building a STRONGER foundation - Cemex

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Geographic Segment Variations in Local Currency(1) 100 Approximate Currency Fluctuations, Net of Inflation Effects Operating Income For the Year Ended December 31, Variations in Mexican Pesos 2008 2009 (in millions of Pesos) North America Mexico ............................................................................ -2% — -2% Ps 14,254 Ps 13,965 United States(2)............................................................... N/A N/A N/A (461) (7,290) Europe Spain(3)........................................................................... -55% -6% -61% 4,325 1,667 United Kingdom.............................................................. +39% — +39% (1,411) (859) Germany.......................................................................... +18% +34% +52% 434 658 France.............................................................................. +24% +32% +56% 505 786 Rest of Europe(4) ............................................................ -59% +8% -51% 2,009 976 South/Central America and the Caribbean Venezuela........................................................................ — — — 958 — Colombia......................................................................... +13% +13% +26% 2,116 2,672 Rest of South/Central America and the Caribbean(5)..... -8% +20% +12% 2,481 2,784 Africa and Middle East Egypt............................................................................... +34% +25% +59% 2,176 3,465 Rest of Africa and the Middle East(6)............................. +20% +29% +49% 558 830 Asia Philippines....................................................................... +58% +31% +89% 528 996 Rest of Asia(7) ................................................................ +35% +44% +79% 57 102 Others(8) ......................................................................... -223% +122% -101% (2,441) (4,912) Consolidated operating income.................................... -39% Ps 26,088 Ps 15,840 N/A = Not Applicable (1) For purposes of a geographic segment consisting of a region, the net sales and operating income data in local currency terms for each individual country within the region are first translated into Dollar terms at the exchange rates in effect as of the end of the reporting period. Variations for a region represent the weighted average change in Dollar terms based on net sales and operating income for the region. (2) On June 15, 2009, we sold three quarries (located in Nebraska, Wyoming and Utah) and our 49% joint venture interest in the operations of a quarry located in Granite Canyon, Wyoming. (3) On December 26, 2008, we sold our Canary Islands operations (consisting of cement and ready-mix concrete assets in Tenerife and 50% of the shares in two joint-ventures, Cementos Especiales de las Islas, S.A. (CEISA) and Inprocoi, S.L.). (4) Our Rest of Europe segment includes our operations in Croatia, Poland, Latvia, the Czech Republic, Ireland, Austria, Hungary, Finland, Norway and Sweden, as well as our other European assets. (5) Our Rest of South/Central America and the Caribbean segment includes our operations in Costa Rica, Panama, the Dominican Republic, Nicaragua, Puerto Rico, Jamaica and Argentina and our trading activities in the Caribbean. (6) Our Rest of Africa and the Middle East segment includes our operations in the UAE and Israel. (7) Our Rest of Asia segment includes our operations in Malaysia, Thailand, Bangladesh, China and other assets in the Asian region. (8) Our Others segment includes our worldwide maritime trade operations, our information solutions company and other minor subsidiaries. Net Sales. Our consolidated net sales decreased approximately 12%, from Ps225.7 billion in 2008 to Ps197.8 billion in 2009. The decrease in net sales was primarily attributable to lower volumes and prices mainly from our operations in the United States and Spain. The infrastructure sector continues to be the main driver of demand in most of our markets. Our consolidated statement of operations present the results of our operations in Australia, net of income tax, for the nine-month period ended September 30, 2009 and the twelve-month period ended December 31, 2008 in a single line item as “Discontinued operations.” Accordingly, our consolidated statement of cash flows for the year ended December 31, 2008 was reclassified. See note 3B to our consolidated financial statements included elsewhere in this annual report. Set forth below is a quantitative and qualitative analysis of the effects of the various factors affecting our net sales on a geographic segment basis.
Mexico Our domestic cement sales volumes from our operations in Mexico decreased approximately 4% in 2009 compared to 2008, and ready-mix concrete sales volumes decreased approximately 14% during the same period. The residential and infrastructure sectors continue to be the main drivers of cement demand in the country. In 2009, activity from other construction sectors softened as they were affected by the overall challenging macroeconomic environment. Our cement export volumes from our operations in Mexico, which represented approximately 3% of our Mexican cement sales volumes in 2009, decreased approximately 61% in 2009 compared to 2008, primarily as a result of lower export volumes to the United States. Of our total cement export volumes during 2009 from our operations in Mexico, 19% was shipped to the United States, 71% to Central America and the Caribbean and 10% to South America. Our net sales from our operations in Mexico represented approximately 20% of our total net sales in 2009, in Peso terms, before eliminations resulting from consolidation. Our average domestic sales price of cement from our operations in Mexico increased approximately 2% in Peso terms in 2009 compared to 2008, and the average sales price of ready-mix concrete increased approximately 1% in Peso terms over the same period. For the year ended December 31, 2009, cement represented approximately 56%, ready-mix concrete approximately 23% and our aggregates and other businesses approximately 21% of our net sales for our operations in Mexico before intra-sector eliminations within the segment and before eliminations from consolidation, as applicable. As a result of the decreases in domestic cement and ready-mix concrete sales volumes, partially offset by the increase in domestic cement and ready-mix concrete sales prices, our Mexican net sales, in Peso terms, declined slightly in 2009 compared to 2008. United States Our domestic cement sales volumes from our operations in the U.S., which include cement purchased from our other operations, decreased approximately 32% in 2009 compared to 2008, and ready-mix concrete sales volumes decreased approximately 38% during the same period. The decreases in our domestic cement and ready-mix concrete sales volumes from our operations in the U.S. resulted primarily from significantly weaker demand in all our U.S. markets, as decreased confidence and lower activity across all sectors resulted in lower volumes. Overall construction activity weakened further as economic conditions continued to worsen and credit availability became extremely scarce. Our operations in the United States represented approximately 19% of our total net sales in 2009 in Peso terms, before eliminations resulting from consolidation. Our average sales price of domestic cement from our operations in the U.S. decreased approximately 6% in Dollar terms in 2009 compared to 2008, and the average sales price of ready-mix concrete decreased approximately 8% in Dollar terms over the same period. The decreases in average prices were primarily due to decreased demand as a result of recessionary economic conditions and tight credit availability. For the year ended December 31, 2009, cement represented approximately 29%, ready-mix concrete approximately 29% and our aggregates and other businesses approximately 42% of our net sales for our operations in the United States before intra-sector eliminations within the segment and before eliminations from consolidation, as applicable. As a result of the decreases in cement and ready-mix concrete sales volumes and average sales prices, net sales from our operations in the United States, in Dollar terms, decreased approximately 40% in 2009 compared to 2008. The decrease in net sales in the United States during 2009 compared to 2008 resulted from weaker demand in our U.S. markets, the recessionary economic conditions and tight credit availability. Spain Our domestic cement sales volumes from our operations in Spain decreased approximately 40% in 2009 compared to 2008, while ready-mix concrete sales volumes decreased approximately 44% during the same period. The decreases in domestic cement and ready-mix concrete sales volumes were the result of the country’s continued challenging economic environment. Overall economic activity continues to worsen and has negatively affected overall cement demand. No particular segment in the construction sector is experiencing growth. Additionally, infrastructure projects continue to be on hold given the lack of liquidity and overall tighter credit conditions. Our 2009 net sales from our operations in Spain represented approximately 5% of our total net sales in Peso terms, before eliminations resulting from consolidation. Our cement export volumes from our operations in Spain, which represented approximately 14% of our cement sales volumes in 2009 from our operations in Spain, increased by approximately 77% in 2009 compared to 2008, primarily as a result of lower domestic sales and higher export volumes to Africa. Of our total cement export volumes in 2009 from our operations in Spain, 7% was shipped to Europe and the Middle East, 90% to Africa, and 3% to other countries. Our average domestic sales price of cement from our operations in Spain decreased approximately 10% in Euro terms in 2009 compared to 2008, and the average price of ready-mix concrete decreased approximately 8% in Euro terms over the same period. For the year ended December 31, 2009, cement represented approximately 59%, ready-mix concrete approximately 22% and our aggregates and other businesses approximately 19% of net sales for our operations in Spain before intra-sector eliminations within the segment and before eliminations from consolidation, as applicable. As a result of the decreases in domestic cement sales volumes and ready-mix concrete sales volumes, our net sales from our operations in Spain, in Euro terms, decreased approximately 44% in 2009 compared to 2008. 101
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CEMEX 2010 20F REPORT building a ST
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Securities registered or to be regi
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Qualitative and Quantitative Market
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INTRODUCTION CEMEX, S.A.B. de C.V.
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As a result of the foregoing transa
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In the U.S., the recession was long
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The Financing Agreement contains ev
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The Financing Agreement restricts u
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During 2009, we reduced the aggrega
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The instruments governing our debt
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On the legislative front, during th
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Our operations in South America, Ce
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the depositary to vote the CPOs und
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Beginning in 2008, MFRS B-10 has el
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(1) Cost of sales includes deprecia
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Item 4 - Information on the Company
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As a condition to closing the RMC a
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Provide our customers with the best
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In connection with the implementati
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In 2010, as a result of our efforts
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In addition, we are one of the worl
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(2) Our cement raw materials operat
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Our Corporate Structure We are a ho
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Cement in Mexico is sold principall
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Aggregates. Our aggregates operatio
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Beginning on June 30, 2008, Ready M
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Products and Distribution Channels
Page 57 and 58: On December 26, 2008, we sold our C
Page 59 and 60: Ready-Mix Concrete. Our ready-mix c
Page 61 and 62: Aggregates. In 2010, we reduced fix
Page 63 and 64: Our Operating Network in France Des
Page 65 and 66: In April 2006, we initiated an expa
Page 67 and 68: Our Operating Network in Colombia P
Page 69 and 70: Our Operations in Nicaragua Overvie
Page 71 and 72: Our Operations in the United Arab E
Page 73 and 74: Our Trading Operations In 2010, we
Page 75 and 76: On December 10, 2010, after receivi
Page 77 and 78: To prevent, control and remediate e
Page 79 and 80: As required by the directive, each
Page 81 and 82: For the 2010 fiscal year, CEMEX wil
Page 83 and 84: Separately, the government of Venez
Page 85 and 86: and CEMEX was required by August 11
Page 87 and 88: January 1, 2008, however, under MFR
Page 89 and 90: foreign subsidiaries. These instrum
Page 91 and 92: Valuation reserves on accounts rece
Page 93 and 94: Stage 1. Communication to the organ
Page 95 and 96: Year Ended December 31, 2010 Compar
Page 97 and 98: Geographic Segment 89 Variations in
Page 99 and 100: United Kingdom Our domestic cement
Page 101 and 102: ended December 31, 2010, Africa and
Page 103 and 104: Operating Income. For the reasons m
Page 105 and 106: Our comprehensive financing result
Page 107: The following tables present select
Page 111 and 112: As a result of the decreases in dom
Page 113 and 114: For the year ended December 31, 200
Page 115 and 116: South America, Central America and
Page 121 and 122: On August 14, 2009, we entered into
Page 123 and 124: As of December 31, 2010, we had U.S
Page 125 and 126: Our Perpetual Debentures As of Dece
Page 127 and 128: The Financing Agreement, as amended
Page 129 and 130: In 1999, CEMEX entered into an agre
Page 131 and 132: Our Equity Derivative Forward Contr
Page 133 and 134: As of December 31, 2009 and 2010, C
Page 135 and 136: In addition, we have entered into f
Page 137 and 138: Private Cash Tender Offer to Holder
Page 139 and 140: Name, Position (Age) Experience Jai
Page 141 and 142: Name, Position (Age) Experience Ram
Page 143 and 144: Tomás Milmo Santos (46) Has been a
Page 145 and 146: Set forth below are the names of th
Page 147 and 148: Consolidated ESOP Information Stock
Page 149 and 150: Item 7 - Major Shareholders and Rel
Page 151 and 152: The following table sets forth the
Page 153 and 154: Item 10 - Additional Information Ar
Page 155 and 156: exempt from registration pursuant t
Page 157 and 158: Our board of directors shall prepar
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Under our by-laws, shareholders rep
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On June 2, 2008, CEMEX, through one
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Exchange Controls See “Item 3 —
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The gross amount of any dividends p
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We have agreed to pay some of the o
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Item 16G - Corporate Governance Sec
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Item 17 - Financial Statements Not
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4.17 Debenture Purchase Agreement,
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4.27.3 Amendment No. 1 to U.S.$525,
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4.41.4 Accession Letter, dated Janu
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4.57 Amended and Restated Dealer Ma
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SIGNATURES CEMEX, S.A.B. de C.V. he
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The Board of Directors and Stockhol
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CEMEX, S.A.B. DE C.V. AND SUBSIDIAR
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1. DESCRIPTION OF BUSINESS CEMEX, S
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C) USE OF ESTIMATES CEMEX, S.A.B. D
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J) IMPAIRMENT OF LONG LIVED ASSETS
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Contingencies and commitments (note
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V) CONCENTRATION OF CREDIT CEMEX, S
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Net sales by product and geographic
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4. CASH AND INVESTMENTS CEMEX, S.A.
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II. Equity forwards in third party
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14. EMPLOYEE BENEFITS Defined contr
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17. EXECUTIVE STOCK-BASED COMPENSAT
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18. EARNINGS (LOSS) PER SHARE CEMEX
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D) CONTRACTUAL OBLIGATIONS CEMEX, S
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Reconciliation of stockholders’ e
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(k) Other U.S. GAAP Adjustments Def
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