(a) to the Companys Annual
Report on Form 10-K for the fiscal year ended March 31, 2006, filed with the Commission on
June 2, 2006 and incorporated herein by reference.
(1)
Trademark License and Name Domain Agreement dated January 30, 2004 between the Company and
Centex Corporation filed as Exhibit 10.5 to the Companys Annual Report on Form 10-K for the
fiscal year ended March 31, 2004 filed with the Commission on June 14, 2004 (the 2004 Form
10-K) and incorporated herein by reference.
Tax Separation Agreement dated as of April 1, 1994, among Centex, the Company and its
subsidiaries filed as Exhibit 10.6 to the 1995 Form 10-K and incorporated herein by
reference.
Paperboard Supply Agreement, dated May 14, 1998, by and among Republic Paperboard Company
(n/k/a Republic Paperboard Company LLC), Republic Group, Inc., and James Hardie Gypsum, Inc.
filed as Exhibit 10.11 to the 2001 Form 10-K and incorporated herein by reference. Portions
of this Exhibit were omitted pursuant to a request for confidential treatment filed with the
Office of the Secretary of the Securities and Exchange Commission.
Form of Indemnification Agreement between the Company and each of its directors filed as
Exhibit 10.9 to the 2004
Form 10-K and incorporated herein by reference.
Subsidiaries of the Company.
Consent of Registered Independent Public Accounting Firm Ernst & Young LLP.
Certification of the Chief Executive Officer of Eagle Materials Inc. pursuant to Rules
13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934, as amended.
Certification of the Chief Financial Officer of Eagle Materials Inc. pursuant to Rules
13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934, as amended.
Certification of the Chief Executive Officer of Eagle Materials Inc. pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Certification of the Chief Financial Officer of Eagle Materials Inc. pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
*
Filed herewith.
(1)
Required to be identified as a management contract or a compensatory plan or
arrangement pursuant to Item 14(a)(3) of Form 10-K.
ARTICLE I
|
1 | |||||
SECTION 1.1
|
Registered Office | 1 | ||||
SECTION 1.2
|
Other Offices | 1 | ||||
|
||||||
ARTICLE II
|
1 | |||||
SECTION 2.1
|
Place of Meetings | 1 | ||||
SECTION 2.2
|
Annual Meeting | 1 | ||||
SECTION 2.3
|
Special Meeting | 1 | ||||
SECTION 2.4
|
Quorum | 2 | ||||
SECTION 2.5
|
Voting | 2 | ||||
SECTION 2.6
|
Conduct of Meetings of Stockholders | 2 | ||||
SECTION 2.7
|
Proxies | 2 | ||||
SECTION 2.8
|
Stockholder List | 3 | ||||
SECTION 2.9
|
Stock Ledger | 3 | ||||
SECTION 2.10
|
Stockholder Action by Written Consent | 3 | ||||
SECTION 2.11
|
Stockholder Proposals at Annual or Special Meetings | 3 | ||||
SECTION 2.12
|
Stockholder Nominations of Persons for Election to the Board of Directors | 4 | ||||
|
||||||
ARTICLE III
|
4 | |||||
SECTION 3.1
|
Number and Election of Directors | 4 | ||||
SECTION 3.2
|
Vacancies and Newly Created Directorships | 5 | ||||
SECTION 3.3
|
Place of Meetings | 6 | ||||
SECTION 3.4
|
Regular Meetings | 6 | ||||
SECTION 3.5
|
Special Meetings | 6 | ||||
SECTION 3.6
|
Quorum | 6 | ||||
SECTION 3.7
|
Conduct of Meetings of the Board of Directors | 6 | ||||
SECTION 3.8
|
Meetings by Telephone Conference | 6 | ||||
SECTION 3.9
|
Action by Written Consent | 6 | ||||
SECTION 3.10
|
Committees of Directors | 7 | ||||
SECTION 3.11
|
Interested Directors | 8 | ||||
SECTION 3.12
|
Resignation | 8 | ||||
SECTION 3.13
|
Compensation of Directors | 8 | ||||
|
||||||
ARTICLE IV
|
8 | |||||
SECTION 4.1
|
General | 8 | ||||
SECTION 4.2
|
Election and Terms | 9 | ||||
SECTION 4.3
|
Salaries | 9 | ||||
SECTION 4.4
|
President | 9 | ||||
SECTION 4.5
|
Vice Presidents | 9 | ||||
SECTION 4.6
|
Secretary | 9 | ||||
SECTION 4.7
|
Treasurer | 10 | ||||
SECTION 4.8
|
Assistant Secretaries | 10 | ||||
SECTION 4.9
|
Assistant Treasurers | 10 |
- i -
SECTION 4.10
|
Other Officers | 10 | ||||
SECTION 4.11
|
Delegation of Authority | 10 | ||||
SECTION 4.12
|
Removal | 11 | ||||
SECTION 4.13
|
Resignation | 11 | ||||
|
||||||
ARTICLE V
|
11 | |||||
SECTION 5.1
|
Certificates Evidencing Shares | 11 | ||||
SECTION 5.2
|
Transfer Agents and Registrars | 11 | ||||
SECTION 5.3
|
Signatures | 11 | ||||
SECTION 5.4
|
Lost, Stolen or Destroyed Stock Certificates | 11 | ||||
SECTION 5.5
|
Transfers | 11 | ||||
SECTION 5.6
|
Record Date | 11 | ||||
SECTION 5.7
|
Registered Stockholders | 12 | ||||
|
||||||
ARTICLE VI
|
12 | |||||
SECTION 6.1
|
General | 12 | ||||
SECTION 6.2
|
Expenses Related to Proceedings | 12 | ||||
SECTION 6.3
|
Advancement of Expenses | 12 | ||||
SECTION 6.4
|
Request for Indemnification | 13 | ||||
SECTION 6.5
|
Determining Entitlement to Indemnification Prior to a Change of Control | 13 | ||||
SECTION 6.6
|
Determining Entitlement to Indemnification After a Change of Control | 13 | ||||
SECTION 6.7
|
Procedures of Independent Counsel | 13 | ||||
SECTION 6.8
|
Expenses of Independent Counsel | 14 | ||||
SECTION 6.9
|
Trial De Novo | 14 | ||||
SECTION 6.10
|
Non-Exclusivity | 15 | ||||
SECTION 6.11
|
Insurance and Subrogation | 15 | ||||
SECTION 6.12
|
Severability | 15 | ||||
SECTION 6.13
|
Certain Persons Not Entitled to Indemnification | 15 | ||||
SECTION 6.14
|
Definitions | 15 | ||||
SECTION 6.15
|
Notices | 16 | ||||
SECTION 6.16
|
Contractual Rights | 17 | ||||
|
||||||
ARTICLE VII
|
17 | |||||
SECTION 7.1
|
Notices | 17 | ||||
SECTION 7.2
|
Waiver of Notice | 17 | ||||
|
||||||
ARTICLE VIII
|
17 | |||||
SECTION 8.1
|
Amendments by Stockholders | 17 | ||||
SECTION 8.2
|
Amendments by Directors | 17 | ||||
|
||||||
ARTICLE IX
|
18 | |||||
SECTION 9.1
|
Fiscal Year | 18 | ||||
SECTION 9.2
|
Disbursements | 18 | ||||
SECTION 9.3
|
Corporate Seal | 18 |
- ii -
(a) | amend the Certificate of Incorporation (except that a committee may, to the extent authorized in the resolution or resolutions providing for the issuance of shares of any series of capital stock of the Corporation adopted by the Board of Directors as permitted by the General Corporation Law of the State of Delaware as set forth in Title 8 of the Delaware Code (the DGCL), fix the designations and any of the preferences or rights of such shares relating to dividends, redemption, dissolution, any distribution of assets of the Corporation or the conversion into, or the exchange of such shares for, shares of any other class or classes or any other series of the same or any other class or classes of stock of the Corporation or fix the number of shares of any series of stock or authorize the increase or decrease of the shares of any series); | ||
(b) | adopt an agreement of merger or consolidation under the DGCL; | ||
(c) | recommend to the stockholders the sale, lease or exchange of all or substantially all of the Corporations property and assets; | ||
(d) | recommend to the stockholders a dissolution of the Corporation or a revocation of a dissolution; or | ||
(e) | amend the Bylaws of the Corporation. |
(i) | declare a dividend; | ||
(ii) | authorize the issuance of stock; or | ||
(iii) | adopt a certificate of ownership and merger pursuant to the DGCL. |
Jurisdiction of | ||||||||
Entity Name | Organization | |||||||
AG SOUTH CAROLINA LLC
|
Delaware | |||||||
AMERICAN GYPSUM COMPANY
|
Delaware | |||||||
AMERICAN GYPSUM MARKETING COMPANY
|
||||||||
d/b/a American Gypsum Marketing
Company, Inc.
|
Delaware | |||||||
CCP CEMENT COMPANY
|
Nevada | |||||||
CCP CONCRETE/AGGREGATES LLC
|
Delaware | |||||||
CCP GYPSUM COMPANY
|
Nevada | |||||||
CENTEX MATERIALS LLC
|
Delaware | |||||||
ILLINOIS CEMENT COMPANY LLC
|
Delaware | |||||||
MATHEWS READYMIX LLC
|
California | |||||||
MOUNTAIN CEMENT COMPANY
|
Nevada | |||||||
NEVADA CEMENT COMPANY
|
Nevada | |||||||
REPUBLIC PAPERBOARD COMPANY LLC
|
Delaware | |||||||
TEXAS CEMENT COMPANY
|
Nevada | |||||||
TEXAS LEHIGH CEMENT COMPANY LP
|
||||||||
d/b/a Texas Lehigh Cement
|
50 | % | Texas | |||||
TLCC GP LLC
|
Delaware | |||||||
TLCC LP LLC
|
Delaware | |||||||
WESTERN AGGREGATES LLC
|
Nevada |
Page 1
/s/ ERNST & YOUNG LLP
|
||||
By: | /s/ STEVEN R. ROWLEY | |||
Steven R. Rowley | ||||
President and Chief Executive Officer | ||||
By: | /S/ ARTHUR R. ZUNKER, JR. | |||
Arthur R. Zunker, Jr. | ||||
Chief Financial Officer | ||||
(i) | the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | ||
(ii) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
By: | /s/ STEVEN R. ROWLEY | |||
Steven R. Rowley | ||||
President and Chief Executive Officer | ||||
(i) | the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | ||
(ii) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
By: | /s/ARTHUR R. ZUNKER, JR. | |||
Arthur R. Zunker, Jr. | ||||
Chief Financial Officer | ||||