<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- --- EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 1999
-------------------------------------------------
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- --- EXCHANGE ACT OF 1934
For the transition period from to
----------------------- -----------------------
Commission file number 0-11936
----------------------------------------------------------
LAFARGE CORPORATION
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
MARYLAND 58-1290226
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
11130 SUNRISE VALLEY DRIVE, SUITE 300, RESTON, VA 20191-4393
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
703-264-3600
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
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 X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
The number of shares of common stock, par value $1.00 per share, of Lafarge
Corporation (the "Common Stock") outstanding as of the latest practicable date,
April 30, 1999, was 72,391,532. In addition, as of such date, there were
outstanding 4,782,754 Exchangeable Preference Shares, no par value per share, of
Lafarge Canada Inc. that are exchangeable at any time into Common Stock on a
one-for-one basis, entitle their holders to dividend and other rights
economically equivalent to those of the Common Stock, and through a voting
trust, vote at meetings of stockholders of the Registrant.
<PAGE> 2
LAFARGE CORPORATION AND SUBSIDIARIES
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1999
INDEX
PAGE
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements
of Income (Loss) (unaudited) - Three-Month and Twelve-Month
Periods Ended March 31, 1999 and 1998 1
Condensed Consolidated Balance Sheets March 31, 1999,
March 31, 1998 (unaudited) and
December 31, 1998 2
Condensed Consolidated Statements of
Cash Flows (unaudited) - Three-Month and Twelve-Month
Periods Ended March 31, 1999 and 1998 3
Notes to Condensed Consolidated Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
Item 3. Quantitative and Qualitative Disclosures About Market Risk 16
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 17
Item 4. Submission of Matters to a Vote of Security Holders 18
Item 6. Exhibits and Reports on Form 8-K 18
SIGNATURE 19
INDEX TO EXHIBITS 20
(i)
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
LAFARGE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(UNAUDITED AND IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS TWELVE MONTHS
ENDED MARCH 31 ENDED MARCH 31
------------------------------------------ -----------------------------------------
1999 1998 1999 1998
------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
NET SALES $ 369,781 $ 334,776 $ 2,483,210 $ 1,897,093
------------------ ------------------ ------------------ ------------------
COSTS AND EXPENSES
Cost of goods sold 350,080 333,407 1,815,659 1,413,290
Selling and administrative 51,423 53,682 214,570 177,189
Amortization of goodwill 4,427 3,748 18,265 6,551
Other expense, net 353 5,018 3,092 7,607
------------------ ------------------ ------------------ ------------------
Earnings (loss) from operations (36,502) (61,079) 431,624 292,456
------------------ ------------------ ------------------ ------------------
Interest expense 14,258 7,627 54,283 22,017
Interest income (3,571) (3,831) (20,169) (14,199)
------------------ ------------------ ------------------ ------------------
EARNINGS (LOSS) BEFORE INCOME TAXES (47,189) (64,875) 397,510 284,638
Income tax benefit (expense) 18,137 25,121 (151,308) (108,295)
------------------ ------------------ ------------------ ------------------
NET INCOME (LOSS) $ (29,052) $ (39,754) $ 246,202 $ 176,343
================== ================== ================== ==================
NET INCOME (LOSS) PER COMMON
EQUITY SHARE-BASIC $ (0.40) $ (.55) $ 3.41 $ 2.47
================== ================== ================== ==================
NET INCOME (LOSS) PER COMMON EQUITY
SHARE-DILUTED $ (0.40) $ (.55) $ 3.39 $ 2.45
================== ================== ================== ==================
DIVIDENDS PER COMMON EQUITY SHARE $ 0.15 $ 0.12 $ 0.54 $ 0.44
================== ================== ================== ==================
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
1
<PAGE> 4
LAFARGE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
MARCH 31 MARCH 31 DECEMBER 31
1999 1998 1998
(UNAUDITED) (UNAUDITED) (AUDITED)
---------------------- ---------------------- ---------------------
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents $ 169,026 $ 121,900 $ 271,138
Short-term investments 93,289 164,423 17,070
Receivables, net 274,530 252,869 335,229
Inventories 284,947 258,339 247,944
Other current assets 67,013 66,622 66,510
---------------------- ---------------------- ---------------------
Total current assets 888,805 864,153 937,891
Property, plant and equipment, (less
accumulated depreciation and
depletion of $1,182,885, $1,091,096
and $1,148,919) 1,465,946 1,311,036 1,400,753
Excess of cost over net tangible assets
of businesses acquired, net 350,517 345,567 353,548
Other assets 207,124 212,416 212,605
---------------------- ---------------------- ---------------------
TOTAL ASSETS $ 2,912,392 $ 2,733,172 $ 2,904,797
====================== ====================== =====================
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued liabilities $ 338,815 $ 306,459 $ 353,736
Short-term borrowings and current portion
of long-term debt 97,619 71,643 44,560
Income taxes payable 16,096 3,656 16,681
Payable to Lafarge S.A. -- 690,000 --
---------------------- ---------------------- ---------------------
Total current liabilities 452,530 1,071,758 414,977
Long-term debt 746,978 124,233 751,151
Deferred income tax 110,354 100,654 110,398
Other post-retirement benefits 152,493 151,992 150,064
Other long-term liabilities 60,879 57,660 63,033
---------------------- ---------------------- ---------------------
Total liabilities 1,523,234 1,506,297 1,489,623
---------------------- ---------------------- ---------------------
Common equity
Common stock ($1.00 par value; 67,471 66,276 67,370
authorized 110.1 million shares;
issued 67.5, 66.3 and 67.4 million
shares, respectively)
Exchangeable shares (no par or stated 35,860 39,494 35,814
value; authorized 24.3 million
shares; issued 4.9, 5.5 and 4.9
million shares, respectively)
Additional paid-in-capital 674,400 666,975 672,555
Retained earnings 752,103 545,042 792,058
Accumulated other comprehensive income (loss) (140,676) (90,912) (152,623)
---------------------- ---------------------- ----------------------
Total Shareholders' Equity 1,389,158 1,226,875 1,415,174
---------------------- ---------------------- ----------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 2,912,392 $ 2,733,172 $ 2,904,797
====================== ====================== ======================
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
2
<PAGE> 5
LAFARGE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED AND IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS TWELVE MONTHS
ENDED MARCH 31 ENDED MARCH 31
--------------------------------------- ------------------------------------
1999 1998 1999 1998
---------------- ----------------- ---------------- -----------------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATIONS
Net income (loss) $ (29,052) $ (39,754) $ 246,202 $ 176,343
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operations:
Depreciation, depletion and amortization 40,536 37,460 159,858 116,704
Provision for bad debts 844 815 3,424 2,485
Gain on sale of assets (2,378) (165) (5,177) (4,924)
Other post-retirement benefits 2,175 847 4,971 377
Other noncash charges and credits, net (506) (6,327) 9,561 10,107
Net change in working capital 7,290 (4,537) (12,144) 15,684
---------------- ----------------- ---------------- -----------------
Net cash provided by (used in) operations 18,909 (11,661) 406,695 316,776
---------------- ----------------- ---------------- -----------------
CASH FLOWS FROM INVESTING
Capital expenditures (60,701) (42,329) (242,725) (125,746)
Acquisitions (35,313) (30,434) (104,159) (39,251)
Redemptions (purchases) of short-term
investments (76,219) (9,055) 71,134 (80,391)
Proceeds from property, plant and
equipment dispositions 2,917 7,087 18,740 21,887
Other 4,701 (2,820) 6,980 5,864
---------------- ----------------- ---------------- -----------------
Net cash used for investing (164,615) (77,551) (250,030) (217,637)
---------------- ----------------- ---------------- -----------------
CASH FLOWS FROM FINANCING
Repayment of Lafarge S.A. payable -- -- (690,000) --
Net increase (decrease) in short-term
and long-term borrowings
(includes current portion) 48,868 38,077 638,349 (82,125)
Issuance of equity securities, net 1,001 2,258 11,500 19,354
Dividends, net of reinvestments (9,912) (7,745) (35,311) (27,884)
Financing costs and other -- -- (12,818) --
---------------- ----------------- ---------------- -----------------
Net cash provided by (used in) financing 39,957 32,590 (88,280) (90,655)
---------------- ----------------- ---------------- -----------------
Effect of exchange rate changes 3,637 4,359 (21,259) (5,524)
---------------- ----------------- ---------------- -----------------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (102,112) (52,263) 47,126 2,960
CASH AND CASH EQUIVALENTS AT
THE BEGINNING OF THE PERIOD 271,138 174,163 121,900 118,940
---------------- ----------------- ---------------- -----------------
CASH AND CASH EQUIVALENTS AT
THE END OF THE PERIOD $ 169,026 $ 121,900 $ 169,026 $ 121,900
================ ================= ================ =================
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
3
<PAGE> 6
LAFARGE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Lafarge Corporation, together with its subsidiaries ("Lafarge" or the
"Company"), is North America's largest diversified supplier of a full
range of aggregates, concrete and concrete products, cement and
cementitious materials, gypsum wallboard and other construction
materials. The Company's core businesses are organized into three
operating segments: the Cement Group; the Construction Materials Group;
and Lafarge Gypsum. See note 8 herein, for information regarding the
Company's operating segments and products.
Lafarge has more than 700 operations doing business in most states and
throughout Canada, where it operates through its major operating
subsidiary, Lafarge Canada Inc. ("LCI"). The primary U.S. markets are in
the northeast, midsouth, midwest, northcentral, mountain and northwest
areas. Lafarge S.A., a French corporation, and certain of its affiliates
("Lafarge S.A.") own a majority of the voting securities of Lafarge,
including the Company's outstanding Common Stock, par value $1.00 per
share (the "Common Stock") and LCI's Exchangeable Preference Shares
(the "Exchangeable Shares").
On June 3, 1998, the Company acquired certain Redland PLC businesses in
North America ("Redland") from Lafarge S.A. for $690 million. Redland
produces and sells aggregates, ready-mixed concrete and asphalt and
performs paving and related contracting services. Redland operated
primarily in the U.S. and owned two quarry operations in Ontario,
Canada. Lafarge S.A. acquired Redland PLC in December 1997. Since the
Company acquired Redland from its majority stockholder, the acquisition
was accounted for similar to a pooling of interests for financial
reporting purposes. Accordingly, as of December 31, 1997, Redland assets
and liabilities acquired by the Company from Lafarge S.A. were
transferred to the Company at Lafarge S.A.'s historical cost, which
approximates the $690 million purchase price paid by the Company. The
Company's condensed consolidated balance sheets as of March 31, 1999,
December 31, 1998 and March 31, 1998 include the balance sheets of
Redland. The condensed consolidated statements of income and cash flows
include Redland from January 1, 1998.
2. The condensed consolidated financial statements have been prepared,
without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission. As a result, certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted. The Company believes that the disclosures made are
adequate to make the information presented not misleading. In the opinion
of management, the accompanying condensed consolidated financial
statements reflect all adjustments necessary to present fairly the
Company's financial position as of the applicable dates and the results
of its operations and its cash flows for the interim periods presented.
These condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements and related notes
included in the Company's 1998 Annual Report on Form 10-K.
3. Because of seasonal, weather-related conditions in most of the Company's
marketing areas, earnings of any one quarter should not be considered as
indicative of results to be expected for a full year or any other interim
period.
4
<PAGE> 7
4. Inventories are valued at the lower of cost or market. The majority of
the Company's U.S. cement inventories, other than maintenance and
operating supplies, are costed using the last-in, first-out ("LIFO")
method, and all other inventories are valued at average cost. At March
31, 1999 and 1998, and at December 31, 1998, inventories consisted of the
following (in thousands):
<TABLE>
<CAPTION>
March 31 December 31
------------------------------------------- ---------------------
1999 1998 1998
------------------- -------------------- ---------------------
<S> <C> <C> <C>
Finished products $ 148,957 $ 131,521 $ 129,838
Work in process 28,779 23,746 10,878
Raw materials and fuel 58,108 57,301 55,760
Maintenance and operating supplies 49,103 45,771 51,468
------------------- -------------------- ---------------------
Total inventories $ 284,947 $ 258,339 $ 247,944
=================== ==================== =====================
</TABLE>
5. Cash paid during the period for interest and income taxes, is as follows
(in thousands):
<TABLE>
<CAPTION>
Three Months Twelve Months
Ended March 31 Ended March 31
------------------------------------------- --------------------------------------------
1999 1998 1999 1998
------------------ ----------------- ------------------- ------------------
<S> <C> <C> <C> <C>
Interest $ 1,375 $ 3,326 $ 43,740 $ 22,265
Income taxes (net of refunds) (10,209)(a) 14,162 128,574 97,392
</TABLE>
(a) Includes a refund of $23.4 million from the Internal Revenue Service.
6. Earnings per share for the three and twelve months ended March 31, 1999
and 1998 includes the following components (in thousands, except per
share amounts):
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
March 31 March 31
-------------------------------- ---------------------------------
1999 1998 1999 1998
---------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
BASIC CALCULATION
-----------------
Net income (loss) $ (29,052) $ (39,754) $ 246,202 $ 176,343
============= ============== ============== ==============
Weighted average number of
common equity shares 72,342 71,737 72,221 71,429
============= ============== ============== ==============
Basic net income (loss)
per common equity share $ (.40) $ (.55) $ 3.41 $ 2.47
============= ============== ============== ==============
DILUTED CALCULATION
-------------------
Net income (loss) assuming dilution $ (29,052) $ (39,754) $ 246,202 $ 176,343
============= ============== ============== ==============
Weighted average number of common
equity shares outstanding 72,342 71,737 72,221 71,429
Net effect of dilutive stock options
based on the treasury stock method -- -- 506 597
------------- -------------- -------------- --------------
Weighted average number of common
equity shares assuming full conversion
of all potentially dilutive securities 72,342 71,737 72,727 72,026
============= ============== ============== ==============
Diluted net income (loss) per
common equity share $ (.40) $ (.55) $ 3.39 $ 2.45
============= ============== ============== ==============
</TABLE>
5
<PAGE> 8
Basic earnings per common equity share were computed by dividing net
income by the weighted average number of shares of Common Stock
outstanding during the period. Diluted earnings per common equity share
assumed conversion of stock options, to the extent such conversion is
dilutive.
7. Statement of Financial Accounting Standards No. 130, "Reporting
Comprehensive Income" ("SFAS No.130"), requires that an enterprise
display comprehensive income which for the Company is the total of net
income (loss) and the current year foreign currency translation
adjustment. Comprehensive income (loss) consists of the following (in
thousands):
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
March 31 March 31
------------------------------ ------------------------------
1999 1998 1999 1998
------------- ------------ ------------- -------------
<S> <C> <C> <C> <C>
Net income (loss) $ (29,052) $ (39,754) $ 246,202 $ 176,343
Foreign currency translation
adjustments 11,947 6,447 (49,764) (20,215)
------------- ------------ ------------- -------------
Comprehensive income (loss) $ (17,105) $ (33,307) $ 196,438 $ 156,128
============= ============ ============= =============
</TABLE>
8. Lafarge adopted Statement of Financial Accounting Standards No. 131,
"Disclosures about Segments of an Enterprise and Related Information"
("SFAS No. 131"), during the fourth quarter of 1998. SFAS No. 131
established standards for reporting information about operating segments
in annual financial statements and requires selected information about
operating segments in interim financial reports issued to shareholders.
It also established standards for related disclosures about products and
geographic areas.
Lafarge's three reportable operating segments, which represent separately
managed strategic business units that have different capital requirements
and marketing strategies, are the Construction Materials Group, the
Cement Group and Lafarge Gypsum. The basis of segmentation is consistent
with the Company's year-end financial statements.
Lafarge evaluates operating performance based on profit or loss from
operations before the following items: other post-retirement benefit
expense for retirees, goodwill amortization related to the Redland
acquisition, income taxes, interest and foreign exchange gains and
losses.
6
<PAGE> 9
Lafarge accounts for intersegment sales and transfers at market prices.
Revenues are attributed to geographic areas based on the location of the
assets producing the revenues. Operating segment information consists of
the following (in millions):
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
March 31 March 31
---------------------------------- ----------------------------------
1999 1998 1999 1998
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Net sales:
Construction Materials
Revenues from external customers $ 187.7 $ 167.7 $ 1,360.0 $ 855.3
Intersegment revenues 1.8 0.9 3.2 2.6
Cement
Revenues from external customers 150.8 143.1 1,013.5 947.7
Intersegment revenues 18.1 16.1 119.9 115.9
Gypsum
Revenues from external customers 31.3 24.0 109.7 94.1
Eliminations (19.9) (17.0) (123.1) (118.5)
--------------- --------------- --------------- ---------------
Total net sales $ 369.8 $ 334.8 $ 2,483.2 $ 1,897.1
=============== =============== =============== ===============
<CAPTION>
Three Months Ended Twelve Months Ended
March 31 March 31
---------------------------------- ----------------------------------
1999 1998 1999 1998
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Earnings (loss) from operations:
Construction Materials (a) $ (22.4) $ (29.7) $ 178.6 $ 70.8
Cement (a) (7.7) (18.2) 299.2 264.4
Gypsum (a) 8.5 3.3 25.2 13.6
Corporate and other (14.9) (16.5) (71.4) (56.4)
--------------- --------------- --------------- ---------------
Earnings (loss) before interest and
income taxes (36.5) (61.1) 431.6 292.4
Interest expense, net (10.7) (3.8) (34.1) (7.8)
--------------- --------------- --------------- ---------------
Earnings (loss) before income taxes $ (47.2) $ (64.9) $ 397.5 $ 284.6
=============== =============== =============== ===============
</TABLE>
(a) Excludes other post-retirement benefit expense for retirees, goodwill
amortization related to the Redland acquisition, income taxes, interest
and foreign exchange gains and losses.
Condensed consolidated geographic information consists of the following
(in millions):
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
March 31 March 31
---------------------------------- ----------------------------------
1999 1998 1999 1998
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Net Sales
United States $ 271.8 $ 234.0 $ 1,738.1 $ 1,118.1
Canada 98.0 100.8 745.1 779.0
------------------------------------------------------------------------
Total $ 369.8 $ 334.8 $ 2,483.2 $ 1,897.1
=============== =============== =============== ===============
Earnings (Loss) from Operations
United States $ (12.9) $ (34.8) $ 281.4 $ 152.2
Canada (23.6) (26.3) 150.2 140.2
--------------- --------------- --------------- ---------------
Total (36.5) (61.1) 431.6 292.4
Interest expense, net (10.7) (3.8) (34.1) (7.8)
--------------- --------------- --------------- ---------------
Earnings (Loss) Before Income Taxes $ (47.2) $ (64.9) $ 397.5 $ 284.6
=============== =============== =============== ===============
</TABLE>
7
<PAGE> 10
Assets by operating segment consist of the following (in millions):
<TABLE>
<CAPTION>
March 31
---------------------------------------------
1999 1998
-------------------- ---------------------
<S> <C> <C>
Assets:
Construction Materials $ 1,094.6 $ 1,073.5
Cement 981.0 835.0
Gypsum 78.6 71.7
Corporate, Redland goodwill and other 758.2 753.0
-------------------- ---------------------
Total assets $ 2,912.4 $ 2,733.2
==================== =====================
</TABLE>
9. In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS No. 133"). The Company must
adopt this statement no later than January 1, 2000. SFAS No. 133
establishes accounting and reporting standards requiring that every
derivative instrument (including certain derivative instruments embedded
in other contracts) be recorded in the balance sheet as either an asset
or liability measured at its fair value. SFAS No. 133 requires that
changes in the derivative's fair value be recognized currently in
earnings unless specific hedge accounting criteria are met. Special
accounting for qualifying hedges allows a derivative's gains and losses
to offset related results on the hedged item in the income statement and
requires that a company formally document, designate and assess the
effectiveness of transactions that receive hedge accounting. The Company
is reviewing SFAS No. 133 and does not currently expect it to materially
impact its financial condition or results of operations.
10. In January 1999, the Company completed the acquisition of a gypsum
wallboard plant located in Newfoundland, Canada.
In late January 1999, the Company announced plans to construct a $90
million state-of-the-art gypsum wallboard plant in northern Kentucky,
just outside of Cincinnati. Scheduled to begin operations in the first
half of 2000, this facility will have the capacity to produce up to 900
million square feet of wallboard a year, which would make it the largest
single production line in the U.S.
On March 30, 1999, the Company completed the acquisition of Corn
Construction Co., an aggregates and asphalt paving business in New Mexico
and Southern Colorado.
11. The Company self-insures for workers' compensation, automobile and
general liability claims up to a maximum per claim. The undiscounted
estimated liability is accrued based on a determination by an outside
actuary. This determination is impacted by assumptions made and actual
experience.
In 1992, the Company's Canadian subsidiary, LCI, along with the Bertrand
& Frere Construction Company Limited and others, became a defendant in
lawsuits instituted in the Ontario (Canada) Court (General Division)
arising from claims brought by building owners, the Ontario New Home
Warranty Program and other plaintiffs regarding alleged defective
concrete, fly ash and cement used in defective footings, foundations and
floors. The damages claimed total more than Canadian $65 million. The
amount of LCI's liability, if any, in these lawsuits is uncertain. LCI
has denied liability and is contesting the lawsuits vigorously. LCI has
also introduced claims against some of its primary and excess insurers
for defense costs and indemnity, if any. The lawsuits were joined and the
hearing was completed in December 1998. The matter was taken under
advisement by the presiding judge and a decision is expected in 1999. LCI
believes that it has insurance coverage that will respond to defense
expenses and liability, if any, in the lawsuits.
8
<PAGE> 11
Currently, the Company is involved in two remediations under the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended by the Superfund Amendments and Reauthorization Act of
1986, which together are referred to as Superfund. At one site where the
Company had been named a potentially responsible party ("PRP"), the
remedial activities are complete, long-term maintenance and monitoring
are under way, and partial contribution has been obtained from
financially viable parties, including the Company. The United States
Environmental Protection Agency ("EPA") will delist this site from the
National Priority List in 1999. At the other site, also on the National
Priority List, some of the PRPs named by the EPA have initiated a
third-party action against some 47 other parties including the Company.
The Company also has been named a PRP at this site. The suit alleges that
in 1969 a predecessor company of the Company sold equipment containing
hazardous substances that may now be present at the site. It appears
that the largest disposer of hazardous substances at this site is the
U.S. Department of Defense and numerous other large disposers of
hazardous substances are associated with this site. Management believes
that neither matter is material to the financial condition, results of
operations or liquidity of the Company.
When the Company determines that it is probable that a liability for
environmental matters or other legal actions has been incurred and the
amount of the loss is reasonably estimable, an estimate of the required
remediation costs is recorded as a liability in the financial statements.
As of March 31, 1999, the liabilities recorded for environmental
obligations are not material to the financial statements of the Company.
Although the Company believes its environmental accruals are adequate,
environmental costs may be incurred that exceed the amounts provided at
March 31, 1999. However, management has concluded that the possibility of
material liability in excess of the amounts reported in the March 31,
1999 Condensed Consolidated Balance Sheet is remote.
In the ordinary course of business, the Company is involved in certain
other legal actions and claims, including proceedings under laws and
regulations relating to environmental and other matters. Because such
matters are subject to many uncertainties and the outcomes are not
predictable with assurance, the total amount of these legal actions and
claims cannot be determined with certainty. Management believes that all
legal and environmental matters will be resolved without material adverse
impact to the Company's financial condition, results of operations or
liquidity.
9
<PAGE> 12
LAFARGE CORPORATION AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Overview
Lafarge Corporation, together with its subsidiaries ("Lafarge" or the
"Company"), is North America's largest diversified supplier of construction
materials. The Company's core businesses are organized into three operating
segments:
The Cement Group - produces and distributes portland and specialty
cements, and cementitious materials, and processes fuel-quality waste and
alternative raw materials for use in cement kilns.
The Construction Materials Group - produces and distributes construction
aggregates, ready-mixed concrete, other concrete products and asphalt,
and constructs and paves roads.
Lafarge Gypsum - produces and distributes gypsum wallboard and related
products.
Lafarge's broad range of products are complemented by its geographic diversity.
Unlike many of its competitors, Lafarge has 700 operations doing business in
most states and throughout Canada, where it operates through its major operating
subsidiary, Lafarge Canada Inc.
Historically, the Company incurs a loss in the first quarter because in many of
the Company's operating regions, sales and operating results are negatively
impacted by winter weather conditions which reduce construction activity. In
addition, a substantial portion of the year's major maintenance projects are
performed during this period of low plant utilization with the associated costs
being charged to expense as incurred. Due to seasonal, weather-related
conditions, earnings of any one quarter should not be considered as indicative
of results to be expected for a full year or any other interim period.
THREE MONTHS ENDED MARCH 31, 1999
The Company acquired certain North American construction materials operations of
Redland PLC ("Redland") effective December 31, 1997 for accounting purposes. The
consolidated statements of income and cash flows include the results of Redland
from January 1, 1998. Since the acquisition was not financed until June 1998,
financing costs were not incurred during the first quarter of 1998.
The seasonal pattern was evident during the three months ended March 31, 1999
when the Company incurred a net loss of $29.1 million, or $0.40 per common
diluted equity
10
<PAGE> 13
share. This compares with a net loss of $39.8 million, or $0.55 per common
diluted equity share, for the first quarter of 1998. The increase in interest
expense of $6.6 million in 1999, compared with the first quarter of 1998, is due
to debt incurred to finance the Redland acquisition. Operating results improved
in all of the Company's main product lines (cement, ready-mixed concrete,
aggregates and gypsum wallboard) reflecting higher sales volumes and prices. The
Company's Canadian operations reported a net loss of $12.5 million, $1.9 million
better than 1998 whereas the U.S. net loss was $16.5 million, $8.8 million
better than 1998.
The Company's net sales increased 10.5 percent to $369.8 million, up from $334.8
million in 1998. Canadian net sales were $98.0 million, down 2.8 percent, while
U.S. net sales increased 16.2 percent to $271.8 million. A relatively mild
winter across most of the United States and Canada boosted product shipments in
most principal product categories and prices trended upward in all main product
lines of cement, concrete, aggregates and gypsum wallboard. Cement shipments
increased 5 percent while ready-mixed concrete and gypsum wallboard volumes rose
8 percent and 14 percent, respectively. Aggregates shipments were flat.
The first quarter loss from the Company's cement operations was $7.7 million,
$10.5 million better than last year. The improvement is primarily due to an
increase in cement shipments in the U.S. and higher prices in both the U.S. and
Canada. Net sales increased 5.9 percent reflecting the rise in shipments and
prices. The Canadian loss excluding the exchange rate fluctuation was $4.7
million, $1.5 million better than 1998 due to a 5.1 percent escalation in net
realization (delivered price per ton to customers less freight) partially offset
by a 45,000 ton decrease in cement shipments. Net sales in Canada decreased 13.3
percent primarily due to lower economic activity in western Canada. Cement
shipments in eastern Canada were flat. The U.S. loss was $3.9 million, $9.9
million better than a year ago. Quarterly results for 1999 include approximately
$1 million of seasonal loss of the Seattle cement plant acquired in late 1998.
Increases in shipments of 10 percent and net realization of 5.3 percent were
partially offset by higher maintenance spending which was incurred during the
quarter. Net sales increased 12.3 percent reflecting the increase in shipments
and prices. Clinker production volumes increased in all regions with an overall
increase of 226,000 tons or 9.8 percent.
The Company's construction materials operations lost $22.4 million, $7.3 million
better than the first quarter of 1998. Net sales of $189.5 million, were 12.5
percent higher than 1998, reflecting an increase in ready-mixed concrete
shipments and higher average selling prices of both ready-mixed concrete and
aggregates due to price increases and favorable product and geographic mix.
Shipments steadily improved during the quarter with March shipments 11 percent
ahead of March, 1998. The outlook for 1999 demand for aggregates is positive. In
Canada, the loss of $14.8 million was consistent with last year. Net sales in
Canada were 3.2 percent higher than 1998 due to a combination of higher average
concrete and aggregates selling prices and a modest improvement in ready-mixed
concrete sales volumes which were 2 percent higher than 1998 as increased
project work in the maritime provinces, stronger demand in northeastern Ontario,
Quebec and Calgary were largely offset by weaker conditions in British Columbia
and the prairie
11
<PAGE> 14
provinces. Aggregates volumes in Canada decreased by 3 percent as higher volumes
in Quebec and northeast Ontario were offset by lower shipments in western
Canada. In the U.S., the first quarter operating loss of $7.7 million was $7.0
million better than 1998. Net sales were up 18.6 percent as a result of higher
average prices in both ready-mixed concrete and aggregates and stronger
ready-mixed concrete shipments. Ready-mixed concrete volumes increased 12
percent due to strong demand and mild weather in Colorado and the Midwest and
increased activity in Louisiana. Higher aggregates volumes in the western U.S.,
due to strong market conditions and mild weather, were largely offset by lower
volumes in Wisconsin and Ohio.
Operating profit from the Company's gypsum wallboard operations was $8.5
million, $5.2 million better than 1998 due to higher shipments and prices. Net
selling price to customers less freight and shipments were 9.4 and 14 percent
higher which boosted net sales by 30.4 percent. Shipments increased 4 percent as
a result of higher production and strong demand in the U.S., and 10 percent as a
result of the inclusion of Canadian operations acquired in January 1999.
For the quarters ended March 31, 1999 and 1998, the Company recorded an income
tax benefit as a result of the seasonal loss from its Canadian and U.S.
operations. The Company's effective income tax rate was 38.4 percent in 1999 and
38.7 percent in 1998.
TWELVE MONTHS ENDED MARCH 31, 1999
The Company reported net income of $246.2 million in 1999, a $69.9 million
increase compared with $176.3 million for the twelve months ended March 31,
1998. Operating profits were $431.6 million, a $139.1 million improvement over
the $292.5 million earned in 1998. Net sales of $2,483.2 million increased 30.9
percent from $1,897.1 million in 1998 primarily due to the inclusion of Redland
operations, greater product shipments and improved cement and ready-mixed
concrete selling prices. Canadian net sales decreased 4.3 percent while U.S. net
sales increased 55.4 percent. The consolidated statements of income include the
results of Redland from January 1, 1998. If Redland operations were included for
all twelve months in the comparative period ended March 31, 1998, net income,
operating profit and net sales would have been approximately $191.2 million,
$360.5 million and $2,357.1 million, respectively.
Cement
Earnings from the Company's cement and waste management operations were $299.2
million, $34.7 million better than last year. Earnings from U.S. operations of
$195.0 million were $20.9 million better than 1998. In the U.S., cement net
realization and shipments increased 4.0 percent and 7.4 percent, respectively.
Earnings from Canadian operations of $113.4 million were $22.9 million better
than 1998. Net realization in Canada increased 2.4 percent (excluding exchange
rate fluctuation) while sales volumes decreased 3.6 percent.
12
<PAGE> 15
Construction Materials
The Company's construction materials operations earned $178.6 million, $107.8
million better than the $70.8 million earned in 1998. If the results from
Redland operations were included for all twelve months in the comparative
period ended March 31, 1998, operating earnings would have been approximately
$138.8 million. The large majority of Redland earnings are from U.S.
aggregates, ready-mixed concrete and asphalt paving activities. In Canada,
earnings were $77.8 million, $18.6 million better than 1998. Ready-mixed
concrete volumes in Canada decreased 0.8 percent while aggregates volumes
increased 13.7 percent due to the inclusion of Redland. Canadian ready-mixed
concrete selling prices were 3.3 percent higher while aggregates prices were
relatively flat. In the U.S., including the impact of the Redland acquisition,
earnings were $105.9 million, $93.7 million better than 1998. U.S. ready-mixed
concrete volumes increased 88.4 percent while selling prices improved 10.5
percent. Aggregates volumes were up 144.5 percent and selling prices remained
relatively flat.
Selling and administrative expenses were $37.4 million higher mainly due to
acquisitions, coupled with higher legal and other professional fees. The
Company's effective income tax rate was 38.1 percent in 1999 and 38.0 percent in
1998.
LIQUIDITY AND CAPITAL RESOURCES
The Company has a syndicated, committed revolving credit facility totaling $300
million extending through December 8, 2003. At March 31, 1999, no amounts were
outstanding. The Company is required to pay annual commitment fees of 0.10
percent of the total amount of the facilities. Borrowings made under the
revolving credit facilities will bear interest at variable rates based on a
bank's prime lending rate or the applicable federal funds rate and are subject
to certain conditions.
Net cash of $18.9 million was provided by operating activities in the first
quarter of 1999 compared with net cash used of $11.7 million in the same period
in 1998. Net cash used for investing activities in the three-month period of
1999 was $87.1 million higher than the same period last year due to an increase
in the purchase of short-term investments and higher capital expenditures due
primarily to increased spending on plant modernizations underway in Richmond,
British Columbia and Kansas City, Missouri. In the first quarter of 1999, net
cash provided by financing activities was $40.0 million compared with $33.0
million in the same period in 1998.
Net cash provided by operating activities for the twelve-months ended March 31,
1999, increased by $89.9 million over the same period in 1998 due to higher net
income and higher non-cash charges. Increased depreciation and amortization
charges are primarily related to increased depreciable assets and goodwill as a
result of the Redland acquisition and capital expenditures on plant and
equipment. Compared with the twelve-months ended March 31, 1998, net cash used
for investing activities in the same period in 1999 increased by $31.5 million
due to increased capital spending and acquisitions.
13
<PAGE> 16
During the first quarter of 1999, the most significant uses of cash were capital
expenditures of $60.7 million, acquisitions of $35.3 million, redemptions of
short-term investments of $76.2 million and dividends paid of $9.9 million. The
most significant sources of funds were cash provided by operations after changes
in working capital of $18.9 million, increases in short-term borrowings of $48.9
million and a decrease in cash. This compares with capital expenditures of $42.3
million, acquisitions of $30.4 million, redemptions of short-term investments of
$9.1 million and dividends paid of $7.7 million during the first quarter of
1998.
Capital expenditures (including acquisitions already completed or in process)
are expected to be approximately $450 million in 1999.
The Company is exposed to foreign currency exchange rate risk inherent in its
Canadian revenues, expenses, assets and liabilities denominated in Canadian
dollars, as well as interest rate risk inherent in the Company's debt. The
Company primarily uses fixed-rate debt instruments to reduce the risk of
exposure to changes in interest rates and has used forward treasury lock
agreements to hedge interest rate change on anticipated debt issuances. There
has been no significant change from year-end.
OTHER FACTORS AFFECTING THE COMPANY - YEAR 2000
Year 2000 computer issues may affect the Company's business application software
and supporting computer infrastructure ("IT Systems") and embedded technology
systems such as process control equipment, instrumentation and other field
systems ("Non-IT Systems"). The Year 2000 computer problem originated from
programmers writing software code that used two digits instead of four to
represent the year. Computer systems using the "two-digit" format may experience
problems handling date sensitive calculations beyond the year 1999. This could
cause many computer systems to fail or to produce inaccurate results and could
result in an interruption in, or a failure of, certain business activities or
operations, which could materially and adversely affect the Company's results of
operations, liquidity or financial condition.
Although the Company believes it has an effective plan to address Year 2000
issues, certain Year 2000 issues are beyond the Company's control. Because these
issues concern, for example, the Year 2000 readiness of third parties, including
customers as well as utilities and other suppliers, the Company is unable to
determine the likelihood of a material impact on its financial condition,
results of operations or liquidity. However, the Company's Year 2000 compliance
program (the "Year 2000 Program") is expected to significantly reduce the
Company's level of uncertainty about Year 2000 issues, including readiness of
third parties. The Company believes that after completion of the projects as
scheduled, the possibility of significant interruptions of its normal operations
should be reduced.
In the first half of 1997, the Company organized and implemented its Year 2000
Program, which includes a program management office staffed with full time
professionals dedicated to the resolution of Year 2000 issues. The objective of
the Year
14
<PAGE> 17
2000 Program is to avoid loss of revenues, unplanned downtime or other adverse
impacts on the business. Each of the Company's major operating locations has a
designated point of contact who is responsible for the development and
implementation of the location's Year 2000 strategy. The Year 2000 Program
addresses the essential phases, activities and tasks that the Company must
undertake for the successful execution of its Year 2000 Program. The Company has
identified four phases to describe its process of achieving Year 2000 readiness:
(1) inventory and assessment, (2) optimum scenario definition, (3) transition
plan definition and (4) implementation.
The Company has completed the first three phases and has determined the
potential impact of the Year 2000 on its IT Systems and Non-IT Systems. As a
result, the Company has developed a transition plan to resolve any issues. The
plan includes the replacement of certain equipment and modification of certain
software to recognize the turn of the century.
IT Systems that were not Year 2000 ready are in the process of being replaced by
software applications or upgraded to Year 2000 ready systems. The IT Systems
implementation phase is expected to be completed by September 30, 1999. As of
March 31, 1999, approximately 63 percent of Non-IT Systems are Year 2000 ready.
The other systems are scheduled for upgrade or replacement during the first nine
months of 1999. Other computer system projects have not been significantly
postponed due to the Year 2000 efforts. The dates on which the Company believes
the Year 2000 projects will be completed are based on the best estimates of
management, which were derived utilizing numerous assumptions of future events,
including the continued availability of certain resources, third-party
modification plans and other factors. There can be no guarantee that these
estimates will be achieved or that there will not be a delay in, or increased
costs associated with, the implementation of the Year 2000 Program.
Operating locations have identified their most critical suppliers to whom
letters have been sent requesting information on their Year 2000 readiness
programs and their state of readiness. The Company evaluates the responses and
develops contingency plans as necessary. Other contingency plans are currently
being developed with an estimated completion date of August 31, 1999. The plans
address information processing and reporting, operations and personnel. The
contingency plans will also include trigger dates (the dates on which the
contingency plan will replace the original action plan if a milestone is not
met) for each non-compliant system.
The Year 2000 Program is expected to result in estimated non-recurring spending
of approximately $18 million to $20 million. As of March 31, 1999, the Company
has incurred approximately $8.7 million ($5.2 million capital and $3.5 million
expense) for upgrading or replacing its IT and Non-IT Systems. Of the
expenditures remaining, approximately 75 percent will be capitalized. Internal
resource requirements are estimated at 50,000 hours of which approximately
32,000 hours have been incurred through March 31, 1999. The Company believes,
with appropriate system replacement or modification,
15
<PAGE> 18
it will be able to operate its time-sensitive IT Systems and Non-IT Systems
through the turn of the century. However, certain Year 2000 issues are beyond
the Company's control including the Year 2000 readiness of third parties.
SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS
Statements made in this Quarterly Report on Form 10-Q that are not historical
facts are forward-looking statements made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995 and within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These statements are not guarantees of future performance
and involve risks, uncertainties and assumptions ("Factors") which are difficult
to predict. Some of the Factors that could cause actual results to differ
materially from those expressed in the forward-looking statements include, but
are not limited to: the cyclical nature of the Company's business; national and
regional economic conditions in the U.S. and Canada; Canadian currency
fluctuations; the outcome and impact of the Year 2000, including Year 2000
readiness of third parties; seasonality; the levels of construction spending in
major markets; supply/demand structure of the industry; competition from new or
existing competitors; unfavorable weather conditions during peak construction
periods; changes in and implementation of environmental and other governmental
regulations; and other Factors disclosed in the Company's Annual Report on Form
10-K filed with the Securities and Exchange Commission. In general, the Company
is subject to the risks and uncertainties of the construction industry and of
doing business in the U.S. and Canada. The forward-looking statements are made
as of this date, and the Company undertakes no obligation to update them,
whether as a result of new information, future events or otherwise.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Information required by this Item is contained in "Liquidity and Capital
Resources" in Management's Discussion and Analysis of Financial Condition and
Results of Operations reported in Item 2 of Part I of this Quarterly Report on
Form 10-Q and is incorporated herein by reference.
16
<PAGE> 19
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The information presented in Note 11 of the "Notes to Condensed Consolidated
Financial Statements" is incorporated herein by reference, pursuant to Rule
12b-23.
On March 18, 1998, a shareholder derivative lawsuit was filed in the Circuit
Court for Montgomery County, Maryland. The lawsuit, filed against all of the
directors of Lafarge Corporation (the "Company"), alleges that they committed
breach of fiduciary duty, corporate waste, and gross negligence in connection
with the Company's purchase of a number of construction materials businesses in
North America from Lafarge S.A., its majority stockholder (the "Redland
Transaction"). Lafarge S.A. took control of these businesses in late 1997, when
it acquired the British construction materials firm Redland PLC.
The Redland Transaction was proposed to the Company in late 1997. The Company's
Board of Directors appointed a special committee of independent directors to
evaluate the Redland Transaction. The special committee conducted extensive due
diligence and retained independent professionals to assist with its evaluation,
including an investment banking firm which advised the committee regarding the
fairness of the price and terms of the proposed Redland Transaction. Based on
its due diligence and the opinions of its specially-retained advisers, the
special committee recommended the Redland Transaction for approval by the full
Board of Directors of the Company. On March 16, 1998, the full Board, consisting
of a majority of independent directors, approved the Redland Transaction. The
Redland Transaction was publicly announced on March 17, 1998.
The Company has been advised by its directors that the lawsuit against them,
which challenges their conduct in evaluating and approving the Redland
Transaction, is without merit. The directors have been vigorously contesting
the lawsuit. After the initial complaint was filed on March 18, 1998, the
directors filed a motion to dismiss on May 19, 1998, which was granted on July
20, 1998. With the Court's permission, the plaintiff filed an amended complaint
on August 28, 1998. The directors filed a motion to dismiss the amended
complaint on September 10, 1998. That motion was argued on February 22, 1999.
On April 27, 1999, the Court ruled that the suit could proceed notwithstanding
the plaintiff's failure to make a demand on the Company's Board of Directors
prior to bringing the lawsuit. Discovery on the merits of the plaintiff's claim
has commenced.
As previously reported in the Registrant's Form 10-Q for the quarterly period
ended June 30, 1998, the Michigan Department of Environmental Quality ("MDEQ")
had issued notices to the Company's cement plant in Alpena, Michigan for:
alleged violations of permit limits for emissions of hydrogen chloride gas;
alleged violations of storm and surface water runoff; alleged deficiencies with
respect to closure of prior on-site cement kiln dust ("CKD") disposal areas;
alleged violations of permit limits and state regulatory requirements for
fugitive dust emissions; and alleged deficiencies in record keeping as required
by the Boiler and Industrial Furnaces regulations under the federal Resource
Conservation and Recovery Act of 1976.
On December 1, 1998, the Company reached an administrative settlement for
$134,655 with the MDEQ for alleged violations of storm and surface water runoff
and received an order from the MDEQ affirming the settlement. On February 14,
1999, the MDEQ and the Company settled outstanding stipulated penalties for
$90,000 in connection with the alleged violations of CKD disposal, and
deficiencies in record keeping. Currently, the Company is engaged in
discussions with the MDEQ to resolve the alleged violations of hydrogen
chloride gas and fugitive dust emissions. The Company expects that if the MDEQ
assesses a penalty for the remaining alleged violations that the total penalty
assessed for the remaining alleged violations will exceed $100,000 but will not
have a material adverse effect on the financial condition, results of
operations, or liquidity of the Company.
17
<PAGE> 20
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The annual meeting of shareholders of the Company was held on May 4, 1999. A
total of 72,386,782 shares were entitled to be voted. At the meeting,
shareholders elected the nominees for the Board of Directors identified below:
<TABLE>
<CAPTION>
Director Elected Votes For Votes Withheld
- ---------------- --------- --------------
<S> <C> <C>
Thomas A. Buell 52,705,647 405,597
Marshall A. Cohen 52,748,832 362,412
Bertrand P. Collomb 52,748,718 362,526
Philippe Dauman 52,749,172 362,072
Bernard L. Kasriel 52,749,296 361,948
Jacques Lefevre 52,749,307 361,937
Paul W. MacAvoy 52,749,411 361,833
Claudine B. Malone 52,749,255 361,989
Robert W. Murdoch 52,748,737 362,507
Bertin F. Nadeau 52,746,767 364,477
John M. Piecuch 52,748,557 362,685
John D. Redfern 52,749,397 361,847
Joe M. Rodgers 52,749,307 361,937
Michel Rose 52,748,667 362,577
Ronald D. Southern 52,025,493 1,085,751
</TABLE>
The shareholders ratified the appointment of Arthur Andersen LLP as auditors to
audit the financial statements of the Company for the year ending December 31,
1999, with voting as follows:
<TABLE>
<CAPTION>
Votes For Votes Against Abstentions Broker Non-Votes
- --------- ------------- ----------- ----------------
<S> <C> <C> <C>
52,692,163 4,302 414,779 0
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits. The following Exhibit is filed as part of this Form 10-Q and
is incorporated herein by reference.
<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
(b) Reports on Form 8-K
The Company has not filed any reports on Form 8-K during the quarterly
period ended March 31, 1999.
18
<PAGE> 21
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LAFARGE CORPORATION
Date: May 14, 1999 By: /s/ Larry J. Waisanen
-------------------------------
LARRY J. WAISANEN
Executive Vice President
and Chief Financial Officer
(Duly Authorized Officer and
Principal Financial Officer)
19
<PAGE> 22
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
20
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FORM
10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999, OF LAFARGE CORPORATION AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 169,026
<SECURITIES> 93,289
<RECEIVABLES> 274,530
<ALLOWANCES> 0
<INVENTORY> 284,947
<CURRENT-ASSETS> 888,805
<PP&E> 2,648,831
<DEPRECIATION> 1,182,885
<TOTAL-ASSETS> 2,912,392
<CURRENT-LIABILITIES> 452,530
<BONDS> 746,978
0
0
<COMMON> 777,731
<OTHER-SE> 611,427
<TOTAL-LIABILITY-AND-EQUITY> 2,912,392
<SALES> 369,781
<TOTAL-REVENUES> 369,781
<CGS> 350,080
<TOTAL-COSTS> 350,080
<OTHER-EXPENSES> 4,780
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 14,258
<INCOME-PRETAX> (47,189)
<INCOME-TAX> 18,137
<INCOME-CONTINUING> (29,052)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (29,052)
<EPS-PRIMARY> (0.40)
<EPS-DILUTED> (0.40)
</TABLE>
