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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
/X/ Annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934 (No fee required, effective October 7, 1996)
For the fiscal year ended December 31, 2003
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Or
/_/ Transition report pursuant to Section 15(d) of the Securities
Exchange Act of 1934 (No fee required)
For the transition period from ________________ to __________________
Commission file number 1-14946
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A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
CEMEX, Inc. Savings and Investment Plan
for Union Employees
1200 Smith Street
Suite 2400
Houston, Texas 77002
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
CEMEX,S.A. de C.V.
Av. Ricardo Margain Zozaya #325
Colonia del Valle Campestre
Garza Garcia, Nuevo Leon
Mexico 66265
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CEMEX, INC. SAVINGS AND
INVESTMENT PLAN FOR
UNION EMPLOYEES
Financial Statements and
Supplemental Schedules
December 31, 2003 and 2002
(With Independent Auditors' Report Thereon)
CEMEX, INC. SAVINGS AND INVESTMENT PLAN
FOR UNION EMPLOYEES
Table of Contents
Page
----
Independent Auditors' Report 1
Financial Statements:
Statements of Net Assets Available for Benefits -
December 31, 2003 and 2002 2
Statement of Changes in Net Assets Available for Benefits -
Year Ended December 31, 2003 3
Notes to Financial Statements 4
Supplemental Schedule - Schedule H, Line 4(i) - Schedule of
Assets (Held at End of Year) - December 31, 2003 8
The following schedules required by the Department of Labor's Rules and
Regulations are omitted because of the absence of conditions under which they
are required:
Schedule G, Part I - Schedule of Loans or Fixed Income Obligations in
Default or Classified as Uncollectible
Schedule G, Part II - Schedule of Leases in Default or Classified as
Uncollectible
Schedule G, Part III - Nonexempt Transactions
Schedule H, Line 4(i) - Schedule of Assets (Acquired and Disposed of
Within the Plan Year)
Schedule H, Line 4(j) - Schedule of Reportable Transactions
[Letterhead of Mir Fox & Rodriguez, P.C.]
INDEPENDENT AUDITORS' REPORT
Participants and Administrator of
CEMEX, Inc. Savings and Investment Plan
for Union Employees:
We have audited the accompanying statements of net assets available for
benefits of the CEMEX, Inc. Savings and Investment Plan for Union Employees
(the Plan) as of December 31, 2003 and 2002, and the related statement of
changes in net assets available for benefits for the year ended December 31,
2003. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 2003 and 2002, and the changes in net assets available for
benefits for the year ended December 31, 2003, in conformity with accounting
principles generally accepted in the United States of America.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets
(held at end of year) is presented for the purpose of additional analysis and
is not a required part of the basic financial statements but is supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. This supplemental schedule is the responsibility of the Plan's
management. The supplemental schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ Mir Fox & Rodriguez
Houston, Texas
June 25, 2004
CEMEX, INC. SAVINGS AND INVESTMENT PLAN
FOR UNION EMPLOYEES
Statements of Net Assets Available for Benefits
December 31, 2003 and 2002
Assets 2003 2002
------ ---- ----
Investments, at fair value:
Mutual funds $ 1,315,532 2,617,636
Common collective trust fund 906,746 1,543,188
Common stock 315,291 301,484
Participant loans 175,554 218,259
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Total investments 2,713,123 4,680,567
Cash 2,486 23,512
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Total assets 2,715,609 4,704,079
Liabilities
Trades payable 2,462 23,468
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Net assets available for benefits $ 2,713,147 4,680,611
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See accompanying notes to financial statements.
CEMEX, INC. SAVINGS AND INVESTMENT PLAN
FOR UNION EMPLOYEES
Statement of Changes in Net Assets Available for Benefits
Year Ended December 31, 2003
Additions to net assets:
Participant contributions $ 726,311
Employer contributions 217,032
Net appreciation in fair value of mutual funds 516,502
Net appreciation in fair value of common stock 122,957
Investment income 142,999
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Total additions to net assets 1,725,801
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Deductions from net assets:
Transfer out of plan 3,676,704
Benefits paid to participants 15,393
Administrative fees and expenses 1,168
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Total deductions from net assets 3,693,265
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Net decrease in net assets available for benefits (1,967,464)
Net assets available for benefits:
Beginning of year 4,680,611
----------------
End of year $ 2,713,147
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See accompanying notes to financial statements.
CEMEX, INC. SAVINGS AND INVESTMENT PLAN
FOR UNION EMPLOYEES
Notes to Financial Statements
December 31, 2003 and 2002
1. Plan Description
General
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The CEMEX, Inc. Savings and Investment Plan for Union Employees (the Plan)
was adopted effective August 1, 1998 for the benefit of the union
employees of the Clinchfied, Georgia and Charlevoix, Michigan plants of
CEMEX, Inc. Effective September 1, 2003, the union employees of the
Charlevoix, Michigan plant ceased participating in the Plan and became
participants in the CEMEX, Inc. Savings Plan. In connection therewith,
assets of $3,676,704 were transferred from the Plan to the CEMEX, Inc.
Savings Plan during 2003.
The Plan is qualified under section 401(a) of the Internal Revenue Code
(IRC) as a defined contribution plan and is subject to the Employee
Retirement Income Security Act of 1974, as amended (ERISA). The following
is provided for general information purposes only. Participants should
refer to the Plan Agreement for a more complete description of the Plan's
provisions.
Eligibility
-----------
Union employees of the Clinchfield, Georgia and Charleviox, Michigan
plants of CEMEX, Inc. with at least three months of service are eligible
to participate in the Plan. Plan entry dates are the first day of the
calendar quarter coinciding with or following the completion of the
service. Effective September 1, 2003, union employees of the Charlevoix,
Michigan plant no longer participate in the Plan.
Contributions
-------------
Participants may contribute from 1% to 16% of their eligible pay, up to an
annual maximum of the lesser of their eligible pay or $40,000. Effective
August 1, 2003, participants employed at the Charlevoix, Michigan plant
may contribute from 1% to 18% of their eligible pay for the period August
1, 2003 through August 31, 2003. Participants may also rollover certain
amounts from other qualified defined benefit or contribution plans.
Participants direct the investment of their participant contributions in
the investment options listed in note 3.
CEMEX, Inc. (the Employer and Sponsor) matches 50% of the amount
contributed by each participant up to the first 6% (5% prior to May 1,
2002) of eligible pay. Effective August 1, 2003, participants employed at
the Charlevoix, Michigan plant will receive matching Employer
contributions for the period August 1, 2003 through August 31, 2003 equal
to 75% of their amount contributed up to the first 6% of eligible pay.
The Employer contributions are in the form of American Depository Shares
representing common stock of CEMEX, S.A. de C.V. (CEMEX stock). Effective
April 12, 2002, a participant may, at any time after the CEMEX stock is
credited to his or her account, make a diversification election and
exercise investment discretion with respect to the Employer matching
contribution. Prior to April 12, 2002, a participant must have attained
the age of 59 1/2 before exercising investment discretion with respect to
the CEMEX stock that was purchased with Employer contributions. The
Employer may make additional contributions in accordance with the
provisions of the Plan Agreement.
Continued
CEMEX, INC. SAVINGS AND INVESTMENT PLAN
FOR UNION EMPLOYEES
Notes to Financial Statements, Continued
Participant accounts
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Separate accounts are maintained for each participant as follows.
Participant accounts are credited with the participant's contribution and
allocations of the Employer's contributions and Plan earnings. Allocations
are based on each participant's earnings or account balance, as defined in
the Plan Agreement. Each participant is entitled to the benefit that can
be provided from the participant's account.
Vesting
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Participants are immediately and fully vested in all contributions plus
actual earnings thereon.
Benefit payments
----------------
Benefits are payable from participant account balances, subject to certain
restrictions, upon termination of employment, retirement, reaching the age
of 59 1/2, or by incurring a disability or financial hardship, as defined
in the Plan Agreement. Participants elect the method of distribution which
may be either in the form of a direct rollover to an eligible retirement
plan, lump sum payment or, if in excess of $5,000, payment over a period
of time not to exceed the shorter of 10 years or certain life expectancies
as defined in the Plan Agreement.
Participant loans
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A participant may obtain a loan from his or her separate account balance.
Each loan is evidenced by a promissory note and may not be less than
$1,000. The loans are secured by the balance in the participant's account
and bear interest at the rate established by the Loan Committee.
Provisions of the Plan require the aggregate of each loan outstanding not
to exceed the lesser of $50,000 or 50% of the participant's vested account
balance. Repayment terms for loans are not to exceed five years and
principal and interest is paid ratably through monthly payroll deductions.
Administrative expenses
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Asset management fees are paid by the Plan, loan fees are paid by the
borrowing participant, and all other administrative costs are paid by the
Sponsor.
Forfeited accounts
------------------
Amounts forfeited for any reason shall first be used to restore previously
forfeited participant accounts which are to be restored under the terms of
the Plan and if any amount remains after that allocation, it shall be used
to reduce the Employer matching contribution for that Plan year.
Plan termination
----------------
Although no interest has been expressed, the Employer has the right under
the Plan to terminate the Plan subject to the provisions of ERISA.
Continued
CEMEX, INC. SAVINGS AND INVESTMENT PLAN
FOR UNION EMPLOYEES
Notes to Financial Statements, Continued
2. Significant Accounting Policies
Basis of presentation
---------------------
The financial statements have been prepared on an accrual basis and
present the net assets available for plan benefits and changes in those
net assets in accordance with accounting principles generally accepted in
the United States of America.
Investment valuation and income recognition
-------------------------------------------
The mutual funds, common collective trust fund and common stock are stated
at fair value based on quoted market prices as of the date of the
financial statements. Participant loans are valued at their outstanding
balances, which approximate fair value. Purchases and sales of securities
are recorded on a trade-date basis. Interest income is recorded on the
accrual basis. Dividends are recorded on the ex-dividend date.
Benefit payments
----------------
Benefits are recorded when paid.
Use of estimates
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The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets, liabilities, and changes therein, and disclosure of
contingent assets and liabilities. Actual results could differ from those
estimates.
3. Investments
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As of December 31, 2003 and 2002, participant contributions to the Plan
were invested at the option of the participants in one or more of the
following investment funds:
2003 2002
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Stable Value Fund $ 906,746 1,543,188
Washington Mutual Investors Fund 337,645 626,364
CEMEX stock 315,291 301,484
PIMCO Total Return Fund 260,485
MFS Research Fund 179,368 367,350
Templeton Foreign Fund 170,249 287,841
Franklin Balance Sheet Investment Fund 114,267 253,298
Franklin Real Estate Securities Fund 78,152 183,231
ING International Small Cap Growth Fund 55,139 107,296
AIM Constellation Fund 46,591 43,451
Templeton Developing Markets Fund 40,573 66,878
Franklin Small Mid-Cap Growth Fund 22,384 74,150
Putnam New Opportunities Fund 10,628 55,434
Alliance Capital Reserve Account 51 245
Bond Fund of America 552,098
Participant loans 175,554 218,259
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$ 2,713,123 4,680,567
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Continued
CEMEX, INC. SAVINGS AND INVESTMENT PLAN
FOR UNION EMPLOYEES
Notes to Financial Statements, Continued
Investments with a fair value that exceeds $135,657 and $234,031 at
December 31, 2003 and 2002, respectively, represent 5% or more of Plan net
assets.
4. Federal Income Tax Status
-------------------------
The Plan obtained its latest determination letter on June 14, 2002 in
which the Internal Revenue Service stated that the Plan, as then designed,
was in compliance with the applicable requirements of the IRC. The Plan's
management believes that the Plan is designed and is currently being
operated in compliance with the applicable requirements of the IRC.
Therefore, the Plan's management believes that the related trust is
tax-exempt and accordingly, no provision for Federal income taxes has been
included in the Plan's financial statements.
5. Risks and Uncertainties
-----------------------
The Plan provides for investment in a common collective trust fund,
various mutual funds, and common stock. Investment securities, in general,
are exposed to various risks, such as interest rate, credit and overall
market volatility risks. Due to the level of risk associated with certain
investment securities, it is at least reasonably possible that changes in
the values of investment securities will occur in the near term and that
such changes could materially affect participants' account balances and
the amounts reported in the statements of net assets available for
benefits.
Supplemental Schedule H, Line
4(i)
Plan Sponsor No. 72-0296500
Plan No. 010
CEMEX, INC. SAVINGS AND INVESTMENT PLAN
FOR UNION EMPLOYEES
Schedule of Assets (Held at End of Year)
December 31, 2003
(a) (b) (c) (e)
Identity of issue, borrower, lessor, Description of investment including maturity date, Current
or similar party rate of interest, collateral, par or maturity value value
-------------------------------------------- ------------------------------------------------------- ------------
INVESCO Trust Company Stable Value Fund; 906,746 shares $ 906,746
Washington Mutual Washington Mutual Investors Fund; 11,732 shares 337,645
* CEMEX, S.A. de S.V. American Depository Shares; 12,034 shares 315,291
PIMCO Total Return Fund; 24,322 shares 260,485
MFS Fund Distributors, Inc. MFS Research Fund; 10,255 shares 179,368
Franklin Templeton Investor Services, Inc. Templeton Foreign Fund; 16,001 shares 170,249
Franklin Templeton Investor Services, Inc. Franklin Balance Sheet Investment Fund; 2,402 shares 114,267
Franklin Templeton Investor Services, Inc. Franklin Real Estate Securities Fund; 3,635 shares 78,152
ING Pilgrim Group ING International Small Cap Growth Fund; 2,033 shares 55,139
AIM Family of Funds AIM Constellation Fund; 2,166 shares 46,591
Franklin Templeton Investor Services, Inc. Templeton Developing Markets Fund; 2,707 shares 40,573
Franklin Templeton Investor Services, Inc. Franklin Small Mid-Cap Growth Fund; 741 shares 22,384
Putnam Investments Putnam New Opportunities Fund; 282 shares 10,628
Pershing Alliance Capital Reserve Account; 51 shares 51
* Participant loans 5.2% to 9.5%; 1-5 year term; payable monthly 175,554
--------------
$ 2,713,123
==============
* Party-in-interest
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees (or other persons who administer the employee benefit
plans) have duly caused this annual report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CEMEX, INC. SAVINGS AND INVESTMENT PLAN
FOR UNION EMPLOYEES
By: /s/ Andrew M. Miller
-------------------------------------
Name: Andrew M. Miller
Title: Chairman of Administrative Committee
Date: June 30, 2004
EXHIBIT INDEX
Exhibit
No. Description
- ------- -----------
1. Consent of Mir Fox & Rodriguez, P.C. to the
incorporation by reference into the Registration
Statement on Form S-8 (File No. 333-86090) of CEMEX,
S.A. de C.V. of its report, dated June 25, 2004,
with respect to the audited financial statements of
the CEMEX, Inc. Savings and Investment Plan For
Union Employees as of December 31, 2003.
EXHIBIT 1
CONSENT OF INDEPENDENT AUDITORS
As independent auditors, we hereby consent to the incorporation by
reference of our report dated June 25, 2004, included in this Form 11-K, into
the previously filed registration statement on Form S-8 of the CEMEX, Inc.
Savings and Investment Plan For Union Employees (File No. 333-86090).
/s/ Mir Fox & Rodriguez
Mir Fox & Rodriguez, P.C.
Houston, Texas
June 28, 2004