building a STRONGER foundation - Cemex

Related Party Transactions
Bernardo Quintana Isaac, a member of our board of directors and chairman of the board of directors of Grupo ICA, S.A.B. de
C.V., or Grupo ICA, a large Mexican construction company. In the ordinary course of business, we extend financing to Grupo ICA for
varying amounts at market rates, as we do for our other customers.
Jose Antonio Fernandez Carbajal, a member of our board of directors, is president and chief executive officer of Fomento
Económico Mexicano S.A.B. de C.V. or FEMSA, a large multinational beverage company. In the ordinary course of business, we pay
and receive various amounts to and from FEMSA for products and services for varying amounts on market terms. Mr. Fernandez
Carbajal is also vice-chairman of the board of Consejo de Enseñanza e Investigación Superior, A.C. (the managing entity of ITESM,)
of which Lorenzo H. Zambrano, our chief executive officer and chairman of our board of directors, is chairman of the board, and
which in 2009 and 2010 received contributions by CEMEX for amounts that were not material.
Rafael Rangel Sostmann, a member of our board of directors, is the Dean of ITESM.
During 2010 and as of May 1, 2011, we did not have any outstanding loans to any of our directors or members of senior
management.
Item 8 - Financial Information
Consolidated Financial Statements and Other Financial Information
See “Item 18 — Financial Statements” and “Index to Consolidated Financial Statements.”
Legal Proceedings
See “Item 4 — Information on the Company — Regulatory Matters and Legal Proceedings.”
Dividends
A declaration of any dividend is made by our shareholders at a general ordinary meeting. Any dividend declaration is usually
based upon the recommendation of our board of directors. However, the shareholders are not obligated to approve the board’s
recommendation. We may only pay dividends from retained earnings included in financial statements that have been approved by our
shareholders and after all losses have been paid for, a legal reserve equal to 5% of our paid-in capital has been created and our
shareholders have approved the relevant dividend payment. According to 1999 Mexican tax reforms, all shareholders, excluding
Mexican corporations, that receive a dividend in cash or in any other form are subject to a withholding tax. See “Item 10 —
Additional Information — Taxation — Mexican Tax Considerations.” Since we conduct our operations through our subsidiaries, we
have no significant assets of our own except for our investments in those subsidiaries. Consequently, our ability to pay dividends to
our shareholders is dependent upon our ability to receive funds from our subsidiaries in the form of dividends, management fees, or
otherwise. The Financing Agreement effectively prohibits us from declaring and paying cash dividends or making other cash
distributions to our shareholders. See “Item 3 — Key Information — Risk Factors — Our ability to repay debt and pay dividends
depends on our subsidiaries’ ability to transfer income and dividends to us.”
The recommendation of our board of directors as to whether to pay and the amount of any annual dividends has been and will
continue to be, in absence of contractual restrictions to pay or declare dividends, based upon, among other things, earnings, cash flow,
capital requirements, contractual restrictions, and our financial condition and other relevant factors.
Owners of ADSs on the applicable record date will be entitled to receive any dividends payable in respect of the A shares and
the B shares underlying the CPOs represented by those ADSs; however, as permitted by the deposit agreement pursuant to which our
ADSs are issued, we may instruct the ADS depositary not to extend the option to elect to receive cash in lieu of the stock dividend to
the holders of ADSs, as we did in connection with the dividend for the 2006 and 2007 fiscal years, as described below. The ADS
depositary will fix a record date for the holders of ADSs in respect of each dividend distribution. Unless otherwise stated, the ADS
depositary has agreed to convert cash dividends received by it in respect of the A shares and the B shares underlying the CPOs
represented by ADSs from Pesos into Dollars and, after deduction or after payment of expenses of the ADS depositary, to pay those
dividends to holders of ADSs in Dollars. We cannot assure holders of our ADSs that the ADS depositary will be able to convert
dividends received in Pesos into Dollars.
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