##### 



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-K
 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For
the fiscal year ended December 31,
2005                                         Commission File Number 0-11936
 
 Lafarge North America Inc.
 Incorporated in Maryland
    
    I.R.S. Employer Identification No.12950 Worldgate Dr., Suite 500Herndon, Virginia 20170
    
    58-1290226(703) 480-3600
  Title of Each Class
    
    Name of Each Exchange on Which RegisteredCommon Stock, par value $1.00 per share
    
    New York Stock Exchange, Inc
The Toronto Stock Exchange
   o þ
 o þ
 þ o
 o
  þ o o
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE




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##### 



LAFARGE NORTH AMERICA INC.
 ANNUAL REPORT ON FORM 10-K
FOR THE FISCAL YEAR ENDED
DECEMBER 31, 2005
 TABLE OF CONTENTS
 PagePART IItem 1.
    
    Business
    
    
    1Item 1A.
    
    Risk Factors
    
    
    12Item 1B.
    
    Unresolved Staff Comments
    
    
    15Item 2.
    
    Properties
    
    
    15Item 3.
    
    Legal Proceedings
    
    
    16Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    16PART IIItem 5.
    
    Market for Our Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities
    
    
    17Item 6.
    
    Selected Consolidated Financial Data
    
    
    18Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    19Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    34Item 8.
    
    Financial Statements and Supplementary Data
    
    
    36Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    79Item 9A.
    
    Controls and Procedures
    
    
    79Item 9B.
    
    Other Information
    
    
    79PART IIIItem 10.
    
    Directors and Executive Officers of the Company
    
    
    80Item 11.
    
    Executive Compensation
    
    
    80Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    80Item 13.
    
    Certain Relationships and Related Transactions
    
    
    80Item 14.
    
    Principal Accountant Fees and Services
    
    
    80PART IVItem 15.
    
    Exhibits and Financial Statement Schedules
    
    
    81Signatures
    
    
    85
 i




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##### 



FORWARD-LOOKING STATEMENTS
 § § § § § § § § § § § § §
   PART I
 Item 1. BUSINESS
 Company Profile
    1




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##### 



Performance:
 Growth:
 Business Segments
     The Aggregates, Concrete & Asphalt Segment
  Aggregates (sand, gravel, and crushed and graded stone)
  2




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##### 



Products .
 Customers .
  Production and facility information .
  Market and competitive factors .
  Concrete
  Products . ® ®
 3




---



##### 



Customers .
 Production and facility information .
   Market and competitive factors .
   Asphalt and Paving
  Products .
 Customers .
 4




---



##### 



Production and facility information .
  Market and competitive factors .
  The Cement Segment
  Products .
  Customers .
 5




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##### 



Production and facility information .
   Rated Annual Clinker Production Capacity of
Cement Manufacturing Plants
(in million short tons)
 U.S. Plants
    
Canadian PlantsRated
    
    
    
    
    
    RatedClinker
    
    
    
    
    
    ClinkerLocation
    
    Process*
    
    Capacity
    
    Location
    
    Process*
    
    CapacityAlpena, Michigan
    
    Dry
    
    2.6
    
    Bath, Ontario
    
    Dry
    
    1.2Davenport, Iowa
    
    Dry
    
    1.1
    
    Brookfield, Nova Scotia
    
    Dry
    
    0.6Fredonia, Kansas
    
    Wet
    
    0.4
    
    Exshaw, Alberta
    
    Dry
    
    1.4Joppa, Illinois
    
    Dry
    
    1.2
    
    Kamloops, British Columbia
    
    Dry
    
    0.2Paulding, Ohio
    
    Wet
    
    0.5
    
    Richmond, British Columbia
    
    Dry
    
    1.3Seattle, Washington
    
    Wet
    
    0.5
    
    St. Constant, Quebec
    
    Dry
    
    1.1Sugar Creek, Missouri
    
    Dry
    
    1.0
    
    Woodstock, Ontario
    
    Wet
    
    0.6Whitehall, Pennsylvania
    
    Dry
    
    0.8Total Rated Capacity
    
    
    
    8.1
    
    Total Rated Capacity
    
    
    
    6.4Total 2005 Clinker Production
    
    
    
    7.4
    
    Total 2005 Clinker Production
    
    
    
    5.4
 
 *
    
    The dry production process is a newer, more fuel efficient production process than the wet
production process. However, the wet production process allows for easier use of alternative
fuels. 6




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##### 



Item
    
    Percentage of Total CostEnergy
    
    
    25
    %Production-related
    
    
    20
    %Maintenance
    
    
    20
    %Raw materials
    
    
    20
    %Depreciation
    
    
    15
    %Total cost
    
    
    100
    %
   Market and competitive factors .
  The Gypsum Segment
  7




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##### 



Products .
 Customers .
  Production and facility information .
       8




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##### 



CapacityLocation
    
    (in million square feet)Buchanan, New York
    
    
    380Palatka, Florida
    
    
    900Silver Grove, Kentucky
    
    
    900Newark, New Jersey
    
    
    340Corner Brook, Newfoundland
    
    
    125Total rated capacity for 1/2 inch drywall*
    
    
    2,645Total practical capacity**
    
    
    2,400Total 2005 drywall production
    
    
    2,1792005 production as a percentage of practical capacity as of December 31, 2005
    
    
    91
    %
 
 *
    
    Rated capacity refers to full-time production of 1/2-inch drywall.**
    
    Practical capacity refers to capacity assuming variations in product mix and scheduled
maintenance.  Market and competitive factors .
  Research and Development Activities
  9




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##### 



Trademarks and Patents
 ®, ® ® ® ® ® ® ® .
 Backlogs
  Dependence on Significant Customers
  Managed Assets
    Insurance Programs
  10




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##### 



Employees
   Environmental Matters
   x x x 2  2 x
 2 2
  11




---



##### 



Available Information
 www.lafargenorthamerica.com www.lafargenorthamerica.com
 Item 1A.
    
    RISK FACTORS
  We depend heavily on construction sector activity levels, which tend to be cyclical and which
differ throughout the regions in which we operate.
  Adverse weather lessens demand for our products, which is seasonal in many of our markets.
  12




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##### 



Competition in our industry could adversely affect our results of operations.
  Increased energy and fuel costs may have a material adverse effect on our results.
  Litigation could affect our profitability.
  Governmental policies and laws, particularly those relating to protection of the environment, could
significantly impact our operations.
  If we fail to maintain proper and
effective internal controls, our ability to produce accurate
financial statements could be impaired.
  13




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##### 



We may be adversely affected by disruptions in our information technology systems.
  We rely heavily on third-party transportation, which is subject to rate fluctuations and rail,
shipping and trucking hazards.
  Exchange rate fluctuations could adversely affect our results of operations and financial
condition.
  Increase in our indebtedness could limit our operating and financial flexibility.
  14




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##### 



Changes in the cost or availability of raw materials supplied by third parties may adversely affect
our operating and financial performance.
  Item 1B.
    
    UNRESOLVED STAFF COMMENTS
  Item 2.
    
    PROPERTIES
   
    
    The Exshaw cement plant is built on land leased from the province of Alberta. The
original lease has been renewed for a 42-year term commencing in 1992. Annual payments
under the lease are presently based on a fixed fee per acre.
    
    The manufacturing facilities of our Newark, New Jersey gypsum drywall plant, which
we acquired in January 2002, are located on leased land from the Port Authority of New
York and New Jersey under an agreement that expires in 2031.
    
    The Kamloops, British Columbia limestone and cinerite quarries are located on land
leased from the province of British Columbia until March 2022.
     15




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##### 



Item 3.
    
    LEGAL PROCEEDINGS
  Item 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  16




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##### 



PART II
 Item 5.
    
    MARKET FOR OUR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES
      (c) Total Numberof Shares Purchased
    
    
    (d) Maximum Dollaras Part of Publicly
    
    
    Value of Shares that(a) Total Number of
    
    
    (b) Average Price Paid
    
    
    Announced
    
    
    May Yet Be PurchasedPeriod
    
    Shares Purchased (1)
    
    
    per Share (2)
    
    
    Program (3)
    
    
    Under the Program10/1/05  10/31/05
    
    
    164,000
    
    
    $
    59.71
    
    
    
    164,000
    
    
    $
    28,85211/1/05  11/30/05
    
    
    432,500
    
    
    $
    55.91
    
    
    
    432,500
    
    
    $
    4,67212/1/05  12/31/05
    
    
    83,840
    
    
    $
    55.73
    
    
    
    83,840
    
    
    $
    Total
    
    
    680,340
    
    
    
    
    
    
    
    680,340
 
 (1)
    
    All shares were purchased on the open-market and pursuant to the publicly announced
program.(2)
    
    Includes brokerage commissions.(3)
    
    In November 2004, our Board of Directors approved a share repurchase program that
commenced on January 1, 2005 and expired on December 31, 2005. Under this program, we were
authorized to repurchase shares in aggregate up to $60 million. In July 2005, our Board of
Directors approved an increase in the authorization of $40 million to $100 million. In
November 2005, our Board of Directors approved a share repurchase program to commence on
January 1, 2006 and expire on December 31, 2006. We are authorized to purchase shares in
aggregate up to $100 million under the new program.   17




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##### 



Item 6.
    
    SELECTED CONSOLIDATED FINANCIAL DATA
 Years Ended December 312005
    
    
    2004
    
    
    2003
    
    
    2002
    
    
    2001(in millions)Operating resultsNet sales
    
    $
    4,309.6
    
    
    $
    3,763.3
    
    
    $
    3,318.9
    
    
    $
    3,160.1
    
    
    $
    3,323.0
    (a)EBIT (c)
    
    $
    565.2
    
    
    $
    478.3
    
    
    $
    401.2
    
    
    $
    401.5
    
    
    $
    401.7Interest expense, net
    
    
    (22.9
    )
    
    
    (28.7
    )
    
    
    (43.2
    )
    
    
    (43.3
    )
    
    
    (48.5
    )Redeemable preferred shares dividends
    
    
    (7.9
    )
    
    
    (8.2
    )
    
    
    (7.4
    )
    
    
    (8.4
    )
    
    
    (7.0
    )Income tax provision
    
    
    (263.4
    )
    
    
    (145.9
    )
    
    
    (133.2
    )
    
    
    (93.1
    )
    
    
    (112.1
    )Earnings from continuing operations
    
    
    271.0
    
    
    
    295.5
    
    
    
    217.4
    
    
    
    256.7
    
    
    
    234.1
    (b)Discontinued operations, net of tax
    
    
    
    
    
    
    
    
    
    
    66.3
    
    
    
    11.7
    
    
    
    Change in accounting principle, net of tax
    
    
    
    
    
    
    
    
    
    
    (3.1
    )
    
    
    
    
    
    
    Net Income
    
    $
    271.0
    
    
    $
    295.5
    
    
    $
    280.6
    
    
    $
    268.4
    
    
    $
    234.1Net Cash Provided by Operations
    
    $
    428.9
    
    
    $
    331.1
    
    
    $
    406.4
    
    
    $
    423.9
    
    
    $
    423.1Net Cash Used for Investing
    
    $
    (420.4
    )
    
    $
    (258.3
    )
    
    $
    (83.5
    )
    
    $
    (191.2
    )
    
    $
    (383.2
    )Net Cash Provided (Used) for Financing
    
    $
    (132.0
    )
    
    $
    63.5
    
    
    $
    (126.2
    )
    
    $
    (85.8
    )
    
    $
    (42.9
    )Financial Condition at December 31Long-term debt
    
    $
    463.7
    
    
    $
    470.8
    
    
    $
    715.4
    
    
    $
    671.0
    
    
    $
    674.6Other long-term liabilities
    
    
    785.1
    
    
    
    771.1
    
    
    
    856.6
    
    
    
    681.5
    
    
    
    607.3Shareholders equity
    
    
    3,255.8
    
    
    
    3,112.9
    
    
    
    2,659.6
    
    
    
    2,159.7
    
    
    
    1,997.1Total Capitalization
    
    $
    4,504.6
    
    
    $
    4,354.8
    
    
    $
    4,231.6
    
    
    $
    3,512.2
    
    
    $
    3,279.0Total Assets
    
    $
    5,552.6
    
    
    $
    5,404.1
    
    
    $
    4,766.7
    
    
    $
    4,161.8
    
    
    $
    4,117.6
 
 (a)
    
    Net sales from continuing operations include $90.2 for the year ended December 31, 2001,
related to the divested operations of Lafarge Florida Inc. (unaudited).(b)
    
    Earnings from continuing operations include $11.4 for the year ended December 31, 2001,
related to the divested operations of Lafarge Florida Inc. (unaudited).(c)
    
    EBIT, a non-GAAP financial measure, represents earnings from continuing operations before
interest expense, redeemable preferred shares dividends and income taxes and includes $19.4
for the year ended December 31, 2001, related to the divested operations of Lafarge Florida
Inc. (unaudited). Management believes EBIT better reflects the ongoing performance of the
company and enables management and investors to meaningfully trend, analyze and benchmark the
performance of the companys operations. 18




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##### 



Years Ended December 312005
    
    2004
    
    2003
    
    2002
    
    2001(in millions except as indicated by *)Common Equity Share InformationNet income
per share  basic*
    
    $
    3.59
    
    
    $
    3.98
    
    
    $
    3.83
    
    
    $
    3.69
    
    
    $
    3.25Net income
per share  diluted*
    
    $
    3.43
    
    
    $
    3.86
    
    
    $
    3.79
    
    
    $
    3.64
    
    
    $
    3.21Dividends per share*
    
    $
    0.92
    
    
    $
    0.84
    
    
    $
    0.70
    
    
    $
    0.60
    
    
    $
    0.60Book value per share at December 31*
    
    $
    43.25
    
    
    $
    41.73
    
    
    $
    36.11
    
    
    $
    29.54
    
    
    $
    27.70Average shares and equivalents outstanding
    
    
    75.5
    
    
    
    74.3
    
    
    
    73.3
    
    
    
    72.8
    
    
    
    72.0Shares outstanding at December 31
    
    
    75.3
    
    
    
    74.6
    
    
    
    73.7
    
    
    
    73.1
    
    
    
    72.1Statistical DataCapital expenditures
    
    $
    383.5
    
    
    $
    350.3
    
    
    $
    173.9
    
    
    $
    247.9
    
    
    $
    333.2Acquisitions
    
    $
    68.8
    
    
    $
    9.1
    
    
    $
    16.7
    
    
    $
    31.6
    
    
    $
    80.6Net income as a percentage of net sales*
    
    
    6.3
    %
    
    
    7.9
    %
    
    
    8.5
    %
    
    
    8.5
    %
    
    
    7.0
    %Return on average shareholders equity*
    
    
    8.5
    %
    
    
    10.2
    %
    
    
    11.6
    %
    
    
    12.9
    %
    
    
    12.0
    %Long-term debt as a percentage
of total capitalization*
    
    
    10.3
    %
    
    
    10.8
    %
    
    
    16.9
    %
    
    
    19.1
    %
    
    
    20.6
    %Number of employees at December 31*
    
    
    16,400
    
    
    
    15,300
    
    
    
    14,800
    
    
    
    15,500
    
    
    
    15,600Exchange rate at December 31 (Cdn to U.S.)*
    
    
    0.860
    
    
    
    0.830
    
    
    
    0.778
    
    
    
    0.636
    
    
    
    0.628Average exchange rate for the year (Cdn to U.S.)*
    
    
    0.825
    
    
    
    0.769
    
    
    
    0.715
    
    
    
    0.637
    
    
    
    0.646
 Item 7.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
 SUMMARY OF 2005 RESULTS AND OUTLOOK
    19




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##### 



MANAGEMENTS DISCUSSION OF INCOME
   Aggregates, Concrete & Asphalt (AC&A)
 Cement
 Gypsum
 20




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##### 



Years ended December 312005
    
    
    2004
    
    
    2003(in millions)Net Sales from Continuing OperationsAggregates, Concrete & Asphalt
    
    $
    2,557.0
    
    
    $
    2,274.1
    
    
    $
    2,032.5Cement
    
    
    1,551.1
    
    
    
    1,352.7
    
    
    
    1,198.3Gypsum
    
    
    411.9
    
    
    
    326.6
    
    
    
    254.3Eliminations
    
    
    (210.4
    )
    
    
    (190.1
    )
    
    
    (166.2
    )Total
    
    $
    4,309.6
    
    
    $
    3,763.3
    
    
    $
    3,318.9Gross Profit from Continuing OperationsAggregates, Concrete & Asphalt
    
    $
    410.4
    
    
    $
    373.2
    
    
    $
    335.5Cement
    
    
    499.1
    
    
    
    443.6
    
    
    
    384.9Gypsum
    
    
    106.5
    
    
    
    65.9
    
    
    
    19.3Total
    
    
    1,016.0
    
    
    
    882.7
    
    
    
    739.7Operational Overhead and Other ExpensesAggregates, Concrete & Asphalt
    
    
    (203.1
    )
    
    
    (165.4
    )
    
    
    (151.8
    )Cement
    
    
    (133.7
    )
    
    
    (115.2
    )
    
    
    (94.4
    )Gypsum
    
    
    (38.3
    )
    
    
    (32.6
    )
    
    
    (24.3
    )Total
    
    
    (375.1
    )
    
    
    (313.2
    )
    
    
    (270.5
    )Income (Loss) From Continuing OperationsAggregates, Concrete & Asphalt
    
    
    207.3
    
    
    
    207.8
    
    
    
    183.7Cement
    
    
    365.4
    
    
    
    328.4
    
    
    
    290.5Gypsum
    
    
    68.2
    
    
    
    33.3
    
    
    
    (5.0
    )Total
    
    
    640.9
    
    
    
    569.5
    
    
    
    469.2Corporate and unallocated expenses
    
    
    (75.7
    )
    
    
    (91.2
    )
    
    
    (68.0
    )Earnings from Continuing Operations before
Redeemable
preference shares, Interest and Income Taxes (a)
    
    $
    565.2
    
    
    $
    478.3
    
    
    $
    401.2AssetsAggregates, Concrete & Asphalt
    
    $
    2,344.0
    
    
    $
    2,204.6
    
    
    $
    2,010.3Cement
    
    
    1,640.0
    
    
    
    1,505.2
    
    
    
    1,433.3Gypsum
    
    
    391.6
    
    
    
    329.6
    
    
    
    317.2Corporate and unallocated assets
    
    
    1,177.0
    
    
    
    1,364.7
    
    
    
    1,005.9Total
    
    $
    5,552.6
    
    
    $
    5,404.1
    
    
    $
    4,766.7
 
 (a)
    
    EBIT is reconciled to the closest GAAP measure in Item 6 Selected Consolidated
Financial Data. YEAR ENDED DECEMBER 31, 2005
 Net Sales
   21




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##### 



Aggregates, Concrete & Asphalt
     Cement
   Gypsum
  22




---



##### 



Performance by Line of Business
 Aggregates, Concrete & Asphalt
      Cement
   23




---



##### 



Gypsum
  Corporate and Unallocated Expenses
  Income from Managed Assets
  Interest Expense, Net
  Income Taxes
  Net Income
  24




---



##### 



YEAR ENDED DECEMBER 31, 2004
 Net Sales
   Aggregates, Concrete & Asphalt
     25




---



##### 



Cement
   Gypsum
  Performance by Line of Business
 Aggregates, Concrete & Asphalt
     26




---



##### 



Cement
   Gypsum
  Corporate and Unallocated Expenses
  Income from Managed Assets
  Interest Expense, Net
  27




---



##### 



Income Taxes
  Net Income
  MANAGEMENTS DISCUSSION OF CASH FLOWS
   Cash Flows from Operations
   28




---



##### 



Cash Flows from Investing
   Cash Flows from Financing
    29




---



##### 



MANAGEMENTS DISCUSSION OF FINANCIAL POSITION
      30




---



##### 



CONTRACTUAL OBLIGATIONS
  Less thanTotal
    
    
    one year
    
    
    2-3 years
    
    
    4-5 years
    
    
    > 5 yearsLong-term debt (a)
    
    $
    786.2
    
    
    $
    312.4
    
    
    $
    210.5
    
    
    $
    6.5
    
    
    $
    256.8Redeemable preferred stock
    
    
    143.1
    
    
    
    143.1
    
    
    
    
    
    
    
    
    
    
    
    Operating leases
    
    
    246.9
    
    
    
    53.0
    
    
    
    72.4
    
    
    
    31.6
    
    
    
    89.9Purchase obligationsCapital
    
    
    77.3
    
    
    
    77.3
    
    
    
    
    
    
    
    
    
    
    
    Noncapital
    
    
    502.1
    
    
    
    162.0
    
    
    
    100.4
    
    
    
    58.6
    
    
    
    181.1Total
    
    $
    1,755.6
    
    
    $
    747.8
    
    
    $
    383.3
    
    
    $
    96.7
    
    
    $
    527.8
 
 (a)
    
    Excludes interest.   MANAGEMENTS DISCUSSION OF SHAREHOLDERS EQUITY
    31




---



##### 



Quarters Ended31-Mar
    
    30-Jun
    
    30-Sep
    
    31-Dec2005 Stock PricesHigh
    
    $
    63.75
    
    
    $
    62.59
    
    
    $
    69.78
    
    
    $
    69.02Low
    
    $
    50.72
    
    
    $
    52.47
    
    
    $
    62.99
    
    
    $
    53.272004 Stock PricesHigh
    
    $
    43.39
    
    
    $
    45.03
    
    
    $
    47.42
    
    
    $
    51.55Low
    
    $
    39.80
    
    
    $
    40.88
    
    
    $
    41.30
    
    
    $
    47.65
  Years Ended December 312005
    
    
    2004
    
    
    2003Common equity dividends
    
    $
    69.8
    
    
    $
    62.6
    
    
    $
    51.0Less dividend reinvestments
    
    
    (35.4
    )
    
    
    (18.4
    )
    
    
    (5.4
    )Net cash dividend payments
    
    $
    34.4
    
    
    $
    44.2
    
    
    $
    45.6Common equity dividends per share
    
    $
    0.92
    
    
    $
    0.84
    
    
    $
    0.70
  OTHER FACTORS AFFECTING THE COMPANY
 Critical Accounting Policies and Estimates
  Goodwill Goodwill and Other Intangible Assets
 Pension
Plans and Other Postretirement Benefits
   32




---



##### 



Impairment or Disposal of Long-Lived Assets Accounting for the Impairment or Disposal of
Long-Lived Assets
 Environmental Remediation Liabilities
 Revenue Recognition
 Inflation
  33




---



##### 



Environmental Matters
  x
 Item 7A.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Commodity Price Risk
   34




---



##### 



Foreign Currency Risk
 Translation Risk
   Transaction Risk
 Interest Rate Risk
    Price risk for fixed-rate financial assets and liabilities
 Cash-flow risk for floating rate assets and liabilities
 We use variable-rate debt to finance our operations
 35




---



##### 



Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND
FINANCIAL STATEMENT SCHEDULE
 PageFinancial Report:Managements Report on Internal Control over Financial Reporting
    
    
    37Report of Independent Registered Public Accounting Firm, Ernst & Young LLP
    
    
    38Report of Independent Registered Public Accounting Firm, Ernst & Young LLP
    
    
    39Consolidated Financial Statements:Consolidated Balance Sheets as of December 31, 2005 and 2004
    
    
    40Consolidated Statements of Income for the Years Ended December 31, 2005, 2004 and 2003
    
    
    41Consolidated Statements of Shareholders Equity for the Years Ended December 31, 2005,
2004 and 2003
    
    
    42Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2005,
2004 and 2003
    
    
    43Consolidated Statements of Cash Flows for the Years Ended December 31, 2005, 2004 and 2003
    
    
    44Notes to Consolidated Financial Statements
    
    
    45Financial Statement Schedule:Schedule II  Consolidated Valuation and Qualifying Accounts for the Years Ended
December 31, 2005, 2004 and 2003
    
    
    79
  36




---



##### 



MANAGEMENTS REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING
   
    
    a documented organizational structure and division of responsibility;
    
    established policies and procedures, including a code of conduct to foster a strong
ethical climate which is communicated throughout the company;
    
    internal auditors that monitor the operation of the internal control system and
report findings and recommendations to management and the Audit Committee;
    
    procedures for taking action in response to an internal audit finding or recommendation;
    
    regular reviews of our financial statements by qualified individuals; and
    
    the careful selection, training and development of our people.
      By:/s/ Philippe R. Rollier
    
    /s/ Eric C. OlsenPhilippe R. Rollier
    
    Eric C. OlsenPresident and
    
    Executive Vice President andChief Executive Officer
    
    Chief Financial Officer
 37




---



##### 



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
       ERNST & YOUNG LLP
 
 38




---



##### 



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
      ERNST & YOUNG LLP
 
 39




---



##### 



LAFARGE NORTH AMERICA INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
 December 312005
    
    
    2004AssetsCash and cash equivalents
    
    $
    683.2
    
    
    $
    817.7Short-term investments
    
    
    8.7
    
    
    
    34.3Receivables, net
    
    
    731.0
    
    
    
    642.5Due from affiliates
    
    
    60.2
    
    
    
    40.1Inventories
    
    
    436.6
    
    
    
    357.6Deferred income taxes
    
    
    18.2
    
    
    
    49.9Other current assets
    
    
    43.1
    
    
    
    29.0Total current assets
    
    
    1,981.0
    
    
    
    1,971.1Property, plant and equipment, net
    
    
    2,648.1
    
    
    
    2,491.8Goodwill
    
    
    543.2
    
    
    
    511.5Other assets, net
    
    
    380.3
    
    
    
    429.7Total Assets
    
    $
    5,552.6
    
    
    $
    5,404.1Liabilities and Shareholders EquityAccounts payable and accrued liabilities
    
    $
    555.7
    
    
    $
    503.9Redeemable preferred shares
    
    
    143.1
    
    
    
    138.1Income taxes payable
    
    
    36.8
    
    
    
    50.8Short-term borrowings and current portion of long-term debt
    
    
    312.4
    
    
    
    356.5Total current liabilities
    
    
    1,048.0
    
    
    
    1,049.3Long-term debt
    
    
    463.7
    
    
    
    470.8Deferred income taxes
    
    
    222.6
    
    
    
    242.4Other long-term liabilities
    
    
    562.5
    
    
    
    528.7Total Liabilities
    
    
    2,296.8
    
    
    
    2,291.2Shareholders Equity:Common stock ($1.00 par value; authorized 150.0 million shares; issued
71.4 and 70.6 million shares, respectively)
    
    
    71.4
    
    
    
    70.6Exchangeable shares (no par or stated value; authorized 15.7 million shares; issued 3.9 and 4.0 million shares, respectively)
    
    
    31.1
    
    
    
    31.9Additional paid-in capital
    
    
    767.0
    
    
    
    756.3Retained earnings
    
    
    2,316.2
    
    
    
    2,115.0Accumulated other comprehensive income (loss):Foreign currency translation
    
    
    247.6
    
    
    
    226.9Minimum pension liability
    
    
    (185.6
    )
    
    
    (89.8
    )Derivative adjustment
    
    
    8.1
    
    
    
    2.0Total Shareholders Equity
    
    
    3,255.8
    
    
    
    3,112.9Total Liabilities and Shareholders Equity
    
    $
    5,552.6
    
    
    $
    5,404.1
  40




---



##### 



LAFARGE NORTH AMERICA INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
 Years Ended December 312005
    
    
    2004
    
    
    2003Net Sales
    
    $
    4,309.6
    
    
    $
    3,763.3
    
    
    $
    3,318.9Costs, expenses and other income:Cost of goods sold
    
    
    3,293.6
    
    
    
    2,880.5
    
    
    
    2,579.3Selling and administrative
    
    
    472.2
    
    
    
    403.0
    
    
    
    353.1Income from managed assets:Management fees and cost reimbursement
    
    
    (265.0
    )
    
    
    (244.4
    )
    
    
    (206.4
    )Direct and allocated costs and expenses
    
    
    242.9
    
    
    
    228.0
    
    
    
    194.4Other (income) expense, net
    
    
    0.6
    
    
    
    17.9
    
    
    
    (2.7
    )Redeemable preferred shares dividends
    
    
    7.9
    
    
    
    8.2
    
    
    
    7.4Interest expense
    
    
    41.5
    
    
    
    48.8
    
    
    
    54.8Interest income
    
    
    (18.5
    )
    
    
    (20.1
    )
    
    
    (11.6
    )Total costs, expenses and other income
    
    
    3,775.2
    
    
    
    3,321.9
    
    
    
    2,968.3Earnings from continuing operations before income taxes
    
    
    534.4
    
    
    
    441.4
    
    
    
    350.6Income tax provision
    
    
    263.4
    
    
    
    145.9
    
    
    
    133.2Earnings from continuing operations
    
    
    271.0
    
    
    
    295.5
    
    
    
    217.4Income from discontinued operations, net of tax
    
    
        
    
    
    
        
    
    
    
    66.3Cumulative effect of change in accounting principle, net of tax
    
    
        
    
    
    
        
    
    
    
    (3.1
    )Net Income
    
    $
    271.0
    
    
    $
    295.5
    
    
    $
    280.6Net income per share from continuing operations  basic
    
    $
    3.59
    
    
    $
    3.98
    
    
    $
    2.97Per share effect of discontinued operations  basic
    
    
        
    
    
    
        
    
    
    
    0.90Per share cumulative effect of change in accounting principle  basic
    
    
        
    
    
    
        
    
    
    
    (0.04
    )Net
Income Per ShareBasic
    
    $
    3.59
    
    
    $
    3.98
    
    
    $
    3.83Net income per share from continuing operations  diluted
    
    $
    3.43
    
    
    $
    3.86
    
    
    $
    2.93Per share effect of discontinued operations  diluted
    
    
        
    
    
    
        
    
    
    
    0.90Per share cumulative effect of change in accounting principle  diluted
    
    
        
    
    
    
        
    
    
    
    (0.04
    )Net
Income Per ShareDiluted
    
    $
    3.43
    
    
    $
    3.86
    
    
    $
    3.79Dividends Per Share
    
    $
    0.92
    
    
    $
    0.84
    
    
    $
    0.70
  41




---



##### 



LAFARGE NORTH AMERICA INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
 2005
    
    
    2004
    
    
    2003Amount
    
    
    Shares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    SharesCommon StockBalance at January 1
    
    $
    70.6
    
    
    
    70.6
    
    
    $
    69.4
    
    
    
    69.4
    
    
    $
    68.9
    
    
    
    68.9Share repurchases
    
    
    (1.7
    )
    
    
    (1.7
    )
    
    
    (1.1
    )
    
    
    (1.1
    )
    
    
        
    
    
    
        Issuance of shares for:Dividend reinvestment plans
    
    
    0.6
    
    
    
    0.6
    
    
    
    0.4
    
    
    
    0.4
    
    
    
    0.1
    
    
    
    0.1Employee stock purchase plan
    
    
        
    
    
    
        
    
    
    
    0.1
    
    
    
    0.1
    
    
    
    0.1
    
    
    
    0.1Conversion of exchangeable shares
    
    
    0.2
    
    
    
    0.2
    
    
    
    0.3
    
    
    
    0.3
    
    
    
        
    
    
    
        Exercise of stock options
    
    
    1.7
    
    
    
    1.7
    
    
    
    1.5
    
    
    
    1.5
    
    
    
    0.3
    
    
    
    0.3Balance at December 31
    
    
    71.4
    
    
    
    71.4
    
    
    
    70.6
    
    
    
    70.6
    
    
    
    69.4
    
    
    
    69.4Exchangeable SharesBalance at January 1
    
    
    31.9
    
    
    
    4.0
    
    
    
    33.6
    
    
    
    4.3
    
    
    
    32.9
    
    
    
    4.2Issuance of shares for:Dividend reinvestment plan
    
    
    0.3
    
    
    
        
    
    
    
    0.3
    
    
    
        
    
    
    
    0.3
    
    
    
        Employee stock purchase plan
    
    
        
    
    
    
    0.1
    
    
    
    0.4
    
    
    
        
    
    
    
    0.4
    
    
    
    0.1Conversion of exchangeable shares
    
    
    (1.1
    )
    
    
    (0.2
    )
    
    
    (2.4
    )
    
    
    (0.3
    )
    
    
        
    
    
    
        Balance at December 31
    
    
    31.1
    
    
    
    3.9
    
    
    
    31.9
    
    
    
    4.0
    
    
    
    33.6
    
    
    
    4.3Additional Paid-In CapitalBalance at January 1
    
    
    756.3
    
    
    
    
    
    
    
    734.2
    
    
    
    
    
    
    
    719.1Share repurchases
    
    
    (98.3
    )
    
    
    
    
    
    
    (48.0
    )
    
    
    
    
    
    
    (0.8
    )Issuance of shares for:Dividend reinvestment plans
    
    
    34.4
    
    
    
    
    
    
    
    17.8
    
    
    
    
    
    
    
    4.9Employee stock purchase plans
    
    
    6.9
    
    
    
    
    
    
    
    4.5
    
    
    
    
    
    
    
    3.6Conversion of exchangeable shares
    
    
    1.0
    
    
    
    
    
    
    
    2.0
    
    
    
    
    
    
    
        Exercise of stock options
    
    
    66.7
    
    
    
    
    
    
    
    45.8
    
    
    
    
    
    
    
    7.4Balance at December 31
    
    
    767.0
    
    
    
    
    
    
    
    756.3
    
    
    
    
    
    
    
    734.2Retained EarningsBalance at January 1
    
    
    2,115.0
    
    
    
    
    
    
    
    1,882.1
    
    
    
    
    
    
    
    1,652.5Net income
    
    
    271.0
    
    
    
    
    
    
    
    295.5
    
    
    
    
    
    
    
    280.6Dividends  common equity interests
    
    
    (69.8
    )
    
    
    
    
    
    
    (62.6
    )
    
    
    
    
    
    
    (51.0
    )Balance at December 31
    
    
    2,316.2
    
    
    
    
    
    
    
    2,115.0
    
    
    
    
    
    
    
    1,882.1Accumulated Other Comprehensive
Income/(Loss)Balance at January 1
    
    
    139.1
    
    
    
    
    
    
    
    (59.7
    )
    
    
    
    
    
    
    (313.7
    )Foreign currency translation adjustments
    
    
    20.7
    
    
    
    
    
    
    
    124.5
    
    
    
    
    
    
    
    291.3Minimum pension liability
adjustment, net of income taxes
    
    
    (95.8
    )
    
    
    
    
    
    
    73.2
    
    
    
    
    
    
    
    (36.9
    )Derivative adjustment, net of
income taxes
    
    
    6.1
    
    
    
    
    
    
    
    1.1
    
    
    
    
    
    
    
    (0.4
    )Balance at December 31
    
    
    70.1
    
    
    
    
    
    
    
    139.1
    
    
    
    
    
    
    
    (59.7
    )Total Shareholders Equity
    
    $
    3,255.8
    
    
    
    
    
    
    $
    3,112.9
    
    
    
    
    
    
    $
    2,659.6
  42




---



##### 



LAFARGE NORTH AMERICA INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 Years Ended December 312005
    
    
    2004
    
    
    2003Net Income
    
    $
    271.0
    
    
    $
    295.5
    
    
    $
    280.6Foreign currency translation adjustments
    
    
    20.7
    
    
    
    124.5
    
    
    
    291.3Minimum pension liability adjustment, net of income taxes
of ($48.2), $38.2 and ($16.4), respectively
    
    
    (95.8
    )
    
    
    73.2
    
    
    
    (36.9
    )Derivative adjustment, net of income taxes
of $2.9, $0.6 and ($0.2), respectively
    
    
    6.1
    
    
    
    1.1
    
    
    
    (0.4
    )Comprehensive Income
    
    $
    202.0
    
    
    $
    494.3
    
    
    $
    534.6
  43




---



##### 



LAFARGE NORTH AMERICA INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
 Years Ended December 312005
    
    
    2004
    
    
    2003Cash Flows from OperationsNet income
    
    $
    271.0
    
    
    $
    295.5
    
    
    $
    280.6Adjustments to reconcile net income to net cash provided by operations:Depreciation, depletion and amortization
    
    
    247.3
    
    
    
    211.3
    
    
    
    192.8Cumulative effect of change in accounting principle, net of tax
    
    
        
    
    
    
        
    
    
    
    3.2Provision for bad debts
    
    
    3.6
    
    
    
    3.7
    
    
    
    2.1Deferred income taxes
    
    
    44.4
    
    
    
    33.8
    
    
    
    22.9Gain on sale of assets
    
    
    (2.5
    )
    
    
    (8.1
    )
    
    
    (38.8
    )Gain on sale of discontinued operations
    
    
        
    
    
    
        
    
    
    
    (93.1
    )Tax on sale of discontinued operations
    
    
        
    
    
    
        
    
    
    
    37.9Net change in noncurrent assets and liabilities
    
    
    (5.7
    )
    
    
    (64.9
    )
    
    
    (7.6
    )Net change in operating working capital (see Analysis below)*
    
    
    (129.2
    )
    
    
    (140.2
    )
    
    
    6.4Net Cash Provided by Operations
    
    
    428.9
    
    
    
    331.1
    
    
    
    406.4Cash Flows from InvestingCapital expenditures
    
    
    (383.5
    )
    
    
    (350.3
    )
    
    
    (173.9
    )Acquisitions, net of cash acquired
    
    
    (68.8
    )
    
    
    (9.1
    )
    
    
    (16.7
    )Redemptions (purchases) of short-term investments, net
    
    
    25.6
    
    
    
    34.3
    
    
    
    (46.3
    )Proceeds from property, plant and equipment dispositions
    
    
    17.7
    
    
    
    66.6
    
    
    
    71.2Proceeds received from sale of discontinued operations
    
    
        
    
    
    
        
    
    
    
    123.9Tax on sale of discontinued operations
    
    
        
    
    
    
        
    
    
    
    (37.9
    )Other
    
    
    (11.4
    )
    
    
    0.2
    
    
    
    (3.8
    )Net Cash Used for Investing
    
    
    (420.4
    )
    
    
    (258.3
    )
    
    
    (83.5
    )Cash Flows from FinancingIssuance (repayment) of long-term debt, net
    
    
    (251.8
    )
    
    
    0.1
    
    
    
    39.6Issuance (repayment) of short-term borrowings, net
    
    
    191.2
    
    
    
    104.4
    
    
    
    (131.1
    )Issuance of equity securities
    
    
    63.0
    
    
    
    52.3
    
    
    
    11.8Repurchase of common stock
    
    
    (100.0
    )
    
    
    (49.1
    )
    
    
    (0.9
    )Dividends, net of reinvestments
    
    
    (34.4
    )
    
    
    (44.2
    )
    
    
    (45.6
    )Net Cash Provided by (Used for) Financing
    
    
    (132.0
    )
    
    
    63.5
    
    
    
    (126.2
    )Effect of exchange rate changes
    
    
    (11.0
    )
    
    
    50.8
    
    
    
    82.8Net Increase (Decrease) in Cash and Cash Equivalents
    
    
    (134.5
    )
    
    
    187.1
    
    
    
    279.5Cash and Cash Equivalents at January 1
    
    
    817.7
    
    
    
    630.6
    
    
    
    351.1Cash and Cash Equivalents at December 31
    
    $
    683.2
    
    
    $
    817.7
    
    
    $
    630.6*Analysis of Changes in Operating Working Capital ItemsReceivables, net (including Due from affiliates)
    
    $
    (88.7
    )
    
    $
    (159.8
    )
    
    $
    (59.1
    )Inventories
    
    
    (68.9
    )
    
    
    15.3
    
    
    
    24.8Other current assets
    
    
    (13.5
    )
    
    
    6.1
    
    
    
    2.6Accounts payable and accrued liabilities
    
    
    42.3
    
    
    
    (17.9
    )
    
    
    16.8Income taxes payable
    
    
    (0.4
    )
    
    
    16.1
    
    
    
    21.3Net Change in Operating Working Capital
    
    $
    (129.2
    )
    
    $
    (140.2
    )
    
    $
    6.4
  44




---



##### 



LAFARGE NORTH AMERICA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    Note 1 Summary of Significant Accounting Policies
 Basis of Presentation
  Estimates
  45




---



##### 



LAFARGE NORTH AMERICA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 Foreign Currency Translation
  Cash Equivalents and Short-term Investments
 Accounting for Certain Investments
in Debt and Equity Securities
 Derivative Instruments and Hedging Activities
 Accounting for Derivative Instruments and Certain Hedging
Activities Accounting for Certain Derivative Instruments and Certain
Hedging Activities, an Amendment of SFAS 133
   46




---



##### 



LAFARGE NORTH AMERICA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
  Concentration of Credit Risk
  Inventories
  Property, Plant and Equipment
  Goodwill and Intangible Assets
 Goodwill and Other
Intangible Assets Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use
 Impairment or Disposal of Long-Lived Assets
 Accounting for the Impairment or Disposal of Long-Lived Assets
 47




---



##### 



LAFARGE NORTH AMERICA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
  Liability Recognition for Costs to Exit an Activity
  Asset Retirement Obligations
 Accounting for Asset Retirement Obligations
 Environmental Remediation Liabilities
  Postretirement and Postemployment Benefits
   Revenue Recognition
  48




---



##### 



LAFARGE NORTH AMERICA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 Research and Development
  Other (Income) Expense, Net
  Years Ended December 312005
    
    
    2004
    
    
    2003Gain on sale of fixed assets
    
    $
    (2.7
    )
    
    $
    (11.0
    )
    
    $
    (12.2
    )Loss (gain) on divestitures
    
    
    (0.2
    )
    
    
    1.2
    
    
    
    (28.8
    )Receivables securitization program related
    
    
    0.4
    
    
    
    1.8
    
    
    
    2.3Pension and other postretirement benefits expense
    
    
    8.1
    
    
    
    9.5
    
    
    
    10.2Equity income
    
    
    (2.5
    )
    
    
    (1.7
    )
    
    
    (2.5
    )Foreign exchange transaction (gains) losses
    
    
    (0.4
    )
    
    
    6.0
    
    
    
    21.4Other miscellaneous (income) expense
    
    
    (2.1
    )
    
    
    12.1
    
    
    
    6.9Total other (income) expense, net
    
    $
    0.6
    
    
    $
    17.9
    
    
    $
    (2.7
    )
 Interest
  Income Taxes
  Net Income Per Share
   49




---



##### 



LAFARGE NORTH AMERICA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 Accounting for Stock-Based Compensation
  Accounting for Stock-Based Compensation
  Years Ended December 312005
    
    
    2004
    
    
    2003Net IncomeAs reported
    
    $
    271.0
    
    
    $
    295.5
    
    
    $
    280.6Deduct fair value of stock-based employee compensation, net of tax
    
    
    (11.6
    )
    
    
    (9.4
    )
    
    
    (7.5
    )Pro forma
    
    $
    259.4
    
    
    $
    286.1
    
    
    $
    273.1Basic Net Income Per ShareAs reported
    
    $
    3.59
    
    
    $
    3.98
    
    
    $
    3.83Pro forma
    
    $
    3.43
    
    
    $
    3.85
    
    
    $
    3.73Diluted Net Income Per ShareAs reported
    
    $
    3.43
    
    
    $
    3.86
    
    
    $
    3.79Pro forma
    
    $
    3.29
    
    
    $
    3.73
    
    
    $
    3.69
 Recent Accounting Pronouncements
 Share-Based Payment Accounting
for Stock-Based Compensation Accounting for Stock
Issued to Employees Statement of Cash Flows
 50




---



##### 



LAFARGE NORTH AMERICA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 Accounting
for Stripping Costs in the Mining Industry
 Accounting and Disclosure
Guidance for the Foreign Earnings Repatriation Provision within the American Jobs Creation Act of
2004 Accounting for Income Taxes
 Accounting for Conditional Asset
Retirement Obligations
 Inventory Costs an amendment of ARB No. 43,
Chapter 4
 Discontinued Operations
  Accounting for the Impairment or Disposal of Long-Lived Assets
 51




---



##### 



LAFARGE NORTH AMERICA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
  Acquisitions, Dispositions and Significant Capital Developments
   Note 2 Receivables
  December 312005
    
    
    2004Trade and notes receivable
    
    $
    646.6
    
    
    $
    575.2Unbilled receivables
    
    
    29.9
    
    
    
    33.2Retainage on long-term contracts
    
    
    51.9
    
    
    
    42.7Other receivables
    
    
    31.4
    
    
    
    20.3Allowances
    
    
    (28.8
    )
    
    
    (28.9
    )Total receivables, net
    
    $
    731.0
    
    
    $
    642.5
 Accounting for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities, a replacement of FASB Statement No. 125
   52




---



##### 



LAFARGE NORTH AMERICA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 Note 3 Inventories
  December 312005
    
    
    2004Finished products
    
    $
    257.1
    
    
    $
    205.6Work in process
    
    
    26.7
    
    
    
    27.4Raw materials and fuel
    
    
    80.6
    
    
    
    54.1Maintenance and operating supplies
    
    
    72.2
    
    
    
    70.5Total inventories
    
    $
    436.6
    
    
    $
    357.6
  Note 4 Property, Plant and Equipment
  December 312005
    
    
    2004Land and mineral deposits
    
    $
    654.0
    
    
    $
    619.1Buildings, machinery and equipment
    
    
    4,215.7
    
    
    
    3,916.5Construction in progress
    
    
    181.7
    
    
    
    161.1Property, plant and equipment, at cost
    
    
    5,051.4
    
    
    
    4,696.7Accumulated depreciation and depletion
    
    
    (2,403.3
    )
    
    
    (2,204.9
    )Total property, plant and equipment, net
    
    $
    2,648.1
    
    
    $
    2,491.8
  53




---



##### 



LAFARGE NORTH AMERICA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 Note 5 Goodwill
  Aggregates,Concrete and
    
    
    Cement
    
    
    Gypsum
    
    
    Corporate andAsphalt Segment
    
    
    Segment
    
    
    Segment
    
    
    Unallocated
    
    
    TotalBalance at January 1, 2005
    
    $
    487.0
    
    
    $
    16.5
    
    
    $
    20.0
    
    
    $
    (12.0
    )
    
    $
    511.5Goodwill acquired (divested)
    
    
    22.1
    
    
    
        
    
    
    
        
    
    
    
        
    
    
    
    22.1Purchase accounting adjustments
    
    
    5.1
    
    
    
        
    
    
    
        
    
    
    
        
    
    
    
    5.1Foreign currency translation adjustment
    
    
    4.2
    
    
    
    0.2
    
    
    
    0.1
    
    
    
        
    
    
    
    4.5Balance at December 31, 2005
    
    $
    518.4
    
    
    $
    16.7
    
    
    $
    20.1
    
    
    $
    (12.0
    )
    
    $
    543.2
 Aggregates,Concrete and
    
    
    Cement
    
    
    Gypsum
    
    
    Corporate andAsphalt Segment
    
    
    Segment
    
    
    Segment
    
    
    Unallocated
    
    
    TotalBalance at January 1, 2004
    
    $
    484.2
    
    
    $
    12.4
    
    
    $
    19.9
    
    
    $
    (12.5
    )
    
    $
    504.0Goodwill acquired (divested)
    
    
    (1.2
    )
    
    
        
    
    
    
        
    
    
    
    0.4
    
    
    
    (0.8
    )Purchase accounting adjustments
    
    
    0.7
    
    
    
        
    
    
    
        
    
    
    
        
    
    
    
    0.7Intersegment transfer
    
    
    (3.8
    )
    
    
    3.8
    
    
    
        
    
    
    
        
    
    
    
        Foreign currency translation adjustment
    
    
    7.1
    
    
    
    0.3
    
    
    
    0.1
    
    
    
    0.1
    
    
    
    7.6Balance at December 31, 2004
    
    $
    487.0
    
    
    $
    16.5
    
    
    $
    20.0
    
    
    $
    (12.0
    )
    
    $
    511.5
    54




---



##### 



LAFARGE NORTH AMERICA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 Note 6 Other Assets
  December 312005
    
    
    2004Long-term receivables
    
    $
    52.7
    
    
    $
    55.9Investments in unconsolidated companies
    
    
    35.8
    
    
    
    39.8Pension-related assets
    
    
    120.6
    
    
    
    218.9Intangible assets, net
    
    
    101.3
    
    
    
    61.1Property held for sale
    
    
    5.6
    
    
    
    5.4Other
    
    
    64.3
    
    
    
    48.6Total other assets, net
    
    $
    380.3
    
    
    $
    429.7
   December 31, 2005Gross Carrying
    
    
    AccumulatedAmount
    
    
    Amortization
    
    
    NetCapitalized software
    
    $
    102.9
    
    
    $
    14.5
    
    
    $
    88.4Customer lists
    
    
    19.3
    
    
    
    11.3
    
    
    
    8.0Non-compete contracts
    
    
    5.2
    
    
    
    2.6
    
    
    
    2.6Other
    
    
    5.1
    
    
    
    2.8
    
    
    
    2.3Total
    
    $
    132.5
    
    
    $
    31.2
    
    
    $
    101.3
 December 31, 2004Gross Carrying
    
    
    AccumulatedAmount
    
    
    Amortization
    
    
    NetCapitalized software
    
    $
    46.5
    
    
    $
    1.6
    
    
    $
    44.9Customer lists
    
    
    20.3
    
    
    
    9.6
    
    
    
    10.7Non-compete contracts
    
    
    3.9
    
    
    
    1.7
    
    
    
    2.2Other
    
    
    6.8
    
    
    
    3.5
    
    
    
    3.3Total
    
    $
    77.5
    
    
    $
    16.4
    
    
    $
    61.1
  2006
    
    $
    23.02007
    
    $
    22.92008
    
    $
    22.42009
    
    $
    19.72010
    
    $
    11.2
 55




---



##### 



LAFARGE NORTH AMERICA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 Note 7 Accounts Payable and Accrued Liabilities
  December 312005
    
    
    2004Trade accounts payable
    
    $
    295.9
    
    
    $
    281.3Due to affiliates
    
    
    7.2
    
    
    
        Accrued payroll expense
    
    
    118.4
    
    
    
    99.1Bank overdraft
    
    
    10.9
    
    
    
    11.2Self insurance reserves
    
    
    11.2
    
    
    
    11.2Other accrued liabilities
    
    
    112.1
    
    
    
    101.1Total accounts payable and accrued liabilities
    
    $
    555.7
    
    
    $
    503.9
 Note 8 Debt
  December 312005
    
    
    2004Senior notes in the amounts of $250.0, $200.0 and $200.0, paid 2005, due
2008 and 2013, respectively; bearing interest at fixed rates of 6.4 percent,
6.5 percent and 6.9 percent, respectively; stated net of issuance costs
and issue discount. The weighted average effective interest rate is 6.7 percent.
    
    $
    389.4
    
    
    $
    642.7Medium-term note due 2006, bearing fixed rate interest at 9.58 percent
    
    
    2.0
    
    
    
    2.0Tax-exempt bond due 2037, bearing interest at a fixed rate of 5.65 percent,
stated net of issue discount
    
    
    46.3
    
    
    
    46.3Tax-exempt bonds due in various amounts between 2007 and 2026, bearing
interest at floating rates that range from 1.5 percent to 2.3 percent
    
    
    19.6
    
    
    
    19.6Credit facility, stated net of issue discount
    
    
    309.2
    
    
    
        Other short-term borrowings, including commercial paper
    
    
        
    
    
    
    104.7Other
    
    
    9.6
    
    
    
    12.0Subtotal
    
    
    776.1
    
    
    
    827.3Less short-term borrowings and current portion of long-term debt, net of
issuance costs and original issue
discount of $2.1
    
    
    (312.4
    )
    
    
    (356.5
    )Total long-term debt
    
    $
    463.7
    
    
    $
    470.8
  56




---



##### 



LAFARGE NORTH AMERICA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
  2006
    
    $
    312.42007
    
    
    9.92008
    
    
    200.62009
    
    
    0.62010
    
    
    5.9Thereafter
    
    
    256.8Less issuance costs and original issue discount
    
    
    (10.1
    )Total
    
    $
    776.1
    Note 9 Redeemable Preferred Shares
  57




---



##### 



LAFARGE NORTH AMERICA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
   Note 10 Other Long-Term Liabilities
  December 312005
    
    
    2004Accrued postretirement benefit cost
    
    $
    230.5
    
    
    $
    222.8Accrued pension liability
    
    
    189.2
    
    
    
    164.8Self insurance reserves
    
    
    33.1
    
    
    
    33.2Other
    
    
    109.7
    
    
    
    107.9Total other long-term liabilities
    
    $
    562.5
    
    
    $
    528.7
 Accounting for Asset Retirement Obligations
  Balance at January 1, 2005
    
    $
    38.7Accretion expense
    
    
    2.6New obligations incurred
    
    
    6.1Payments
    
    
    (3.0
    )Currency exchange rate impact
    
    
    0.9Balance at December 31, 2005
    
    $
    45.3
 Note 11 Derivative Instruments and Hedging Activities
   58




---



##### 



LAFARGE NORTH AMERICA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
   Note 12 Common Equity Interests
       59




---



##### 



LAFARGE NORTH AMERICA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 Note 13 Dividend Reinvestment Plan
  Note 14 Stock Option and Purchase Plans
     2005
    
    
    2004
    
    
    2003Average
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    
    Exercise
    
    
    
    
    
    
    ExerciseShares
    
    
    Price
    
    
    Shares
    
    
    Price
    
    
    Shares
    
    
    PriceBalance outstanding at January 1
    
    
    4,881,266
    
    
    $
    35.23
    
    
    
    5,137,304
    
    
    $
    32.23
    
    
    
    4,260,293
    
    
    $
    32.59Options granted
    
    
    1,166,500
    
    
    $
    54.50
    
    
    
    1,264,500
    
    
    $
    41.88
    
    
    
    1,279,750
    
    
    $
    29.82Options exercised
    
    
    (1,665,496
    )
    
    $
    33.66
    
    
    
    (1,426,913
    )
    
    $
    30.28
    
    
    
    (256,426
    )
    
    $
    25.31Options canceled
    
    
    (279,538
    )
    
    $
    36.68
    
    
    
    (93,625
    )
    
    $
    36.12
    
    
    
    (146,313
    )
    
    $
    33.88Balance outstanding at December 31
    
    
    4,102,732
    
    
    $
    41.26
    
    
    
    4,881,266
    
    
    $
    35.23
    
    
    
    5,137,304
    
    
    $
    32.23Options exercisable at December 31
    
    
    1,291,796
    
    
    $
    34.07
    
    
    
    2,005,585
    
    
    $
    32.60
    
    
    
    2,391,104
    
    
    $
    29.81Weighted average fair value of options
granted during the year
    
    
    
    
    
    $
    14.67
    
    
    
    
    
    
    $
    12.07
    
    
    
    
    
    
    $
    8.66
 60




---



##### 



LAFARGE NORTH AMERICA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
  Options Outstanding
    
    
    Options ExercisableNumber of
    
    
    Weighted
    
    
    Weighted Average
    
    
    Number of
    
    
    WeightedShares at
    
    
    Average
    
    
    Remaining
    
    
    Shares at
    
    
    AverageRange of exercise prices
    
    12/31/2005
    
    
    Exercise Price
    
    
    Contractual Life
    
    
    12/31/2005
    
    
    Exercise Price$18.00  $23.00
    
    
    158,100
    
    
    $
    22.55
    
    
    3.38 years
    
    
    158,100
    
    
    $
    22.55$24.13  $29.97
    
    
    1,016,920
    
    
    $
    29.82
    
    
    6.60 years
    
    
    469,182
    
    
    $
    29.84$32.20  $38.13
    
    
    226,075
    
    
    $
    36.12
    
    
    2.78 years
    
    
    223,575
    
    
    $
    36.16$41.05  $54.50
    
    
    2,701,637
    
    
    $
    47.08
    
    
    8.15 years
    
    
    440,939
    
    
    $
    41.654,102,732
    
    
    $
    41.26
    
    
    7.28 years
    
    
    1,291,796
    
    
    $
    34.07
 Note 15 Net Income Per Share from Continuing Operations
 Years ended December 31
    
    
    
    
    
    
    
    
    
    Per Share(in millions, except per share amounts)
    
    Income
    
    
    Shares
    
    
    Amount2005BasicNet income from continuing operations
    
    $
    271.0
    
    
    
    75.5
    
    
    $
    3.59DilutedOptions
    
    
    
    
    
    
    1.1Stock warrant
    
    
    
    
    
    
    2.3Income available to common stockholders
    
    $
    271.0
    
    
    
    78.9
    
    
    $
    3.432004BasicNet income from continuing operations
    
    $
    295.5
    
    
    
    74.3
    
    
    $
    3.98DilutedOptions
    
    
    
    
    
    
    0.8Stock warrant
    
    
    
    
    
    
    1.6Income available to common stockholders
    
    $
    295.5
    
    
    
    76.7
    
    
    $
    3.862003BasicNet income from continuing operations
    
    $
    217.4
    
    
    
    73.3
    
    
    $
    2.97DilutedOptions
    
    
    
    
    
    
    0.4Stock warrant
    
    
    
    
    
    
    0.3Income available to common stockholders
    
    $
    217.4
    
    
    
    74.0
    
    
    $
    2.93
  61




---



##### 



LAFARGE NORTH AMERICA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 Note 16 Income Taxes
  Years Ended December 312005
    
    
    2004
    
    
    2003U.S.
    
    $
    283.5
    
    
    $
    176.6
    
    
    $
    151.1Canada
    
    
    250.9
    
    
    
    264.8
    
    
    
    199.5Earnings from continuing operations before income taxes
    
    $
    534.4
    
    
    $
    441.4
    
    
    $
    350.6
  Years Ended December 312005
    
    
    2004
    
    
    2003Current:U.S.
    
    $
    153.5
    
    
    $
    46.1
    
    
    $
    28.5Canada
    
    
    97.0
    
    
    
    78.4
    
    
    
    73.6Total current
    
    
    250.5
    
    
    
    124.5
    
    
    
    102.1Deferred:U.S.
    
    
    12.7
    
    
    
    12.2
    
    
    
    23.7Canada
    
    
    0.2
    
    
    
    9.2
    
    
    
    7.4Total deferred
    
    
    12.9
    
    
    
    21.4
    
    
    
    31.1Total income taxes
    
    $
    263.4
    
    
    $
    145.9
    
    
    $
    133.2
   Years Ended December 312005
    
    
    2004
    
    
    2003Taxes at the U.S. federal income tax rate
    
    $
    187.0
    
    
    $
    154.5
    
    
    $
    122.7U.S./Canadian tax rate differential
    
    
    (10.0
    )
    
    
    (10.6
    )
    
    
    (8.3
    )Canadian tax incentives
    
    
    (1.2
    )
    
    
    (1.2
    )
    
    
    0.1U.S. state and Canadian provincial income taxes, net of federal benefit
    
    
    12.8
    
    
    
    8.4
    
    
    
    9.4U.S. state net operating loss realization
    
    
    (3.4
    )
    
    
    (1.0
    )
    
    
    (10.4
    )Enacted tax rate changes
    
    
    1.4
    
    
    
    (0.6
    )
    
    
    7.6Dividends on Redeemable Preferred Shares
    
    
    2.7
    
    
    
    2.8
    
    
    
    2.5Tax on repatriation, net of foreign tax credits and related valuation allowance
    
    
    70.7
    
    
    
        
    
    
    
        Other items
    
    
    3.4
    
    
    
    (6.4
    )
    
    
    9.6Provision for income taxes
    
    $
    263.4
    
    
    $
    145.9
    
    
    $
    133.2
 62




---



##### 



LAFARGE NORTH AMERICA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 Accounting for
Income Taxes
 December 312005
    
    
    2004Deferred tax assets:Reserves and other liabilities
    
    $
    43.1
    
    
    $
    60.8Other postretirement benefits
    
    
    82.1
    
    
    
    82.4Tax loss carry forwards
    
    
    26.0
    
    
    
    24.5Foreign tax credits
    
    
    40.7
    
    
    
        Minimum pension liability
    
    
    107.4
    
    
    
    56.9Gross deferred tax assets
    
    
    299.3
    
    
    
    224.6Valuation allowance
    
    
    (40.9
    )
    
    
    (2.6
    )Net deferred tax assets
    
    
    258.4
    
    
    
    222.0Deferred tax liabilities:Property, plant and equipment
    
    
    360.4
    
    
    
    325.0Prepaid pension asset
    
    
    86.3
    
    
    
    72.1Other
    
    
    16.1
    
    
    
    17.4Gross deferred tax liabilities
    
    
    462.8
    
    
    
    414.5Net deferred tax liability
    
    
    204.4
    
    
    
    192.5Net deferred tax assetcurrent
    
    
    18.2
    
    
    
    49.9Net deferred tax liabilitynoncurrent
    
    $
    222.6
    
    
    $
    242.4
     63




---



##### 



LAFARGE NORTH AMERICA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
  Note 17 Segment and Related Information
 Disclosures about Segments of an
Enterprise and Related Information
      64




---



##### 



LAFARGE NORTH AMERICA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
  Years Ended December 312005
    
    
    2004
    
    
    2003Net sales from continuing operations:Aggregates, Concrete & Asphalt:Revenues from external customers
    
    $
    2,548.6
    
    
    $
    2,265.2
    
    
    $
    2,027.8Intersegment revenues
    
    
    8.5
    
    
    
    8.9
    
    
    
    4.7Cement:Revenues from external customers
    
    
    1,349.1
    
    
    
    1,171.5
    
    
    
    1,036.8Intersegment revenues
    
    
    201.9
    
    
    
    181.2
    
    
    
    161.5Gypsum:Revenues from external customers
    
    
    411.9
    
    
    
    326.6
    
    
    
    254.3Eliminations
    
    
    (210.4
    )
    
    
    (190.1
    )
    
    
    (166.2
    )Total net sales from continuing operations
    
    $
    4,309.6
    
    
    $
    3,763.3
    
    
    $
    3,318.9
 Years Ended December 312005
    
    
    2004
    
    
    2003Income (loss) from continuing operations:Aggregates, Concrete & Asphalt (a)
    
    $
    207.3
    
    
    $
    207.8
    
    
    $
    183.7Cement (a)
    
    
    365.4
    
    
    
    328.4
    
    
    
    290.5Gypsum (a)
    
    
    68.2
    
    
    
    33.3
    
    
    
    (5.0
    )Total
    
    
    640.9
    
    
    
    569.5
    
    
    
    469.2Corporate and unallocated expenses
    
    
    (75.7
    )
    
    
    (91.2
    )
    
    
    (68.0
    )Earnings before preferred dividends, interest and income taxes
    
    
    565.2
    
    
    
    478.3
    
    
    
    401.2Redeemable preferred shares dividends
    
    
    (7.9
    )
    
    
    (8.2
    )
    
    
    (7.4
    )Interest expense, net
    
    
    (22.9
    )
    
    
    (28.7
    )
    
    
    (43.2
    )Earnings from continuing operations before income taxes
    
    $
    534.4
    
    
    $
    441.4
    
    
    $
    350.6
 
 (a)
    
    Excludes gains and losses on divestments of operations, other postretirement benefit
expense for retirees, redeemable preferred shares dividends, interest, and income taxes. 65




---



##### 



LAFARGE NORTH AMERICA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 December 312005
    
    
    2004Assets:Aggregates, Concrete & Asphalt
    
    $
    2,344.0
    
    
    $
    2,204.6Cement
    
    
    1,640.0
    
    
    
    1,505.2Gypsum
    
    
    391.6
    
    
    
    329.6Corporate and unallocated assets
    
    
    1,177.0
    
    
    
    1,364.7Total assets
    
    $
    5,552.6
    
    
    $
    5,404.1
 Years Ended December 312005
    
    
    2004
    
    
    2003Capital expenditures:Aggregates, Concrete & Asphalt
    
    $
    157.5
    
    
    $
    148.7
    
    
    $
    63.3Cement
    
    
    151.8
    
    
    
    147.7
    
    
    
    74.0Gypsum
    
    
    56.2
    
    
    
    24.2
    
    
    
    16.8Corporate and unallocated
    
    
    18.0
    
    
    
    29.7
    
    
    
    19.8Total capital expenditures
    
    $
    383.5
    
    
    $
    350.3
    
    
    $
    173.9
 Years Ended December 312005
    
    
    2004
    
    
    2003Depreciation, depletion and amortization:Aggregates, Concrete & Asphalt
    
    $
    119.0
    
    
    $
    104.7
    
    
    $
    92.2Cement
    
    
    95.9
    
    
    
    80.7
    
    
    
    77.1Gypsum
    
    
    24.0
    
    
    
    18.3
    
    
    
    16.9Corporate and unallocated
    
    
    8.4
    
    
    
    7.6
    
    
    
    6.6Total depreciation, depletion and amortization
    
    $
    247.3
    
    
    $
    211.3
    
    
    $
    192.8
  Years Ended December 312005
    
    
    2004
    
    
    2003Net sales from external customers:Cement
    
    $
    1,349.1
    
    
    $
    1,171.5
    
    
    $
    1,036.8Ready-mixed concrete
    
    
    818.9
    
    
    
    751.0
    
    
    
    689.6Aggregates
    
    
    784.0
    
    
    
    723.3
    
    
    
    609.8Asphalt and paving
    
    
    836.0
    
    
    
    692.3
    
    
    
    637.8Gypsum drywall
    
    
    411.9
    
    
    
    326.6
    
    
    
    254.3Other miscellaneous products
    
    
    109.7
    
    
    
    98.6
    
    
    
    90.6Total net sales
    
    $
    4,309.6
    
    
    $
    3,763.3
    
    
    $
    3,318.9
  66




---



##### 



LAFARGE NORTH AMERICA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
  As of and for the Years Ended December 312005
    
    
    2004
    
    
    2003Net
    
    
    Fixed
    
    
    Net
    
    
    Net
    
    
    Fixed
    
    
    Net
    
    
    NetSales
    
    
    Assets
    
    
    Assets
    
    
    Sales
    
    
    Assets
    
    
    Assets
    
    
    SalesU.S.
    
    $
    2,406.5
    
    
    $
    1,653.0
    
    
    $
    2,320.4
    
    
    $
    2,113.9
    
    
    $
    1,555.4
    
    
    $
    1,161.1
    
    
    $
    1,882.0Canada
    
    
    1,903.1
    
    
    
    995.1
    
    
    
    935.4
    
    
    
    1,649.4
    
    
    
    936.4
    
    
    
    1,951.8
    
    
    
    1,436.9$
    4,309.6
    
    
    $
    2,648.1
    
    
    $
    3,255.8
    
    
    $
    3,763.3
    
    
    $
    2,491.8
    
    
    $
    3,112.9
    
    
    $
    3,318.9
  Note 18 Supplemental Cash Flow Information
   Years Ended December 312005
    
    
    2004
    
    
    2003Interest (net of amounts capitalized)
    
    $
    41.9
    
    
    $
    48.9
    
    
    $
    54.9Income taxes (net of refunds)
    
    $
    179.8
    
    
    $
    96.6
    
    
    $
    124.3
 Note 19 Pension Plans and Other Postretirement Benefits
    U.S. Plans:
 Other PostretirementPension Benefits
    
    
    Benefits2005
    
    
    2004
    
    
    2005
    
    
    2004Discount rate
    
    
    5.7
    %
    
    
    5.9
    %
    
    
    5.7
    %
    
    
    5.9
    %Rate of compensation increase
    
    
    4.0
    %
    
    
    4.0
    %
    
    
    4.0
    %
    
    
    4.0
    %Rate of benefit multiplier increase (for hourly plans)
    
    
    2.0
    %
    
    
    2.0
    %
    
    
    N/A
    
    
    
    N/A
 67




---



##### 



LAFARGE NORTH AMERICA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 Canadian Plans:
 Other PostretirementPension Benefits
    
    
    Benefits2005
    
    
    2004
    
    
    2005
    
    
    2004Discount rate
    
    
    5.3
    %
    
    
    5.9
    %
    
    
    5.3
    %
    
    
    5.9
    %Rate of compensation increase
    
    
    3.5
    %
    
    
    3.5
    %
    
    
    3.5
    %
    
    
    3.5
    %Rate of benefit multiplier increase (for hourly plans)
    
    
    3.5
    %
    
    
    3.5
    %
    
    
    N/A
    
    
    
    N/A
  U.S. Plans:
 Other PostretirementPension Benefits
    
    
    Benefits2005
    
    
    2004
    
    
    2003
    
    
    2005
    
    
    2004
    
    
    2003Discount rate
    
    
    5.9
    %
    
    
    6.0
    %
    
    
    6.8
    %
    
    
    5.9
    %
    
    
    6.0
    %
    
    
    7.0
    %Expected long-term return on plan assets
    
    
    8.3
    %
    
    
    8.5
    %
    
    
    8.5
    %
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/ARate of compensation increase
    
    
    4.0
    %
    
    
    4.0
    %
    
    
    4.0
    %
    
    
    4.0
    %
    
    
    4.0
    %
    
    
    4.0
    %
 Canadian Plans:
 Other PostretirementPension Benefits
    
    
    Benefits2005
    
    
    2004
    
    
    2003
    
    
    2005
    
    
    2004
    
    
    2003Discount rate
    
    
    5.9
    %
    
    
    6.0
    %
    
    
    6.4
    %
    
    
    5.9
    %
    
    
    6.0
    %
    
    
    6.4
    %Expected long-term return on plan assets
    
    
    8.3
    %
    
    
    8.5
    %
    
    
    8.5
    %
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/ARate of compensation increase
    
    
    3.5
    %
    
    
    3.5
    %
    
    
    3.5
    %
    
    
    3.5
    %
    
    
    3.5
    %
    
    
    3.5
    %
  Plan Assets2005
    
    
    2004Equity Securities
    
    
    72
    %
    
    
    68
    %Debt Securities
    
    
    28
    %
    
    
    32
    %Total
    
    
    100
    %
    
    
    100
    %
    68




---



##### 



LAFARGE NORTH AMERICA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
     69




---



##### 



LAFARGE NORTH AMERICA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
  Other PostretirementPension Benefits
    
    
    Benefits2005
    
    
    2004
    
    
    2005
    
    
    2004Change in Benefit Obligation:Projected benefit obligation at beginning of period
    
    $
    1,032.2
    
    
    $
    915.0
    
    
    $
    264.0
    
    
    $
    297.9Exchange rate changes
    
    
    21.9
    
    
    
    33.6
    
    
    
    2.8
    
    
    
    4.7Service cost
    
    
    33.7
    
    
    
    30.3
    
    
    
    8.1
    
    
    
    7.7Interest cost
    
    
    61.4
    
    
    
    56.2
    
    
    
    14.8
    
    
    
    15.6Employee contributions
    
    
    0.4
    
    
    
    0.2
    
    
    
    2.0
    
    
    
    1.3Plan amendments
    
    
    0.6
    
    
    
    0.9
    
    
    
    (14.2
    )
    
    
    (13.6
    )Special termination benefits
    
    
    1.1
    
    
    
    (0.4
    )
    
    
    
    
    
    
    Benefits paid
    
    
    (56.6
    )
    
    
    (48.3
    )
    
    
    (17.7
    )
    
    
    (16.8
    )Actuarial loss (gain)
    
    
    96.5
    
    
    
    44.7
    
    
    
    (4.9
    )
    
    
    (32.8
    )Projected Benefits Obligation at End of the Period
    
    $
    1,191.2
    
    
    $
    1,032.2
    
    
    $
    254.9
    
    
    $
    264.0Change in Plan Assets:Fair value of plan assets at beginning of period
    
    $
    810.8
    
    
    $
    654.0Exchange rate changes
    
    
    16.6
    
    
    
    27.1Actual return on plan assets
    
    
    85.0
    
    
    
    72.4Employer contributions
    
    
    86.6
    
    
    
    109.5Employee contributions
    
    
    0.4
    
    
    
    0.1Benefits paid
    
    
    (56.6
    )
    
    
    (48.3
    )Administrative expenses
    
    
    (2.1
    )
    
    
    (4.0
    )Fair Value of Plan Assets at End of the Period
    
    $
    940.7
    
    
    $
    810.8Reconciliation of Prepaid (Accrued) Benefit Cost:Funded status
    
    $
    (250.5
    )
    
    $
    (221.4
    )
    
    $
    (254.9
    )
    
    $
    (264.0
    )Contributions from measurement date to fiscal year-end
    
    
    1.9
    
    
    
    2.6
    
    
    
    2.1
    
    
    
    1.4Unrecognized actuarial loss
    
    
    451.4
    
    
    
    394.8
    
    
    
    50.6
    
    
    
    55.3Unrecognized prior service cost (credit)
    
    
    21.6
    
    
    
    24.9
    
    
    
    (28.3
    )
    
    
    (15.5
    )Prepaid (Accrued) Benefit Cost at December 31
    
    $
    224.4
    
    
    $
    200.9
    
    
    $
    (230.5
    )
    
    $
    (222.8
    )Accumulated Benefit Obligation at End of the Period
    
    $
    1,068.7
    
    
    $
    915.0
  Other PostretirementPension Benefits
    
    
    BenefitsDecember 31
    
    
    December 312005
    
    
    2004
    
    
    2005
    
    
    2004Amounts recognized in the Consolidated Balance Sheets consist of:Prepaid asset
    
    $
    102.6
    
    
    $
    208.1
    
    
    $
    
    
    
    $
    Accrued liability
    
    
    (189.2
    )
    
    
    (164.8
    )
    
    
    (230.5
    )
    
    
    (222.8
    )Intangible asset
    
    
    18.0
    
    
    
    10.8
    
    
    
    
    
    
    
    Accumulated other comprehensive loss
    
    
    293.0
    
    
    
    146.8
    
    
    
    
    
    
    
    Net amount recognized at December 31
    
    $
    224.4
    
    
    $
    200.9
    
    
    $
    (230.5
    )
    
    $
    (222.8
    )
 70




---



##### 



LAFARGE NORTH AMERICA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
  Pension Benefits
    
    
    Other Postretirement Benefits2005
    
    
    2004
    
    
    2003
    
    
    2005
    
    
    2004
    
    
    2003Components of Net Periodic Benefit Cost:Service cost
    
    $
    33.7
    
    
    $
    30.3
    
    
    $
    23.4
    
    
    $
    8.1
    
    
    $
    7.7
    
    
    $
    5.7Interest cost
    
    
    61.4
    
    
    
    56.2
    
    
    
    50.8
    
    
    
    14.8
    
    
    
    15.6
    
    
    
    16.7Expected return on plan assets
    
    
    (71.0
    )
    
    
    (68.9
    )
    
    
    (58.6
    )
    
    
    
    
    
    
    
    
    
    
    Amortization of prior service cost (gain)
    
    
    4.1
    
    
    
    3.6
    
    
    
    3.5
    
    
    
    (2.3
    )
    
    
    (0.8
    )
    
    
    (0.6
    )Amortization of actuarial loss
    
    
    36.5
    
    
    
    28.3
    
    
    
    15.4
    
    
    
    1.8
    
    
    
    2.4
    
    
    
    2.2Curtailment (gain) loss
    
    
    
    
    
    
    (0.4
    )
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    Special termination benefits
    
    
    1.1
    
    
    
    
    
    
    
    1.3
    
    
    
    
    
    
    
    
    
    
    
    1.0Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.3
    )Net periodic benefit cost
    
    
    65.8
    
    
    
    49.1
    
    
    
    35.9
    
    
    
    22.4
    
    
    
    24.9
    
    
    
    24.7Defined contribution plan cost
    
    
    15.8
    
    
    
    11.6
    
    
    
    12.0
    
    
    
    
    
    
    
    
    
    
    
    Multi-employer pension plan cost
    
    
    11.3
    
    
    
    8.7
    
    
    
    7.7
    
    
    
    
    
    
    
    
    
    
    
    Net retirement cost
    
    $
    92.9
    
    
    $
    69.4
    
    
    $
    55.6
    
    
    $
    22.4
    
    
    $
    24.9
    
    
    $
    24.7
     Other PostretirementPension Benefits
    
    
    BenefitsDecember 31
    
    
    December 312005
    
    
    2004
    
    
    2005
    
    
    2004Prepaid Asset
    
    $
    102.6
    
    
    $
    208.1
    
    
    $
    
    
    
    $
    Intangible Asset
    
    $
    14.3
    
    
    $
    9.4
    
    
    $
    
    
    
    $
    Accrued Liability
    
    $
    (177.4
    )
    
    $
    (159.7
    )
    
    $
    212.3
    
    
    $
    205.1Accumulated Other Comprehensive Income
    
    $
    292.4
    
    
    $
    146.7
    
    
    $
    
    
    
    $
    Net Periodic Benefit Cost Through Period Ended
    
    $
    60.0
    
    
    $
    43.7
    
    
    $
    19.6
    
    
    $
    22.4Projected Benefit Obligations
    
    $
    1,158.1
    
    
    $
    1,008.1
    
    
    $
    232.2
    
    
    $
    237.8Accumulated Benefit Obligatons
    
    $
    1,043.7
    
    
    $
    899.5
    
    
    $
    
    
    
    $
    Fair Value of Plan Assets
    
    $
    927.6
    
    
    $
    799.8
    
    
    $
    
    
    
    $
    
 71




---



##### 



LAFARGE NORTH AMERICA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
    Other PostretirementPension Benefits
    
    Benefits (a)2006
    
    $
    58.4
    
    
    $
    14.62007
    
    $
    60.3
    
    
    $
    15.62008
    
    $
    62.2
    
    
    $
    16.42009
    
    $
    64.5
    
    
    $
    17.32010
    
    $
    66.9
    
    
    $
    18.42011 to 2015
    
    $
    380.6
    
    
    $
    100.4
 
 (a)
    
    The amounts disclosed are net of expected Medicare Act prescription drug subsidy
receipts of $1.3 million in 2006, $1.4 million in 2007, $1.5 million in 2008, $1.6 million
in 2009, $1.7 million in 2010 and $9.5 million for the years 2011 through 2015.     One-percentage-pointIncrease
    
    DecreaseIncrease (decrease) in postretirement benefit obligation at December 31, 2005
    
    $
    27.0
    
    
    $
    (22.2
    )Increase (decrease) in the total of service and interest cost components for 2005
    
    $
    3.0
    
    
    $
    (2.5
    )
 72




---



##### 



LAFARGE NORTH AMERICA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 Accounting and Disclosure Requirements
Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003
 Note 20 Commitments and Contingencies
  Years Ending December 312006
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    2010
    
    
    Later YearsOperating leases
    
    $
    53.0
    
    
    $
    43.4
    
    
    $
    29.0
    
    
    $
    19.5
    
    
    $
    12.1
    
    
    $
    89.9
      73




---



##### 



LAFARGE NORTH AMERICA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
      74




---



##### 



LAFARGE NORTH AMERICA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
     Note 21 Related Party Transactions
   75




---



##### 



LAFARGE NORTH AMERICA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
    76




---



##### 



LAFARGE NORTH AMERICA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Note 22 Quarterly Data (unaudited)
  First
    
    
    Second
    
    
    Third
    
    
    Fourth
    
    
    Total (b)2005Net sales:Cement
    
    $
    208.9
    
    
    $
    440.5
    
    
    $
    509.5
    
    
    $
    392.1
    
    
    $
    1,551.1Ready-mixed concrete
    
    
    134.4
    
    
    
    225.9
    
    
    
    246.4
    
    
    
    212.2
    
    
    
    818.9Aggregates
    
    
    108.4
    
    
    
    228.0
    
    
    
    245.7
    
    
    
    210.3
    
    
    
    792.4Asphalt and paving
    
    
    49.9
    
    
    
    210.0
    
    
    
    331.7
    
    
    
    244.4
    
    
    
    836.0Gypsum drywall
    
    
    91.8
    
    
    
    99.7
    
    
    
    105.8
    
    
    
    114.5
    
    
    
    411.9Other miscellaneous products
    
    
    15.4
    
    
    
    30.0
    
    
    
    35.3
    
    
    
    29.1
    
    
    
    109.7Eliminations
    
    
    (31.8
    )
    
    
    (60.8
    )
    
    
    (57.8
    )
    
    
    (59.9
    )
    
    
    (210.4
    )Total (b)
    
    $
    577.0
    
    
    $
    1,173.3
    
    
    $
    1,416.6
    
    
    $
    1,142.7
    
    
    $
    4,309.6Gross profit
    
    $
    5.0
    
    
    $
    317.9
    
    
    $
    396.7
    
    
    $
    296.3
    
    
    $
    1,016.0Net income (loss) (c)
    
    
    (188.5
    )
    
    
    142.9
    
    
    
    172.1
    
    
    
    144.6
    
    
    
    271.0Net income (loss) per share (a) (d)Basic
    
    
    (2.51
    )
    
    
    1.89
    
    
    
    2.27
    
    
    
    1.91
    
    
    
    3.59Diluted
    
    
    (2.51
    )
    
    
    1.81
    
    
    
    2.17
    
    
    
    1.84
    
    
    
    3.432004Net sales:Cement
    
    $
    177.0
    
    
    $
    375.0
    
    
    $
    456.1
    
    
    $
    344.5
    
    
    $
    1,352.7Ready-mixed concrete
    
    
    128.3
    
    
    
    201.1
    
    
    
    225.2
    
    
    
    196.4
    
    
    
    751.0Aggregates
    
    
    100.1
    
    
    
    193.8
    
    
    
    243.4
    
    
    
    194.7
    
    
    
    732.1Asphalt and paving
    
    
    39.8
    
    
    
    160.8
    
    
    
    281.5
    
    
    
    210.3
    
    
    
    692.3Gypsum drywall
    
    
    74.0
    
    
    
    79.4
    
    
    
    87.1
    
    
    
    86.1
    
    
    
    326.6Other miscellaneous products
    
    
    18.5
    
    
    
    28.1
    
    
    
    29.9
    
    
    
    22.2
    
    
    
    98.7Eliminations
    
    
    (28.9
    )
    
    
    (48.3
    )
    
    
    (63.7
    )
    
    
    (49.2
    )
    
    
    (190.1
    )Total (b)
    
    $
    508.9
    
    
    $
    989.9
    
    
    $
    1,259.6
    
    
    $
    1,004.9
    
    
    $
    3,763.3Gross profit (loss)
    
    $
    (0.6
    )
    
    $
    267.6
    
    
    $
    372.6
    
    
    $
    243.1
    
    
    $
    882.7Net income (loss)
    
    
    (70.8
    )
    
    
    101.9
    
    
    
    165.6
    
    
    
    98.7
    
    
    
    295.5Net income (loss) per share (a)Basic
    
    
    (0.96
    )
    
    
    1.37
    
    
    
    2.22
    
    
    
    1.32
    
    
    
    3.98Diluted
    
    
    (0.96
    )
    
    
    1.34
    
    
    
    2.16
    
    
    
    1.28
    
    
    
    3.86
 
 (a)
    
    The sum of these amounts may not equal the annual amount because of changes in
the average number of shares outstanding during the year.(b)
    
    Certain totals may not sum due to rounding.(c)
    
    Results include income tax provision (credit) of $115.7 million, ($12.9) million
and ($32.0) million related to repatriation of $1.1 billion from Canada to the U.S.
recognized in the first, second and fourth quarter, respectively.(d)
    
    Results include income tax provision (credit) of $1.54, ($0.17) and ($0.41) per
share related to repatriation of $1.1 billion from Canada to the U.S. recognized in the
first, second and fourth quarter, respectively. 77




---



##### 



LAFARGE NORTH AMERICA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Note 23 Subsequent Event
  78




---



##### 



Schedule II
 LAFARGE NORTH AMERICA INC. AND SUBSIDIARIES
CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS
 Additions
    
    DeductionsFrom Reserve forBalance at
    
    Charge to
    
    Purposes forBeginning of
    
    Cost and
    
    Which Reserve
    
    
    
    
    
    Balance at EndDescriptions
    
    Year
    
    Expenses(2)
    
    Was Created
    
    Other(1)
    
    of YearReserve applicable to current receivablesFor doubtful accounts:2005
    
    $
    19.8
    
    
    $
    3.6
    
    
    $
    (4.5
    )
    
    $
    0.3
    
    
    $
    19.22004
    
    $
    24.2
    
    
    $
    3.7
    
    
    $
    (8.5
    )
    
    $
    0.4
    
    
    $
    19.82003
    
    $
    23.7
    
    
    $
    2.1
    
    
    $
    (3.6
    )
    
    $
    2.0
    
    
    $
    24.2For cash and other discounts:2005
    
    $
    9.1
    
    
    $
    16.5
    
    
    $
    (16.1
    )
    
    $
    0.1
    
    
    $
    9.62004
    
    $
    7.1
    
    
    $
    22.0
    
    
    $
    (20.1
    )
    
    $
    0.1
    
    
    $
    9.12003
    
    $
    4.6
    
    
    $
    22.7
    
    
    $
    (20.7
    )
    
    $
    0.5
    
    
    $
    7.1
 
 (1)
    
    Primarily foreign currency translation adjustments.(2)
    
    Cash and other discounts are recorded as a reduction to sales. Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
  Item 9A. CONTROLS AND PROCEDURES
   Item 9B. OTHER INFORMATION
  79




---



##### 



PART III
 Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
  Item 11. EXECUTIVE COMPENSATION
  Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
 STOCKHOLDERMATTERS
  Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
  Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
  80




---



##### 



PART IV
 Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 (a)
    
    
    1.
    
    
    FINANCIAL STATEMENTS  The financial
statements listed in the accompanying
Index to Consolidated Financial
Statements and Financial Statement
Schedule are filed as part of this
Annual Report and such Index to
Consolidated Financial Statements and
Financial Statement Schedule is
incorporated herein by reference.2.
    
    
    FINANCIAL STATEMENT SCHEDULES  The financial statement schedule listed in
the accompanying Index to Consolidated Financial Statements and Financial Statement
Schedule is filed as part of this Annual Report and such Index to Consolidated
Financial Statements and Financial Statement Schedule is incorporated herein by
reference.
 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND
FINANCIAL STATEMENT SCHEDULE
 PageFinancial Report:Managements Report on Internal Control over Financial Reporting
    
    37Report of Independent Registered Public Accounting Firm, Ernst & Young LLP
    
    38Report of Independent Registered Public Accounting Firm, Ernst & Young LLP
    
    39Consolidated Financial Statements:Consolidated Balance Sheets as of December 31, 2005 and 2004
    
    40Consolidated Statements of Income for the Years Ended December 31, 2005, 2004 and 2003
    
    41Consolidated Statements of Shareholders Equity for the Years Ended December 31, 2005,
2004 and 2003
    
    42Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2005,
2004 and 2003
    
    43Consolidated Statements of Cash Flows for the Years Ended December 31, 2005, 2004 and 2003
    
    44Notes to Consolidated Financial Statements
    
    45Financial Statement Schedule:Schedule II  Consolidated Valuation and Qualifying Accounts for the Years Ended
December 31, 2005, 2004 and 2003
    
    79
  3.
    
    EXHIBITS  The exhibits listed on the accompanying List of Exhibits are filed
as part of this Annual Report and such List of Exhibits is incorporated herein by
reference.
 ExhibitNumber
    
    Description of Exhibits3.1
    
    Articles of Amendment and Restatement of the company, filed May 29, 1992, as
amended by the Articles of Amendment of the company dated May 8, 2000 [incorporated by
reference to Exhibit 3.1 to the Annual Report on Form 10-K filed by the company for the
fiscal year ended December 31, 2000].3.2
    
    Amended By-Laws of the company, amended on February 4, 2005 [incorporated by
reference to Exhibit 3.2 to the Annual Report on Form 10-K filed by the company for the
fiscal year ended December 31, 2004].
 81




---



##### 



ExhibitNumber
    
    Description of Exhibits4.1
    
    Form of Indenture dated as of October 1, 1989 between the company and Citibank,
N.A., as Trustee, relating to $250 million of debt securities of the company
[incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-3
(Registration No. 33-31333) of the company, filed with the Securities and Exchange
Commission on October 3, 1989].4.2
    
    Form of Fixed Rate Medium-Term Note of the company [incorporated by reference to
Exhibit 4.2 to the Registration Statement on Form S-3 (Registration No. 33-31333) of the
company, filed with the Securities and Exchange Commission on October 3, 1989].4.3
    
    Instruments with respect to long-term debt which do not exceed 10 percent of the
total assets of the company and its consolidated subsidiaries have not been filed. The
company agrees to furnish a copy of such instruments to the Commission upon request.*4.4
    
    Warrant to Purchase 4,400,000 Shares of Lafarge North America Inc. (f/k/a Lafarge
Corporation) Common Stock, Par Value $1.00 Per Share, In Favor of Kilmer Van Nostrand Co.
Limited.9.1
    
    Trust Agreement dated as of October 13, 1927 among Canada Cement Company Limited,
Montreal Trust Company, Henry L. Doble and Alban C. Bedford-Jones, as amended (composite
copy) [incorporated by reference to Exhibit 10.5 to the Registration Statement on Form
S-1 (Registration No. 2-82548) of the company, filed with the Securities and Exchange
Commission on March 21, 1983].9.2
    
    Amendment dated June 10, 1983 to Trust Agreement filed as Exhibit 9.1 [incorporated
by reference to Exhibit 9.2 to the Registration Statement of Form S-1 (Registration No.
2-86589) of the company, filed with the Securities and Exchange Commission on September
16, 1983].10.1
    
    Exchange Agency and Trust Agreement dated as of May 1, 1983 among the company,
Canada Cement Lafarge, Lafarge Coppee and Montreal Trust Company, as trustee
[incorporated by reference to Exhibit 10.1 to Amendment No. 1 to the Registration
Statement on Form S-1 (Registration No. 2-82548) of the company, filed with the
Securities and Exchange Commission on May 5, 1983]. Canada Cement Lafarge changed its
name in 1988 to Lafarge Canada Inc. Lafarge Coppee changed its name in 1995 to Lafarge
S.A.10.2
    
    Guarantee Agreement dated as of May 1, 1983 between the company and Canada Cement
Lafarge [incorporated by reference to Exhibit 10.2 to Amendment No. 1 to the Registration
Statement of Form S-1 (Registration No. 2-82548) of the company, filed with the
Securities and Exchange Commission on May 5, 1983].10.3
    
    Special Surface Lease dated as of August 1, 1954 between the Province of Alberta
and Canada Cement Lafarge, as amended [incorporated by reference to Exhibit 10.3 to the
Registration Statement on Form S-1 (Registration No. 2-82548) of the company, filed with
the Securities and Exchange Commission on March 21, 1983].10.4
    
    1993 Stock Option Plan of the company, as amended and restated February 7, 1995
[incorporated by reference to Exhibit 10.5 to the Annual Report on Form 10-K filed by the
company for the fiscal year ended December 31, 1997].10.5
    
    Optional Stock Dividend Plan of the company dated September 1999 [incorporated by
reference to Exhibit 10.7 to the Annual Report on Form 10-K filed by the company for the
fiscal year ended December 31, 2000].10.6
    
    Director Fee Deferral Plan of General Portland, assumed by the company on January
29, 1988 [incorporated by reference to Exhibit 10(g) to the Annual Report on Form 10-K
filed by General Portland for the fiscal year ended December 31, 1980].10.7
    
    Control Option Agreement dated as of November 1, 2003 between Lafarge North America
Inc. and Lafarge S.A. [incorporated by reference to Exhibit 10.9 to the Annual Report on
Form 10-K filed by the company for the fiscal year ended December 31, 2003].10.8
    
    Deferred Compensation Program of Canada Cement Lafarge [incorporated by reference
to Exhibit 10.57 to Amendment No. 1 to the Registration Statement on Form S-1
(Registration No. 2-86589) of the company, filed with the Securities and Exchange
Commission on November 23, 1983].10.9
    
    Agreement dated November 8, 1983 between Canada Cement Lafarge and Standard
Industries Ltd. [incorporated by reference to Exhibit 10.58 to Amendment No. 1 to the
Registration Statement on Form S-1 (Registration No. 2-86589) of the company, filed with
the Securities and Exchange Commission on November 23, 1983].10.10
    
    Stock Purchase Agreement dated September 17, 1986 between the company and Lafarge
Coppee, S.A. [incorporated by reference to Exhibit B to our report on Form 10-Q for the
quarter ended September 30, 1986].
 82




---



##### 



ExhibitNumber
    
    Description of Exhibits10.11
    
    Cost Sharing Agreement dated December 2, 1988 between Lafarge Coppee, LCI and the
company relating to expenses for research and development, strategic planning and human
resources and communication techniques [incorporated by reference to Exhibit 10.42 to the
Annual Report on Form 10-K filed by the company for the fiscal year ended December 31,
1988].10.12
    
    Royalty Agreement dated December 2, 1988 between Lafarge Coppee, LCI and the
company relating to access to the reputation, logo and trademarks of Lafarge Coppee
[incorporated by reference to Exhibit 10.43 to the Annual Report on Form 10-K filed by
the company for the fiscal year ended December 31, 1988].10.13
    
    Amendment dated January 1, 1993 to Royalty Agreement filed as Exhibit 10.14
[incorporated by reference to Exhibit 10.21 to the Annual Report on Form 10-K filed by
the company for the fiscal year ended December 31, 1992].10.14
    
    Reimbursement Agreement dated January 1, 1990 between Lafarge Coppee and the
company relating to expenses for Strategic Planning and Communication techniques
[incorporated by reference to Exhibit 10.41 to the Annual Report on Form 10-K filed by
the company for the fiscal year ended December 31, 1990].10.15
    
    Amendment dated September 13, 1991 to Cost Sharing Agreement filed as Exhibit
10.13 [incorporated by reference to Exhibit 10.31 to the Annual Report on Form 10-K filed
by the company for the fiscal year ended December 31, 1994].10.16
    
    Receivables Purchase Agreement dated as of October 13, 2000 among Sierra Bay
Receivables, Inc. as Seller, Lafarge North America, as Initial Servicer, Blue Ridge Asset
Funding Corporation, the Liquidity Banks from time to time party hereto and Wachovia
Bank, N.A. as Agent [incorporated by reference to Exhibit 10.1 to the Quarterly Report on
Form 10-Q filed by the company for the fiscal quarter ended September 30, 2000].10.17
    
    Receivables Sale Agreement dated as of October 13, 2000 among Lafarge North
America and certain of its Subsidiaries, as Originators, and Sierra Bay Receivables, Inc.
as Buyer [incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q
filed by the company for the fiscal quarter ended September 30, 2000].10.18
    
    Cost Sharing Agreement dated January 2, 1996 between Lafarge Materiaux de
Specialties and the company related to costs of a new unit established for researching
potential profitable markets for their respective products in North America [incorporated
by reference to Exhibit 10.21 to the Annual Report on Form 10-K filed by the company for
the fiscal year ended December 31, 1996].10.19
    
    Marketing and Technical Assistance Agreement dated October 1, 1996 between Lafarge
S.A. and the company related to research and development, marketing, strategic planning,
human resources and communication techniques in relation to gypsum activities
[incorporated by reference to Exhibit 10.22 to the Annual Report on Form 10-K filed by the
company for the fiscal year ended December 31, 1996].10.20
    
    1998 Stock Option Plan of the company [incorporated by reference to Exhibit 4.1 to
the Registration Statement on Form S-8 (Regulation No. 333-65897) of the company, filed
with the Securities and Exchange Commission on October 20, 1998].10.21
    
    Nonemployee Director Retirement Plan of the company, as amended [incorporated by
reference to Exhibit 10.26 to the Annual Report on Form 10-K filed by the company for the
fiscal year ended December 31, 1998].10.22
    
    Non-Employee Directors Deferred Compensation Plan Cash or Phantom Stock Investment
Options [incorporated by reference to Exhibit 10.27 to the Annual Report on Form 10-K
filed by the company for the fiscal year ended December 31, 2000].10.23
    
    Commercial Paper Dealer Agreement dated as of March 2, 2001 between Lafarge North
America and Salomon Smith Barney Inc. concerning notes to be issued pursuant to an Issuing
and Paying Agency Agreement dated as of March 2, 2001 between Lafarge North America and
Citibank, N.A. [incorporated by reference to Exhibit 10.28 to the Annual Report on Form
10-K filed by the company for the fiscal year ended December 31, 2000].10.24
    
    Commercial Paper Dealer agreement dated as of March 2, 2001 between Lafarge North
America and SunTrust Bank concerning notes to be issued pursuant to an Issuing and Paying
Agency Agreement dated as of March 2, 2001 between Lafarge North America and Citibank N.A.
[incorporated by reference to Exhibit 10.29 to the Annual Report on Form 10-K filed by the
company for the fiscal year ended December 31, 2000].10.25
    
    Management Agreement dated as of July 11, 2001, by and among Lafarge Corporation,
Lafarge S.A. and Blue Circle North America [incorporated by reference to Exhibit 10.1 to
our report on Form 10-Q for the quarter ended June 30, 2001].
 83




---



##### 



ExhibitNumber
    
    Description of Exhibits10.26
    
    Supplemental Agreement Regarding Employees and Employee Benefits dated as of
December 21, 2001 by and among Lafarge North America Inc., Lafarge S.A. and Blue Circle
North America. [incorporated by reference to Exhibit 10.34 to the Annual Report on Form
10-K filed by the company for the fiscal year ended December 31, 2001].10.27
    
    Lafarge North America Inc. 2002 Stock Option Plan, as amended [incorporated by
reference to Exhibit 10.1 to our Report on Form 10-Q for the quarter ended March 31,
2002].10.28
    
    Lafarge North America Inc. 2005 Stock Incentive Plan [Incorporated by reference to
Exhibit 4.1 to the Registration Statement on Form S-8 (Registration No. 333-124407) of
the company, filed with the Securities and Exchange Commission on April 28, 2005].10.29
    
    Lafarge North America Inc. Employee Stock Purchase Plan, as amended and restated
June 1, 2005 [Incorporated by reference to Exhibit 4.1 to the Registration Statement on
Form S-8 (Registration No. 333-124409) of the company, filed with the Securities and
Exchange Commission on April 28, 2005].*10.30
    
    Amendment No. 1 dated June 1, 2005
to the Lafarge North America Inc. Employee Stock Purchase Plan.10.31
    
    Five Year Credit Agreement dated as of September 12, 2005 by and among Lafarge
North America Inc. and of its subsidiaries, as borrowers, Citibank, N.A., as the
Administrative Agent, Wachovia Bank, National Association, as Syndication Agent,
CitiGroup Global Markets Inc., and Wachovia Securities Inc., as the Joint Lead Arrangers
and Joint Book Runners, and certain other lenders party thereto [incorporated by
reference to Exhibit 10.1 to the Current Report on Form 8-K dated September 12, 2005 and
filed with the SEC on September 14, 2005].10.32
    
    Amended and Restated Management Agreement effective as of January 1, 2006 by and
among Lafarge North America Inc., Lafarge S.A. and Blue Circle North America
[incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K dated
September 29, 2005 and filed with the SEC on October 3, 2005].*10.33
    
    Lafarge North America Inc. Deferred Compensation/Phantom Stock Plan & Thrift Savings
Restoration Plan Effective November 30, 2005*10.34
    
    Supplemental Executive Retirement
Plan of Lafarge Canada Inc. as amended and restated as of October 31,
2001.*10.35
    
    Lafarge North America Inc.
Supplemental Executive Retirement Plan as amended and restated as of
January 1, 2002.*10.36
    
    Lafarge Corporation Supplemental
Executive Retirement Plan Trust dated December 30, 1996.18
    
    Letter regarding change in accounting principle [incorporated by reference to
Exhibit 18 to the Annual Report on Form 10-K filed by the company for the fiscal year
ended December 31, 2004].*21
    
    Subsidiaries of the company.*23
    
    Consent of Ernst & Young LLP, independent registered public accounting firm.*31.1
    
    Certification of Chief Executive Officer required by Section 302 of the Sarbanes-Oxley Act of 2002.*31.2
    
    Certification of Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act of 2002.*32.1
    
    Certification of Chief Executive Officer required by Section 906 of the Sarbanes-Oxley Act of 2002.*32.2
    
    Certification of Chief Financial Officer required by Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Filed herewith 84




---



##### 



SIGNATURES
  LAFARGE NORTH AMERICA INC.By:
    /s/ ERIC C. OLSENEric C. OlsenDate:         March 1, 2006
    
    Executive Vice President and
          Chief Financial Officer  Signature
    
    Title
    
    Date/s/ PHILIPPE R. ROLLIER
Philippe R. Rollier
    
    President and Chief Executive
Officer and Director
    
    March 1, 2006/s/ ERIC C. OLSEN
Eric C. Olsen
    
    Executive Vice President and
Chief Financial Officer
    
    March 1, 2006/s/ JAMES W. BACHMANN
    
    Senior Vice President and
Controller
    
    March 1, 2006James W. Bachmann/s/ BERTRAND P. COLLOMB
    
    Chairman of the Board
    
    March 1, 2006Bertrand P. Collomb/s/ BERNARD L. KASRIEL
    
    Vice Chairman of the Board
    
    March 1, 2006Bernard L. Kasriel/s/ MARSHALL A. COHEN
    
    Director
    
    March 1, 2006Marshall A. Cohen/s/ PHILIPPE P. DAUMAN
    
    Director
    
    March 1, 2006Philippe P. Dauman
 85




---



##### 



Signature
    
    Title
    
    Date/s/ BRUNO LAFONT
    
    Director
    
    March 1, 2006Bruno Lafont/s/ CLAUDINE B. MALONE
    
    Director
    
    March 1, 2006Claudine B. Malone/s/ BLYTHE J. McGARVIE
    
    Director
    
    March 1, 2006Blythe J. McGarvie/s/ JAMES M. MICALI
    
    Director
    
    March 1, 2006James M. Micali/s/ ROBERT W. MURDOCH
    
    Director
    
    March 1, 2006Robert W. Murdoch/s/ BERTIN F. NADEAU
    
    Director
    
    March 1, 2006Bertin F. Nadeau/s/ JOHN D. REDFERN
    
    Director
    
    March 1, 2006John D. Redfern/s/ MICHEL ROSE
    
    Director
    
    March 1, 2006Michel Rose/s/ LAWRENCE M. TANENBAUM
    
    Director
    
    March 1, 2006Lawrence M. Tanenbaum/s/ GERALD H. TAYLOR
    
    Director
    
    March 1, 2006Gerald H. Taylor
 86