8-K

CRH PUBLIC LTD CO 8-K Report (May 13, 2009)

Filed May 13, 2009For Securities:CRH

Summary

CRH Public Limited Company (CRH) filed a Form 6-K on May 13, 2009, primarily to furnish the consolidated financial statements of its subsidiary, CRH America, Inc., for the years ended December 31, 2008, and December 31, 2007. The filing provides a detailed look into the financial performance and position of CRH America, a U.S.-based building materials supplier. Key financial takeaways for investors include a decrease in net sales from $885.6 million in 2007 to $803.1 million in 2008, reflecting challenging market conditions. Despite this revenue decline, operating income saw a significant improvement from $122.0 million in 2007 to $77.3 million in 2008, though this is presented alongside a substantial increase in interest expense and related party interest income. The company also reported a net income of $67.0 million for 2008, up from $37.1 million in 2007, aided by a substantial increase in related party interest income which offset increased interest expenses.

Key Highlights

  • 1CRH America, Inc. reported net sales of $803.1 million in 2008, a decrease from $885.6 million in 2007, indicating a slowdown in the building materials sector.
  • 2Operating income for CRH America, Inc. decreased to $77.3 million in 2008 from $122.0 million in 2007.
  • 3Net income for CRH America, Inc. increased to $66.96 million in 2008 from $37.10 million in 2007, significantly influenced by a large increase in related party interest income.
  • 4The company's balance sheet shows a substantial increase in 'Due from parent and affiliates' to $6.7 billion in 2008 from $6.0 billion in 2007.
  • 5Long-term debt increased to $5.55 billion in 2008 from $4.73 billion in 2007, with significant borrowings from global bonds.
  • 6The financial statements for the year ended December 31, 2007, were restated due to an inappropriate application of the short-cut method to interest rate swap agreements.
  • 7CRH America, Inc. made acquisitions totaling $27.3 million in 2008 and $86.5 million in 2007, primarily in the precast concrete products segment.

Frequently Asked Questions

This Form 6-K filing by CRH Public Limited Company is primarily to furnish the consolidated financial statements of its U.S. subsidiary, CRH America, Inc., for the fiscal years ended December 31, 2008, and December 31, 2007. It provides investors with detailed financial information about CRH's U.S. operations.

In 2008, CRH America experienced a decrease in net sales ($803.1 million vs. $885.6 million in 2007) and operating income ($77.3 million vs. $122.0 million in 2007). However, net income saw a significant increase ($67.0 million vs. $37.1 million in 2007), largely driven by a substantial rise in interest income from related parties, which helped offset increased interest expenses.

The 'Due from parent and affiliates' balance, which increased to approximately $6.7 billion in 2008 from $6.0 billion in 2007, represents loans, income tax accounts, and accrued interest owed to CRH America, Inc. by its parent company (Oldcastle, Inc.) and other affiliated companies. While typically due on demand, the parent company's management intends not to repay these within the next twelve months.

The financial statements for the year ended December 31, 2007, were restated to correct an inappropriate application of the 'short-cut method' to interest rate swap agreements that were accounted for as fair value hedges. This restatement impacted other income and net income for 2007.