building a STRONGER foundation - Cemex

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CEMEX, S.A.B. DE C.V. AND SUBSIDIARIES SELECTED CONSOLIDATED FINANCIAL INFORMATION As of and for the year ended December 31, 2006 2007 2008 2009 2010 (in millions of Pesos, except ratios and share and per share amounts) Statement of Operations Information: Net sales.............................................................................. Ps 213,767 Ps 228,152 Ps 225,665 Ps 197,801 Ps 178,260 Cost of sales(1) ................................................................... (136,447) (151,439) (153,965) (139,672) (128,307) Gross profit ......................................................................... 77,320 76,713 71,700 58,129 49,953 Operating expenses ............................................................. (42,815) (45,103) (45,612) (42,289) (39,110) Operating income................................................................ 34,505 31,610 26,088 15,840 10,843 Other expense, net(2).......................................................... (580) (2,984) (21,403) (5,529) (6,672) Comprehensive financing result(3)..................................... (505) 1,018 (28,326) (15,106) (15,627) Equity in income of associates............................................ 1,425 1,487 869 154 (524) Income (loss) before income tax......................................... 34,845 31,131 (22,772) (4,641) (11,980) Discontinued operations(4)................................................. — 288 2,097 (4,276) — Non-controlling net income ................................................ 1,292 837 45 240 27 Controlling interest net income (loss)................................. 27,855 26,108 2,278 1,409 (16,516) Basic earnings (loss) per share(5)(6)(7).............................. 1.29 1.17 0.09 0.05 (0.55) Diluted earnings (loss) per share(5)(6)(7)........................... 1.29 1.17 0.09 0.05 — Dividends per share(5)(8)(9)............................................... 0.28 0.29 — — — Number of shares outstanding(5)(10) ................................. 21,987 22,297 22,985 25,643 29,975 Balance Sheet Information: Cash and temporary investments ........................................ 18,494 8,108 12,900 14,104 8,354 Property, machinery and equipment, net............................. 201,425 250,015 270,281 258,863 231,458 Total assets.......................................................................... 351,083 542,314 623,622 582,286 515,097 Short-term debt ................................................................... 14,657 36,160 95,269 7,393 5,637 Long-term debt ................................................................... 73,674 180,636 162,805 203,751 197,181 Non-controlling interest and perpetual debentures(11)....... 22,484 40,985 46,575 43,697 19,524 Total controlling stockholders’ equity ................................ 150,627 163,168 190,692 213,873 194,176 Other Financial Information: Net working capital(12) ...................................................... 10,389 15,108 16,358 12,380 9,051 Book value per share(5)(10)(13)......................................... 6.85 7.32 8.30 8.34 6.48 Operating margin ................................................................ 16.1% 13.9% 11.6% 8.0% 6.1% Operating EBITDA(14) ...................................................... 48,466 48,752 45,787 36,153 29,317 Ratio of Operating EBITDA to interest expense(14).......... 8.38 5.53 4.49 2.68 1.80 Investment in property, machinery and equipment, net ...... 16,067 21,779 20,511 6,655 4,726 Depreciation and amortization............................................ 13,961 17,666 19,699 20,313 18,474 Net cash flow provided by continuing operations(15) ........ 47,845 45,625 38,455 33,728 21,838 Basic earnings (loss) per CPO(5)(6)(7)............................... 3.87 3.51 0.30 0.18 (1.65) U.S. GAAP(16)(17): Statement of Operations Information: Net sales.............................................................................. Ps 203,660 Ps 226,742 Ps 224,804 Ps 197,801 Ps 178,260 Operating income (loss)(17) ............................................... 32,804 28,623 (42,233) 10,396 5,484 Controlling interest net income (loss)................................. 26,384 21,367 (61,886) (5,904) (7,170) Basic earnings (loss) per share............................................ 1.23 0.96 (2.31) (0.21) (0.23) Diluted earnings (loss) per share......................................... 1.23 0.96 (2.31) (0.21) (0.23) Balance Sheet Information: Total assets.......................................................................... 351,927 563,565 605,072 558,541 504,065 Perpetual debentures(11) .................................................... 14,037 33,470 41,495 39,859 16,310 (in millions of Pesos, except ratios and share and per share amounts) Long-term debt(11)............................................................. 69,375 164,497 162,810 203,602 197,068 Non-controlling interest...................................................... 7,581 8,010 5,105 3,865 3,334 Total controlling stockholders’ equity ................................ 153,239 172,217 151,294 165,539 151,538 22
(1) Cost of sales includes depreciation, as well as freight expenses of raw materials used in our producing plants. Our cost of sales excludes (i) expenses related to personnel and equipment comprising our selling network and those expenses related to warehousing at the points of sale, which are included as part of our administrative and selling expenses line item, and (ii) freight expenses of finished products from our producing plants to our points of sale and from our points of sale to our customers’ locations, which are all included as part of our distribution expenses line item, except for distribution or delivery expenses related to our ready-mix concrete business, which are included in our cost of sales. (2) Beginning in 2007, current and deferred Employees’ Statutory Profit Sharing (“ESPS”) is included within “Other expense, net.” Until December 31, 2006, ESPS was presented in a specific line item within the income taxes section of the statement of operations. The “Selected Consolidated Financial Information” data for 2006 were reclassified to conform to the presentation required beginning in 2007. (3) Comprehensive financing result includes financial expenses, financial income, results from financial instruments, including derivatives and marketable securities, foreign exchange result and monetary position result. See “Item 5 — Operating and Financial Review and Prospects.” (4) On October 1, 2009, we completed the sale of our Australian operations to a subsidiary of Holcim Ltd. for approximately $2.02 billion Australian Dollars (approximately U.S.$1.7 billion). “Discontinued operations” includes the results of our Australian operations, net of income tax, for the nine-month period ended September 30, 2009, the twelve-month period ended December 31, 2008 and the six-month period ended December 31, 2007. Accordingly, our financial information under MFRS and under U.S. GAAP presented above for the years ended December 31, 2007, 2008 and 2009 was restated to present our Australian operations as “Discontinued Operations.” See note 3B to our consolidated financial statements included elsewhere in this annual report. (5) Our capital stock consists of Series A shares and Series B shares. Each of our CPOs represents two Series A shares and one Series B share. As of December 31, 2010, approximately 97.8% of our outstanding share capital was represented by CPOs. Each of our ADSs represents ten CPOs. (6) Earnings (loss) per share are calculated based upon the weighted average number of shares outstanding during the year, as described in note 18 to our consolidated financial statements included elsewhere in this annual report. Basic earnings (loss) per CPO is determined by multiplying the basic earnings (loss) per share for each period by three (the number of shares underlying each CPO). Basic earnings (loss) per CPO is presented solely for the convenience of the reader and does not represent a measure under MFRS. (7) Basic earnings per share in the table above for the years ended December 31, 2007, 2008 and 2009 are comprised of basic earnings per share of continuing operations of Ps1.16, Ps0.01 and Ps0.21, respectively, and basic earnings per share of discontinued operations of Ps0.01 in 2007, Ps0.08 in 2008 and a loss per share of Ps0.16 in 2009. Likewise, diluted earnings per share for the years ended December 31, 2007, 2008 and 2009 are comprised of diluted earnings per share of continuing operations of Ps1.16, Ps0.01 and Ps0.21, respectively, and diluted basic earnings per share of discontinued operations of Ps0.01 in 2007, Ps0.08 in 2008 and a loss per share of discontinued operations of Ps0.16 in 2009. In 2006 and 2010, the results of operations and basic and diluted earnings (loss) per share are comprised solely of results from continuing operations. In 2010, diluted earnings per share are not presented because, pursuant to MFRS, diluted earnings per share shall not be disclosed when the result from continuing operations for the period is a loss. (8) Dividends declared at each year’s annual shareholders’ meeting are reflected as dividends of the preceding year. (9) In years prior to the 2008 fiscal year, our board of directors proposed, and our shareholders approved, dividend proposals, whereby our shareholders had a choice between stock dividends or cash dividends declared in respect of the prior year’s results, with the stock issuable to shareholders who receive the stock dividend being issued at a 20% discount from then current market prices. The dividends declared per share or per CPO in these years, expressed in Pesos, were as follows: 2006, Ps0.81 per CPO (or Ps0.27 per share); 2007, Ps0.84 per CPO (or Ps0.28 per share); and 2008, Ps0.87 per CPO (or Ps0.29 per share). As a result of dividend elections made by shareholders, in 2006, Ps161 million in cash was paid and approximately 212 million additional CPOs were issued in respect of dividends declared for the 2005 fiscal year; in 2007, Ps147 million in cash was paid and approximately 189 million additional CPOs were issued in respect of dividends declared for the 2006 fiscal year; and in 2008, Ps214 million in cash was paid and approximately 284 million additional CPOs were issued in respect of dividends declared for the 2007 fiscal year. For purposes of the table, dividends declared at each year’s annual shareholders’ meeting for each period are reflected as dividends for the preceding year. We did not declare a dividend for fiscal years 2008, 2009 and 2010. At our 2008, 2009 and 2010 annual shareholders’ meetings, held on April 23, 2009, April 23, 2010, and February 24, 2011, respectively, our shareholders approved recapitalizations of retained earnings. New CPOs issued pursuant to each of the recapitalizations were allocated to shareholders on a pro-rata basis. As a result, shares equivalent to approximately 334 million CPOs, approximately 384 million CPOs and approximately 401 million CPOs were allocated to shareholders on a pro-rata basis in connection with the 2008, 2009 and 2010 recapitalizations, respectively. In each case, CPO holders received one new CPO for each 25 CPOs held and ADS holders received one new ADS for each 25 ADSs held. There was no cash distribution and no entitlement to fractional shares. (10) Based upon the total number of shares outstanding at the end of each period, expressed in millions of shares, and includes shares subject to financial derivative transactions, but does not include shares held by our subsidiaries. 23
Page 1: CEMEX 2010 20F REPORT building a ST
Page 4 and 5: Securities registered or to be regi
Page 6 and 7: Qualitative and Quantitative Market
Page 9 and 10: INTRODUCTION CEMEX, S.A.B. de C.V.
Page 11 and 12: As a result of the foregoing transa
Page 13 and 14: In the U.S., the recession was long
Page 15 and 16: The Financing Agreement contains ev
Page 17 and 18: The Financing Agreement restricts u
Page 19 and 20: During 2009, we reduced the aggrega
Page 21 and 22: The instruments governing our debt
Page 23 and 24: On the legislative front, during th
Page 25 and 26: Our operations in South America, Ce
Page 27 and 28: the depositary to vote the CPOs und
Page 29: Beginning in 2008, MFRS B-10 has el
Page 33 and 34: Item 4 - Information on the Company
Page 35 and 36: As a condition to closing the RMC a
Page 37 and 38: Provide our customers with the best
Page 39 and 40: In connection with the implementati
Page 41 and 42: In 2010, as a result of our efforts
Page 43 and 44: In addition, we are one of the worl
Page 45 and 46: (2) Our cement raw materials operat
Page 47 and 48: Our Corporate Structure We are a ho
Page 49 and 50: Cement in Mexico is sold principall
Page 51 and 52: Aggregates. Our aggregates operatio
Page 53 and 54: Beginning on June 30, 2008, Ready M
Page 55 and 56: 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
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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
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January 1, 2008, however, under MFR
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foreign subsidiaries. These instrum
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Valuation reserves on accounts rece
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Stage 1. Communication to the organ
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Year Ended December 31, 2010 Compar
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Geographic Segment 89 Variations in
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United Kingdom Our domestic cement
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ended December 31, 2010, Africa and
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Operating Income. For the reasons m
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Our comprehensive financing result
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The following tables present select
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Mexico Our domestic cement sales vo
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As a result of the decreases in dom
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For the year ended December 31, 200
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South America, Central America and
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On August 14, 2009, we entered into
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As of December 31, 2010, we had U.S
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Our Perpetual Debentures As of Dece
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The Financing Agreement, as amended
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In 1999, CEMEX entered into an agre
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Our Equity Derivative Forward Contr
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As of December 31, 2009 and 2010, C
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In addition, we have entered into f
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Private Cash Tender Offer to Holder
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Name, Position (Age) Experience Jai
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Name, Position (Age) Experience Ram
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Tomás Milmo Santos (46) Has been a
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Set forth below are the names of th
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Consolidated ESOP Information Stock
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Item 7 - Major Shareholders and Rel
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The following table sets forth the
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Item 10 - Additional Information Ar
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exempt from registration pursuant t
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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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