building a STRONGER foundation - Cemex

and CEMEX was required by August 11, 2009 to invite the relevant shareholders to make claims for the compensation ordered by the
Panel by August 11, 2009 unless the shareholder was able to demonstrate to the Australian Securities & Investments Commission that
special circumstances applied. As of December 31, 2010, CEMEX had deposited a total of approximately $16.62 million Australian
Dollars (approximately U.S.$18.2 million as of April 30, 2011, based on an exchange rate of $0.9114 Australian Dollars to U.S.$1.00)
into a bank account against which payments to claimants have been made (“Special Purpose Account”). As of December 31, 2010,
CEMEX has made payouts for $16.41 million Australian Dollars (approximately U.S.$18.0 million as of April 30, 2011, based on an
exchange rate of $0.9114 Australian Dollars to U.S.$1.00) to successful claimants. As all deadlines in relation to making claims under
the Panel’s orders have expired, CEMEX has no further liability or potential liability to make payments under those orders. CEMEX
has withdrawn the remaining balance from the Special Purpose Account, leaving only the amount to account for checks still
unpresented.
Texas General Land Office Litigation. The Texas General Land Office (“GLO”) alleged that CEMEX Construction Materials
South, LLC failed to pay approximately U.S.$550 million in royalties related to mining by CEMEX and its predecessors since the
1940s on lands that, when transferred originally by the State of Texas, contained reservation of mineral rights. The petition filed by the
GLO also states that the State is seeking injunctive relief, although the State has not acted on such request. On December 17, 2009, the
Texas court handling this matter granted CEMEX’s motion for summary judgment finding that the GLO’s claims had no merit. The
GLO filed a Motion for Reconsideration that was denied by the court. The court separated the parties’ ancillary claims, including
CEMEX’s counter claims and third party claims against Texas Land Commissioner Jerry Patterson and the State’s trespass to try title
claim against CEMEX, from the case’s central claims of breach of contract, conversion and injunction, holding that these ancillary
claims should be held in abeyance until resolution of the GLO’s appeal. The GLO filed its appeal on March 25, 2010. Both parties
submitted briefs and the Court of Appeals heard oral arguments in this matter on May 3, 2011. It is not certain when the Court will
issue its ruling. CEMEX will continue to vigorously defend the claim.
Strabag Arbitration. Following an auction process, we (through our subsidiary RMC Holding B.V.) entered into a share
purchase agreement, dated July 30, 2008 (the “SPA”), to sell our operations in Austria (consisting of 26 aggregates and 41 ready-mix
concrete plants) and Hungary (consisting of 6 aggregates, 29 ready-mix concrete and 4 paving stone plants) to Strabag SE, one of
Europe’s leading construction and building materials groups (“Strabag”), for €310 million (approximately U.S.$459.6 million as of
April 30, 2011, based on an exchange rate of €0.6745 to U.S.$1.00). On February 10, 2009, the Hungarian Competition Council
approved the sale of the Hungarian assets subject to the condition that Strabag sell the ready-mix concrete plant operating in
Salgótarján to a third party within the next year. On April 28, 2009, the Austrian Cartel Court (Kartellgericht) (the “ACC”) approved
the sale of the Austrian assets subject to the condition that Strabag sell to a third party several ready-mix concrete plants, including the
Nordbahnhof plant in Vienna. The Nordbahnhof plant had, however, already been dismantled by the time of the approval, so this
condition could not be satisfied. Contrary to our recommendation that a supplementary application should have been made to the
ACC, Strabag and the Austrian competition authority appealed the decision of the ACC. On July 1, 2009, Strabag gave notice of its
purported rescission of the SPA, arguing that the antitrust condition precedent under the SPA had not been satisfied before the
contractual cut-off date of June 30, 2009. On the same day, we notified Strabag that we considered their purported rescission invalid.
In the face of Strabag’s continued refusal to cooperate in making a supplementary application to the ACC, we rescinded the SPA with
effect from September 16, 2009. On October 19, 2009, we (through RMC Holding B.V.) filed a claim against Strabag before the
International Arbitration Court of the International Chamber of Commerce, requesting a declaration that Strabag’s rescission of the
SPA was invalid, that our rescission was lawful and effective and claiming damages in a substantial amount likely to exceed
€150 million (approximately U.S.$222.4 million as of April 30, 2011, based on an exchange rate of €0.6745 to U.S.$1.00). On
December 23, 2009, Strabag filed its answer to our request for arbitration asking the tribunal to dismiss the claim and also filed a
counterclaim for an amount of €800,000 (approximately U.S.$1.2 million as of April 30, 2011, based on an exchange rate of €0.6745
to U.S.$1.00) as damages and applied for security for costs in the amount of €1,000,000 (approximately U.S.$1.5 million as of
April 30, 2011, based on an exchange rate of €0.6745 to U.S.$1.00) in the form of an on-demand bank guarantee. The security for
costs application was withdrawn by Strabag on March 9, 2010. We consider Strabag’s counterclaim to be unfounded, and we will
continue to demand that Strabag respond to CEMEX for the damages caused by Strabag’s breach of contract. The arbitral tribunal was
constituted on February 16, 2010 and a first procedural hearing was held on March 23, 2010 at which the parties agreed on the terms
of reference and procedural rules in accordance with Article 18 of the ICC Rules of Arbitration. Pursuant to the procedural rules, on
June 30, 2010, we submitted our statement of claim and our list of witnesses. On October 29, 2010, Strabag submitted its statement of
defense and counterclaim. On January 14, 2011, we submitted our reply and answer to Strabag’s counterclaim. On March 7, 2011,
Strabag submitted its rejoinder. Pursuant to Article 21 of the ICC Rules, the evidentiary hearing took place from May 2 to May 9,
2011.
Colombia Water Use Litigation. On June 5, 2010, the District of Bogotá’s environmental secretary (Secretaría Distrital de
Ambiente de Bogotá) issued a temporary injunction suspending all mining activities at CEMEX Colombia’s El Tunjuelo quarry,
located in Bogotá, Colombia. As part of the temporary injunction, Holcim Colombia and Fundación San Antonio (local aggregates
producers which also have mining activities located in the same area as the El Tunjuelo quarry) have also been ordered to suspend
mining activities in that area. The District of Bogotá’s environmental secretary alleges that during the past 60 years, CEMEX
Colombia and the other companies have illegally changed the course of the Tunjuelo River, have used the percolating waters without
permission and have improperly used the edge of the river for mining activities. In connection with the temporary injunction, on
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